Publishers Weekly
02/20/2023
In this meticulous study, economist Edwards (Crisis and Reform in Latin America) recounts the history behind the 2019 Chilean protest movement that led to a constitutional referendum and the election of a left-wing president who vowed to eradicate “the neoliberal model.” Edwards traces the roots of this tumult back to 1955, when the U.S. State Department launched a plan to influence Latin American affairs by training Chilean economists in the free market ideology of Milton Friedman and his colleagues at the University of Chicago. For years, the Chicago-trained economists had little influence on Chilean policy until military dictator Augusto Pinochet seized power in 1973 and turned the economy over to them. Edwards credits the Chicago Boys’ policies, including low corporate taxes, tight restrictions on unions, and a pension system based on personal savings accounts, with helping to transform Chile into the wealthiest nation in Latin America by the early 2000s, but also reveals how the program entrenched high rates of inequality, fostered corruption, and produced environmental destruction. Marked by Edwards’s firm grasp of regional politics and lucid explanations of economic theory, this is a valuable primer on a complex subject. (May)
From the Publisher
A Financial Times Best Book of the Year: Economics
Kirkus Reviews
2022-12-14
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.
