‘Economic War’ from Allende’s Chile to Chavista Venezuela

As you know I’m spending way too much time watching The Battle for Venezuela, which I predicted in September 2015 would in fact be a battle, implying blood and unlikely to be a democratic transition. Catch up on my thoughts at the Venezuela tag.

The propaganda front or “info war” is important in any battle, but increasingly so in the modern era with internet and real-time reporting. One common theme from Hugo Chavez to Nicolas Maduro is the “economic war” allegedly waged by Venezuela’s oligarchy to undermine the socialist revolution which will benefit the working pueblo.

The latest bloody chapter came via the looting of every store in Ciudad Bolivar after the government announced the abrupt removal in three days of all 100-bolivar bills, which represent about three quarters of Venezuela’s currency. Predictably, the government could not exchange all those bills for new ones in a region where a third of people have no bank accounts to deposit their savings into.

But before the predictable riots ensued, the Venezuelan government had alleged an outrageous international conspiracy to justify the removal of the bills.

The scale of the conspiracy is staggering: More than 300 million of Venezuela’s highest-denomination bank notes have been ferried out of the country in recent months. Huge stacks of 100-bolivar bills now sit in warehouses throughout Central and Eastern Europe — Poland, Ukraine, Switzerland, Germany, the Czech Republic, Macedonia — all part of a devious plot hatched by the U.S. Treasury Department. Working through local nongovernmental organizations and local mafia syndicates, the plotters have spirited the actual physical banknotes first by land to neighboring Colombia and later by air to Europe in an ambitious bid to overthrow Venezuela’s socialist government by choking off the supply of paper money, setting off chaos and destabilizing the economy. The notes can’t be destroyed because the Americans have offered to pay dollars for them to their proxies, but only once the government has actually been overthrown.

Hat tip: Francisco Toro

Just a day or two into the lawlessness, the government backtracked on the bills, conspiracy or no, and will now take its time in phasing out those 100-bolivar notes.

The economic war theory in Venezuela is absurd given Chavismo has been in power so long they effectively control all means of production. The government is the oligarchy (as in any truly socialist country). There isn’t enough of a private-sector oligarchy left to wage any kind of war beyond complaining from exile.

But this idea of an “economic war” led by a shadowy capitalist conspiracy was not invented by Chavismo. It’s actually standard procedure from the propaganda section of the socialist playbook.

In 1973, Chile’s military staged a coup against socialist president Salvador Allende. The incident is widely cited in rants against American meddling, which is generally exaggerated, but most don’t know that the subsequent right-wing dictator Augusto Pinochet is still very popular within Chile and that the coup took place during the kind of economic crisis that always ensues when a socialist state assumes complete control.

President Allende committed suicide during the coup. Allende’s niece, award-winning author Isabel Allende, would publish her signature novel The House of the Spirits 10 years after his death. As I describe it to people, the book is basically a One Hundred Years of Solitude for Chile. It follows three generations of a Chilean family to tell Chile’s modern history, with magic realism to boot. So while it copy’s Gabo’s style, the book is good.

Five years after reading it, I never forgot “The Conspiracy” chapter. It features a fictional account of such an economic war as she imagines it was waged against her uncle. I’ve transcribed parts of the chapter below. It serves as an interesting look at the education of a socialist. In texts like Open Veins and Confessions of an Economic Hitman, this is the kind of narrative they believe in their hearts and minds. It helps to understand the things they do, like the latest episode in Venezuela.


Senator Trueba spent the night in his party headquarters, forcibly restrained by his followers, who were convinced that if he went outside the crowd would recognize him and immediately hang him from the first lamppost they could find. Trueba was more surprised than angry. He could not believe what was happening, even though he had been singing the same old song for years about how the country was crawling with Marxists. But he was not depressed; far from it. In his old fighter’s heart fluttered a sense of elation he had not felt for years.

“It’s one thing to win an election and quite another to be President,” he remarked mysteriously to his teary co-religionists.

