Chile is rewriting its constitution. Americans should pay attention.
Unlike America, Chile is trying to fix the problems
Chile has a new president-elect: Gabriel Boric, a scruffy 35-year-old who looks like any of about a hundred leftist podcasters. The country is also in the process of writing a new constitution, thanks to a referendum that passed by an eye-popping 4-1 margin. A prime focus of the new government will be what to do with its enormous reserves of lithium, even as the departing president continues to sell off leases to extract it.
Meanwhile, the American Supreme Court recently struck down President Biden's coronavirus vaccine mandate in part because COVID-19 "is not an occupational hazard in most" workplaces. Chile is blazing a totally new political trail in the process of tackling the most urgent problem facing humanity, while the American government is a mummified hulk unable to carry out elementary acts of self-protection.
Climate policy, the relationship of the people to their government, the ownership of national resources — these questions and more are being decided right now by the Chilean people. It's a time of danger and opportunity for Chile, and a lesson for the United States that national institutions can be changed at will.
Let me start with some background. Both Boric's election and the new constitution are rooted in a giant outbreak of political unrest that began back in 2019. As Lili Loofbourow explained at Slate at the time, this was due to a confluence of factors: extreme inequality, rampant corruption, high debt, and rent burdens, and perhaps most importantly, a political system that was virtually non-responsive to the popular will. Prior to 2019, voter turnout was pitiful, and only about one-fifth of the population was affiliated with a political party.
This was intentional. The old constitution was written under the military dictatorship of Augusto Pinochet in 1980 (after seizing power, with American help, in 1973), and approved through a referendum of dubious legitimacy. In its original incarnation, it was highly anti-democratic: It had two chambers of the legislature, extremely unequal representation between districts, a military veto over certain policy matters, and other structures intended to prevent voters from having much influence over policy, especially taxation and welfare.
Aside from the typical dictator instincts, these structures of economic authoritarianism came from Pinochet's American advisers. He invited a bunch of neoliberal economists from the University of Chicago (often called the "Chicago boys") to use Chile as a sandbox for their utopian theories. They were very upfront about their preferences. "Personally, I prefer a liberal dictator to democratic government lacking in liberalism," the economist Friedrich von Hayek told a Chilean newspaper at the time (with "liberal" meaning "neoliberal" in a current context).
A central tenet of neoliberalism is that property should be protected from democracy — that it should be illegal, if at all possible, to expropriate the rich or even tax them much. This kind of thinking is naturally highly attractive to the wealthy, like Pinochet's backers and the dictator himself, who accumulated a huge hoard of wealth while in power. Thus all the numerous obstacles to taxing and spending, and thus Chile's enormous inequality today.
At any rate, while the constitution has been amended numerous times over the years to remove these structures, it still created an ossified and corrupt political class. Soon enough, a classic brushfire social rebellion got started thanks to a modest subway fare increase that was simply one imposition too many. Two years of mass protests, strikes, and organizing later, and Chile's got a fresh new president and is in the process of writing a new constitution.
But what is Chile's upcoming new government going to do with its power? A new constitution is all well and good, but there will still be difficult policy decisions to consolidate a prosperous egalitarian system.
That brings me to lithium. As Somini Sengupta writes at The New York Times, Chile has the second-largest proven lithium reserves in the world (behind Australia), and what should be done with them is a central question for the constitutional drafters. These are both a promise and a danger. On the one hand, they will be fantastically lucrative to develop, and the world very badly needs lithium to produce the necessary batteries to power the transition away from fossil fuels. On the other hand, international mining corporations will swipe all the money if they possibly can, the process of extraction can be environmentally toxic, and if the Chilean economy becomes dependent on lithium profits, it will be harmed by its inevitable wild gyrations in price.
The example of what Norway did with oil is an instructive model to follow. When that country found huge reserves in the North Sea, the first thing it did was declare them the property of the Norwegian state and people. They then hired an outside firm to teach their state-owned oil company how to build an ocean drilling platform, and proceeded to carry out drilling in-house, rather than hiring a contractor to do it. Then, when the money started rolling in, Norway invested it rather than spending it outright.
Today, the Norwegian government owns three-quarters of its national wealth outside of owner-occupied homes, and a staggering 1.4 percent of all the stock market equities in the world, in trust funds that are the collective property of all Norwegians. This also prevented the oil money from giving Norway the economic "Dutch disease" or becoming too dependent on the price gyrations of a single commodity — as Venezuela learned in 2014 to its chagrin.
If a lithium company was similarly set up as part of a Chilean national fund, it would be only natural to mine it slowly and carefully so that environmental damage is minimized and the reserves are not tapped out too quickly. A private company will logically tend to skimp on protections, pillage the land, and leave behind a polluted wasteland, but if profits are only one objective among several, a state-owned firm could take its time and keep degradation to a minimum. Fundamentally, if the Norwegian government can operate oil rigs in about the most difficult location imaginable, then Chile should be able to mine its own lithium.
In any case, from an American vantage point, this is all frankly staggering. The U.S. Constitution is so entrenched as a part of national culture and identity that it is practically a fetish object. No other country has our kind of quasi-theological legal culture, where various factions try to achieve political outcomes by installing their partisans on the bench and dreaming up tortured readings of constitutional provisions.
At present, it's impossible to imagine a referendum to draft a new constitution passing at all, let alone by anything close to Chile's 4-1 margin. It's similarly impossible to imagine using any of America's vast natural resources to set up a social wealth fund that might distribute some of the profits currently hoarded by the billionaire class to all the people.
To be fair, Chile's constitution was tainted by its association with a brutal, mass-murdering and -torturing dictator, and so it was relatively easy to convince Chileans to ditch it. But for an American, this only underlines the importance of imagination and organization in politics. The American Constitution is objectively just as bad as the Pinochet-era Chilean one, if not worse, and for basically the same reasons. It was deliberately designed to insulate political power from voters, its basic structure is wildly unfair and easily a century out of date, and for complex reasons, it has gotten even worse over time.
Chile is not the only country in the western hemisphere where the political system has frozen into an ossified, dysfunctional mess. But it turns out a constitution, no matter how old, is just some words on a page. If enough people demand a new one, it can be done. After all, it's how we got our current Constitution in the first place. No time like the present to start asking.