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Thom's blog
The Failed Libertarian Experiment in Chile
The libertarian experiment failed in Chile, and now Chileans once-and-for-all, have said goodbye to the religion of Reaganomics. On Tuesday, Michelle Bachelet, a socialist, will take office as President of Chile. This is a great personal achievement for her. Bachelet was president before from 2006 to 2010, but because Chile’s constitution prevents presidents from serving for more than one consecutive term, she was unable to run in the 2009 elections, which were won by outgoing right-wing president Sebastian Pinera.
Bachelet now gets the rare opportunity to be president twice at two different times, something only one American (Grover Cleveland) has ever been able to do. But for Chileans, Bachelet’s inauguration is about more than just personal glory. It’s about finally putting to rest the legacy of one of South America’s most brutal dictators: General Augusto Pinochet, and the Chicago School of Economics that he brought with him when he took over the country.
As I pointed out in December when Bachelet was first elected, in the early 1970s Chile was one of the most progressive countries in South America. The democratically elected socialist president, Salvador Allende, nationalized big businesses and gave every Chilean access to free healthcare and higher education. GDP went up and income inequality went down. But not everyone was happy with President Allende’s 1970s Chilean version of the New Deal.
Behind his back, the Nixon administration and Chile’s corporate and military elite conspired to sabotage Allende’s reforms and destroy the economy. Although Allende’s policies were successful, Chile still needed foreign loans to survive - and so the Nixon administration got the International Monetary Fund (IMF) to suspend all aid. This decimated the economy and stunted the progress Allende had made over his first few years in office.
-Thom
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