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Long and narrow, Chile clings to the western edge of South America's South­ern Cone. Hugging - page 17 / 46





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Chile                                   453

phone company. But Chilean property owners, with the exception of the small, underdeveloped financial sector, were not affected and, for the most part, raised no alarm. Accelerating agrarian reform and the organization of the peasantry was the third major policy area. This immediately created fric­tion between the landed oligarchy and Unidad Popular, although for most of 1971 these tensions remained isolated.

Conflict, however, sharpened progressively from mid-1971 on, as Unidad Popular directed nationalization policy more and more toward large-scale domestic companies. In part, Unidad Popular wanted to break the economic power of the Chilean business sectors that opposed their government, be­lieving that would break their political power as well. Nationalization of ma­jor textile firms and forestry industries in May and June 1971 and the at­tempted nationalization of a leading pulp and paper firm that also published the major conservative newspaper in Chile, El Mercurio, galvanized upper-class opposition to Allende's government.

Meanwhile, an economic crisis fueled by deficit spending and falling in­vestment began to engulf Chile. This began to turn the middle class and medium and small business against Unidad Popular. Mounting labor strife and the creation of an alternative commercial distribution system for basic consumer goods to counter mounting scarcity, the Juntas de Abastecimiento Popular, further stiffened opposition by those groups.

In December 1971, confrontation over all of these pressing issues culmi­nated in the formation of a broad coalition of the middle class, medium- and small-scale businesspeople, and large-scale business groups against Unidad Popular: the Private Sector National Front. To break the back of the bour­geoisie, Allende's government responded with a nationalization policy tar­geted against the nation's most important consumer durables, food pro­cessing, pulp and paper, beverages, construction, and fishing companies. Meanwhile, the Christian Democratic party's efforts to negotiate national­ization policy with Unidad Popular finally collapsed in mid-1.972.

Class conflict mounted quickly afterward. Business staged a massive lock­out, the "Bosses' Strike" that began in August 1972. Labor countered by breaking into factories and running down inventory to keep production go­ing. A monthlong trucker's strike—clandestinely financed by the U.S. Cen­tral Intelligence Agency—broke out in October in tandem with more mas­sive lock-outs. Labor answered by organizing alternative transportation systems. After this. Conservative political parties and the Christian Demo­cratic party united in an electoral alliance, the Democratic Confederation, to sweep the March 1973 congressional elections. The plan, to gain a two-thirds majority in congress to impeach Allende, failed as Unidad Popular increased its popular vote from 36 percent to 44 percent. Electoral support for oppo­sition parties dropped from 64 percent during the 1970 presidential election to 54 percent.

These electoral results and the violent social conflict that engulfed Chile afterward, set the stage for the military's intervention. It should be added that from the very beginning the U.S. government did everything in its

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