Gabriel Boric, the former student radical who rode a wave of left-wing unrest into Chile's presidency in 2021, left office Wednesday, replaced by José Antonio Kast, a right-wing populist who secured a landslide victory last December. Boric's election was supposed to be a watershed moment for a country long held up as Latin America's free market success story; it appeared Chile was repudiating the liberal economic model that had defined it for decades. Yet the leftist project collapsed under its own weight, and the Chilean pendulum has since swung violently in the opposite direction. But Kast arrives with a different set of dangers.
The story begins in the 1970s, when Chile transitioned from socialism to free market capitalism during the murderous dictatorship of Augusto Pinochet. Under Pinochet's predecessor, the socialist President Salvador Allende, the inflation rate had reached over 600 percent, and the nation's economy had been on the verge of collapse. That origin left an indelible stain on what became one of the greatest economic success stories of the past half-century. Chile's free market reformers struck a Faustian bargain with the Pinochet regime: In exchange for looking the other way as thousands were tortured and disappeared, they were granted enormous latitude to slash regulations, cut tariffs, and privatize state-owned companies.
