In 1970, Venezuela was a little richer than Chile — $1,014 nominal dollars per capita versus $933! on World Bank figures. Both were corrupt social democrat countries with poor management and bloated government. Fifty years later in 2020, Venezuela, which continued and worsened its socialism, had a GDP per capita of only $1,691 nominal dollars while Chile, which after the 1973 coup took a free-market approach, had soared to a GDP per capita of $12,990. Yet Chile just voted to reverse its policies and follow Venezuela’s. Why?

I visited both countries on a number of occasions in the 1980s and early 1990s, and Venezuela’s descent into left-wing politics and dire poverty did not surprise me. The economy was dominated by the state-owned oil company, Petroleos de Venezuela, and there were really no independent sources of wealth. Because of the country’s relatively high labor costs, there was no tourist industry worth a damn, nor was there a private sector beyond oil that offered ordinary people a chance to grow rich. In 1990, I undertook a consulting assignment to find opportunities for corporate finance business in the country, and came to the conclusion that, even in a relatively good year as that was, there were no non-oil corporations worth financing or where private sector investors might see opportunities for growth.

At the same time, while the Venezuelan government was having a modest moment of opening to the free market in 1990, there was no real conviction behind it, and indeed, why would there be – there was no worthwhile free market to which the government could open. Hence, I was unsurprised by the successful electoral coup of Hugo Chavez in 1998, which used the miseries of the substantial urban proletariat to take over the centrally-controlled power structure funded by oil revenues. I would have supported U.S. intervention in 2002 to back the last attempt by the Venezuelans at breaking free of Chavez but did not even then have much hope that a brighter future might emerge from their success. The decline into chaos and dictatorship since 2002, where even the oil revenues have faltered, is also no surprise, although it is a fate that any thoughtful people would surely wish to avoid.

Chile on the other hand, when I visited it in the 1980s seemed a beacon of hope for the future. A plethora of private sector companies had emerged far beyond the copper mines that traditionally constituted Chile’s wealth, and with low inflation, a burgeoning capital market and an intelligently privatized pension scheme, there seemed no reason why Chile should not become ever wealthier, its growth rates outstripping those in the rest of Latin America and its living standards ever-rising as more and more new private sector opportunities arose. The country had huge natural resources and only a modest population, so wealth seemed naturally to burgeon in its future – as indeed has occurred. The transition from autocracy to democracy might have been difficult, but it was handled well in 1988-90, with no great disturbance of the economic system that was bringing Chile such new-found prosperity.

Now Chile has voted, not just for the social democracy that it has endured on a couple of occasions since 1990, but for out-and-out socialism on the Chavez model. President-elect Gabriel Boric is a carbon copy of Chilean President Salvador Allende, whose advent to power with a minority 36% of the vote was so disastrous for Chile in the early 1970s. This time around, however, there is no ITT, no President Richard Nixon, and no CIA full of patriots like G. Gordon Liddy, who together helped Chile throw off Allende in 1973 and bring the admirable Augusto Pinochet to power.

One’s initial instinct, therefore is to ask what Chileans were thinking; do they not remember the problems of the early 1970s? Then with an aged smile one is forced to remember that no, they don’t; like most emerging markets Chile has a relatively young age distribution, so few of their voters can remember the disasters of the last period of leftist domination. In any case, the Boric majority is not just composed of die-hard Allende voters; he got 56% of the vote in the recent run-off, not 36%.

The recent action of the Chilean electorate is thus completely irrational; given a clear choice between continued progress and descent into abject poverty, they chose the latter. We must therefore look at structural reasons for this irrationality and examine closely whether such structural reasons might also exist in our own democracies.

The first and most obvious reason, especially in Chile’s case, is higher education. The students and graduate students in Chile have been a strong and consistent force in favor of the worst possible policies – the constitutional convention, sitting since last May and clearly set to destroy Chile’s economic freedoms, was a typical product of this class of traitorous clerks.

The percentage of young people heading for higher education has soared in the last 50 years, in Chile and elsewhere, and it must surely now be clear that our societies have earned hugely negative returns from this gigantic expenditure of time and money. The modern economy requires a wider range of intellectual skills than that of a century ago, but the vast majority of those can best be taught either through apprenticeships or through short, specialist programs of technical education. Many of the non-technical skills taught at great expense through Masters’ programs can best be learned on the job or are best not learned at all – much of what is called advanced education is pure indoctrination by the hard left.

My own Harvard Masters in Business Administration has always been a very good meal ticket – it gets me membership of the Harvard Club of New York City – but its truly useful skills could have been taught me in six months and were taught to my son in his junior year at his public high school. As for today’s Harvard MBA, I am not at all sure it has any value whatsoever, so dumbed down and woke-ized has the syllabus become. If that is even partially true for a Harvard MBA, I am damn sure it is true for Masters degrees in journalism, social sciences and the like.

Most countries will eliminate an enormous burden from their public sectors by reverting to a world in which only 5% of the populace pursue a general college education and maybe another 5% pursue specialized vocational training of some sort or another. The excess who are instead educated through apprenticeships or short specialist courses will no longer be indoctrinated by leftist professors and will have a better change of understanding how a workable economy functions. With that, such irrational electoral choices will be much scarcer.

The second source of electoral irrationality is the nexus of media and social media. Naturally, this interacts with the first source; prominent journalists these days all have fancy college degrees, very probably Journalism Masters and are thus thoroughly indoctrinated with the leftist tosh of their professors. Social media also is dominated by amateur journalists, perhaps slaving away in dead-end jobs for the government, but who fancy their chances of becoming “influencers” if they can collect enough followers – the “party line” is thus likely to emanate from them also, and by its infinite replication through the Internet gets the respectability of near-unanimity, so that those deviants who oppose it can be disregarded as a minority faction of probably dangerous subversive eccentrics. The anti-Communist McCarthyism of the 1950s was never 1% as effective as the Left-dominant McCarthyism of today.

The third and in some countries most important influencer of electorate irrationality is China. This is not just a conspiracy theory; the CIA was active in the 1950s in the electoral processes of countries thought susceptible to Communism, such as France and Italy, and it is reasonable to expect that the opposing major power, China, would have a similar operation in many countries today. (Alas, to the extent that the CIA has an equivalent operation today, it will be run by over-educated wokies and will therefore push enthusiastically in the wrong direction.)

One cannot assign every irrationally bad election result to Chinese influence, of course, but in Chile there is strong evidence that they have ambitions in this direction. China is close to controlling the world’s supply of lithium, an essential ingredient in the electric-car batteries towards which, possibly also through Chinese influence, the world is moving. However, the world’s largest non-Chinese-controlled supplier of lithium is Chile’s Sociedad Quimica y Miniera (NYSE:SQM), in which Chinese interests already have a minority participation and the controlling shareholder is Julio Ponce Lerou, a son-in-law of the late President Pinochet. President-elect Boric has already claimed that SQM is exploiting the “people’s lithium” – presumably China will ensure in short order that it becomes the Chinese people’s lithium. With such an incentive, do you really believe China was un-involved in Chile’s recent election? I don’t.

We cannot do much about the media, conventional or “social” and we cannot do much about China. But we can at least stand up against the tyranny of the college system. So, my message to the mothers of America is, to mis-quote Noel Coward: “Don’t Put Your Daughter Into College, Mrs. Worthington” – or your son. If enough parents rebel, the U.S. political system can be saved.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)