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Expansion of the Trans-Pacific Partnership (CPTPP): Impact on Chile

Some countries are truly bent on free international trade. Chile is one of them.On March 9, 2018, Chile signed the expanded and renewed TPP agreement, also called CPTPP—the acronym for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The original TPP agreement hammered out in 2016 had to be replaced by the CPTPP after the United States pulled out of the accord. The American government had demanded tariff protection for twenty-two of its key industries, a notion which the Trump administration would have only made more repugnant.

The other nations could not agree with the terms sought by the Land of the Free. That is because TPP—and now CPTPP—are quite simple agreements. Most tariffs, duties, value added taxes are eliminated immediately between member countries. Most related regulations are, too—although a few irksome ones are still included. However, the CPTPP is not a Behemoth document like NAFTA. It is, instead, rather simple.

The main complications in 2018 were found in that some countries will phase-in most tariff and tax reductions over four years, instead of immediately, with a few being phased-in over ten to fifteen years. As far as I could tell, Chile only phased-in tariff elimination for iron and steel products over a few years. Tariffs and VAT for nearly all items were eliminated on March 9, 2018, and a few other countries followed suit. Overall, considerable immediate relief is good, and waiting a few years for most of the rest to come into play is not too bad.

Since the participating country list is now longer, Chilean consumers will benefit from lower prices. Chile’s tariffs were already low, 6% across the board for new goods and 9% for used ones. Since 2005, Chile had connected with New Zealand, Brunei and Singapore to eliminate all trade barriers (i.e., import duties, value added taxes, and onerous import/export regulations) between them via the original TPP treaty. Chile already has separate free trade agreements with the United States and the European Union.

Now, in 2018, the list of CPTPP participating countries has expanded to eleven: with Canada, Australia, Malaysia, Vietnam, Japan, Mexico and Peru now included—representing a total population of 516.7 million people and featuring eight OECD-members or otherwise developed small countries. Moreover, Taiwan, the Philippines, Colombia, Thailand, Laos, Indonesia, Cambodia, Bangladesh, South Korea, India and Sri Lanka have all expressed interest in joining CPTPP—which would bring the total number of countries to twenty-two—representing a total population of 2.6 billion people and featuring ten OECD-members or otherwise developed small countries. Thus, CPTPP is already a big nearly-free market and will probably get much larger.

Businesses also benefit from facilitated trade between these countries, no matter in which of the countries their headquarters is located. Furthermore, CPTPP features a mechanism whereby investors or companies have the right to sue foreign governments for treaty violations. CPTPP also significantly paves the way for pharmaceutical development and distribution among its members, likely providing great access to better healthcare for member countries and lower cost.

The least attractive parts of the CPTPP are its imposition of environmental standards imposed by radical ecologists (which most of the signatories were already doing anyway) and strict human rights rules, including damaging child labor laws. Both of those things will tend to increase poverty and dampen economic growth. Stricter intellectual property rights provisions will be applied as well. Nevertheless, albeit the CPTPP is pretty far from strict libertarianism, it is overall a libertarian-favored policy that should bring many benefits to people living in member countries, like Chile.

John Cobin, Ph.D. Twitter

Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

A Grateful Immigrant

Some people are surprised to learn that not only did I immigrate to Chile, but I also renounced my American citizenship after I became a Chilean. Indeed, I prefer freedom, and with all its faults Chile is an even freer place than the United States of America. I do not mean to say that the Chilean state is good or without its faults; not at all. I am a libertarian and according to my experience, the theoretical framework of my Worldview, and the empirical results that I have seen many scholars come up with: all States are vile.

In Chile there is no justice, there is crime; it is a lying, dishonest, deceitful and distrustful society with an odious bureaucracy that is coupled with annoying hassles and hurdles to get anything done. People tend to be overtly selfish, especially when driving or shopping. A large percentage of professionals and tradesmen seem to be incompetent. The Marxist minority is disgusting and irksome. These things are annoying. However, there are dozens of excellent reasons to be in Chile: beautiful landscapes, good medical care, low taxes, privatization of pensions and former state-run enterprises, affordable housing (in Chilean First World places), the best anti-seismic construction in the world, good food, a large number of libertarians, little political correctness, scant radical ecology or radical feminist policies, a strong family focus, strong opposition to abortion, etc.

I left the U.S.A. and I eliminated my citizenship because I did not want to be linked with that state and I adopted the considerably less malignant Chilean one. I am certainly more optimistic about the future of Chile than that of North America. Chile is my homeland now and I am working to make it even more libertarian.

What do I think about the old country? Not much; I do not feel any moral obligation to liberate the U.S.A. from its evil, nor raise funds from here to free its serfs from their regulatory, tax and politcally-correct slavery. Am I a degenerate or indolent for not caring about fixing the big mess up yonder? I do not think so. Instead, I recommend that North Americans (and Europeans) come to Chile.

For me, life is clearly a struggle between good and evil, in general trying to help others be a little freer, even though my main desire is for Chile to move towards greater liberty. Such freedom is a strong magnet that will automatically attract oppressed immigrants—similar to Hong Kong in the Twentieth Century. My idea is not original, since during the Nineteenth Century and the first decades of the Twentieth, Valparaíso, Chile fulfilled that magnetic function. I want Valparaíso to regain that virtue during the Twenty-First Century so that, once again, the world’s oppressed, poor, ignorant and persecuted will reach its shores alon with the rest of the country.

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I am a grateful immigrant because Chile welcomed me on March of 1996 when I was thrity-three years old—without a job, with less than USD$10,000 in savings, with five children under eight years old (and another one to be born that July), and without being able to speak much Spanish. We all had a temporary visas when we arrived, obtained before boarding the plane, but nothing else of significant earthly value besides courage, resourcefulness, dedication and diligence.

In addition, I have been rather serious about promoting Chile to others. Since 2006, I have publicized and “sold” the country to many Americans (and several Europeans), with many of them having come down to stay (a few in conditions similar mine in 1996). Now, most of these folks speak, more or less, in Spanish. Many of them work here and are applying for Chilean nationality. I am happy for them and I hope they serve as great blessings for Chile.

With the help of some fabulous individuals (i.e., Chicago boys or, in one case, a UCLA boy) who trusted me and hired me even though I spoke Spanish poorly, boosted my career growth and later facilitated the development of some projects in Chile. I would be remiss not to mention and thank, in a special way, Álvaro Vial, who even signed up to be my personal guarantor, allowing to lease my first home in 1997, as well as Harald Beyer, Cristian Laurroulet, and later (in 2008) Francisco Labbé, among others.

In mentioning these fine men, I am not implying that I got work on account of favoritism. For instance, to get my first full time job in Chile I had to pass a “test” before being hired by the Finis Terra University. It consisted in me teaching a semester-long course (in English) about free market and public policy topics, for authorities and professors of the university. Thus, I earned the job based on my merits. I am infinitely grateful for the opportunity they gave me. Also, nobody claimed that I was going to take away the work of a Chilean that might have otherwise gotten my university post. Its authorities, with the exception of Adelio Pipino, were pro-immigrant.

Now, I want to help other immigrants as others have helped me—especially considering the great influx of immigrants that has arrived since 2015. Accordingly, I am especially happy to see Baptists (of which I am one) working with Haitian immigrants to learn Spanish and the Bible. I am libertarian in word and deed, and there is no man more naturally libertarian than a Baptist.

Unlike other Chileans who disdain immigrants, how could I be anti-immigrant after having such a good reception in Chile? I have been settled in the country for the better part of twenty-two years, working, paying taxes, participating in politics and active in church, writing 1,505 letters to the editor, hundreds of blog entries pertaining to Chile, and have been the subject of many press interviews. My language skills still leave something tp be desired. Yet, I was relatively comfortable writing this article in Spanish (having had people who helped me correct mistakes), before putting it into English. Another issue: note that my second daughter (Rachel) was born here, in Quilpué, on July 7, 1996 and is a Chilean citizen, too. I have another son who opted for nationality as well. For so many reasons, I have always felt welcome to Chile.

Álvaro Vial and Héctor Hevia (among others) told me that when they went to study at the universities of Chicago and Western Michigan, respectively, they were surprised by how well the gringos received them, willing to help and show kindness to an unknown foreigner. I must agree that the generosity and volunteerism of Americans is unparalleled in the world. (It is, after all, a country made up of once persecuted, oppressed and poor ignorant immigrants or their descendants, right?)

Upon seeing me in 1996, they told me that they were goig to take the opportunity to return the favor of what they had received in America by being generous and helpful to me, without expecting anything in return. At other times, different men helped me, too, especially in 2008 and 2015-2016. It is worth mentioning that Pablo Baraona, Hermógenes Pérez de Arce and super-libertario Álvaro Bardón nearly became my fans by helping me become yet another emblematic (or enigmatic?) Chilean libertarian who believed in the economic policies they envoked under Pinochet, and who showed his preference to live in these furthest confines of the world instead of the “fabulous” United States. I’m grateful for them too.

Blurb in <i>La Estrella</i> (The Star) of Valparaíso in January 1996 alerting people to the fact that the "<i>gringo loco</i>" was going to arrive.jpg

They put this notice for me at La Estrella in Valparaíso (January 1996). Mrs. Marta Ramírez (another fabulous person) answered and leased us a country house in Lo Hidalgo, between Limache and Villa Alemana. I am grateful again because he was interested in my case. From there, I launched my life in Chile. It has not been easy, but I have shown that you can achieve success as an immigrant in Chile.

Having considered the main provisions of the bill championed by President Piñera (April 2018) to modify Chilean immigration legislation, I think it will cause more distortions than solutions. Would it not be better to privatize the border? In what sense am I different from the Haitian immigrant so frequently despised today? My skin is white, my eyes are greenish, and my university and postgraduate education (coupled with my professional career) is far better than theirs. Are those the reasons why I was preferred? The differences I have with immigrants from Argentina, Colombia and Venezuela are relatively minor compared to the massive ones I have with Haitians—except that those folks already speak Spanish as their first language, unlike my unpolished drivel—wherein they beat me hands-down. All of that evidence leads me to believe that there is an immigrant prototype that the Chilean government under Piñera likes.

