Democratic erosion is currently a global crisis, as many countries experience various forms of backsliding, including the United States. The global loss of democratic systems largely coincides with the increase of extreme forms of capitalism forming globally. I argue that capitalism lies at the root of this erosion. Democratic consolidation requires economic reforms, in order to address systemic inequalities, for unchecked privatization, which neoliberal capitalism causes, leads to displacement and inequality. Democracy and capitalism are arguably at odds with each other. Wolfgang Merkel, a political science scholar, argues that capitalism and democracy are incompatible for a number of reasons. Merkel points out that capitalism functions through profit-orientated trade, and contrasts that with the search for the common good in democracy. Property, civic and political rights unequally distributed benefit capitalism, while they harm democracy (Merkel 2014). The financialization of capitalism since the 1980s and the deregulated globalized markets have made the relationship between capitalism and democracy even more strained in recent years (Merkel 2014). Chile presents an example of taking steps against democratic erosion with the election of Gabriel Boric, a progressive anti-capitalist leader. If Boric’s plans to restore democratic order in Chile are enacted smoothly, the country may present a new opportunity for democratic consolidation globally to follow suit.
In 2019, capitalism itself was protested within Chile. Prior to the protests, the United States intervened in Chile to build a free-market economy: something the United States has been eager to do throughout Latin America in order to generate wealth through trade. Chile was the first country where this was declared a successful implementation model. In 1980 a new constitution was put in place to legally transform the Chilean economy (Barbaro 2019). With the drastic switch to capitalism, the economy grew, inflation decreased, and Chile became the richest country in Latin America at the time. The downside to this switch was a sudden increase in poverty, especially among the Chilean elderly, due to the decline in social welfare programs and increased privatization of services (Barbaro 2019). The rise in prices of daily necessities gave many people extreme economic anxiety and drove many Chileans into poverty, while those on top became increasingly more wealthy. The middle-class and poor did not see any growth and did not reap any benefits of this new economic system. After Pinochet, Chile’s authoritarian leader, raised the metro fairs within cities, Chile erupted into protests. Following these unending protests and riots, the Pinochet regime deployed the military on the people to put an end to the protests, sending the message that their voices were not being heard or respected. Protesters began demanding a change to the constitution, working across social boundaries to create drafts to propose to the federal government, which was remarkable (Barbaro 2019).
Years later, after the fall of Pinochet’s dictatorship, with the election of Gabriel Boric, the country shows signs of democratic consolidation. Boric was a student protest leader and transitioned into the head of State over the course of 10 years. Boric has expressed that his goal is to leave the presidency with less power than he inherited it with (Marcelo 2022). He has helped create a new constitution to be implemented later this year. Chileans are hopeful and eager to begin this new era in their history. Boric has already elected an all-female cabinet, for the first time ever within the Americas. Despite this hopeful change, the divided legislature has created problems for Boric’s economic reforms, but the rocky beginning has not diminished hope. The fate of the country now lies in the implementation of the new constitution. If enacted correctly, the country could set an example for countries across the world to begin democratic consolidation with a critical look at capitalism and social welfare. Chile is facing expected troubles with the transition to a new presidency and constitution. The transition presents a new opportunity to carefully examine how different economic systems and democracy overlap: from neoliberal capitalism to a system with greater social welfare and decreased privatization.
Casals, Marcelo, 2022. “The End of Neoliberalism in Chile”, Dissent Magazine.
Merkel, Wolfgang, 2014. “Is Capitalism Incompatible with Democracy?”
Barbaro, Micheal, 2019. “Capitalism on Trial in Chile.” New York Times.
*Photo by Prensa Latina, “Gabriel Boric’s Big Challenge”, Creative Commons Zero Licence.