Chile is in the process of rewriting its constitution. Americans should be careful.
Chile has a new elected president: Gabriel Boric, a scruffy 35-year-old who looks like any of a hundred left-wing podcasters. The country is also in the process of drafting a new constitution, thanks to a referendum that was passed by a stunning 4-to-1 margin. even as the outgoing president continues to sell leases to extract it.
Meanwhile, the US Supreme Court recently struck down President Biden’s coronavirus vaccine mandate, in part because COVID-19 “is not an occupational hazard in most” workplaces. Chile is forging a totally new political path in the process of solving the most pressing problem facing humanity, while the US government is a mummified carcass incapable of performing basic acts of self-protection.
Climate policy, the people’s relationship to their government, ownership of national resources – these and many other issues are being decided right now by the Chilean people. This is a time of danger and opportunity for Chile, and a lesson for the United States that national institutions can be changed at will.
Let me start with a little background. Boric’s election and new constitution are rooted in a massive outbreak of political unrest that began in 2019. As Lili Loofbourow explained to Slate at the time, this was due to a confluence of factors: extreme inequality, endemic corruption, high debt and rent burdens, and perhaps most importantly, a political system virtually unresponsive to the popular will. Prior to 2019, voter turnout was pitiful and only about a fifth of the population was affiliated with a political party.
It was intentional. The old constitution was drafted under the military dictatorship of Augusto Pinochet in 1980 (after taking power, with American help, in 1973), and approved by a referendum of dubious legitimacy. In its original incarnation, it was highly undemocratic: it had two legislative chambers, extremely unequal representation between districts, a military veto on certain political issues, and other structures intended to prevent voters from having much influence. on politics, especially taxation. and well-being.
Besides the typical dictator instincts, these structures of economic authoritarianism came from Pinochet’s American advisers. He invited a group of neoliberal economists from the University of Chicago (often called the “Chicago boys”) to use Chile as a sandbox for their utopian theories. They were very upfront about their preferences. “Personally, I prefer a liberal dictator to a democratic government devoid of liberalism,” economist Friedrich von Hayek told a Chilean newspaper at the time (with “liberal” meaning “neoliberal” in today’s context).
A central tenet of neoliberalism is that property should be protected from democracy – that it should be illegal, if possible, to expropriate the rich or even tax them heavily. This type of thinking is understandably very attractive to the wealthy, like Pinochet’s supporters and the dictator himself, who amassed enormous treasury while in power. Hence all the many obstacles to taxing and spending, and thus the huge inequality in Chile today.
However, while the constitution has been amended numerous times over the years to remove these structures, it has still created an ossified and corrupt political class. Soon, a classic social rebellion began with a modest increase in subway fares that was just one too many impositions. Two years of mass protests, strikes and organizing later, and Chile has a new president and is in the process of drafting a new constitution.
But what will the new Chilean government do with its power? A new constitution is all well and good, but there will still be difficult political decisions to be made to consolidate a prosperous egalitarian system.
This brings me to lithium. As Somini Sengupta writes at The New York Times, Chile has the second largest proven lithium reserves in the world (behind Australia), and what to do with it is a central question for the framers of the Constitution. These are both a promise and a danger. On the one hand, their development will be extremely lucrative and the world badly needs lithium to produce the batteries necessary for the transition from fossil fuels. On the other hand, international mining companies will grab all the money if they can, the mining process can be toxic to the environment, and if the Chilean economy becomes dependent on lithium profits, it will be harmed by its inevitable wild price swings.
The example of what Norway has done with oil is an instructive model to follow. When this country discovered huge reserves in the North Sea, the first thing it did was to declare them the property of the Norwegian state and people. They then hired an outside company to teach their state oil company how to build an ocean drilling rig, and did the drilling in-house, rather than hiring a contractor to do it. Then, when the money started coming in, Norway invested it rather than spending it outright.
Today, the Norwegian government holds three-quarters of its national wealth outside of owner-occupied homes, and 1.4% of all stock markets worldwide, in trust funds that are collectively owned by all Norwegians. . It has also prevented oil money from giving Norway the economic ‘Dutch disease’ or becoming overly dependent on fluctuations in single commodity prices – as Venezuela learned to its chagrin in 2014. .
If a lithium company were created in the same way under a Chilean national fund, it would be natural to operate it slowly and carefully in order to minimize environmental damage and not to exploit reserves too quickly. A private company will logically tend to skimp on protections, plunder land and leave behind a polluted wasteland, but if profit is just one goal among many, a public company could take its time and minimize degradation. Basically, if the Norwegian government can operate oil rigs in the hardest place to imagine, Chile should be able to mine its own lithium.
In any case, from an American point of view, all of this is frankly astounding. The American Constitution is so embedded in national culture and identity that it is practically a fetish object. No other country has our kind of quasi-theological legal culture, where various factions attempt to achieve political results by siting their supporters on the bench and dreaming up tortured readings of constitutional provisions.
Right now, it’s impossible to imagine a referendum to draft a new constitution passing at all, let alone anything close to Chile’s 4-1 margin. Likewise, it is impossible to imagine using any of America’s vast natural resources to create a social wealth fund that could distribute some of the profits currently amassed by the billionaire class to everyone.
To be fair, Chile’s constitution was tainted by its association with a brutal, murderous, and mass-torturing dictator, and so it was relatively easy to convince Chileans to abandon it. But for an American, this only underscores the importance of imagination and organization in politics. The American Constitution is objectively as bad as the Chilean Constitution of the Pinochet era, if not worse, and for basically the same reasons. It was deliberately designed to isolate political power from the voters, its basic structure has been grossly unfair and easily outmoded for a century, and for complex reasons it has become even worse over time.
Chile is not the only country in the Western Hemisphere where the political system has frozen into a sclerotic and dysfunctional mess. But it turns out that a constitution, no matter how old, is just a few words on a page. If enough people request a new one, it can be done. After all, that’s how we got our current Constitution in the first place. No better time than the present to start asking.