The policies of the military government, though encouraging the development of free enterprise and a new entrepreneurial class, caused unemployment, a decline of real wages, and, as a consequence, a worsening of the standard of living of the lower and middle classes. Political and social conditions were complicated by a developing international economic crisis. In 1981 a new constitution, as well as an eight-year extension of Pinochet’s presidential term, was enacted after a tightly controlled plebiscite was held in 1980.