At any rate, I have empathy for the immigrants who have been coming to Chile since 2015. I hope that Chile is beneficial to them, and that they will consider becoming part of our pro-life libertarian political party (and perhaps ponder becoming Baptists, too!). Normally those who have fled oppression and social malice, having been persecuted by the Left, come to their new homeland willing to oppose the slavish, often violent and bloodthristy Left that beleaguered it. Just how beneficial would attracting so many new adherents that detest the Left be for the libertarian Right?

This article was published (in Spanish) by the popular, left-wing Chilean magazine The Clinic, on April 13, 2018.

Haz click aquí para ver la versión en español de este artículo.

John Cobin, Ph.D. Twitter

Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

New Pro-Life Libertarian Party in Chile / Nuevo Partido Político Libertario Chileno a Favor de la Vida

Chile has many classical liberals or libertarians that are pro-life who have now formed their own political party: the Independence Party. Chile tiene muchos liberales clásicos o libertarios que están a favor de la vida, y ya han formado su propio partido político: el Partido Independencia.

This article is written in both English and Spanish. The idea is (1) to inform English speakers of an important new political movement in Chile and also (2) to help attract people in Chile to participate. If you are a citizen or permanent resident of Chile, and you agree with the platform (whether or not you speak Spanish), please sign the Party’s online form to join with us and show your support!

Español abajo.

English

Declaration of Principles of the Independence Party

Preliminary Statement: In accordance with Article 5 of Law No. 18,603, the Independence Party expresses its commitment to the strengthening of democracy and respect, the guarantee and promotion of human rights enshrined in the Constitution, in ratified international treaties and laws in force in Chile, and in life generally.

1- On the human being and the individual:

The person is an end in itself and not a means. As a rational being (when we say rational being, we do not say that its actions are entirely dedicated mainly to its own survival) he exists for his own effort and courage in cooperation with others, and not to be used by others. Being endowed with a volitional consciousness (free will), social relations must be based on free collaboration that is voluntary between subjects to be considered fair, while rejecting forced impositions by the state.

2- On the Chilean nation:

The Independence Party advocates a civic nationalism. We consider Chile a Western and Hispanic American nation, with major cultural influences coming from several human groups: the Indians, the conquerors of the Spanish empire, many other European countries (especially Germany, Britain, Italy, Croatia, France, Switzerland, Belgium, Holland, Austria, Portugal), the United States, and a large Orthodox Christian remnant from Syria, Lebanon, Palestine—that part of the former Ottoman Empire that is now called Israel. Chile is a country of immigrants, but it is also a country of indigenous people, former Spanish conquerors and other settlers, but now its culture and common traits are easily identifiable as the small differences seen across our long geography.

The preservation and improvement of our nation is not a racial or biological problem, neither military nor expansionist. Civic nationalism seeks conservation and CULTURAL improvement of what we understand today by “Chile”. We reject isolationism or racism in every way.

  1. On citizenship and the state:

Citizens must be free and equal in dignity and rights. We live in a mixed society, with a state that exploits the private productive relationships of people through high taxes and regulation. Tax measures and administrative measures are due to adequate levels of effectiveness and efficiency. We stand for privatization and the use of market-based regulation wherever possible to reduce taxes and government regulation.

4- On property as a natural right:

Life, liberty and property are natural rights that are antecedent to the State. The defense of property is the basis of a well-formed civil society, allowing personal development and the improvement of individual initiative and private enterprise.

A free individual must take responsibility for the positive and negative consequences of his actions. The fruits of his work, i.e., his property, must be protected from the consequences of the acts of others, and thus protected by justice, peace and social harmony.

5- On justice:

We understand by justice the recognition of the fact that people and nature cannot be changed or interpreted differently and according to the discretion of others, much less by means of public policy. It means respect for the truth in an incorruptible way, given that all human beings must be judged by what is and treated accordingly with equality.

6- On protective and subsidiary status:

The state or, better said, the government, must defend the property rights of the people, which are the expression of human nature, savings, capital formation and the preservation of life and happiness, must promote voluntary private solidarity and ultimately fulfill the subsidiary role focused on the population most in need to guarantee the minimum benefits for the healthy coexistence. In doing so, government should rely on private, charitable, philanthropic, mutual and market-based institutions as much as possible.

7- On the law and legislation:

The law is a declaration of the sovereign will of the individuals that make up the national community, spontaneously generated and antecedent to the state, either in the general sphere of the country or in each territorial unit with it scorresponding jurisdictions. Legislation is the artifically imposed rules or codes of conduct created by legislative bodies of the government or state.

Notwithstanding the above, Chile is a Republic where natural rights are fundamental and protected, namely: the rights to life, freedom and the pursuit of happiness. None of these rights may be restricted by majority vote or decrees by the executive or judicial power.

8- On national sovereignty:

The sovereignty of Chile lies in its people and is applied throughout its territory: Accordingly, it is important to review and submit to the democratic control of international treaties, pacts and agreements to which Chile subscribes.

9- On decentralization and cantonization:

In order to increase the degrees of freedom and responsibility of individuals, we believe that the delegation of decision-making power to the smallest organizational and territorial unit is important. We believe that the vast majority of administrative, valuation and tax matters correspond to the competencies of local communities. That is why we propose the cantonization as administrative structure of each territory, accomplishing as much decentralization as possible to promote efficiency and effectiveness. The current provinces will become autonomous political bodies to make decisions on issues of economic, social and regulatory relevance. We propose with this a confederated and cantonal Chile.

10- On trust in the family and community:

Given that human beings are eminently social and empathic beings, we believe in the family and the community (e.g., religious groups, neighborhood associations, sports club, and other institutions), as instances of participation and solidarity in which individuals may find support, help and mutually beneficial cooperation. We believe that the weight of “social action” falls on them instead of the bureaucratic and impersonal state.

We also believe that this makes the individual responsible for the positive or negative results derived from his actions. In terms of thinking, individuals must be free to believe and choose as they deem best, even if considered absurd or ridiculous to others, noting only that one may deny reality but not the consequences of reality. Man must be allowed to err, so long as he does not force his will upon others.

11- On free association, the right to discern and self-defense:

People should be free to associate with those they deem best according to their own criteria. No one can be forced to belong to an association. The members of each intermediate body (e.g., churches, companies, families, groups of friends, foundations, clubs, etc.) have the right to express their power to discern when accepting a new member. We oppose any legislation that attempts to prevent the exercise of this right unless it is a matter of national security. We oppose state intervention or involvement in marriage, the foundational unit of family and society, which should be left to private institutions or associations to define, determine and regulate. All people have a right to defend themselves, by force of arms if necessary, against any other human being or autocratic state that seeks to deprive them of their natural rights by force.

12- On the environment and privatization of externalities:

In order to fully develop human nature, we believe that it is necessary for people to live in a clean and healthy environment. Without prejudice to the foregoing, we understand that individuals have different preferences and visions regarding the type of environment in which they want to live. Recognizing the legitimacy of these differences, we believe that the free market is the mechanism to resolve them, through an adequate definition of property rights and the prices of externalities. We believe that public policies tend to make environmental problems permanent and only slightly improved, being subjected to the perverse incentives of interest groups, and that market-based solutions to environmental, population and natural resource problems are in every way to be preferred.

13- On the right to life and the free movement of peoples related to immigration:

We believe that every human being, whose personality or personhood cannot be infringed on or separated from him by public policy, has an inalienable right to life, from the moment of conception to death. Euthanasia of the elderly or infirm, or voluntary abortion, are acts of aggression against a person that must not be allowed, excepting only self-defense abortion in cases where the position of the fetus in the fallopian tube will with certainty kill both the mother and unborn child. All persons have the right to travel and should be welcomed into Chile as a means to improve our country’s population and development. However, it may be necessary to rely on market-based regulation (e.g., privatized borders, largely-privatized civil registry services and border security guards, private medical teams to isolate infectious diseases) to define the quantity and placement of immigrants.

14- On free-market policy alternatives and the use of force internationally:

Finding and providing solutions to policy problems are an essential feature of any political party. Thus, we propose the use of market incentives, market-based regulation, private initiative and historically favored rules like allodial property rights to encourage the development of remote regions, improve the quality of life, foment business and economic growth, protect residents from infectious diseases, and promote peace. National defense is important and Chile has a right to defend its citizens and their property against aggressors, but we oppose the opportunistic, expansive use of militarism or warfare to subdue other peoples. We all oppose all international entanglements with multinational social or political bodies such as the United Nations, the World Bank, the International Monetary Fund, the Bank of International Settlements, the International Court of Justice, and so forth. We oppose, too, the imposition of political correctness doctrines on individuals by the state, as well as state criminalization, regulation and other rules regarding what individuals choose to smoke, inhale, ingest, whether in the form of a drug, alcohol or food.

15- On the Party’s historical position:

The price of freedom is eternal vigilance and Chile has not yet achieved full independence from state encroachment. The mission of the Independence Party is the unification of the Chileans in a collective process that allows the development of each individual in the country. It represents a rupture with world and national bureaucracies, at the same time being a renewed means to keep Chile open to the rest of the world. Peace with other nations includes trade and free migration that is not contradictory to our independence and sovereignty. As Chile has a strong history of receiving other peoples peacefully, we encourage migration processes that allow for healthy coexistence through market-based regulation, that ensure avoiding cultural and uncivilized clashes. From 1840 to 1930, Valparaíso was one of the economically freest places in the world, yielding a prosperity built on diversity of immigrants and free flows of capital and goods. We aim to restore this golden age of Chile, coupled with a furtherance of the social and political freedoms.

Note for the English version onlyValparaíso even enjoyed free banking from 1862 to 1879. To a lesser extent, similar freedom movements were observed in south-central Chile by European migrations (from 1860 to 1910) to the 9th (especially), 10th, and 14th regions—largely comprised of people fleeing religious (anti-Evangelical) or early-Marxist persecutions in their home countries. Punta Arenas, Santiago, Iquique and Antofagasta also flourished with the influx of immigrants, many of whom became fabulously wealthy. Such freedom is cherished by liberty-lovers today worldwide and showcased by other libertarian parties and libertarian think tanks around the world.

