Chicago-school economists delivered a shock-treatment blueprint to Pinochet’s coup regime within days

Evidence

Chile’s transformation into an exemplary laboratory of neoliberalism owed much to Harberger’s Chicago Boys. On 12 September 1973, the morning after the coup, their 189-page economic programme, El Ladrillo (‘The Brick’) was on the desk of every major figure in the new regime. It called for trade liberalisation and tariff reductions; widespread privatisation, including of social security; and a regressive value-added tax. In 1993, Harberger noted with satisfaction that this vision was now overwhelmingly accepted by all of Chile’s major parties, while, at the time, the Chicago programme was ‘too market-oriented, too open-economy, and too technocratic’ even for the traditional Chilean right. In 1975, Friedman met with Pinochet to convince him that Chile’s economy required ‘shock treatment’, primarily in the form of a drastic reduction in public spending. The general, Friedman noted, ‘was sympathetically attracted to the idea of a shock treatment but was clearly distressed at the possible temporary unemployment that might be caused’. In the wake of his visit, Friedman wrote to Pinochet to stiffen his resolve: ‘There is no way to end the inflation that will not involve a temporary transitional period of severe difficulties, including unemployment’. — Jessica Whyte, The Morals of the Market, 322

Categorization

• XREF: Directly evokes Naomi Klein’s ‘Shock Doctrine’ thesis on the coupling of economic shock and political repression; also connects to the reader’s austerity/neoliberalism readings. — connects to: Chicago economists trained under a US aid program shaped Pinochet’s reforms — Angus Burgin, The Great Persuasion: Reinventing Free…, 516; Chile’s Chicago Boys network predated Pinochet grounded in pre-coup institutions. — Quinn Slobodian, Globalists: The End of Empire and the…, 544; Hayek and Friedman personally advised and legitimized the Pinochet dictatorship. — Jessica Whyte, The Morals of the Market: Human Rights…, 305 (+4 more)
• SEED: Angle: Friedman’s personal ‘stiffening’ of Pinochet’s resolve humanizes — and indicts — the theorist behind austerity as a body count.

Broader Connections

• Nobel-winning Chicago economists actively endorsed Pinochet’s dictatorship #expands (0.85) — Jessica Whyte, The Morals of the Market, 329
• Chicago-trained economists filled key Chilean ministries under Pinochet #expands (0.80) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1624
• The Chicago Boys’ shock program reached Pinochet through Admiral Kelly in 1975. #qualifies (0.80) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1564
• A coup enabled economists to capture a whole state’s economic machinery #expands (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1576