Chile used to be considered the economic poster child of Latin America – economic liberalisation led to huge gains in terms of GDP, life expectancy and lifting people out of poverty. But in recent months, the country has been mired in violent protests, to which there is still no end in sight.
Who is to blame? For large parts of the Western media, the answer is simple: the culprit is neoliberalism! The Guardian titles: “Blame the Chicago Boys”, a reference to the foreign-trained economists who liberalised the Chilean economy during the Pinochet dictatorship. Open Democracy claims that “This economic system […] has benefitted the economic elites whilst creating inequality and suffering for the majority”. Inevitably, there have been some nostalgic references to Chile’s brief experiment with socialism in the early 1970s, the implication being that if only that experiment had continued, Chile would be a vastly better place today.
This presents us with a good opportunity for some stocktaking of the situation of a country that continues to fascinate a lot of observers on both the Left and the Right. So how should we evaluate the situation of Chile today: neoliberal hellhole or rags-to-riches success story? What explains the Left’s ongoing fondness for a brief socialist experiment that ended nearly half a century ago? What might Chile look like today if the socialists had succeeded? Can free-market liberals defend the legacy of the Chicago boys with a good conscience, given that those reforms were carried out under a brutal military dictatorship?”
The IEA's Dr Kristian Niemietz discusses the topic with the IEA's Darren Grimes.