Only in the English version (proposed addition):
16- On financial regulation and banking: As an essential element of free enterprise, the banking, insurance and financial sectors must be freed from ties to the state, leaving their formation and regulation to market-based institutions. We support free banking and competing banknote issue, gold-based banking, and unregulated crytpo-currency activities. Financial accounts and transactions should be completely private and untaxed, both for Chileans and residents from other countries living in Chile.

We face an opportunity never before seen, where a group of Chileans is resolved, and thus decided to take the reins of history, to take Chile down the path of greater individual freedom and free markets.

Long live Chile!

Declaración de principios del Partido Independencia:

Declaración Preliminar: En conformidad con el Articulo 5 de la Ley Número 18.603, el Partido Independencia expresa su compromiso con el fortalecimiento de la democracia y el respeto, la garantía y la promoción de los derechos humanos asegurados en la Constitución, en los tratados internacionales ratificados y vigentes en Chile, y en las leyes.

1- Sobre el ser humano e individuo:

La persona es un fin en sí mismo y no un medio. Como un ente racional (al decir ente racional no decimos que sus actos enteramente lo sean si no que es su principal herramienta de supervivencia) existe por su propio esfuerzo y valentía en cooperación con otros y no para ser utilizado por otros. Siendo dotado de una conciencia volitiva (libre albedrío) las relaciones sociales deben basarse en la colaboración libre y voluntaria entre sujetos para ser consideradas justas, rechazando de esta manera cualquier tipo de imposición forzosa por parte del Estado.

2- De la nación chilena:

El Partido independencia propugna un nacionalismo cívico. Consideramos a Chile una nación occidental e hispanoamericana, cuyas principales influencias culturales provienen de varios grupos humanos: los indígenas, los conquistadores del imperio español, los colonos europeos (especialmente Alemania, Reino Unido, Italia, Croacia, Francia, Suiza, Bélgica y Holanda), Estados Unidos y del imperio turco-otomano provenientes de lo que hoy es Israel o Palestina y Siria. Chile no es fundamentalmente un país de inmigrantes (como lo podría ser Estados Unidos por ejemplo), es un país de indígenas, conquistadores y colonos, por lo que su cultura y rasgos comunes son fácilmente identificables pese a las pequeñas diferencias dadas por la larga geografía que nos aleja.

La preservación y mejora de nuestra nación no es un asunto racial ni biológico, ni militar ni expansionista. El nacionalismo cívico busca la conservación y el desarrollo de lo que hoy entendemos por “Chile”. Rechazamos de plano cualquier forma de racismo o nacionalismo étnico.

3- Ciudadanía y Estado:

Los ciudadanos deben ser libres e iguales en dignidad y derechos. Vivimos en una sociedad mixta, con un Estado que explota las relaciones productivas privadas de las personas a través de altos impuestos. Es por esto que deben reducirse las tasas impositivas y los órganos administrativos deben acercarse a niveles óptimos de eficacia y eficiencia con tal de servir a las personas de la mejor manera posible en materias que no pueden ser resueltas por el mercado.

4- La propiedad privada como Derecho Natural:

La vida, la libertad y la propiedad privada son derechos naturales anteriores al Estado. La defensa de la propiedad privada es la base de una sociedad civil bien conformada, permite la creación de riqueza, el desarrollo personal y potencia la iniciativa individual.

Un individuo libre debe hacerse responsable de las consecuencias positivas y negativas de sus actos, incluyendo de los frutos de su trabajo.

5- Justicia:

Entendemos que la justicia implica que las personas y la naturaleza no pueden ser cambiadas o interpretadas de manera diferente y según el arbitrio de algunos. La justicia significa el respeto por la verdad de una manera incorruptible, siendo el ser humano juzgado por lo que es y tratado en consecuencia.

6- Estado protector y subsidiario:

El Estado debe propender a defender los derechos de propiedad de las personas, que son una expresión de la naturaleza humana, debe promover la solidaridad privada voluntaria y soluciones de mercado y en última instancia cumplir un rol subsidiario focalizado en la población más necesitada garantizando las prestaciones mínimas.

7- Sobre la ley:

La ley es una declaración de la voluntad soberana de los individuos que conforman la comunidad nacional, ya sea ésta en el ámbito general del país o en cada unidad territorial y de la correspondiente jurisdicción.

Sin perjuicio de lo anterior, Chile es una República, y por ello los derechos naturales y fundamentales tales como los derechos a la vida, a la libertad y a la búsqueda de la felicidad no pueden ser coartados por leyes de la mayoría.

8- De la soberanía nacional:

La soberanía de Chile radica en su gente y se aplica en su territorio, debido a lo anterior nos parece importante revisar y someter al control democrático los tratados internacionales, pactos y acuerdos que Chile suscribe.

9- Descentralización y cantonización:

Con el fin de aumentar los grados de libertad y de responsabilidad de los individuos, nos parece importante la delegación de poder de decisión a la unidad organizacional y territorial más pequeña; creemos que la gran mayoría de los asuntos administrativos, valóricos y tributarios corresponden a competencias propias de la comunidad local, es por esto que proponemos la cantonización como estructura administrativa de cada territorio. Las actuales provincias pasarán a ser organismos políticos con autonomía para tomar decisiones en temas de relevancia económica, social y regulatoria. Proponemos con esto un Chile confederado y cantonal.

10- La confianza en la familia y la comunidad:

Siendo el ser humano un animal eminentemente social y empático, creemos en la familia y en la comunidad (grupo religioso, barrio, club deportivo, etc…) como instancias de participación y solidaridad en los que los individuos pueden encontrar contención, ayuda y apoyo. Creemos que recae en ellos el peso de la “acción social” en lugar del Estado burocrático e impersonal.

Creemos además que esto responsabiliza al individuo de los posibles resultados positivos y negativos de sus acciones. En términos de pensamiento, los individuos deben tener la libertad de creer y elegir lo que ellos consideren mejor, aunque esto sea considerado absurdo o ridículo para otros, considerando que uno puede negar la realidad pero no las consecuencias de la realidad. El ser humano debe estar permitido de errar siempre y cuando no imponga su voluntad sobre otros.

11- De la libre asociación y el derecho a discernir:

Las personas deben ser libres de asociarse con quienes estimen mejor según su propio criterio. Nadie puede ser obligado, forzado o inducido a pertenecer a una asociación. Los miembros de cada cuerpo intermedio (empresas, familias, grupos de amigos, fundaciones, clubes, etc…) tienen derecho a expresar su potestad de discernir al momento de aceptar a un nuevo miembro. Nos oponemos a cualquier legislación que intente impedir el ejercicio de este derecho a menos que se trate de un asunto de seguridad nacional. Nos oponemos a la intervención del Estado en el matrimonio, la unidad fundacional de la familia y de la sociedad, cuya determinación y regulación debería dejarse en manos de instituciones privadas o asociaciones.

Todos los seres humanos tienen el derecho a defenderse, por las armas si es necesario, contra otros seres humanos o contra un Estado autocrático que busque quitarle sus derechos naturales por la fuerza.

12- Medio ambiente y privatización de externalidades:

Con el fin de desarrollar plenamente la naturaleza humana, consideramos que es necesario que las personas puedan vivir en un ambiente limpio y sano Sin perjuicio de lo anterior entendemos que los individuos tienen distintas preferencias y visiones respecto del tipo de ambiente en el que quieren vivir. Reconociendo la legitimidad de esas diferencias creemos que el mecanismo para resolverlas es el mercado mediante una adecuada definición de los derechos de propiedad y de los precios de las externalidades.

Creemos que las políticas medioambientales del Estado son soluciones marginales que tienden a hacer que estos problemas medioambientales sean permanentes ya que generan incentivos perversos en ciertos grupos de intereses. Por lo mismo, creemos en soluciones de mercado a problemas, medioambientales y de asignación de recursos naturales.

13- Sobre el derecho a la vida y la libertad de movimiento con respecto a la inmigración

Creemos que todo ser humano, cuya personalidad o persona no puede ser transgredida o separada por políticas públicas, tiene derecho a la vida, desde el momento de la concepción a la muerte. La eutanasia de los mayores y enfermos o el aborto voluntario, son actos de agresión contra personas y no pueden ser permitidos salvo en casos de defensa propia cuando la posición del feto en las trompas de falopa provocará con seguridad la muerte de la madre y del niño que está por nacer.

Creemos en el derecho que de las personas a migrar y creemos que estas deberían ser bienvenidas a Chile como una forma de mejorar la cultura y el desarrollo del país. Sin embargo, para definir la cantidad y la distribución de los inmigrantes, promovemos soluciones de mercado tales como la privatización de las fronteras, la privatización del registro civil y de los guardias y personal médico en las fronteras y siempre en conformidad con la decisión soberana del pueblo chileno.

14- Sobre el libre mercado y el uso internacional de la fuerza

La búsqueda y la promoción de soluciones a problemas políticos es la función principal de cualquier partido político.

Respecto del desarrollo de regiones remotas, de su calidad de vida, de su economía y de su seguridad, proponemos el uso de incentivos de mercado, de la iniciativa privada y de los derechos alodiales.

La defensa nacional es importante y Chile tiene el derecho de defender a sus ciudadanos y su propiedad contra agresores. Sin embargo nos oponemos al uso oportunista y expansionista de la fuerza militar para someter a otras personas.

Nos oponemos al involucramiento con entidades políticas o sociales internacionales que limiten la soberanía de Chile, tales como las Organización de las Naciones Unidas, el Fondo Monetario Internacional y la Corte Internacional de Justicia entre otros.

Nos oponemos a la imposición de doctrinas de lo políticamente correcto, que no son otra cosa que formas de autocensura.

Nos oponemos a la criminalización y la regulación de substancias que los individuos elijan fumar, aspirar o ingerir. Sin embargo entendemos las repercusiones sociales que esto conlleva y por lo tanto entregamos parte importante de la toma de estas decisiones a las comunidades expresadas en sus cantones.

15- Posición Histórica:

El precio de la libertad es la eterna vigilancia y Chile no ha logrado una independencia plena del Estado y de organismos y entidades foráneas. La misión del Partido Independencia es la unificación de los chilenos en un proceso colectivo que permita el desarrollo de cada una de las individualidades que lo componen.