The idea of eliminating the new President, however, was not yet on anybody’s mind, for his enemies were sure they would put an end to him through the same legal channels that had carried him to triumph. That was what Esteban Trueba was thinking. The next day, when it was clear that there was no need to fear the festive crowds, he left his refuge and headed to a country house on the outskirts of the city, where a secret lunch was held. There he met with other politicians, a group of military men, and gringos sent by their intelligence service to map a strategy for bringing down the new government: economic destabilization, as they called their sabotage.

It was an enormous colonial-style house surrounded by a flagstone patio. When Senator Trueba arrived, there were already several cars parked in front of it. He was received effusively, because he was one of the undisputed leaders of the right and because, having prepared for what might happen, he had made the necessary contacts months in advance. After the meal—cold fish with avocado sauce, roast suckling pig in brandy, and chocolate mousse—they dismissed the waiters and bolted the doors to the dining room. There they sketched out the main lines of their strategy. When they were finished, they stood and made a toast to the fatherland. Everyone, except the foreigners, was willing to risk half his personal fortune in the endeavor, but only old Trueba was also willing to give his life. “We won’t give him any peace, not even for a minute. He’ll have to resign,” he concluded firmly.

“And if that doesn’t work, Senator, we have this,” said General Hurtado, placing his service pistol on the table.

“We’re not interested in a military coup, General,” the head of Embassy intelligence replied in studied Spanish. “We want Marxism to be a colossal failure and for it to fall alone, so we can erase it from the people’s minds throughout the continent. You understand? We’re going to solve this problem with money. We can still buy a few members of Congress so they won’t confirm him as President. It’s in your Constitution: he didn’t get an absolute majority, and Congress has to make the final choice.”

“Get that idea out of your head, mister!” Trueba exclaimed. “You’re not going to bribe anyone around here! The Congress and the armed forces are above corruption. It would be better if we used the money to buy the mass media. That would give us a way to manipulate public opinion, which is the only thing that really counts.”

“You’re out of your mind! The first thing the Marxists are going to do is destroy freedom of the press!” several voices said.

“Believe me, gentlemen,” Senator Trueba replied. “I know this country. They’ll never do away with freedom of the press. Besides, it’s in their platform: they’ve sworn to respect democratic rights. We’ll catch them in their own trap.”

Senator Trueba was right. They were unable to bribe the members of Congress, and on the date stipulated by law the left calmly came to power. And on that date the right began to stockpile hatred.

