THE CHILE PROJECT

The history of the economic shock that accompanied the right-wing military coup in Chile in 1973.

In 1955, the U.S. State Department launched a project in which Chilean economists were trained in the free market fundamentalism of Milton Friedman. When Augusto Pinochet overthrew the government of Salvador Allende, “the first Marxist politician to be freely elected as a head of state in any country,” the “Chicago Boys,” as they were called, went to work undoing Allende’s socialist reforms and installing policies that included the privatization of social security, the use of school vouchers, and the abolition of thousands of regulations. As Edwards, a professor of economics and former chief economist for Latin America and the Caribbean at the World Bank, writes, the economists “would soon find out how different pontificating from the ivory tower was from actually implementing policies aimed at changing decades of entrenched policies.” Still, Chile eventually found its footing as a bastion of neoliberalism, and in the early 2000s, “Chile became, by a wide margin, the wealthiest nation in Latin America.” The nation was also marked by predatory capitalism and shocking inequality, a situation that was just fine by Friedman but was anathema to the working people of Chile—and was “a serious weakness that was mostly ignored by the architects of the model and that would come to haunt them.” Additionally, given that neoliberalism is globalist, Chile was long hampered in international trade by its status as a pariah nation thanks to the very military dictatorship that had brought the Chicago Boys to the fore. For all its successes, neoliberal Chile came to suffer from the failure of privatized social security. With the election of the leftist activist Gabriel Boric to the presidency in 2021, Chile is now abandoning many Chicago tenets in order to “move away from markets and competition.” Throughout, Edwards maintains a detailed yet accessible narrative.

A closely argued study of the merits and demerits of free market economics in action.