Representa una ruptura contra las burocracias mundiales y nacionales, al mismo tiempo que una fuerza renovadora y abierta al mundo. La paz con otras naciones incluye el comercio libre y la inmigración lo cual no debe estar en contradicción con nuestra independencia y soberanía.

Chile tiene una larga tradición de recibir a otros pueblos de forma pacífica. Creemos y promovemos procesos migratorios regulados que permitan una coexistencia sana mediante soluciones de mercado que eviten choques culturales y civilizatorios.

Entre 1840 y 1930, Valparaíso fue uno de los lugares económicamente más libres del mundo y su prosperidad se construyó sobre la inmigración y la libre circulación de bienes y capitales. Buscamos restaurar la era dorada de Chile y avanzar las libertades sociales y políticas queridas por amantes de la libertad en todo el mundo.

Estamos ante una oportunidad nunca antes vista, donde un grupo de chilenos resueltos ha decidido tomar las riendas de la historia para llevar a Chile por la senda de la libertad.

¡Viva Chile!

Este artículo está escrito en inglés y español. La idea es (1) informar a los hablantes de inglés de un importante movimiento político nuevo en Chile y también (2) ayudar a atraer a personas en Chile para que participen. Si usted es ciudadano o residente permanente de Chile, y está de acuerdo con la plataforma del Partido Independencia, firme el formulario en línea del Partido para unirse a nosotros y mostrar su apoyo.

John Cobin, Ph.D. Twitter

Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

The Free Market: Our Future Friend at the Chilean Border

The discussion on the new Chilean immigration law has been accompanied by images of long lines outside consulates abroad, as well as long wait times for immigration services in Chile. These irksome troubles have been exacerbated by the startling discovery of immigrant trafficking networks, along with worrisome potential private pension (AFP) problems that will almost certainly be generated by the ingress of hundreds of thousands of people. Those workers—if for no other reason than their age or lack of steady employment at first—will have gaps in their AFP contributions as they find it necessary to undertake precarious or informal jobs.

Many of these failures could be remedied by privatizing border services.

Border services basically consist of (1) ensuring national and health security—for human beings, animals and crops, (2) helping to ensure a growing population currently threatened by a low birth rate—1.8 children per couple in Chile, (3) providing local labor markets with resources where shortages exists, and (4) managing the issuance of visas, passports and travel documents.

All these services could be provided by a well-designed system of concessions linked with economic incentives. The concessionaires would lose part of their annual income or bonuses for failing to fulfill their mandates and not taking care of their reputation. Through a competitive bidding process, each concessionaire could be assigned a certain number of kilometers of border or coastline, others would watch over airports and ports, and still others take charge of offices that issue passports, a much wider variety of visas, and travel documents.

The market-regulatory framework of private border services must comprise at least the following elements: (1) promotion of competition among concessionaires, (2) adequate power to catch, punish and expel those who fail to comply with Chilean immigration regulations, and (3) issuance and approval of visas and passports, encompassing all aspects of their duration, type, status, prices and discounts.

The lion’s share of the price of visas and passports would form part of the concessionaire’s income and, with competition, the prices would vary between different points of entry, issuing offices, and would depend on the required options and delivery times (speed) specified by a client. The other part of the concessionaire’s income would come from the government, which pays each one a base plus bonus for good behavior and results.

There is no doubt that the current situation beleaguers both prospective immigrants—who wait hours or even days to obtain their visas—and Chileans who are exposed to state-driven, artificial Civil Registry strikes, high passport prices and, above all, the ineffectiveness state institutions that for years now have let in hundreds of thousands of illegal immigrants, often assisted by quasi-mafias that specialize in human trafficking.

By privatizing of border services Chile would once again take the lead as a world pioneer in market solutions to government failure, improving border services and better regulating immigration, improving the country’s security, reducing its fiscal spending requirements, and generate better, greater and newer technologies and industrial capacity. If successful, other countries would do well to follow suit, just like they followed Chile in privatizing pension services.

Versión en español

John Cobin, Ph.D. (George Mason University) Twitter
Alejandro Rogers, MBA (MIT Sloan)
Co-Founders Independence Party (Chile)
www.libertarios.cl
Escape America Now

Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

Making Decent Money Teaching English to Chinese While in Chile

One problem facing non-retired newcomers to Chile is finding a way to earn money in their new environment, especially when they do not yet speak Spanish. However, one thing that native English speakers can do is teach English to Chinese (ages 4 to 60) via video chat or Skype. If you happened to have homeschooled your kids then this job will be particularly easy. Apparently, a college degree is required and some experience teaching children (but homeschooling counts!). That might knock out a few prospects, but there are ways to improvise. Maybe one could sell them on a junior college degree and teaching piano lessons or heading up a boy scout troop can be used as proxies.

There is no prep time and no commuting time; nothing to grade and no department meetings to attend. You work from home and get paid via PayPal. Plus, many advanced Chinese students, which have faced censorship throughout their lifetimes, will gleefully pay you to “free talk” with them about pro-liberty and anti-communist / anti-state books like <i>Animal Farm</i>. The company strongly prefers American and Canadian native speakers, but (from what I understand) British, Australian, South African and Kiwi applicants are not excluded, even though it will be harder for them to land the job. They also do not mind if an employee lives in Chile or any other ex-pat destination. As of October 2017, the company had 6,000 teachers, just over one-half of them filipinos, 1,900 Americans or Canadians, and 1,000 other native speakers.

Resultado de imagen para logo 51talk

The NYSE-listed company is legitimate and I have confirmed that monthly, tax-free fee payments are made to English teachers. If you can get in as a one-on-one instructor, you will start at USD $15 per hour and if you work hard at it you will be raised to USD $20 per hour in just a few months. Eventually you will top out at USD $22 per hour. However, the demand for 4-child group glasses is so high now that they are requiring new hires to go in as group teachers right off the bat at USD $18 per 45-minute class. With some hires, it is not clear that they will ever teach individuals, and thus may not be able to get raises for a longer period. It may be something to negotiate. The company provides all the online teaching materials.

It is decent money for a stay-at-home-job. After one qualifies as a group teacher and starts working, he can then branch off and do extra individual classes. In April 2017, the company had 1,400 teachers. By October 2017, there were 1,900 teachers just from North America , not counting the thousand from other English-speaking countries or the Philippines. The demand for teachers is huge among Chinese parents and adult learners, especially if for Americans or Canadians with experience. Most teachers are women and women are in greater demand than men among the Chinese, but both genders get hired.

You can work as little as 15 hours per week (nine 45-minute small group classes) or full time+ and get to select the hours and times that you work. Actually, For one-on-one teachers, the minimum requirement is that one make himself available “at least 30 hours during peak for a period of 15 days,” which translates to 15 hours per week. Peak periods are 6am to 10am (New York time/EDT), plus 10pm to 6am on Friday and Saturday nights and working all night. Making oneself available does not mean that you will necessarily be teaching or earning money. You probably will (there is a seemingly unlimited supply of Chinese learners), but the requirement is that you be in front of your computer ready to go, while you do whatever other computer work you wish, or perhaps working as a part time proofreader (search for such jobs online or go to www.flexjobs.com). If you distinguish yourself, you might be asked to teach small groups or do training assignments long term, generally working full time, at a rate of pay up to USD $26.40 per hour or more for group classes, which also pay bonuses monthly, quarterly and semi-annually.

While the job is hardly high-paying, the money goes a long way in Chile or other Latin American countries (or places like rural Italy!). One can live (or travel) anywhere with a internet connection of at least 2 mbps download, 2 mbps upload. You need to have a camera, microphone and earphones. If you are interested, please follow this signup link for 51Talk. Make sure you fill out the form completely or you will not be interviewed right away.

Who knows? You might even make some business contacts in China that lead to enriching opportunities to import goods to Chile and export Chilean natural resources to China. What have you got to lose by trying? It is like getting a backup job that you can bring to a boil during times of slow regular employment, and let simmer as a weekend/evening hobby when normal work is going well. It is also an ideal part time job for a housewife and stay-at-home mom who wants to augment family income a bit.

After trying this for a while myself, I am ready to recommend that all non-wealthy newcomers to Chile join 51Talk (or something else similar) prior to coming to Chile. They should work from their home country on the weekend or evenings as a “hobby,” and do enough work to attain the $18 or $20 per hour level (which happens after 100 hours or 325 hours of one-on-one work are successfully completed). Then, whenever they need it, they can turn it on as a full time income source, starting at USD $18-$20, when they get to Chile. It makes a lot of sense. No visa needed. No taxes. Get paid via the ATM.

Again, whenever you do not need it, you can cut back to the minimum availability of 15 hours per week. It is like having an asset in your pocket to be used at any time. That has to be worth something to many newcomers. In fact, it might make the difference between choosing to come or not. Best of all. you can make sure you like it by doing it for a few months in the home country.

P.S. There are hundreds of online ESL teaching companies, especially aimed at China, South Korea and Japan. For instance, this site lists online ESL companies all over the world. Apparently, 51talk is quite competitive. However, this is one standout worth checking on, FastSchool, which apparently pays much more ($40 or $125 per hour). If that rate were true, then more serious money can be made. However, my attempts to get meaningful communication out of them has so far been fruitless. They may not be a serious organization. For teaching Chinese children, 51Talk’s main competitor seems to be VipKid. That company apparently pays more than 51Talk but is harder to get on with. You might try them as well if interested.