Organization was necessary, because the “road to Socialism” quickly became a battlefield. While the people were celebrating their victory, letting their hair and beards grow, addressing each other as “compañero,” rescuing forgotten folklore and native crafts, and exercising their new power in lengthy meetings of workers where everyone spoke at once and never agreed on anything, the right was carrying out a series of strategic actions designed to tear the economy to shreds and discredit the government. They controlled the influential mass media and possessed nearly limitless financial resources, as well as the support of the gringos, who had allocated secret funds for the program of sabotage. Within a few months the results could be seen. For the first time in their lives, people had enough money to cover their basic needs and to buy a few things they had always wanted, but now they were unable to do so, because the stores were nearly empty. Shortages of goods, which was soon to be a collective nightmare, had begun. Women woke at dawn to stand in endless lines where they could purchase an emaciated chicken, half a dozen diapers, or a roll of toilet paper. Shoe polish, needles, and coffee became luxury items to be gift-wrapped and given as presents for birthdays and other special occasions. The anxiety of scarcity had arrived: the country was swept with rumors about products supposedly going to disappear, and people bought anything they could, without thinking, as a precaution. They stood in line without even knowing what was being sold, just so they would not lose a chance to buy something, even if they did not need it. A new occupation was born: professional line standers, who held other people’s places for a reasonable sum.. There were also peddlers of sweets who took advantage of the lines to hawk their goods, and people who rented blankets for the long nighttime lines. The black-market flourished. The police tried to strain it, but it was like a plague that seeped in everywhere, and no matter how much they checked the trucks and stopped people carrying suspicious packages, they could not prevent it. Children made transactions in schoolyards. In the hysteria to get things, there were all sorts of confusions: people who had never smoked wound up paying an exorbitant sum for a pack of cigarettes, and those without children found themselves fighting over cans of baby formula. Spare parts for kitchens, for industrial machinery, and for cars disappeared from the market. Gasoline was rationed, and the lines of automobiles could last two days and a night, constricting the city like a gigantic motionless boa tanning in the sun. There was not enough time to stand in so many lines, and since office workers had to get around the city on foot or by bicycle, the streets filled with panting cyclists that looked like a frenzy of Dutchmen. This was the state of things when the teamsters declared their strike; by the second week, it was clear that this was not a union matter but a political one, and that the men had no intention of returning to work. The Army wanted to take control because the produce was rotting in the fields and there was nothing for housewives to buy in the markets, but the drivers had dismantled their engines and it was impossible to move the thousands of trucks that were strewn along the highways like so many fossilized remains. The President appeared on television asking the people to be patient. He warned country that the teamsters were in the pay of the imperialists and that they would stay out on strike indefinitely; people would be wise, he said, to plant their own vegetables in their yards and on their terraces, at least until another solution was found. Meanwhile, the people who were accustomed to poverty and most of whom had never eaten chicken except at Christmas and on Independence Day, did not give up the euphoria of the first days of victory. They organized themselves as if for war, determined not to let the economic sabotage spoil what they had won. They continued celebrating in a festive spirit and singing that the people would never be defeated—even though each time they sang it sounded more out of tune because divisiveness and hatred were inexorably growing.

Like everyone else, Senator Trueba also found his life changed. His enthusiasm for the struggle he had undertaken restored his former vigor and relieved some of the pain in his aching bones. He worked as he had in his heyday. He made numerous conspiratorial trips abroad and traveled the country tirelessly from north to south on planes, cars, and trains, on none of which were there now such things as first-class tickets. He endured the extravagant dinners with which his hosts received him in each city, town, and village he visited by pretending to have the appetite of a prisoner, despite the fact that his aging digestive tract was no longer up to such acrobatics. He lived in meetings. At first his long democratic experience impeded his ability to set traps for the new government, but he soon gave up the idea of obstructing it by legal means and came to accept the fact that the only way to unseat it was by using illegal ones. He was the first to declare in public that only a military coup could halt the advance of Marxism because people who had anxiously waited fifty years to be in power would not relinquish it because there was a chicken shortage.

“Stop acting like a bunch of faggots and take out your guns!” he shouted when there was talk of sabotage.

He made no secret of his ideas. He broadcast them to the four winds. Still dissatisfied, he went to the military school from time to time to throw corn at the cadets, shouting through the fence that they were all a bunch of chickens. He was forced to hire a pair of bodyguards to protect him from his own excesses. However, he often forgot that he had engaged them, and when he felt them spying on him he would have a tantrum, insulting them and threatening them with his cane until he was practically choking, his heart was beating so hard. He was convinced that if anyone tried to assassinate him, these two stocky morons would be powerless to prevent it, but he trusted that their presence would at least scare off spontaneous detractors.

