Nothing to lose but their chains;

The scene at La Moneda was very different early on Sept. 11, 1973. With avenues for peaceful change apparently exhausted, and legislators asking for military action, the military made its move. Allende at first thought he had a fighting chance: Over 1,000 carabineros, with an array of armaments including mini-tanks and heavy machine guns, were supposedly ready to defend him. Allende also thought that thousands of workers would turn their factories into forts. He was wrong on both counts; the carabineros, unenthusiastic to start with, pulled out when they saw a unified military opposed to them, and few of the workers had an interest in dying.

Allende did. He turned down Chilean Air Force offers of an airplane to take him and his family to the foreign destination of his choice. Heavily fortified by Chivas Regal, eyewitnesses said, he told some of his remaining defenders that he would kill himself, as President Jose Balmaceda had done in 1891. But first, as James Whelan relates, he said, "Let's give ourselves the pleasure of smashing the busts of all these old reactionaries," and led the way in knocking over the busts of almost all Chile's former presidents. At around noon, two air force planes bombed La Moneda. Shortly after 2 p.m., as soldiers assaulted the building, presidential doctor Patricio Guijon saw Allende shoot himself with the AK-47 that Fidel Castro had given him.

Other battles raged in and around Santiago that day and during the next several weeks. Some 100 Socialist paramilitary fighters fought in one factory area, killing at least 30 carabineros. Other brigades fought at the State Technical University. Happily, the military's estimate of at least 5,000 deaths expected, and Allende's prediction that 1 million lives would be lost, were both overshots; some 750 persons probably died in Santiago fighting over the next three weeks, and some 2,000 in the entire country over the next six months. That was bad enough so that the "Chile Emergency Committee" (which included Jane Fonda, I.F. Stone, Joan Baez, Kurt Vonnegut, and others) could take out full-page ads in The New York Times and other newspapers proclaiming that "the streets are red with blood ... thousands are reported to have been killed.... Having dealt a death blow to the constitutional order, the right-wing junta has launched a reign of terror.

Actually, the reaction among the two-thirds of Chileans not on the left, and even some on the left who had feared a protracted civil war, was one of relief. The leftist National Democrats issued a statement to the armed forces: "Today we feel proud of what you have done. We are with you because you have interpreted [the desires] of the great majority in our country." On Sept. 12 the Christian Democrats' national committee gave its reaction: "The events which Chile is experiencing are the consequence of the economic disaster, institutional chaos, armed violence, and moral crisis to which the deposed government brought the country, dragging the Chilean people into anguish and desperation. The facts demonstrate that the armed forces and carabineros did not seek power." The PDC expressed confidence that the armed forces would schedule new elections "just as soon as they have fulfilled the tasks which they have undertaken to save the Chilean nation from the grave dangers of destruction and totalitarianism which threatened...."

How long was "just as soon as they have fulfilled the tasks?" That depended on what the tasks were. In the eyes of the military junta and its leader, General Augusto Pinochet Ugarte, the task was to prevent future Marxist dictatorships by reconstructing the economy on free-market lines-and that would take many years. Initially, he had broad public support for that effort. Gallup Polls in 1975, 1976, and 1977 showed three-fourths of Chileans expressing support for Mr. Pinochet, favoring free-market economic policies, and believing that conditions were improving. Only 12 percent in 1977 demanded immediate elections.

The military leaders used that opportunity to turn over control of economic policy to a group of Chileans trained in the United States, and particularly by Milton Friedman and other free-market-defending economics professors at the University of Chicago. Jose Pinera, the most famous of what became known as "the Chicago boys," now spends part of his time in Washington and part in a business office just east of Santiago. He was 30 when Mr. Pinochet saw him being interviewed on television and asked him to present his ideas directly to the Cabinet. Mr. Pinera then was shocked to receive an invitation to join the Cabinet as minister of labor and social security.

Mr. Pinera's greatest success was in social security reform, which he is now trying to bring to the United States (see WORLD, June 29). But other changes-privatization of companies, dramatic decreases in wage taxes, reduction of tariffs to a maximum rate of 11 percent, a reduction of the wage tax and a freeing of the economy generally-also had a dramatic effect on the Chilean economy from the mid-'80s to the mid-'90s. As former finance minister Hernan Buchi summarized the changes, "The government freed all prices, including bread. To make this politically feasible, direct subsidies, not price subsidies, were given to the poor.... In agriculture, we regularized property and water rights, and allowed people to buy and sell land."

More changes also emerged: "The government changed the regulations and allowed the private sector to operate ports.... The telecommunications sector was opened, so even remote farmers could communicate immediately with markets." A statistical comparison of 1973 and 1996, when under the center-left government economic growth began to slow down, illuminates the big picture. Chile's population during those 23 years increased from slightly over 10 million to 14.3 million, while gross domestic product leaped from $17.7 billion to $71.5 billion (in 1995 U.S. dollars), which means that GDP per capita jumped from $1,775 to $4,737.

Meanwhile, inflation dropped from 500 percent to 6.6 percent, exports as a percentage of GDP nearly tripled from 8 percent to 23 percent, and copper exports dropped from 82 percent of total exports to 37 percent, which meant that Chile no longer feasted or starved as the price of copper rose or fell. Social indicators also improved enormously. Infant mortality from 1973 to 1996 fell from 66 per 1,000 live births to 13; average years spent in school doubled to nine; life expectancy increased from 64 to 73 years; and water safe to drink became universal in urban areas.