“We’re at war against a powerful enemy,” declared President Sebastián Piñera live on Sunday night TV from the Chilean army headquarters. “Democracy not only has the right but the duty to defend itself using all instruments … and the rule of law to fight those who would destroy it.” You may be forgiven for thinking Chilean democracy is besieged by some terrifying force: a foreign army, or even an invader from outer space. Nothing could be further from the truth. Piñera’s statement is doublethink: a lie travelling the world while truth is still putting on its boots.

Piñera then did what they all do – the Trumps, the Bolsonaros, the Johnsons of this world. He stamped his authority

But who is the enemy Piñera has gone to war with? One of his government’s own making – namely, the poorer people of Chile. This is the country that is the ground-zero for the neoliberal economic model now in crisis all over the world. From Canada and the United States to Chile and Argentina, the fire this time in the Americas and elsewhere is being fanned by the few. They’ve benefited the most from an economic model that consists of squeezing the many. And now, having nothing else to lose but their bullshit jobs and half-lives, the dispossessed are rising up like an army.

The Chilean people have been robbed of everything. Health, education, water, transport, all basic services have been privatised. Hope has been privatised. What else is there to do? Protest peacefully? Done that.

I witnessed a dance-in a few years back in Santiago. Dressed up like zombies in a 1980s Michael Jackson video, the student movement demanded free public education. They’ve been doing so since 2006. The protests intensified in 2011, during the first Piñera administration: 70% of the population supported their demands, widely seen as part of a general desire to transform the economic and political model established by the military dictatorship that governed the country from 1973 to 1990, after the violent coup against democratic socialist Salvador Allende.

Consider Chile’s privatised education system. It emerged during the Pinochet years in the 1980s, resulting in the 1990 education constitutional framework, signed by the general himself. After the first wave of student mobilisations, Pinochet’s framework was replaced by the 2009 General Education Law, which introduced no significant changes.

Like the rest of Chile’s neoliberal model, it was set in constitutional stone so that its reform or repeal would be nearly impossible. Such provisions became part of a constitutional framework designed by Pinochet’s intellectual collaborators like Jaime Guzmán, who was responsible for drafting most of the constitution that still governs Chile.

Guzmán was inspired by Francoist falangism and Third Reich constitutionalism, revised for a late 20th-century landscape. According to this ethos, respect for the constitution and the rule of law only goes as far “as the situation permits”, as the junta members put it on 11 September 1973, the day of the coup. This qualification has been accepted by all post-dictatorship rulers of Chile, if not in principle at least in practice.

Play Video 1:46 Chile protests rage despite president's retreat over subway fare rise – video report

In the dictatorship, meaningful protest and direct action were forbidden. Engaging in such acts meant risking summary execution, torture or disappearance. In the democracy, nominal rights to protest exist but remain severely limited. Social protest is frequently criminalised and direct action often equated with terrorism.

Judging from the videos and testimonies circulated this week by concerned citizens and protesters, engaging in such acts still risks violent reprisals from the authorities.

The Pinochet regime offers us a lesson: a neoliberal model can only be established by a campaign of scapegoating and lies, underpinned by the promise to “take back control”, “restore order and the constitution” and deliver “the will of the people”, plus a modicum of force. It can only be maintained if such force is normalised, shielding the model from the protests of the left-behind, which are inevitable when the dispossessed realise the game was rigged from the very outset. These were the tactics of Chile’s military junta. Clearly, its actions have echoes in the present.

This time, the spark that blew the powder keg came on 13 October, when the transport ministry announced the Santiago underground fare would rise by 30 pesos. Thereafter, school students began organising fare-dodging acts of protest all over the city. Thirty pesos might not sound much. And if you squint, Chile’s economy isn’t doing that badly: it has a GDP of $15,902 (£14,155) per capita, one of the highest in Latin America.

But for the many, Chile’s workers and precariat, the average salary is low: only £350 per month. Commuters coming from the peripheries to work in the capital may have to spend between £50 to £70 a month on transport alone. Try to feed a family with what’s left in a country without universal healthcare or free education. It is the same across the continent – in Quito, Buenos Aires, Bogotá, Rio. No wonder the hemisphere is exploding.

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After the adults started joining students in fare-dodging protests, economics minister Juan Fontaine, very much of the free-market Chicago school, advised them to get up earlier to avoid the more expensive fares. His colleague, transport minister Gloria Hutt, later implied fare-dodgers were criminals. As protests raged across the city, a video of Piñera partying at an upscale restaurant during his grandson’s birthday went viral. People took to the streets.

Piñera then did what they all do – the Trumps, the Bolsonaros, the Johnsons of this world. He stamped his authority in the name of democracy, law, and the will of the people. In the country of Pinochet, Piñera resorted to the behaviour of a dictator.

The state is now behaving like security for the country’s privatised industries. The crackdown is not about protecting the people. It’s not about 30 pesos. It’s about 30 years of an economic model elevated to the level of constitutional principle for the benefit of those who got richer during the Pinochet years, and continue to get even richer during Piñera’s – while the many suffer. They’re not taking it any more.

• Oscar Guardiola-Rivera is a senior lecturer in law at Birkbeck, University of London and author of What If Latin America Ruled the World?