Tres Marias was one of the last haciendas in the South to be expropriated under the agrarian reform. The same peasants who had been born there and had farmed the land for generations formed a cooperative and took title to the property, because it had been three years and five months since they had last seen their patron and they had long since forgotten his hurricane-like temper. The foreman, terrified by the turn of events and the fiery tone of the meetings the tenants held in the schoolhouse, gathered up his belongings and disappeared without a word to anyone, not even Senator Trueba, for he did not wish to face his anger and he felt he had done his duty by warning him many times in the past. With his departure Tres Marias was left adrift for quite a while. There was no one to give orders and no one to obey them; the peasants, for the first time in their lives, were savoring the taste of freedom and the experience of being their own patron. They divided up the pastureland and each grew whatever he wanted, until the government sent an agronomist who gave them seed on credit and brought them up to date on the demands of the market, the difficulties of transporting produce, and the advantages of fertilizers and disinfectants. But the peasants paid him little attention, since he seemed like a city slicker and it was easy to see that he had never had a plow in his hand; still, they celebrated his arrival by opening the sacred wine cellar of their former patron, sacking his aged wines, and slaughtering his breeding bulls in order to eat their testicles with onion and basil. After the agronomist had left, they also ate the imported cows and all the brood hens. Esteban Trueba discovered that he had lost his land when they notified him that they were going to pay him for it with government bonds that had a thirty-year maturation and at the same price he had listed on his tax statement. He lost control. He went to his arsenal, picked up a machine gun he did not know how to use, and—without telling anyone, not even his bodyguards—ordered his chauffeur to drive him straight to Tres Marias. He traveled for many hours, blind with rage and without any clear plan in mind.

When they arrived, the chauffeur had to slam on the brakes because a thick wooden beam had been thrown across the gate to the hacienda as a roadblock. One of the tenants was standing guard, armed with a pike and an unloaded shotgun. Trueba got out of the car. When he saw the patron, the poor man frantically rang the schoolhouse bell, which had been hung nearby in case they needed to sound an alarm, and quickly threw himself to the ground. A hail of bullets sailed past his head and embedded themselves in the neighboring trees. Trueba did not stop to see if he was dead. With unusual dexterity for a man his age, he headed down the path to the hacienda without looking to either side, so that the blow to the back of his head took him by surprise and he fell flat on his face in the dust before he even realized what had happened. The next thing he knew he was in the dining room of the main house lying face up on the table, his hands tied and a pillow under his head. A woman was pressing moist compresses to his forehead, and gathered around him were almost all his tenants, staring at him with intense curiosity.

“How do you feel, compañero?” someone asked.

“Sons of bitches! I’m nobody’s compañero!” the old man roared, trying to sit up.

He struggled and shouted so much that they loosened his bonds and helped him to his feet, but when he attempted to leave he saw that the windows had been bricked in from outside and that the door was locked. They tried to explain to him that things had changed and that he was no longer the patron, but he refused to listen. He was foaming at the mouth and his heart was about to burst. Cursing like a madman, he threatened them with such punishment and vengeance that they could only respond with laughter. Finally they grew bored and left him alone, locked in the dining room.

In the following months, the situation deteriorated greatly, like a country at war. Spirits ran high, especially among the women of the opposition, who paraded in the streets pounding their empty pans in protest against the shortages in the stores. Half the population hoped to overthrow the government and the other half defended it, and no one had time to worry about work. One night Alba was astonished to find the streets in the center of the city dark and almost deserted. Garbage had not been collected all that week, and stray dogs were scavenging among mountains of waste. Telephone poles were covered with posters faded by the winter rains, and every available inch of space was filled with the slogans of the two opposing sides. Half the street lamps had been smashed, and there were no lights on in any of the buildings; the only illumination came from a few sad bonfires fed by newspaper and wooden planks, around which the small groups that stood guard in front of the ministries, the banks, and the offices were warming themselves, taking turns to make sure the gangs of the extreme right that roamed the streets at night did not jump them in the dark. Alba saw a van pull up before one of the public buildings. A group of young men in white helmets piled out, armed with buckets of paint and brushes, and proceeded to cover the walls with light-colored paint. Then they drew huge multicolored doves, butterflies, and bloody flowers, with hand-lettered verses by the Poet and appeals for the people to unite. These were the youth brigades, who thought they could save the revolution with patriotic murals and inflammatory doves. Alba went up to them and pointed to the mural on the other side of the street. It was stained with red paint and contained a single word printed in enormous letters: Djakarta.

“What does that mean, compañero?” she asked one of them.

“I don’t know,” he replied.