P.P.S. For the 51Talk phone interview via Zoom: The people that interview you do not speak perfect English. They will ask about what your teaching experience is, especially with kids. Mention homeschooling and teaching at church, scouts, whatever. Make it sound to them like you know how to teach. They will never check out anything you have said. Tell them you have a college diploma and that you are a native speaker from America/Canada (or wherever). I am not sure that dress is that important so long as you are business casual or better. Age is not an issue, as far as I know. Get your Internet upload speed to at least 2mbps, then take a screenshot of speedtest.net to send them. Upgrade your internet after you get the job if necessary. You will need a résumé of sorts, as I recall. Tell them what they want to hear. How the money works: A student told me that he pays US$30.50 per half-hour (25-minute) class with Americans/Canadians, or 200 Yuan RMB. (Some might pay less since I have hear as low as 90 Yuan RMB in 2016 but perhaps rate have gone up.) Group classes are only one-fourth of that rate, which is the same price charged for individual instruction by filipino 51Talk teachers. Teachers get paid as low as $7.50 to start for individual classes and rise over time to as much as $11 for that same half hour, which is 36% of the class fee. By the way, one young lady wanted to know if it was “just” for a capitalist to earn that increment and I told her it was. The business owner has to have (in volume) a return on his capital after paying teachers and hundreds support personnel and computational setup/expenses. The question came up while she was reading the summary of Marxist ideology in chapter one of <i>Animal Farm</i> with me, particularly old Major (Marx/Lenin’s) speech abut how people are miserable since businessmen allegedly rob them of their true due. Of course, 51Talk is hardly going broke and probably has room to grant even higher salaries and bonuses (some group teachers can get a monthly US$150 bonus for perfect attendance and even another $150 for not being late to any class, making the houly for group classes as high as $35). Anyway, that is how the money part works. You need not tell the interviewer that you have this information.

P.P.P.S. I suggest that you get a TESOL or TEFL certificate of at least 120 hours of training. It is not required but will help you get the job if you have one. The TESOL is not hard to get and might help for this job or in the future. As of the time of writing, Groupon was offering the course at a 98% discount: only US$9. Click this link to purchase and then get it done. If you have any background in this stuff at all, 120 hours can be done in under 10, if not under 5. 51Talk and other places recommend (or even require) either this TESOL certificate or the TEFL, so it would seem like a good use of time to get it, especially at a 98% discount.

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country.

Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

Christian Theology of Public Policy: Highlighting the American Experience (2006)

Bible and Government: Public Policy from a Christian Perspective (2003)

A Primer on Modern Themes in Free Market Economics and Policy (2009)

Presidential Election 2017: Chile Turns Right

About seven million Chileans and permanent residents voted in today’s runoff election (December 17, 2017), about 700,000 more than a month ago in the November 2017 general election. Still, voter turnout was remarkably low (48.7%), probably meaning that the disgusted hard Left largely stayed home; contrary to those folks, early indications are that the Right went to the polls in force. The candidate from the Right, Sebastián Piñera, won handily 54.5% to 45.5%, keeping pace with the general rightward political shift in all of Latin America. The nine-point spread is significant given that Chile has often been considered to be a leftist nation. Exuberant celebrations shut down major arteries in Santiago, Viña del Mar and elsewhere.

Piñera beat Alejandro Guillier (despite the journalist’s strong gestures to communist party members and a promise to soak the rich) in the Santiago metro area and 12 of the 14 regions of the country (his two regional losses were in the deep south: Punta Arenas and Coyhaique; he also lost in leftist hotspots like Castro on Chiloé, Valdivia and San Antonio). Piñera simply killed it in Northeastern Santiago, Concón/Viña del Mar, Concepción/Talcahuano, Iquique, Puerto Varas, Santa Bárbara, Los Angeles and Temuco, and did well in the farm belt of the Central Valley (Rancagua, Curicó, Talca, Chillán, etc.).

He surprisingly won in traditionally hard-Left mining areas in the north and southcentral part of the country (La Serena/Coquimbo, Antofagasta, Calama, Copiapó, Coronel, Arauco). He lost as expected in leftist Valparaíso (44.5%-55.5%) but dominated in Concepción/Talcahuano (56.5%-43.5%, surprisingly) and the entire 8th region (58.5%-41.5%), Viña del Mar (57%-43%) and Concón (64%-36%), as well as the inland central 5th Region areas of Quilpué and Villa Alemana, Olmué, Limache, Quillota, La Calera, San Felipe and Los Andes. Even lackluster Osorno and Puerto Montt went for Piñera.

All of Northeastern Santiago was dominated by votes in his favor, with the three largest comunas handing Piñera 81% to 88% of the vote in a lopsided victory (no surprise other than the margin). He won the other four Northeastern Santiago comunas handily, too, and also downtown Santiago. His only surprising Santiago metro area losses were in Estación Central, Puente Alto and La Florida.

Two-thirds of the effectively-irrelevant worldwide votes cast in Chilean consulates (15,766) went for Guillier, most of them coming from families exiled under Pinochet. The Left’s hope that votes from Chileans living abroad would be a significant boon turned out to be unfounded.

Libertarians, Christian ones or otherwise, should be cautiously happy with the outcome for several reasons. First, although the Chilean Congress is sharply divided, there is a chance that the three exceptions for legal abortion might be overturned with the (now puny) Christian Democrats crossing over and voting with the Right. Second, there is also a possibility that taxes will be reduced, participation in politically-correct left-wing groups like the United Nations will be diminished, as well as radical environmentalist policies cooled, and that immigration will be encouraged. Third, there is now a greater chance that regions (including areas like Viña del Mar, Concón, Concepción and La Serena) will get more infrastructure funding. Fourth, there is now a chance to cut down Chile’s external debt—which has risen under recent leftist rule—and to take the heat off of private universities’ profits. Fifth, Chile should now take a slightly harder stand against criminals, especially thieves, with the police given a freer hand. Finally, there should be a huge uptick in the economy as the world returns to invest in Chile’s production of natural resources. Look for the next four years to feature an economic boom in Chile, as the country returns to being the clear “go-to” place of choice for freedom-loving North Americans and Europeans.

The Chilean Left is rather insipid, ignorant, calloused and even silly, and libertarians should be happy to not have to deal with them for the time being. We need to hope that presidential candidate José Antonio Kast, the closest man to a libertarian in the 2017 race, receives a prominent post in the Piñera cabinet, setting him up for another presidential run in 2021. Minister of Public Works would be a logical choice. Remember that Kast garnered 7.9% of the vote in the 8-way presidential race last month, running as an independent. Compare that to Ron Paul or Libertarian Party and Constitution Party candidates in the U.S.A. in national elections (that might get 1% to 3% in a 4-way or 5-way race) and one can immediately sense that there is a much stronger constitutionalist/libertarian tendency, percentage-wise, in Chile than in other parts of the world (even America).

We also need to take advantage of the new congressional election rules that allowed candidates with as little as 2.8% to win a seat in Congress last month, putting truly libertarian candidates forward in the larger places where Piñera won big (that have 7 or 8 seats up for grabs) and let them get dragged in on the coattails of the victorious right-wing (Chile Vamos) candidates in 2021. The congressional vote of a 7th place vote-getter counts just as much as that of the one who came in 1st place! Now is the time to select our candidates (six or eight of them if possible), running as libertarians or independents but coalitioned with the Right’s parties, and raise money for their campaigns.  We might actually have a shot at winning a few seats across the country in Northeastern Santiago, Concón/Viña del Mar, Concepción, Los Angeles, Temuco, Rancagua, and perhaps Talca. Remember that, in Chile, a congressman does not have to live in his district. Having a post-Pinochet era presidential candidate from the Right win twice has now set up a whole new political landscape for Chile that is thus generally favorable for libertarians. This 2017 victory was absolutely good for Chile.

However, let’s be careful not to get too excited. Piñera is a very rich centrist at best, even though he is supposedly representing the Right. The median voter theory indicates that national election winners need to be centrists and pragmatists in two-way run-off races, and Piñera fits that mold. Piñera is not going to promote liberty and free markets. He is not going to fully champion personal liberties. He favored corporate tax rate hike during his last term, the “morning after pill,” egregious gender-based labor laws, small handouts to the poor, and gay civil unions (instead of getting government out of the marriage business altogether). He is not going to legalize drugs, nor reduce taxes and regulation to nearly zero.

The only libertarian-leaning policies we can expect might be seen in more liberal immigration, less state-control of enterprises, the salvation of existing private medical insurance and private social security plans, slightly lower taxes and maybe slightly less-Draconian labor laws than his predecessor championed. In short, Piñera is not our man. His own past is hardly spotless, and many have doubts about his character and vainglorious motivations, as he carves out his spot in Chilean history. Some outright say that he is disingenuous or even evil and a former embezzler (from a bank Talca long ago).

Such is the nature of the state and its key leaders, at least for libertarians. Consequently, libertarians should be delighted to have gotten rid of the leftist threat and the expected improvements on account of Piñera’s victory, but should hardly get their hopes up for a significantly more libertarian Chile via his policies. Our most exciting horizon has to do with winning some congressional seats in 2021 and that should be our focus. Come on down and join the party!

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

Important New (Mostly Bad) Legislation in Chile

Besides the imminent opening of the new Metro Line 6 in central Santiago, and the fabulous season-end flop of the Chilean national soccer team, along with the upcoming presidential and congressional elections on November 19, 2017, hardly anything has been more polemical than the controversial, new legislation that has passed, which has been recently affirmed and is now being implemented by the Chilean Left. Indeed, the Left is making its mark before losing power, and the resulting tattoo is bad for Chile.

First, the least-pernicious change: as of September 2018, Chile will have a 16th region. The new region of Ñuble will be split off the north end of the 8th Region (Concepción) and will thus be comprised of only about 440,000 inhabitants. Nearby regions have almost twice that amount. The provincial capital will be Chillán. It is still unclear how this new region will benefit the Left, other than that it creates a whole new level of bureaucracy and wastethings that leftists typically love—and this new region will have its own legislators—although it is unclear that they will be from the Left, given that the central valley farm belt towns do not tend to vote leftist.

Second, Chile is no longer a pro-life country, at least not in legal practice. The Left has successfully subverted the Constitution. The Chilean Constitution of 1980, Chapter 3, Article 19, Paragraph 1 says that, “La constitución asegura a todas las personas el derecho a la vida y la integridad física y psíquica de la persona. La ley protege la vida del que está por nacer.” That affirmation means, “The constitution ensures all persons the right to life and their physical and mental integrity. The law protects the life of the unborn.” [Emphasis added]

Yet, in spite of Chile’s constitutional provision to protect life from the point of conception, the Left rammed a bill through the Chilean Congress that permits abortion in the three cases of (1) the life of the mother being in jeopardy, (2) the baby being deformed or defective and (3) rape. The Right challenged the new legislation in constitutional court and just recently lost. (Chilean judges tend to be leftists.) As a result, just like in the United States, the Constitution simply does not matter. By extension, Americans should be put on notice that even obtaining a right to life amendment to the U.S. Constitution would have little or no effect on saving the unborn in the face of leftist meddling and manipulation.

