The free market fascist assassination on D.C.’s Embassy Row

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SANTIAGO, CHILE - OCTOBER 17, 2013: Collage of the newspapers issued in 1973 during Chilean coup d'etat taken in Santiago, Chile.
Dmitry Chulov / Shutterstock.com

When the U.S. was attacked on September 11, 2001, people in Chile remembered another 9/11 in 1973. That’s when Chile’s democratically elected government led by socialist Salvador Allende was brutally overthrown by the military with the assistance of the U.S.

Chilean-American novelist Ariel Dorfman described the three-year peaceful revolution of the Allende years: 

“Peasants became the owners of their land, workers managed their own factories, the resources of the country that had been plundered by foreign corporations were nationalized, with the profits going to health and education, children were given free milk at school, and millions of books were sold at negligible prices at newsstands.”

A massive economic and psychological destabilization campaign was conducted. Big lies promoted hysteria. The affluent were told that the government would seize their homes. A conspiracy theory was manufactured by the CIA about mass beheadings of military officers. Allende would also abolish Christmas! The CIA redesigned the layout of Chile’s leading newspaper El Mercurio. The front page (which previously resembled the New York Times with many articles with several rather small headlines) was covered with blown-up photos and huge screaming headlines.

The coup was led by General Augusto Pinochet. A personality cult developed with saint-like statuettes. He had the special protection of the Virgin Mary and was guided by “the mysterious hand of God.”

But the Pinochet regime and other U.S.-backed military dictatorships in Latin America were condemned around the globe. In the 1970s after the Vietnam war and the Watergate scandal/intelligence agency investigations, U.S. liberals advocated a re-evaluation of foreign policy, particularly concerning human rights.

In August 1976, The Nation published an article entitled “The ‘Chicago Boys’ in Chile: Economic ‘Freedom’s’ Awful Toll.” The author was Orlando Letelier, a internationally known Chilean economist who was so important to Allende that he was appointed to several crucial positions in the government: at first ambassador to the U.S., then minister of foreign affairs and finally, minister of defense.

Political analyst Naomi Klein said the article “rocked the U.S. political establishment.”

After the coup, Letelier was tortured and held in several concentration camps. A worldwide campaign lobbied for his release and he moved to Washington, D.C. where he was employed by the Institute for Policy Studies, a leftwing think tank.

Letelier became an eloquent critic of the Pinochet regime, lobbying the U.S. Congress and European governments and unions. He promoted boycotts of Chilean products and sabotaged loans to the dictatorship.

However, he was frustrated that many who condemned the regime also praised it for its fervent free-market fundamentalism which involved rapid privatization of state enterprises, deregulation, the elimination of price controls and the crushing of labor unions.

In his essay, Letelier noted that economist Milton Friedman of the University of Chicago was “the intellectual architect and unofficial adviser for the team of economists now running the economy.” 

Friedman had authored the famous book ‘Capitalism and Freedom’ which argued that only his policies were compatible with political democracy. Friedman had criticized the human rights abuses of the Pinochet regime but Letelier said he was being hypocritical:

“While the ‘Chicago boys’ have provided an appearance of technical respectability to the laissez-faire dreams and political greed of the old landowning oligarchy and upper bourgeoisie of monopolists and financial speculators, the military has applied the brutal force required to achieve those goals. Repression for the majorities and ‘economic freedom’ for small privileged groups are in Chile two sides of the same coin.”

On September 21, 1976, Letelier was driving to work when a remote-controlled bomb under his car detonated on Embassy Row in downtown Washington, D.C. Letelier and a coworker Ronni Moffitt were killed in the blast.

The bombing was the work of the Chilean secret police known as the DINA. Two DINA officers and five Cuban American terrorists were eventually convicted and sentenced to prison. The team leader was DINA agent Michael Townley, an American-Chilean who had lived in the country since 1957 when his dad became the head of Ford Motor Company operations in Chile.

In 1995, DINA head Manuel Contreras was convicted in Chile of having ordered Letelier’s murder and was sentenced to seven years in prison. A detailed CIA intelligence assessment in 1987 concluded that Pinochet “personally ordered” the assassination.

Chile under Pinochet was the world’s first experiment in Chicago Boys-style free-market fundamentalism. Letelier’s 1976 warnings would be ignored. Milton Friedman, the once fringe economist, was now a star. In 1980, PBS aired a show written and narrated by Friedman called “Free to Choose.” He was an adviser to British prime minister Thatcher and President Reagan. Many Democrats tagged along.

Today, we may be entering a new era. Joe Biden proposes massive public investment in his “Build Back Better” proposals. Very once in a while, he makes a snarky comment about Milton Friedman.