Notes on the social market economy of Chile

• Click to share on Facebook (Opens in a new window)
• Click to share on Twitter (Opens in a new window)
• Click here to share on LinkedIn (Opens in a new window)
• Click to email a friend (Opens in a new window)

Editor's Note: Roberto Salazar Córdova was Vice Minister of Economy of Ecuador, is CEO Hexagon Latam / UK / Global, a company that develops and licenses Computer Tools with Artificial Intelligence for mediation. Salazar has a record of 25 years working in research, transparency management and international cooperation work.

(CNN Spanish) - In Chile, many think that the problem of past weeks is old and has a history, centered on the inequality of the social market economy model. Many others think that it is rather a problem of efficiency, caused by prices that are high compared to a salary that has rigidities.

Some industry captains have started with the second approach, assuming the tax costs of street orders, and adjusting upward wages - voluntarily - so that relative prices do not affect the real variables of income, employment and the investment.

Currently, people in Chile, in a country that aims to be the first developed country in Latin America, have taken to the streets peacefully to seek greater income to compensate and have looked towards those with greater income to be financed via transfers.

The business knows this demand, talks and has talked for years, always concluding that the problem of taxes is that they are saturated.

• Piñera announced that two international summits are suspended for protests in Chile

The signal, therefore, in which communes and companies agree, is that work must be done to reform the rigidities of wages. Interestingly, both agree equally that we must also lower taxes, and not just let them float free to wages (as prices of goods and services float free). Apparently the observed march is not anti-liberal. It seems to be rather liberal.

In the debate, the position has stagnated with the position of the socialist and even communist parties, which in their interventions have doubted that Chile needs to remove rigidities in labor contracts so that it can be hired for hours.

This issue is under debate, but it is generally accepted that it will open spaces to create jobs. Something in which there is consensus is that it is necessary to legalize the platforms that give employment, so that based on productivity, it will be high based on productive hours worked with machine (motor) and equipment (telephone). There are flexible jobs there. On the other hand, social protection is requested for these workers.

• Chile: how did we get here, what has happened so far and what's next?

Another consensus that has been observed in recent days is that Chile must remove excessive tax burdens for small businesses so that they can generate greater returns. Communists and capitalists, citizens, businessmen and authorities, agree that the market control entity must be polished so that there is more competition.

In the street it is also agreed that the problem is, in many cases, the State. There will be a lot of dialogue in the councils. Personally, I believe that public spending of zero impact should be lowered and state spending that creates opportunities should be increased.

Another of the notes that I have taken in the days of protests is that it is required to release the credit and allow more international competition to lower rates, allowing banks to enter the “retail” and reduce the weight of the cost of credit, favoring the consumption that people are looking for today, "so that no one can think of opting to plunder." These are phrases that are heard and resonate.

In this regard, research by the academy shows that we must give more and more momentum to the investment of those who have education and ideas, but do not have access to a capital market because it is imperfect and full of regulations.

It is interesting to note that an open path for Chile towards the future and development, in which there is consensus in regional forums and in diverse spaces of public, private, communities, academia, media and international organizations, it is that the free access to foreign technological investors must be decompressed for their association with local investors, from developing communities, according to training and training programs financed by the same investors.

• Is Chilean capitalism in the chair of the accused?

Along these lines, several forums have started in the weekend after the closing of the "curfew": based on dialogues made with society as a whole, not so much with the parties, nor through the ministries.

Perhaps the dialogue continues these days with the mayors, who have debated whether they are transferred to state competition and some fiscal decentralization is done.

Libertarians believe that the proposed solutions must be destabilized and families free from the yoke of the public sector, so that it is possible to be free and to consume whatever reaches the home with their free work.

Listening to the voices shows that in Chile we need a mode of production where we have free time to enjoy the well-being of family leisure, removing stress and being able to re-create instead of always having to do accounts. In that kind of country we want to live.

It would seem that the consensus is that it is the free country that we must recover. "I want real freedom to do my projects and I want equal opportunities for my children to do theirs," said a parent in a line to shop at the supermarket.

Parents and their children have marched to be what they want to be, and they, like the children of any other family, want something simple: go to work or start in a reliable country where one, at the end of the day, can also Have fun and have leisure.

Protests in Chile