What’s worse, the rule allows women to self-declare or self-proclaim that they were raped, without evidence, in order to obtain an abortion. They do not have to report the rape to the police, ask the fiscal (District Attorney) to prosecute the named aggressor or be certified as having been raped by a doctor (with a sample of residual semen and DNA taken). Chilean culture is full of lying and mistrust, of course, and thus this new legislation has virtually achieved the same openness toward abortion on demand as found in North America, China and Europe.

The policy is a real tragedy for Chile and liberty, as innocent unborn human beings can now be slaughtered with impunity. The fact that a child’s father is a horrible man (or even a criminal) should not lead to the unborn human being compelled to die, in order to adjudicate the crime of another. Doing so is inherently cruel and certainly anti-libertarian.

Obviously, the mother should be compensated by enslaving the perpetrator for 18 or 23 years, or more, once the legal facts are established and the accused is found guilty. But killing an innocent party for the crime of another cannot be just. The internet has many videos and articles featuring adults that were generated as a result of rape. I suggest you watch one or two of them. Nevertheless, the rape issue matters little in the Chilean case, since the “rape” exception is just a leftist ruse to permit a backdoor means of limitless abortion on demand.

There is some hope that the rule will change once the Right is back in power and once Chileans realize that the rule allows de facto abortion on demand. At least very few, if any, “doctors” are stepping up to the plate to start the murderous racket so far. Abortion is not widely approved of in Chile. Even so, one of the things I have liked most about Chile as a libertarian has been trashed: very negative news indeed.

Third, the famous binomial parliamentary election system in Chile has been replaced, both houses of Congress have been redistricted, and the number of diputado and senado seats have been increased by approximately 30%, from 120 to 155 and 38 to 50, respectively These changes will likely favor the Left by removing the binomial protection of minority interests.

Under the new system, individual parties will continue to form coalitions. The highest vote-getter in each coalition will serve as a benchmark, with the second place candidate being assigned a value of one-half of the benchmark, the third place candidate a value of one-third, the fourth place candidate a value of one-fourth and the fifth place candidate a value of one fifth of the benchmark. This method was developed by D’Hont.

After the final scoring is tabulated for all coalitions, the score sheets are merged and winners are assigned from each coalition. Since some places in Chile are dominated by the Left (mainly) or the Right, one can expect that the benchmark value for the favored party will be so high that the opposition parties will hardly be able to have their top vote-getters exceed 50%, 33%, 25% or even 20% of the favored party’s benchmark figure. Thus, in some places, it is evident that four or five seats (maybe more in some congressional districts?) will go to the dominant coalition’s candidates.

New senator counts: Smaller regions will have only two senadores: 15th (Arica), 1st (Iquique), 3rd (Copiapó), 16th (Chillán), 11th (Coyhaique) and 12th (Punta Arenas). Middle-sized ones will have three: 2nd (Antofagasta), 4th (La Serena), 6th (Rancagua), 8th (Concepción), 14th (Valdivia) and 10th (Puerto Montt). Larger regions will have five: the Santiago Metropolitan area, 5th (Valparaíso), 7th (Talca) and 9th (Temuco). One-half of all senators and all congressmen are elected during each presidential election cycle.

New congressmen counts: Extreme northern and southern regions will have only on district with three diputados: 15th (Arica), 1st (Iquique), 11th (Coyhaique) and 12th (Punta Arenas). Of the remaining regions, smaller-sized ones will have one district with five of them: 2nd (Antofagasta), 3rd (Copiapó), 16th (Chillán) and 14th (Valdivia). The 4th (La Serena) has one district, too, but with seven diputados. Middle-sized regions will have two districts with varying numbers of congressmen: eight in each of the two for the 5th (Valparaíso), five in one and four in the other in the 6th (Rancagua), seven in one and four in the other in the 7th (Talca), eight in one and five in the other in the 8th (Concepción), seven in one and four in the other in the 9th (Temuco) and five in one and four in the other in the 10th (Puerto Montt). The Santiago Metropolitan area has seven districts, two with eight congressmen, two with seven, two with six, and one with five.
In total, there will be 29 congressional districts across the 16 regions of Chile (as of September 2018), of which 7 (24.1%) pertain to the Santiago metropolitan area. The Santiago metropolitan area has 30.3% of all Chilean congressmen, the 5th Region (Valparaíso/Viña del Mar), 10.3%, and the 8th Region (Concepción/Talcahuano), 8.4%. Some fear that the new distribution and gerrymandering will benefit the Left, but it is still unclear how, except that they might possibly pick up extra seats in heavily-leftist areas of the country under the D’Hont system.
The system does benefit libertarian independent candidates significantly, since they can gain a seat in Congress with just 11% of the vote in the largest districts of Santiago and the 5th and 8th regions, and 25% in the smallest districts, with 13%, 15%, 17% or 20% needed in districts with sizes in between. Under the previous system, independents needed 5% more votes (e.g., 30% in smaller districts) to have a shot. It would be nice to get a true libertarian in the Chilean Congress from central or northeastern Santiago, Viña del Mar, Concón, Temuco, Villarrica, Pucón or San Pedro de la Paz!
Fourth, a stupid new gender rule has been imposed upon political parties and coalitions, requiring that all coalitions have at no more than 60% of their candidates from one gender. Noncompliance will result in all the candidates from the offending coalition being removed from the ballot. As a special incentive, the government (taxpayer) will award UF500 (US$21,400) to a party for each female candidate that it successfully gets elected. In addition, the victorious woman will get a prize from the state of UF0.01 (US$0.43) for each vote she received, which may be used to reimburse campaign expenses. This sort of blatant feminist public policy is nothing less than sickening, and bodes poorly for Chile.
Finally, here is a legal change from back in 2014 that I have not gotten around to reporting until now: personal bankruptcy is now possible in Chile. Before that year, only companies could file for bankruptcy protection. Bankruptcy may be declared once every five years. I view this as a positive step, especially in a country where credit card and personal/consumer loan (“signature”) debts can all now be secured eventually by real property. That’s right: there is no such thing as unsecured debt in Chile insofar as banks and credit institutions are concerned. By charging exorbitant interest rates for such products, those institutions get to have their cake and eat it, too.
On balance, other than this last bit of bankruptcy legislation, none of these new rules bodes well for Chile. Even though the country stands head and shoulders above other nations of the world in terms of possible ex-pat destinations, it appears that it should now be knocked down a bit.
Time will tell if the new 16th Region and the new parliamentary election rules will end up being negative or positive on balance. The first test will come during the November 2017 elections. We will also see if the evil or stupid abortion and feminist policy rules stand up under the expected right-leaning government to come. So, do not be so quick to cross Chile off your list of country candidates. Other places are still much worse. And some things might actually improve in Chile yet! Thankfully, the current mood is very anti-Left.

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

Note on Cost of Living for Newcomers to Chile

The cost of living is a technical economics term. It means, generally, “the level of prices relating to a range of everyday items, and regular household, educational, tax, insurance and transportation expenses.” Investopedia provides a more complete definition:

Cost of living is the amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes and health care. Cost of living is often used to compare how expensive it is to live in one city versus another locale. Cost of living is tied to wages, as salary levels are measured against expenses required to maintain a basic standard of living throughout specific geographic regions.

Accordingly, newcomers from Paris, London, New York and Hong Kong will find Chile to be relatively inexpensive, albeit with lower salary expectations, while people from places like small town Italy, rural New Zealand and many places in the USA and Canada located outside of major cities will find it to be extraordinarily expensive. The same thing is true when people from those places travel to other spots in the world that feature a significant cost of living disparity.

Sometimes, normally rational people, make rather irrational judgments based on limited data. For example, newcomers to Chile from the USA see that gasoline costs much more in Chile and then extrapolate that the overall cost of living is higher in Chile. This conclusion is false. By the same logic, Venezuela and Bolivia, where gasoline supposedly costs fifteen U.S. cents per gallon, must be extraordinarily cheaper places to live than in the USA, where gasoline is “excessively” expensive. However, this reasoning is erroneous. Other things in those countries are not cheap. Living in the Third World is cheaper for a lot of things but the added costs of bodyguards, criminal threats, political unrest, unsanitary conditions, etc. have to be factored into the equation.

Can I fairly judge that the USA or Finland are excessively expensive for wine since I pay US$4 for the same bottle Chile that people in those countries pay US$25 or US$40? One must look at overall cost of living in Chile verses those other countries without getting caught up in extrapolating on the prices of individual products, whether they be cheaper (e.g., medical care, vegetables, yogurt, pharmaceuticals, maid service) or more costly (e.g., gasoline, peanut butter, boxed cereals, power tools). Also, to be fair and consistent, one should never compare cost of living in small town Italy or Arkansas verses a major metro area like Santiago. Instead, use Atlanta, Charlotte, Houston, Detroit, Philadelphia, Phoenix, Milan, Berlin, Hong Kong, Sydney or Singapore as a baseline. Should anyone be surprised to know that living in Chicago, San Francisco, Munich, Barcelona or Geneva costs more than it does in Mobile, Little Rock, Porto, Cuneo or Salerno?

Some items that make up our standard of living should also be considered within any discussion of cost of living. For instance, what is the value of having an ocean or maintain view from your living room window? What is the value added by having a Mediterranean climate? What is the benefit of having a maid that does all your cooking, cleaning and laundry? Does having a year-round garden appeal to you? How about a much lower probability of being mugged, murdered, drafted, bombed or accidentally shot by cops? Let’s not forget to consider the level of air and water pollution, or overall food quality. Or maybe add the proximity to good medical care, a professional baseball stadium or world-class theater, not to mention living in strong buildings, with great internet service and quality interurban highways all around.

In other words, any analysis is deficient that simply compares only the cost of living in a place without also considering the amenities which influence our standard of living and quality of life. With most of the aforementioned items, Northeastern Santiago and Viña del Mar, Chile provide far more to augment one’s standard of living than can be found in most metro areas of over one million population around the world. The same can be said of Auckland and some other places, but not many others. For many people, it is worth paying more to have a better environment and certain amenities.