And none of them knew why the opposition had painted that Asiatic word on the walls; they had never heard about the piles of corpses in the streets of that distant city. Alba climbed on her bicycle and pedaled home. After the gasoline rationing and the public transport strike, she had unearthed this childhood toy from the basement as her only means of getting around. She was thinking of Miguel, and a dark foreboding gripped her throat. It had been ages since she had gone to class, and time hung heavy on her hands. The professors had declared an indefinite strike and the students had taken over all the buildings. Bored with practicing the cello at home, she used the time when she was not sleeping with Miguel, strolling with Miguel, or talking with Miguel to work at the hospital in the Misericordia District, where she helped her Uncle Jaime and a few other doctors who continued to practice there despite an order from the school of medicine to stop work so as to sabotage the government. It was a Herculean task. The hallways were piled with patients who had to wait for days, like a moaning herd, to be examined. The orderlies no longer brought supplies. Jaime would fall asleep with his scalpel in his hand, so busy that he often forgot to eat. He had lost weight and looked haggard. He was working eighteen-hour shifts, and when he could finally lie down on his cot, he was often unable to sleep. His mind raced at the thought of all the patients who were waiting for him, the lack of anesthesia, syringes, and cotton, and the realization that even if he could be multiplied by a thousand it would still not be enough, because it was like trying to stop a train with your bare hands

The President appeared on television almost every night to denounce the ruthless war being waged by the opposition. He was very tired, and at times his voice would crack. People said that he was drunk, and that he spent his nights in orgies with mulattas flown in from the tropics to warm his bones. He announced that the striking teamsters were receiving fifty dollars a day from abroad to keep the country at a standstill. People responded that he was being sent coconut ice cream and Soviet arms via diplomatic pouch. He said that his enemies were conspiring with the generals to launch a coup d’etat because they would rather see democracy dead than be governed by him. They accused him of telling paranoid lies and of stealing paintings from the National Museum to hang in his mistress’s bedroom. He warned that the right was armed and determined to sell the country to imperialism, and they replied that his pantry was stocked with breasts of fowl while the masses had to stand in line to buy the neck and wings of the same bird.

The day Luisa Mora rang the bell of the big house on the corner, Senator Trueba was in his study doing his accounts …

“I’ve come to bring you some bad news, Esteban,” Luisa Mora said after she had settled into the armchair.

“Ah, dear Luisa! I’ve had enough of that,” he said, sighing …

She told him she had spent the past ten months studying the astrological charts of each important person in the government and the opposition, including Trueba himself. When she compared the charts, they showed that at this exact historic moment there would be a terrible sequence of events, bringing blood, pain, and death.

“I don’t have the slightest doubt about it, Esteban,” she concluded. “Terrible times lie ahead. There will be so many dead they will be impossible to count. You will be on the side of the winners, but victory will only bring you suffering and loneliness.” …

“But I didn’t come here to upset you with news that’s beyond your control, Esteban. I came to speak with Alba, because I have a message for her …”

The senator sent for Alba …

“I came to tell you to be careful, child,” Luisa Mora said after she had dried her tears. “Death is at your heels. Your Grandmother Clara is doing all she can to protect you in the Hereafter, but she sent me to tell you that your spiritual protectors are powerless when it comes to major cataclysms. She says it would be wise for you to take a trip, that you should cross the ocean. You’ll be safe there.”

At this point in the conversation Esteban Trueba lost his patience. He was convinced he was dealing with a crazed old woman. Ten months and eleven days later he would recall Luisa Mora’s prophetic words, when they took Alba away in the middle of the night, while the curfew was in force.


The last chapter is titled “The Terror,” and it chronicles the repressive years under Pinochet. For more journalistic coverage of the Allende crisis and subsequent coup, check out these from the NYT archive:

Thinking about Chile’s post-Allende fate inevitably leads to comparisons with Venezuela’s fate after the 2002 failed coup against Hugo Chavez. Given the humanitarian crisis in Venezuela and how many have died due to corruption or economic hardship, how low the country has fallen and how a generation of wealth has been erased, was the coup the right thing to do?

Gotta give a shout to Online OCR for their super and free jpg-to-text software.


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