D H
Jun 18 · Last update 2 mo. ago.

Was Chile’s Economic Miracle a lie?

Chile is often quoted as a success story of open market capitalism, with famous free-market proponent Milton Friedman describing the Chile's free market as paving the way for a free society. The turn around of Chile’s economic policy in the 70s and 80s was largely due to the input of a group of Chilean economists dubbed the “Chicago Boys”, as they had studied economics at the University of Chicago under Friedman and Arnold Harberger. However some economists have pushed back against this, arguing against the outcomes of the role of economic liberalism in Chile and the description of these policies as an economic miracle. So what is the story of Chile’s economic miracle? Is the standard narrative of the success of Chile’s economic miracle fraudulent? Or is there misunderstanding surround this period of Chile’s economic history? pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html#10
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No, but the word miracle makes it misleading…
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The redirection of the Chilean economy under Pinochet, carried out in collaboration with the CIA, essentially gave away profitable state enterprises to big businesses, while repressing labour, and introduced repressive corporate socialism despite the rhetoric framework put forward by Milton Friedman disciples. While much of the critique of this period focuses on the brutal arbitrary detentions, torture, murder and exile of union leaders and government opposition under the Pinochet dictatorship, the economic reforms were just as damaging to Chilean society. Much of the "miracle" of the neoliberal growth of the late 70s and early 80s was based on foreign debt and financial speculation, forming a bubble that burst in 1982 leading to a 14% drop in GNP, 30% unemployment and a spirally debt crisis as the government backed the private companies who now held national debt. So despite preaching about free markets the Pinochet government, backed up by the Chicago Boys and the IMF, disparaged state intervention in the economy but encouraged the bail out private debtors. Chile's miracle was as much of a lie as neoliberalism's free markets are.

multinationalmonitor.org/hyper/issues/1994/08/mm0894_12.html webarchive.loc.gov/all/20130706111810/http%3A//www.intelligence.senate.gov/pdfs94th/94chile.pdf

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DH edited this paragraph
The redirection of the Chilean economy under Pinochet, carried out in collaboration with the CIA, essentially gave away profitable state enterprises to big businesses, while repressing labour, and introduced repressive corporate socialism despite the rhetoric framework put forward by Milton Friedman disciples. While much of the critique of this period focuses on the brutal arbitrary detentions, torture, murder and exile of union leaders and government opposition under the Pinochet dictatorship, the economic reforms were just as damaging to Chilean society. Much of the "miracle" of the neoliberal growth of the late 70s and early 80s was based on foreign debt and financial speculation, forming a bubble that burst in 1982 leading to a 14% drop in GNP, 30% unemployment and a spirally debt crisis as the government backed the private companies who now held national debt. So despite preaching about free markets the Pinochet government, backed up by the Chicago Boys and the IMF, disparaged state intervention in the economy but encouraged the bail out private debtors. Chile's miracle was as much of a lie as neoliberalism's free markets are.

No, but the word miracle makes it misleading…

Chile’s economic miracle did happen, but to leave it there is to skip over the relevance of this part of Chile’s history. Chile’s economic miracle should be depicted as a solidification of corporate power not a benefit to Chileans as a whole, professor C.B. Macpherson of the University of Toronto objected to Friedman’s take on free-market liberalism and Chile is a perfect example of this. Macpherson argued that political freedom actually came before economic freedom, and the ones to initially benefit from this economic freedom were property owning elites, who used their new-found political freedom in their own interests, opening the doors to unrestrained capitalism. The current protests in Chile are perfect evidence of this, people are massively dissatisfied as although the economy has grown since Pinochet inequality is rampant, with half of what is traded on Chile’s stock exchange is controlled by only four families.

aljazeera.com/indepth/features/2013/11/other-side-chile-economic-miracle-201311159282210130.html jstor.org/stable/3231503?seq=1

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Jun 18
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