The Story of the Chicago Boys and the Downfall of Neoliberalism
February 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.