The Chilean political experience of the last two decades has been traumatic. It has affected the nation's political culture, has altered profoundly public morality, and has left a deep imprint on professional and business ethics. It cannot be understood without taking into consideration two major factors. One is the authoritarian habits grafted upon political life by seventeen years of dictatorship. The other is the socially-regressive nature of the economic policies imposed during that period. The various "shock treatments" of perceived economic ailments, followed by policies unabashedly biased in favor of big business has laid the weight of an alleged "economic miracle" increasingly upon wage-earners. Significant examples of the resulting economic inequities are:

1. Under the Chilean "rules of the game;' mortgages are adjusted daily, while salaries are adjusted annually and to a much lesser extent. In 1989 alone about 50,000 families lost their homes due to rising mortgage payments.

2. Unemployment reached record levels in 1982, with rates above 30 percent, and the index of extreme poverty-the percentage of the population unable to acquire the minimum subsistence "basket"-was twice the 1970 figure. Even today, more than 38 percent of families, or 44 percent of the population, remain in extreme poverty.

3. During the military regime, the foreign debt increased more than six-fold. In 1982, the Chilean state took over responsibility for paying private indebtedness incurred by banks and corporations, both national and international, operating in Chile until that time. This "nationalization of losses;' passing the burden to Chilean taxpayers, was decided by the three members of the military junta, acting unilaterally as a de facto legislature.

4. Only in 1985, after twelve years of military rule, did average income and consumption approach levels existing fifteen years earlier, in 1970. While poverty was widespread and expanding for most Chileans, a tiny elite developed habits of conspicuous and highly superfluous consumption, habits contrasting sharply with Chile's relatively austere patterns of consumption before the 1970s.

5. Living conditions for the middle class deteriorated noticeably, while that of the poor became virtually unbearable. In spite of this, the military regime reduced the maximum capital gains tax on corporations to 10 percent.

For years the authoritarian regime catered almost exclusively to big business and finance, in particular the highly integrated banking conglomerates. At the same time, it created abusive powers and privileges for the security establishment. The beneficiaries have not forgotten. Thus, it has been extremely difficult for the new democratic alliance to reverse, or even neutralize, the regressive social effects of these pro-elite policies.

Today, the elected government is tied up by "legislation" the dictatorship issued after its defeat in both the 1988 plebiscite and 1989 election. Pinochet was to remain Commander in Chief of the Army. The armed forces were given legal and de facto autonomy from civilian control. The Senate was stacked with a fictitious majority, nearly one-third of its members being Pinochet's appointees.

This constraining mechanism proved quite effective. When the newly-elected democratic government of President Patricio Aylwin attempted to raise the capital gains tax to 20 percent, the bill was quickly rejected by the Pinochet-dominated Senate. Subsequent behind the scenes negotiations led to a 15 percent ceiling. In most Western countries, such a tax is well above 30 percent.

An alliance of local "yuppies" and neo-liberal economists has helped to bring all this about. They have been the main advisors of the authoritarian regime, have dominated the executive, and have also dominated the faculty at the forcefully-reorganized universities.

The social cost of the Chilean "miracle" has been high. Aggregate statistics and survey data on that cost are as abundant as those more "optimistic" indicators of the "macroeconomic successes" of the Pinochet regime. Heinous human rights abuses can be paired with effective macroeconomic management; growing poverty for many with expanding wealth for a few; increased human insecurity with rapid modernization. Yet, over 40 percent of the electorate, well beyond those objectively benefited, still support the regime. The persistence of this authoritarian strain represents a significant problem for our democracy.

There is more, however, to the authoritarian and unbridled capitalism pursued in Chile for seventeen years than purely structural parameters indicate, a subtle but insidious "ethical cost" affecting all spheres of life but, most directly and dramatically, the professions.

Chile had a long and honorable tradition of ethical regulation and effective enforcement vested in professional associations known as "professional collegiatures" The exercise of a profession, whether law, engineering, medicine, or the like, was contingent upon membership in a professional college. At the end of the 1970s, the colleges' regulatory functions were eliminated by decree. Instead, regulation was left to "market forces:'

The most damaging of such "liberalizations" occurred in medicine. The public sector was dramatically reduced; the public health system was virtually dismantled. The immediate effects were both a prohibitive increase in the cost of medicine and a sharp decrease in accessibility for most Chileans. The drastic privatization of the national health system also entailed an extreme mercantilization of medical practice. Since the Chilean College of Physicians had been the chief enforcer of ethical standards, the liberalization of the profession, without appropriate ethics legislation, resulted in a dangerous ethical void. Since a practitioner is no longer required to be a member of the College, there is virtually no public recourse against professional malpractice. The College has not even been able to punish medical professionals, in particular psychiatrists, involved in acts of torture that security agencies performed during the dictatorship.

A similar impotence now obtains within the College of Journalists, especially in matters related to the defense of members. Members of the College who dare to expose personnel of the security apparatus have faced harassment through "military courts" and even attempts on their lives. Today, the risks are still great because of the relatively large number of former security agents integrated in "professional" networks running from the official to the underworld.

The military regime also attempted to reorganize the educational system on a mercantile basis, almost overnight. Public education has been a preoccupation of virtually all Chilean governments since the nineteenth century. In the twentieth century, liberal administrations became keenly aware of the fundamental integrative role of education in nation building, what in Chile was referred to as the "teaching mission" of the state. The dictatorship's program to "municipalize public education" accentuated discrimination between "good" and "bad" neighborhoods. Financially, it segregated rich and poor municipalities, causing a noticeable overall decline of educational standards.

Given the impoverishment of most Chilean white and blue-collar sectors, massive privatization led inevitably to elitism. This was particularly the case for higher education. It has not been overcome even by a system of `education on credit:'

With the advent of the democratically-elected government, other evidence of 'ethical dysfunction' began to emerge:

1. A British journalist investigating the clandestine manufacture and sale of prohibited weapons destined for Iraq was found hanged in his hotel room in 1989; the official version was "suicide."

2. Foreign consortia (also involved in the Iraq deal) made a shady deal for the right to establish a nuclear waste dump in northern Chile.

3. A series of scandals related to the sale of public properties culminated in 1990 with the discovery of a clandestine financial operation inside the Army and resignation of senior officers. Some observers have suggested that Chile could be an important center for laundering narco-dollars. The unusual stability of US currency in local markets over the last two years, as well as the sudden forced retirement of more than 150 agents of the Bureau of Investigations for involvement with narco-traffickers, gives some credence to this suggestion.

4. In 1990, many secret mass graves were discovered in Army-run prison camps. These presumably contained the bodies of disappeared -and officially denied-prisoners, all victims of summary execution in contravention of international law.

5. The report of the National Commission on Troth and Reconciliation, made public in March 1991, contained the gruesome details of over 2000 deaths by illegal execution, torture, or "trying to escape" at the hands of the security forces between 1973 and 1990.

What most surprised the public at large was that such things have come out. Yet, they may be just the "tip of the iceberg:' For seventeen years, Chilean courts-especially the highly politicized Supreme Court-were utterly unable, or unwilling, to stop the continuous and systematic violations of human rights. Worse, they contributed an aura of legitimacy to what the New York Times once called "the most repulsive regime in the world:"

Human rights organizations have denounced the "moral crisis" fueled by the actions of the dictatorship. Frequently, the Catholic Church has been at the forefront defending the victims of repression. But, they were-and still are-rebuffed by those involved in the repression. General Pinochet, himself a devout Catholic, angered by the mere suggestion of a crisis, replied: "There is no such moral crisis, only moralists in crisis.”

Translated by author with help of Sue Pechter and Jorge Nef