- Zach Silk is the president of Civic Ventures and a recurring cohost on the “Pitchfork Economics” podcast.
- He says that Chile represents “the tip of the proverbial spear in the fight against income inequality.” The protests there have captured the attention of elites through economic erosion and show that people will lash out when they realize they’re playing a rigged game.
- For more on this topic, listen to the latest episode of “Pitchfork Economics.”
- Visit Business Insider’s homepage for more stories.
It’s been more than five years since Civic Ventures founder Nick Hanauer made a dire prediction about global economic inequality in Politico Magazine. The piece was titled “The Pitchforks Are Coming … for Us Plutocrats,” and in it Hanauer predicted that after four decades of the poor getting poorer and the rich getting richer, it was only a matter of time before the people rose up in anger.
“You show me a highly unequal society,” Hanauer wrote, “and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
He was right: The pitchforks are here. If you have any doubt as to what this kind of inequality-fueled uprising might look like, Melissa Etehad described it in the Los Angeles Times last month: “From Chile to Sudan, Lebanon to Colombia, mounting anger and frustration over rising economic and social inequality, political corruption, and disillusionment with democratically elected and authoritarian governments have led to a wide array of mass protests in recent months.”
Each of these protests started over a seemingly modest matter. Chile’s protest began with a few dozen high school girls demonstrating against a small subway fare price hike. A tiny tax on calls to and from the popular messaging app WhatsApp kicked off nationwide turmoil in Lebanon. Iran and Ecuador saw unrest rise over slashed fuel subsidies. In Sudan, it was a one-two punch of fuel and bread subsidy reductions that inspired people to take to the streets. An uptick in the price of onions inspired mass action in India. These protests all began in urban areas and spread like wildfire. People were injured, and even killed, in clashes with law enforcement.
But it’s clear now that these uprisings aren’t just about a few dimes here and there. They’re about an ever-growing majority of the global populace that has become fed up with cost of living increases, low wages, the erosion of public trusts like health insurance and pensions, and a corrupt justice system that protects the wealthiest citizens from the consequences of their actions while penalizing the poorest citizens for smaller and smaller infractions. In Chile, a relatively small 3.75% increase in subway fare was simply the spark that started the fire.
This week on our podcast “Pitchfork Economics,” Nick Hanauer and Civic Ventures Fellow Paul Constant interview physicist César Hidalgo about the protests in Chile and what they might mean for the rest of the world. Chile represents the tip of the proverbial spear in the fight against income inequality. It’s nearly 65% more unequal than the OECD average. Perhaps that’s why the protests have been so much more consequential than in other nations: At last count, some 26 people have died, with untold thousands injured since the first actions on October 18. The chaos has caused over a billion and a half dollars in property damage, and battles with law enforcement have become commonplace.
These protests have inspired uncertainty in Chile’s economy, leading the nation’s finance minister to lower the annual economic growth for 2019 from 2% to 1.4% and lower next year’s forecast by over a full percentage point. In response, Chilean leaders are rolling out a five-and-a-half billion-dollar recovery plan to keep the economy from collapsing. The people, in other words, have captured the attention of the elites who run the nation by threatening them in the only language they understand: money.