'Neoliberalism never left': Why far-right victory in Chile revives ghost of Pinochet

Washington, DC – In a stunning electoral upset that has scrambled assumptions about Chile’s political direction, Jose Antonio Kast has swept to the presidency with 58.1 per cent of the vote, completing a comeback that few would have predicted after his defeat four years ago.

The ultra-conservative leader defeated Communist Party candidate Jeannette Jara in a race dominated by concerns over crime, migration, and an economy that has failed to deliver rising living standards to much of the population.

Kast’s victory makes him the first far-right president since the end of Augusto Pinochet’s dictatorship in 1990, reviving a political current many Chileans believed had been buried by history.

At the heart of the result sits a deeper contradiction.

Chileans took to the streets in 2019 in their millions to protest an economic model born under military rule, one built on privatisation, deregulation, and limited state intervention.

Yet they have now elected a president who openly champions that same market-first philosophy.

For Patricio Navia, noted Chilean political scientist who teaches at New York University, the outcome is less a vote for ideology than a verdict on performance.

“The most likely reason for Kast’s victory this year is that people were discontent with the reforms implemented by Boric and the results of those reforms,” Navia told TRT World.

“Chileans have been for a long time expressing their discontent with the fact that the economic model is not producing growth and opportunities for all. They don’t want a different economic model. They want the market-friendly economic model to work well for them.”

Kast, who lost to Gabriel Boric in 2021, framed his campaign around restoring order and reigniting growth.

He has pledged tax cuts, deregulation, and incentives for foreign investment, promising to “unleash the private sector’s potential” while operating within democratic institutions.

That message resonated with voters frustrated by slow growth, high inflation, and a sense that Boric’s reform agenda had stalled.

Chile’s economy grew 1.6 percent year on year in the third quarter of 2025, driven by domestic demand, but contracted slightly quarter on quarter. For many households, the macro figures have offered little comfort.

Navia argues that Kast’s win reflects a demand for adjustment rather than rupture.

“Kast won because Chileans want change. They don’t want radical change, but they want a market-friendly change,” he said.

“The losing candidate, Jeannette Jara, is a member of the Communist Party. Chileans want change, but not that kind of change.”

To understand why this argument still carries weight, it helps to return to the origins of Chile’s economic model.

In the 1950s and 1960s, amid Cold War competition in Latin America, the United States backed an academic exchange between the world-renowned University of Chicago and Santiago’s Pontificia Universidad Catolica, one of South America’s most prestigious universities.

Young Chilean economists trained under leading figures in monetarist economics, Milton Friedman and Arnold Harberger, returned home steeped in free-market doctrine.

Coup and overhaul

Their moment came after the 1973 coup that overthrew socialist president Salvador Allende.

Under Pinochet, the so-called Chicago Boys were handed extraordinary power. They slashed tariffs, privatised state companies, deregulated finance, and shrank the role of the state.

The early years were punishing, with unemployment hitting around 30 per cent during the debt crisis of the early 1980s. Over time, however, Chile stabilised and then surged ahead of its neighbours.

By the 1990s, Chile was being hailed as Latin America’s star performer.

Poverty fell sharply, GDP per capita climbed, and successive centre-left governments kept the core of the model intact while expanding social programmes at the margins.

Yet inequality remained stubbornly high, and key services, from pensions to education, stayed largely in private hands.

Those tensions exploded in October 2019, when a small rise in Santiago metro fares triggered nationwide protests.

Demonstrators denounced low pensions, expensive healthcare, and a system they said forced families into debt to survive.

The unrest shattered Chile’s image of stability and eventually led to a failed effort to replace the Pinochet-era constitution.

External forces loom

Despite his rhetoric, Boric never dismantled the neoliberal framework.

Navia is blunt about the continuity. “Chile is very neoliberal now. The status quo is neoliberalism,” he said.

“Although President Boric promised to bury neoliberalism, neoliberalism has survived Boric. Pensions are privatised. Highways are privately operated. Most children go to privately-owned and publicly subsidised schools.”

From this perspective, Kast does not represent a return to neoliberalism because it never left in the first place. “Kast doesn’t need to bring neoliberalism back. He needs to make it work better for everyone,” Navia added.

“The protests in 2019 exposed the limitations of neoliberalism. But Chileans believe that improving neoliberalism is a better recipe than trying to impose a state-centred economic model.”

Jenaro Abraham, a political scientist at Gonzaga University in Washington state, who has a large body of academic work on Latin America, agrees that Chile never truly broke with the Pinochet-era model, but he places greater emphasis on external power and structural constraint.

Abraham told TRT World that compared to much of Latin America, “Chile remains one of the countries where a disproportionate share of social responsibilities is offloaded onto the market.”

Abraham argues that Boric was blamed for economic anxieties rooted in a system he lacked the power to transform. He also situates Chile’s neoliberalism within a global hierarchy.

“More broadly, neoliberalism in Chile cannot be understood as a purely domestic ideological choice,” he said.

“It has historically been imposed through coercive relationships with the Global North — most clearly during the Pinochet dictatorship, in close alignment with US interests and the Chicago Boys.”

Kast faces challenges

That legacy, Abraham warns, limits how far any elected government can stray.

While aggressive market policies can function in the short term, he says they tend to deepen inequality and social fragility. Credit fills the gaps left by a weak welfare state, until even small shocks provoke unrest, as Chile saw in 2019.

Kast now inherits a country more democratic, more vocal, and more polarised than the one the Chicago Boys reshaped half a century ago. His immediate focus is likely to be security and migration, but the larger test will be economic.

“The country has grown little for 10 years,” Navia said. “Without economic growth, the neoliberal model will be the culprit for people’s discontent.”

Whether Chile once again becomes a regional example or a cautionary tale remains an open question.

For Abraham, the signal is double-edged.

“Rather than signalling a durable solution to regional crises, Chile’s rightward turn underscores the contestation embedded in neoliberal governance across the hemisphere.”