Nevertheless, cost of living still serves as a good starting point. After all, newcomers must be able to survive. If they have no accumulated wealth, they can create portable income by becoming a 51Talk online English teacher with a decent salary, most likely tax-free. After having money to spend, they will likely want to avoid paying higher living costs. At this point, many newcomers become frustrated by the price of “little” items. Perhaps the following remarks will help keep things in perspective and alleviate frustrations about living in Chile for the fist couple of years.

One newcomer recently told me, “Prices are by far the most demoralizing thing about Chile.” I suggested that he read the chapter on cost of living in my book Life in Chile: A Former American’s Guide for Newcomers. He needed to get the “big picture.” Many smaller items are more expensive in Chile but many larger budget items are not. His frustrations and worries were based more on emotion than rational analysis. Do not make the same mistake.

It is always good to answer questions and concerns rationally when it comes to the relative cost of products and overall cost of living, especially when the products in consideration make up a small percentage of our overall spending in any five-year period. For instance, how much contact lens solution does one buy a year? Even if it is significant, are there alternative means to get it cheaper? Can you have it shipped to you via Amazon and pay the 25% duty in Chile and still come out ahead? Do the same exercise with peanut butter, pliers, shoes and alarm clocks. It is not more expensive to live in Chile. You simply have to change your way of doing things from what you used to do. Try ordering smaller things online or stocking up on them while on trips to Europe or the USA and even pay an extra suitcase fee to bring them back (you might save enough to cover the costs of the flight!).

A household’s biggest budget items are housing, insurance and taxes. Those costs are all going to be reduced dramatically in Chile, even as a percentage of income, dwarfing any extra costs one has for “little” things. Food, transportation and education are important second category items. Depending on how one handles them (mode, selection, quality, etc.), and where one chooses to live, they will be either a little more or a little less in Chile than where you came from.

Let’s consider another “little” item that tends to be expensive in Chile by USA standards, but is not something you can import: meat. Think about it. How much more does a family spend on meat, continuing to eat it normally in Chile as they would have in the old country? Let’s say it costs an extra US$200 per month or US$2,400 per year. This sum pales by comparison to US$40,000 less in paid taxes alone, once a newcomer starts working his professional job. Until then, he simply has to absorb the cost as part of the price of emigrating. Even so, assuming the family eats lots of fruits and vegetables, there might be savings of US$2,000 per year if those foods are regularly bought in open-air markets. Therefore, look at the big picture rather than individual items. Also remember that we do not eat GMO-fed beef in Chile and the fruits and vegetables are better quality. Again, the cost of living should not be divorced from the standard of living.

A similar thing could be said of electricity costs. A newcomer living in an apartment in Santiago once told me, “I got the electric bill; it is unbelievable. I cannot understand how people can survive here.” Yet they do survive here, and on much less than their American counterparts. Why? They know how to play the game, whereas a tourist does not. After my years in Chile, I am now spending about the same on electricity as I did in the land of the free. In our household, we use electricity for lighting, small kitchen appliances, range hood, oven, washer, dishwasher and things plugged into outlets inside the house. Outside it is used for a sewage pump, lights and outlets (e.g., for the lawnmower). Those that choose to heat with electricity make a mistake. Most locals choose to get one of the Japanese or European kerosene units, like Toyotomi. The cost for heating will thus be much less over the long run than using electricity. Another slightly more expensive but more convenient option is to hook into the natural gas system if it is available.

My (cynical) Chilean wife says that Chileans that heat with electricity have found a way to alter the electric meters and thus rip off the companies. She may be right. Others use some sort of gas heating system. Newcomers should listen to her. She often knows. While in Las Condes, we used the Toyotomi heater instead of the apartment’s furnace heat or electric heaters. We saved a bundle and the heat was better. Also, the maid could help fill up the heating unit, maintain it and the room temperature, which is a benefit that newcomers are likely not accustomed to having.

What newcomers often do not realize is that electricity bills come with whopping surcharges for “overuse.” In Chile, once you go over a basic amount of electricity in winter you get nailed with a rate that is 2x or 3x the normal rate and the bill skyrockets. So, in order to not cross the threshold, one learns to mix into one’s household some natural gas (or propane) appliances for heating, hot water, cooking and clothes drying. Is that inconvenient or a hassle compared to the USA (Europeans are used to such things)? Maybe so. But so what? You do not live in the old country any more. It is just something else to learn, in a new place. Locals know how to optimize energy use. Imitate them. Every government-sanctioned utility monopoly has its own unique way of “ripping off” citizens and tourists. You have to learn to cope here just like anywhere else. Locals know. Newcomers must learn. Why do newcomers expect to know everything the first two months after arrival?

A key point of my book, Life in Chile: A Former American’s Guide for Newcomers, is to inform newcomers of issues as much as possible prior to coming to Chile. Things will be hard enough as it is for newcomers. Yet these folks routinely put off reading it as if the information were optional. They pay the price because of when they arrive unprepared. All newcomers have a hard time, but the more ignorant ones suffer the most. Newcomers should not think immigration will be easy. I have never said it is. However, you can look at my experience and that of many others who have stayed and see that it is more-than-possible to make it. Hard times make for hard choices, but the diligent can succeed.

Consider, too, the cost of using interurban toll roads. For instance, driving from Santiago to the Talca (farm belt) area on the weekend will cost perhaps US$24 dollars in tolls round trip (33% less on weekdays). One might first ask why there is a toll when gasoline (not so much diesel) taxes are so high? In Chile, most interurban highways are private and tolls are paid to a company that has won a monopoly right through a competitive bidding process (one of the “Chicago boys'” innovations stemming from the 1980s). Because of that fact, newcomers will notice that highways are in perfect condition, unlike Chile’s city streets (often rotten outside of Santiago). Fuel taxes are used in part to pay for city roads. Hence, Chile is a case study in why all roads should be private.

Furthermore, before one complains that, “Roads are no better here than in the USA,” he should consider how much he pays in taxes in the USA or Europe to get those good roads. Remember, too, that in New Jersey, Illinois, Pennsylvania and California people pay tolls to the state on top of paying taxes. Also, tolls in Chile are much cheaper than New York and Europe. In those places one already pays high income and fuel taxes. Consequently, one must not judge the cost of living in Chile based on what a tourist pays for things. Once one has a job and pays less in taxes, owns a home and use medical care in Chile, all will become strikingly clear: the savings far outweighs the additional costs for some things.

For example, if one earns US$120,000 in the USA and pays US$45,000 in all taxes, including income, Social Security, car registration, capital gains, property taxes and fuel taxes, in Chile he might pay US$12,000. Europeans will have a similar experience. Given that fact, is it “excessive” to pay US$24 in tolls to go to Talca, especially if one only goes there, say, four times a year? Once again, if one only looks at the cost of the tolls, he is missing the bigger picture.

Newcomers also tend to be myopic in my experience. They might be saving, for instance, 80% on world-class medical care in Santiago (compared to the USA) or procedures like in-vitro fertilization, not to mention the associated high transportation costs of traveling to specialized clinics. Yet they completely ignore those massive savings (that even newcomers can garner) and instead complain about the relatively paltry costs of things like tolls, meat and contact lens cleaner. Doing so is really irrational, if not ridiculous. Those who do so are not yet seeing the whole picture. With the savings in medical care and procedures alone, how much “excess” costs for cleaning fluid, meat and tolls can one pay? Five or ten year’s worth?

Newcomers live as tourists for the first year or two in Chile. The associated extra costs have to be counted as part of the cost of resettling to a new country without a visa in hand. Probably, no one has ever told them that it would be cheap to leave the old country and settle into a new one. Ask yourself: “Is it worth it to me to spend an extra US$25,000 on store-bought products over the next two years in order not to have to stay in my present country?” If so, deal with it.

So many people come to Chile with the unfounded expectation that transactions costs to adopt a new culture and way of life will be low. This thinking is tragically errant, always leading to frustration. An international move, including full immigration to a new country where one does not speak the language, is not easy and is hardly cheap. Why anyone would think otherwise is beyond me. I never make such claims in what I write or on my webinars. Nonetheless, rest assured that over time initial costs do subside. In the meantime, do not be surprised by the transition costs you will face. Try to minimize them, of course. Yet, is it not far worse to live in danger in the old country? Be thankful that you at least have the money to pay to move, Most that want to do so, cannot. That fact is one reason why becoming a 51Talk online English teacher is a Godsend.

Consider, too, that coming to Chile can end up being a career enhancement. No matter what happens, even if one “goes back,” being in Chile provides an opportunity for career growth. Indeed, there is little downside professionally if one plays his cards right. These benefits offset transitional costs. Living productively overseas does not look bad on one’s resume: after a few years you will be able to list such new personal attributes as “bilingual,” “experienced in living in an overseas environment,” “dual citizen” and “cross culturally trained.” How many new opportunities will those attributes create for you? Might it generate a higher rate of pay, too? Thus, the higher transition costs do come with some ancillary benefits. In addition, if one ends up buying real estate while here, Chile is a good place to invest in rental units and a retirement or second home, even if one chooses to leave someday.

Think about it. Base your judgments and conclusions in rationality.

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country. Non-wealthy immigrants to Chile should also create a portable income by signing up to be a 51Talk online English teacher. Read more details about the job in my previous post on the subject.

 Dr. Cobin’s updated and enlarged 2017 book, Life in Chile: A Former American’s Guide for Newcomers, Fourth Edition, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $129.

For a brief introduction consider Dr. Cobin’s abridged 2015 book (56 pages): Chile: A Primer for Expats ($19), offering highlights (somewhat outdated) found in the larger book. Buy Dr. Cobin’s Public Policy books at Amazon.com:

Increased Real Estate Taxes in Chile

One of the worst outcomes of the landslide election in favor of the Chilean Left in 2014 was the reality of paying higher taxes. Now it is coming to fruition in some areas, although for most people coming in from abroad the effect will be minimal. Unfortunately, those few newcomers that will be engaged in the building or real estate development and trading businesses in Chile will be impacted more.

