Military rule in Chile (1973-1990)
Led by General Augusto Pinochet Ugarte, the military formed a ruling council to govern the country. In the years that followed the overthrow of the Allende government, Chile became an extraordinary study in contrasts and the inter-play of opposing forces and ideas. During a time when thousands of Chileans died in fighting between supporters and opponents of the military, thousands more fled the country, others were imprisoned, freedom of the press was restricted and political parties banned, the foundation was laid for the restoration of democracy and the resurgence of a free-market, growing economy.
Pinochet's government, guided by a group of Chilean economists trained at the University of Chicago under the economist Milton Friedman, stabilized and improved the economy by returning many of the state-owned industries to the private sector. The "Chicago Boys" as they were called, took strong measures to control inflation, imposing strict wage and price controls, and increasing exports of fruit, forestry and sea food. In 1980, the military government placed a new constitution before the Chilean people for approval, calling for a gradual restoration of democracy during the 1990's. By 1987, opposition political parties were allowed to operate on a limited basis, and in 1988, Pinochet's government honored the 1980 constitution and called for a plebiscite (vote by the people) to decide if Pinochet would serve an eight year term as president. The voters rejected the continuation of the military government and free elections were held in 1989 for a civilian president and a two-house legislature. Patricio Aylwin was elected president, and in 1990 the new democratically-elected government was installed and Pinochet and the military stepped aside.