As many people might know, I drive a fairly long distance to get to class. To pass the time, I’ve taken to listening to audiobooks. One of my favorite books was the Ascent of Money, which explored the beginning of coinage, stock markets, insurance and how fiscal innovations shaped the nations of today. On the topic of Chile, the author took great effort to explore the positive aspects of the dictator in regard to economic policy and the application of free-market ideology. Knowing next to nothing about Chilean history, I was intensely interested in what our Chilean hosts thought about Augusto Pinochet after so many years.
In the early months of 1973, President Allende, who had imposed many socialist programs like nationalizing mines, banks and other key industries, was encountering an inflation rate over 800%. There were strikes by miners and truck drivers. Right-wing groups were disrupting power lines and transport routes. It looked like Chile was on the brink of a civil war. Augusto Pinochet, already in a general in the military, took over the government in 1973 establishing a dictatorship and took swift action to suppress the opposition. As Alex and his uncle addressed, people were fearful of their lives and many were jailed, tortured, exiled or killed due to their political affiliations. As horrible and alarming these human rights abuses were, Pinochet also made many sweeping reforms to Chilean free-market policy.
The Chicago Boys, a group of economists from the University of Chicago working under Milton Friedman, started writing recommendations to economic policy even before Pinochet took over the government. However, it wasn’t until 1975 did the dictator start reconsidering his approach to his economic and government policy. After having a personal meeting with Friedman, the Pinochet regime soon started to apply these principles by ‘removing trade barriers, encouraging export growth, privatizing state-owned industries, creating a central bank able to control interest and exchange rates without government interference, cutting wages sharply, and privatizing the social security system’. These actions have developed a solid foundation for the Chilean economy to grow faster and stronger than their counterparts in the rest of South America. Pinochet, knowing his actions created this foundations, actively campaigned to the Chilean people that if they wanted to enjoy the benefits of his regime, they needed to ignore the human rights abuses that occurred. Continuing to remain influential and having the monetary means to fight many cases in court, Pinochet died without facing prison for these abuses. Decades after the end of his regime and years after his death, Pinochet remains controversial as Chileans struggle to accept that their economic prosperity was made possible by a man many would have happily seen jailed for the pain he inflicted on his people.
In the early months of 1973, President Allende, who had imposed many socialist programs like nationalizing mines, banks and other key industries, was encountering an inflation rate over 800%. There were strikes by miners and truck drivers. Right-wing groups were disrupting power lines and transport routes. It looked like Chile was on the brink of a civil war. Augusto Pinochet, already in a general in the military, took over the government in 1973 establishing a dictatorship and took swift action to suppress the opposition. As Alex and his uncle addressed, people were fearful of their lives and many were jailed, tortured, exiled or killed due to their political affiliations. As horrible and alarming these human rights abuses were, Pinochet also made many sweeping reforms to Chilean free-market policy.
The Chicago Boys, a group of economists from the University of Chicago working under Milton Friedman, started writing recommendations to economic policy even before Pinochet took over the government. However, it wasn’t until 1975 did the dictator start reconsidering his approach to his economic and government policy. After having a personal meeting with Friedman, the Pinochet regime soon started to apply these principles by ‘removing trade barriers, encouraging export growth, privatizing state-owned industries, creating a central bank able to control interest and exchange rates without government interference, cutting wages sharply, and privatizing the social security system’. These actions have developed a solid foundation for the Chilean economy to grow faster and stronger than their counterparts in the rest of South America. Pinochet, knowing his actions created this foundations, actively campaigned to the Chilean people that if they wanted to enjoy the benefits of his regime, they needed to ignore the human rights abuses that occurred. Continuing to remain influential and having the monetary means to fight many cases in court, Pinochet died without facing prison for these abuses. Decades after the end of his regime and years after his death, Pinochet remains controversial as Chileans struggle to accept that their economic prosperity was made possible by a man many would have happily seen jailed for the pain he inflicted on his people.
- Ascent of Money by Niall Ferguson
- http://www.bbc.com/news/world-latin-america-24014501
- http://www.wsj.com/articles/SB10001424052748703411304575093572032665414
- http://www.nytimes.com/2006/12/11/world/americas/11pinochet.html?oref=slogin&_r=0
- https://books.google.com/books?id=3uFAr6lhPxgC&pg=PA142&lpg=PA142&dq=chile+inflation+1973+800%25&source=bl&ots=5H67lYFgjK&sig=wKXwuwubj5JXZ93lMg9nHlDeiI0&hl=en&ei=Iy1ZS-P2Js6ztgeT_NScAg&sa=X&oi=book_result&ct=result#v=onepage&q=chile%20inflation%201973%20800%25&f=fals