The best feature of the current regime is its fall into the abyss in terms of popularity (with socialist President Bachelet’s approval rating recently declining to just 26% from around 70%), is that the policies are affecting and hurting so many people from the middle class that it is now unlikely that the Left will return to power for at least a decade.

Until the present administration, Chile has had no capital gains taxes for individuals (except companies, which treat capital gains like any other gain) so long as their real property was held for longer than one year. Such individuals were not considered “habitual” buyers and sellers of real property and thus not in the real estate business.

Now there will be capital gains taxes, starting on January 1, 2017, for everyone. However, there is an exclusion of 8,000 UF, which is just under 200 million pesos or about US$317,000, considering together the total gains from the sale of post-2004 purchased properties sold in any given year.

Upper middle class apartments in northeastern Santiago currently sell for 7,000 UF to 9,000 UF, and in Viña del Mar/Concón about 30% to 40% less, meaning that one’s property value will have to double or more to surpass the exclusion. Thus, in practice, most people are not going to be affected by this tax. And if they are prudent tax planners, they will sell (and perhaps immediately repurchase) property when their capital gain is closing in on 8,000 UF.

Moreover, those who inherit appreciated real property will receive a credit for the inheritance tax against the capital gains tax, so as to avoid double taxation. Nowhere is a rate for the capital gains tax given, so I must assume that it will be the same as one’s marginal income tax rate, which will certainly be much higher once a sizable capital gain is added to his income in any given year. The top marginal personal income tax rate in Chile under the tax reform will be 35% (for incomes over 1,440 UF annually or about US$56,000). For many people, the capital gains tax will be well-worth avoiding. There are several articles detailing the new tax, including the Chilean Library of Congress site. Look it over (warning:  it’s in Spanish!).

What is more onerous is the implementation of the 19% value added tax (IVA) on the sale of properties (excluding land value), effective January 1, 2016. This new tax will likely raise the price consumers pay for newly built homes by 8% to 12%, according to an article in La Nación, with higher rates in the range being applied to middle class purchasers of homes (without considering land value) between 2,000 UF and 3,000 UF (currently US$80,000 to US$120,000). The reason that the consumer will not simply pay an additional 19% is not due to a strict inelasticity of demand, which might well be the case in the marketplace, but rather because the contractor or building firm receives a credit toward the IVA it pays during construction. That credit has been limited, and will decline over the next few years, under the 2014 leftist tax reform. Still, the IVA credit does lower the overall price impact to consumers to no more than a 12% increase. See the chart in this article for details on the calculation.

Buyers and sellers of raw land or unimproved building lots will not have to pay IVA. Only buildings and things that add value to the land are taxed. What is unclear from my reading is whether sellers of used homes will also have to charge IVA to buyers. Apparently not! If not, great, but that tax differential will cause a significant distortion in the housing market, making a wider disparity between used and new home prices. From what I can tell from

From what I can tell from the Chilean Library of Congress article mentioned above, at first the only people affected by the IVA tax are “habitual” sellers of real estate: contractors and builders that build-to-sell, rather than individuals. However, the law is somewhat ambiguous, and it could be interpreted to include real property traders, and maybe real estate firms and brokers (although my wife assures me that such is not the case since they are not the owners of the property).

As always, new taxes and tax increases distort market conditions and induce inefficiencies. One thing that is clear is that anyone that buys a property, or signs a promise to buy it or a rent-to-own contract by December 31, 2015 will not have to pay the value added tax. Thus, my best advice is to conclude your real property transactions by year end, unless you hold to a contrarian position that the tax distortion (quite possibly) will cause a major decline in demand for real property, and thus reduce prices. The problem with the contrarian position is that it assumes that demand from foreign buyers coming to Chile will also fall. This possibility is undermined by the fact that Chilean property already looks like a bargain to serfs from Northern Hemisphere countries, and still would appear cheap even if the price were 12% higher. Hence, I remain unconvinced that overall demand will fall enough to reduce prices, but it could happen.

My interpretation is that foreign buyers will be unfazed by the tax hike. There will be a flurry of local people buying property before year end, especially in new developments and apartment buildings. After that, I see a significant distortion in moderately prices (2,000 UF to 3,000 UF) homes since middle income earners will find it harder to qualify when the property they want costs 12% more. Contractors in this market will likely have to sell for less and have lower profits, and thus will not continue to expand to build in middle class areas. That’s too bad since much urban blight has been removed in places like Viña del Mar, Valparaíso, Temuco, Puerto Montt, Concepción and central and western Santiago by putting up new apartments and tract homes in previously run-down areas. Now, under the tax reform, much more of Chile will remain blighted. It is also too bad for people employed in the construction sector since many of them will lose their jobs.

Moreover, the new tax law doubles the onerous tax paid to take out a mortgage, making loan acquisition more expensive for the middle class (since upper class and poorer people generally do not or cannot take out mortgages). The resulting higher unemployment and harm inflicted on the middle class does have a silver lining in that the current regime’s coalition is sure not to remain in power in either Congress or the Presidency. The tax reform policy will end up being a vote-losing action.

For most people, and especially newcomers to Chile, the effect of the new taxes can be avoided with careful planning and by not becoming a “habitual” trader of real estate. While this new limitation is bad, the truth of the matter is that few people coming to Chile will be affected unless they buy a new home starting next year. They will simply have to pay more, certainly if they buy from a firm selling units or homes, but perhaps also if they buy through a real estate agent (using a loose interpretation of the new law). Thus, it might behoove them to buy and remodel a used home offered “by owner” instead and make certain that they will avoid the value added tax. After they own a property, they should make sure to sell it prior to exceeding the 8,000 UF exclusion on the capital gains tax.

As a side note, the corporate tax rate is also be scaled up from 21% currently, increasing by 1.5% annual increments, to its final resting level of 27% in 2019. Another stupid blunder of the leftist President and Congress! This tax might have a more dramatic effect on newcomers than the real estate tax hikes.

Finally, something to bear in mind about any new tax that is easily avoided at first is that it will likely become more onerous in the future. Once the camel’s nose is in the tent, it does not take long before the whole camel is inside as well. Let’s hope that by ousting the Left next election, Chileans will also sweep away the new taxes and reforms with it!

 

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country.

Dr. Cobin’s book, Life in Chile: A Former American’s Guide for Newcomers, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service – Chile Consulting – where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $49.

Dr. Cobin’s sequel book, Expatriates to Chile: Topics for Living, adds even further depth on important topics to expatriates who either live in Chile already or who have Chile on the short list of countries where they hope to immigrate. The book deals with crucial issues pertaining to urban and rural real estate transactions, natural disasters, issues pertaining to emigration and its urgency, money and the quality of life, medical care and insurance, business opportunities, social manifestations (including welfare state and divorce policy concerns), Chile in the freedom indices, social maladies (lying, cheating, stealing and murder), as well as discussion of a few places worth visiting and some further comments about Santiago.

Dr. Cobin’s next sequel, Living in Chile: Key Details of History, Culture, Politics and Places for the Serious Immigrant, goes into detail that mainly those people living in Chile already or serious immigrants will be interested in. It is also of special importance to libertarians that want to know something about the political and ideological undercurrents, past highlights (like having a free port much like Hong Kong or free banking), and people that want practical information and where they can retire on their budget. The travel section compliments the other books in the series so that those that read all three books can be sure to have covered the key places of the country from top to bottom.

This book is chock full of savory details that only a true immigrant and former American with many years of experience would know. Some things are only learned over long periods of time and observation. Take advantage of tapping into Dr. Cobin’s deep knowledge of the country and insights of importance to serious immigrants.

For a brief introduction consider Dr. Cobin’s abridged book (56 pages): Chile: A Primer for Expats ($19), offering highlights found in the two larger books.

Buy Dr. Cobin’s Public Policy books at Amazon.com:

Christian Theology of Public Policy: Highlighting the American Experience (2006)

Bible and Government: Public Policy from a Christian Perspective (2003)

A Primer on Modern Themes in Free Market Economics and Policy (2009)

Chile 7th Freest Place on Earth (Heritage Foundation)

     While the Fraser Institute has not yet updated its rankings for economic freedom in 2014, and Chile remains in 11th place in their list, the Heritage Foundation has done so and Chile is in 7th place. Be sure to check out Chile in the 2014 Index of Economic Freedom.    Chile is a freer place than most countries (ranked 7th by Heritage Foundation for 2014) and looks better and better all the time. You might consider investing in the country and even moving to Chile. Chile has a new sustainable community starting called Freedom Orchard. Check it out. Buy your “Plan B” lot in it, and diversify out of the decaying assets in “First World” nations.
Also, be sure to tune in to Dr. Cobin’s radio program: “Red Hot Chile” at noon (ET) on Fridays on the Overseas Radio Network (ORN). You can also join the thousands of other people who download the shows each month via the archive link on our Red Hot Chile page (recorded show updated every Monday morning).
Be sure, too, to visit AllAboutChile.com for discussion and forums about the country and what’s going on with Freedom Orchard.
Dr. Cobin’s book, Life in Chile: A Former American’s Guide for Newcomers, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service – Chile Consulting – where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $49.
Dr. Cobin’s sequel book, Expatriates to Chile: Topics for Living, adds even further depth on important topics to expatriates who either live in Chile already or who have Chile on the short list of countries where they hope to immigrate. The book deals with crucial issues pertaining to urban and rural real estate transactions, natural disasters, issues pertaining to emigration and its urgency, money and the quality of life, medical care and insurance, business opportunities, social manifestations (including welfare state and divorce policy concerns), Chile in the freedom indices, social maladies (lying, cheating, stealing and murder), as well as discussion of a few places worth visiting and some further comments about Santiago.
For a brief introduction consider Dr. Cobin’s abridged book (56 pages): Chile: A Primer for Expats ($19), offering highlights found in the two larger books.
Buy Dr. Cobin’s Public Policy books at Amazon.com:
Christian Theology of Public Policy: Highlighting the American Experience (2006)
Bible and Government: Public Policy from a Christian Perspective (2003)
A Primer on Modern Themes in Free Market Economics and Policy (2009)These and other resources can be found on the Escape America Now resource page.