By Tyler Cowen
THE PROTESTS in Chile have mostly come as a surprise, which should caution against simple explanations for them. In fact, caution is warranted whenever the question is how to interpret civil unrest.
In the case of Chile, it has the highest real wages in Latin America, income inequality has mostly been falling, and life expectancy is above average for the region. By Latin American standards Chile has a low rate of crime and a high degree of public order. Chile has had open and honest elections, and peaceful transfers of power, since 1990.
So if you think the protesters are complaining about conditions in Chile — well yes, of course. But you still need a theory of why people in Chile’s neighboring countries, which are generally doing worse along multiple dimensions, are not also taking to the streets. That is difficult to explain, and it suggests that there are multiple and complex causes of the unrest in Chile, and perhaps in many other countries too.
There have been a few attempts to blame the protests on “neoliberalism” in Chile and the history of “the Chicago Boys.” But again, the puzzle is why many in worse-off Latin American nations aren’t even more upset. Neoliberalism, for instance, seems to have allowed Chile to avoid the relative decline of Argentina. A good rule of thumb is that if your hypothesis can’t explain cross-sectional variations across nations or regions, it probably isn’t very well thought through.
Second, a protest against poor conditions is not the same as a protest against inequality. Many Chilean complaints revolve around the pension system, health care, water rights, public transportation, schools and corruption. Are Chileans upset that their transport options aren’t better? That’s a complaint in absolute terms. Or are they upset that they are riding the subway while many of the wealthy have private cars with drivers? That’s a relative complaint.
The answer will depend on the protester, and in virtually all protests around the world there will be those with both motives. But some North American commentators try to equate these two grudges and subsume them all under the heading of inequality. That just won’t wash.
Your interpretation of this question, whether the complaints are absolute or relative, will influence how you try to address the protests. Is the answer to narrow the gap between the rich and the poor? Or is it simply to improve public services?
As a general matter, it is not easy to find systematic correlations between high income inequality and social unrest. In many cases, income inequality leads to an uninvolved or dispirited population, just as in the U.S. many of the worse-off individuals are also the least likely to vote.
So often the response to poor objective conditions has a lot to do with the subjective framing of those conditions. And in that regard it may be useful to point out several relevant features of the Chilean situation.
Perhaps most important, Chile’s democracy has been successful for long enough that expectations are relatively high, and to some extent Chile considers its peers to be the other OECD nations (Chile is the first OECD member in South America). Note that Chile has high income inequality by OECD standards, but not by Latin American standards.
Another observation: Income inequality is often more galling when different economic classes encounter each other on a regular basis. So much Chilean economic and social activity is concentrated in Santiago, just as in South Korea it is in Seoul and in Singapore it is in… Singapore. In all three countries, I believe, feelings of inequality and envy are worse for that reason. By contrast, if you are a lower-middle-class person in, say, Mississippi, you may view the mansion and private plane of Bill Gates as if from a different universe.
I’ve also found Chile to have a relatively tough set of social expectations in terms of class, dress and educational background, and a relatively narrow set of expectations for women. These pressures for conformity may contribute to discontent.
A related point is that Chile has a relatively small percentage of indigenous citizens compared to many other Latin American nations. Therefore many poorer Chileans may, if only subconsciously, see themselves as less successful versions of wealthier Chileans, rather than perceiving themselves as belonging to a different group altogether, with a separate language and customs. I have loved my time in Chile, where I have visited virtually every region, and enjoy the Chilean people. Yet I find there is something a little monotonous and oppressive in its national spirit.
These are all speculations, I realize, and hardly definitive answers. Take them in that spirit — and by the same token, beware of simplistic theories drawn from domestic politics about civil unrest in faraway places.
BLOOMBERG OPINION
