[Marxism] WSJ wants to know: Will Chile's President Flunk the Test?

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

June 9, 2006     
THE AMERICAS

Will Chile's President Flunk the Test?

By MARY ANASTASIA O'GRADY 
June 9, 2006; Page A15
WALL STREET JOURNAL

When Chilean President Michelle Bachelet met with George W. Bush
yesterday in Washington, she appeared the picture of self-possession.

Back home, the nation is not nearly so composed. For the past three
weeks a nationwide "strike" to protest inferior public schools by
more than 600,000 students shut down the country's government-run
secondary education system. Students laid siege to hundreds of
schools and marched in the streets, throwing rocks and committing
vandalism. Yesterday they returned to class but the issue is not yet
resolved.

On the domestic front, Chile is coming to terms with the myth of the
Socialists' "third way," the idea that a liberalized open economy can
function perfectly well alongside the atavistic structures of
status-quo statism, embodied here in the public schools. At some
point the two were bound to clash.

On the international front, despite the weak role it has so far
played in the global war on terror and in the Organization of
American States, Chile is the regional model for democracy and could
be a key actor in the multilateral effort to contain the ambitious
Venezuelan President Hugo Chávez. Ms. Bachelet's handling of the
crisis will not only affect her ability to govern Chile. It also
could pull Chilean foreign policy further to the left.

Last week Ms. Bachelet tried to diffuse the strike with a nationally
televised address proposing $200 million more in school funding
through next year. Student leaders rejected that offer. On Monday,
the violence worsened when a former communist guerrilla group, the
Manuel Rodriguez Patriotic Front (FPMR), mobilized labor militants,
members of the education bureaucracy and university students to join
the fun. The demonstrators ransacked neighborhoods and tried to
barricade a central boulevard with burning tires. On Tuesday, the
students occupied a United Nations office in Santiago.

It is critical to separate the students' fundamental gripe from the
radicalism of Chile's ultra left, which seeks to destabilize
democracy itself. The students' central complaint -- that public
schools are shoddy -- has a certain validity in the eyes of many
law-abiding Chileans and even the conservative Catholic Church.
Unfortunately, Ms. Bachelet's proposal to throw money at the problem
doesn't inspire confidence in a solution.

In 1982, Chile introduced a voucher system that allows children to
use government funds to attend either public or private schools. The
voucher system seeks to improve the quality of education by creating
competition for students. Among private-school students, it has
worked; test scores are up. But public schools remain disappointing.

The problem is that rather than a full-fledged voucher system, Chile
has a quasi-voucher program that distorts the choice and competition
effects of vouchers by subsidizing public schools directly. The
rationale for the subsidy is fine: Since the cost of educating a poor
child is higher than a middle-class child, extra funding is needed to
support poor children. But unfortunately, that extra funding does not
go into the hands of the student as a tool for choice. Instead, it
goes directly to the public schools that the poor children attend. If
a poor student wants to go to a private school, he cannot take the
subsidy with him.

Claudio Sapelli, a Chicago-trained economist at the Catholic
University in Santiago, has studied the distortions of the
quasi-voucher system and written a chapter in the book "What America
Can Learn From School Choice In Other Countries," (Cato Institute,
2005). On the subject of the "non-portable" funding, he wrote,
"schools receive it in the form of supply subsidies, which merely
accentuates the dependence of poor students on public schools." In
other words, in the absence of making the subsidy portable, neither
choice nor competition have had a chance to emerge.

The trouble for Chilean politicians is that the government
bureaucracy and teachers' unions are powerful special interests. So
although a more competitive system is needed, the incentive to feed
the monster bureaucracy may be greater.

Meanwhile, the dust-up could have other repercussions. To counter the
charge that she caved in to violence, Ms. Bachelet has pledged that
there will be no further financial concessions. But there are other
ways to compensate her left flank.

That's where the international worry comes in. In October, Latin
American countries will decide whether it will be Venezuela or
Guatemala that wins the next opening for a non-permanent Latin
America seat on the U.N. Security Council. The leftist government of
Argentina, which has repeatedly used anti-Americanism to strengthen
its hand at home, has already said it will vote for Venezuela. Given
Hugo's close alliance with the mullahs, this is a vote for Iran.

How did Argentina, once an upstanding member of the international
community, morph into a sympathizer for the axis of evil? Partly it
has been influenced by the terrorist background of key members and
advisers of the current government, who were involved with the
Argentine equivalent of the FPMR in the 1970s. But Argentine foreign
policy has also been shaped by orchestrated street violence.
President Nestor Kirchner has found that to placate thugs and shore
up his base at home, nothing is as gratifying as carrying water for
Hugo.

No one expects Chile to sink to Argentine lows. But remember that the
most terrifying violence in this "strike" occurred when union members
of the education bureaucracy took to the streets with the FPMR; their
modus operandi is clear.

On the U.N. vote Ms. Bachelet will feel pressure from these Chilean
extremists, along with neighboring Argentina and friends like Fidel
Castro and Mr. Chávez who know something about exporting organized
violence. Let's hope that fear or political expediency do not drive
her decision. That would be a tragedy for regional stability and for
Chile's global prestige.


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