Thatcher’s Dirty Little Secret

Thatcher is lionised as a champion of freedom and democracy. So why did she support a tyrant?

The burial yesterday of Baroness Thatcher has given politicos an excuse to trawl back through her time in office with the expressed purpose of petty point scoring. This is all the more vital as Parliament is in recess and the wretched souls are getting withdrawal symptoms. And there’s one part of Thatcher’s past that might just give you pause for thought.

It turns out that the great champion of freedom and democracy had a very cosy understanding with South American military dictator; General Augusto Pinochet of Chile.

Oh course Pinochet wasn’t the only dictator Western Powers cut deals with. It was the Cold War and the West were willing turn a blind eye to most regimes provided they were sufficiently anti-communist and left our business alone. But Pinochet is significant in two ways; firstly the Falklands, and secondly his legacy.


A quick glance at the map will tell you why Chile mattered in 1982. Although Chile and Argentina’s respective junta’s shared a hatred of the Soviets and their commie allies in Latin America (even going as far as helping each other hunt down the others Pinochet looking like a bosstrouble makers) they were geopolitical rivals. Thus although Chile was officially neutral during the Falklands War, it was a distinctly pro-British neutrality, a fact admitted by none other than Margaret Thatcher and Chilean junta and air force member (Ferndndo Matthei) themselves. Chile’s Westinghouse long range radar gave the vulnerable British armada early warning of Argentinean air attacks. So vital was this, that on the day the radar down for overdue maintenance, Argentinean fighter-bombers struck the troopships Sir Galahad and Sir Tristram, killing 53. Chilean support included intelligence sharing, allowing British aircraft to operate with Chilean colours, and facilitating the safe return of British special forces.

For this, Pinochet deserves the gratitude of the British people.

However it is Pinochet’s domestic legacy for which we should be most interested, for Pinochet, to some extent, established the model China and Russia are adopting today; economic liberialisation but without political freedom. This of course sounds counterintuitive as we’ve been brought up on the idea that the two go hand in hand; economic freedom breeds a latent middle class, which in turn breeds the institutes needed for a stable democracy, namely a free press, independent courts, trade unions, and mulitiparty democracy. Yet none of those things existed in Chile under Pinochet, but his economic record is superb.

Pinochet saved a country reeling from 1000% inflation, with an empty treasury, cut off from financial markets, and where hundreds of businesses had been appropriated by the State. Pinochet declared that he wanted “to make Chile not a nation of proletarians, but a nation of proprietors.”

Under Pinochet, businesses recovered most of their lost industrial and agricultural holdings, as the junta returned properties to original owners, and sold other industries expropriated by Allende’s Popular Unity government to private buyers. This period saw a huge expansion in investment as Chile became once again open for business. Financial conglomerates became major beneficiaries of Pinochet’s reforms. Large foreign banks reinstated the credit cycle, as the Junta resumed payment of and interest instalments. International lending organisations such as the World Bank, the IMF, and the Inter-American Development Bank once again felt confident in lending to Chile. Foreign multinational corporations expropriated by the ousted Allende government, returned to Chile.

To the dismay of the current batch of Leftist demagogues in South America, Pinochet introduced the free-market policies that produced the Chilean economic miracle — reforms that not even Allende’s socialist successors have dared reverse. Pinochet left behind the most successful country in Latin America. In the past 20 years Chile’s economy has grown at twice the regional average, and its poverty rate has halved.

It is also worth noting here that despite attempts to caricature Pinochet as just another blood thirsty tyrant in a garish uniform, the general defied convention and the temptations of power, and held a referendumPinochet and the Pope on his rule. On 5 October 1988, 55.99%of voters asked Pinochet to step down, which he dutifully did, with presidential and legislative elections the following year. Nearly half wanted him to stay on.


Compare this to Cuba, an economically ruined and freedomless country. Like Pinochet, Castro also killed and exiled thousands. But even when it became obvious that his communist economic system had impoverished his country, he refused to abandon that system: Cuba is now reversing a partial liberalization effort. To this day, Cuba imprisons or persecutes anyone who suggested Cubans could benefit from freedom of speech or the right to vote.



Pinochet was a friend of Britain, the West, and Free Marketeers everywhere. Like all friends he had his flaws, but Chile and the world are better because of him.


  1. Good article that nicely illustrates the complexities of foreign policy. It shows how we sometimes have to deal with less-than-savoury characters in the furtherance of our national interest and also how sometimes these regimes, while not exactly tasteful, do sometimes create positive results. I never realised that he actually held a referendum on whether to remain “The Leader” and then actually accepted the results – something that makes him more democratic than the European Union.

    Quick point re the Sir Galahad and the Sir Tristram – although the lack of Chilean early warning radar was a factor, the limitations of the Task Force’s Sea Harriers was also a key factor in the sinking, along with the tactics used by the Argentine pilots and the failure to provide adequate protection for those ships.

    The Chileans could tell us what was coming, but not necessarily what the target was, and for that we had to rely on the radars of the various warships in the area. Unfortunately these were hampered by the terrain around the various landing areas. The Argentine pilots would fly at extreme low-level through the hills, effectively hidden from radar, until the last moment when they would come over the top to make their attack, and only then could the fighter controllers aboard the ships then direct the Sea Harriers to engage them. The only way to effectively defend against aircraft flying that kind of attack is to have an airborne radar that could ‘look-down’ on the area, but unfortunately at the time the Navy had no airborne early warning assets to do this and relied on ships to prove early warning and direct the intercepting Sea Harriers until they could use their own radar. The Sea Harriers themselves suffered from a radar that was not very reliable in a ‘look-down’ engagement over land and would frequently be cluttered with returns from the ground. The Sea Harrier was also limited in the amount of time it could spend in the area due to a lack of fuel, hampered by a desire by the Task Force Commanders to keep Hermes and Invincible away from the Argentine aircraft. On top of all that, the two landing ships were sent into Bluff Cove without any escort, as most of the available warships were in San Carlos Water protecting the main landings. In the event, the Argentine A-4s were able to get through and hit the ships, although they were caught on the way out by a pair of Sea Harriers who shot down three of the attacking aircraft and severely damaged a fourth.

    Had the Navy possessed an airborne early warning capability the Argentine A-4s would have been seen and intercepted well before they got to Bluff Cove, but we lost that capability when the Ark Royal had been scrapped in 1978. Of course, if we still had that capability it is doubtful whether the Argentines would have invaded the Falklands in the first place…

  2. How can a libertarian brush over Pinochet’s repressive regime as “flaws”? He was a brutal murderer and no freedom lover should defend him just because he was “less bad” than Castro.

    • Thanks for your comments Daniel.

      For me, Libertarianism does not extend to imposing my moral values on another person or government. That can and should extend to the state level too.


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