Courtesy Reuters

Change For Chile

Is the Tide Turning Against Free-Market Capitalism?

Sunny days in Santiago, Chile see throngs of lunch-hour pedestrians pushing their way into cafés and restaurants along streets jammed with the latest models of foreign cars. The city center is studded with huge shopping centers and high-rise office towers made of glass and steel. The display of prosperity reflects Chile’s thriving economy, which boasts full employment, low inflation, and record exports of copper, gold, fruit, wine, seafood, and cellulose. According to the International Monetary Fund, Chile is Latin America’s star performer, with annual economic growth averaging five percent over the last two decades. The country’s success is the result of a free market, a private enterprise system that stimulates investment,and a public sector that maintains tight fiscal discipline. It was thus no surprise when, in 2010, Chile became the first South American country invited to join the Organization of Economic Cooperation and Development.

But the country’s economic success has not been enjoyed by all Chileans. The World Bank calculates that 15 percent of the population, or 2.5 million Chileans, live below the $2-a-day poverty line. Although that is half what it was 20 years ago, social critics argue that more of the country’s poor could have benefited from the recent economic boom. Today, protestors demand more public spending on education, housing, health rights, and rural land recovery programs, which, they say, would ease the burden on the worst off. The glittering streets of Santiago are frequently choked with demonstrators, mostly students,who demand free university education for all. To be sure, there is far greater access to higher education in Chile now more than ever before: over one million students are enrolled in universities today -- a significant increase from the 250,000 enrolled before 1990. This is mostly thanks to the creation of more than 20 new private universities across the country. But increased access has provoked protests from student organizations that claim tuition fees and student loans violate the constitutional entitlement to free public education.

In southern Chile, a

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