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Abstract
The term ‘Chicago Boys’ remains closely associated with the orthodox neoliberal adjustment implemented in Chile by the Pinochet dictatorship. The conventional portrayal of the Chicago Boys is of a group of US-trained, technocratic economists who institutionalised neoliberal principles and technocratic prerogatives in public policymaking in Chile. This article will contend the Chicago Boys were much more than neoliberal technocrats: they were a revolutionary vanguard that designed and led a capitalist revolution and radically altered the material and ideological foundations of the nation.
Acknowledgements
The author would like to thank Leo Panitch and Liisa North for their support and feedback. This work was supported by a Doctoral Research Award from the International Development Research Centre (IDRC). The author would also like to thank the two anonymous reviewers for their excellent comments and suggestions.
Notes
1. The label ‘Chicago Boys’ is used here to describe the core group of individuals who designed and implemented the neoliberal transformation of Chilean society. Some members of the group were neither economists (Jorge Cauas) nor Chicago-educated (Hernán Büchi and José Piñera), nor state officials (Manuel Cruzat). There were also important differences amongst those one could describe as ‘Chicago Boys’. What united the group, however, was their adherence to a common sense of mission (transformation of Chilean society), values (economics as a neutral science, the elevation of markets, and a suspicion towards politics and the state), and core policy positions (liberalisation of markets and private ownership of economic assets).
2. On Chile, see Silva, “Technocrats and Politics in Chile”; and Valdés, Pinochet’s Economists. While Silva and Valdés rightfully note there were Chicago-trained economists in the private sector and civil society, their focus is on the role of the Chicago Boys in the dissemination of neoliberal ideas and technocratic policymaking within the state. On Latin America, see Teichman, “Mexico and Argentina”; and Dargent, Technocracy and Democracy in Latin America.
3. See Schneider, “Supply-Side Economics.”
4. Plehwe, “Introduction.”
5. Peck et al., “Postneoliberalism and its Malcontents,” 106.
6. For an interesting and useful comparison of neoliberal reforms and their effects in Chile and Argentina, see Undurraga, “Neoliberalism in Argentina and Chile.”
7. Farías, “Improvising a Market, Making a Model.”
8. See Moulian and Vergara, “Estado, Ideología y Económica Política en Chile”; Martínez Bengoa and Díaz, Chile, The Great Transformation; Gárate, La Revolución Capitalista de Chile.
9. Huneeus prefers the term ‘ODEPLAN Boys’ to ‘Chicago Boys’, on the grounds that there was not a strict separation between economists and groups like the Gremialistas and that National Planning Office (ODEPLAN), which was the early node of radical activity, was the key site of cross-fertilisation. I will use the term ‘Chicago Boys’ here for several reasons: (1) the Chicago Boys were the dominant civilian group within the state, in many ways absorbing and assimilating ideas and adherents, including from the Gremialistas; (2) while ODEPLAN was a key recruiting, organisational, and policy-development node, the Ministry of Finance was the clear centre of policymaking gravity, and the Ministry was dominated by Chicago Boys for most of the military dictatorship; and (3) the Chicago Boys themselves, more than any other group in society, bridged state and civil society in the design and implementation of the neoliberal project. See Huneeus, “Technocrats and Politicians.”
10. Huneeus, “Technocrats and Politicians.”
11. Fontaine Talavera, “Sobre el Pecado Original,” 96–8.
12. Ibañez and Lüders, Hacia una Moderna Economía, 21.
13. Many of the ideas expressed in The Brick can be traced to the Frei government and the Alessandri campaign of 1970. Prior to entering the military regime, several Chicago Boys had worked under Frei (in the Central Bank) and on the Alessandri campaign; the more radical ideas, however, were only possible politically under the military regime, and in particular once Pinochet had concentrated power. See Silva, “Technocrats and Politics”; Valdés, Pinochet’s Economists; and Clark, “State and the Making.”
14. Arancibia Clavel, Conversando con Roberto Kelly, 164.
15. Ruiz and Orellana, “Panorama Social de Chile,” 30.
16. Vergara, Auge y Caída del Neoliberalismo, 168–73; Silva, In the Name of Reason, Chapter 5.
17. De Castro, El Ladrillo; Rolf Lüders, former Minister of Finance in the Pinochet government, interview with author, 19 July 2011.
18. DIPRE, Somos Realmente Independientes, 362.
19. Büchi, La Transformación Económica, 57.
20. Büchi, La Transformación Económica, 72.
21. Büchi, La Transformación Económica, 237.
22. De Castro, El Ladrillo, 29.
23. Büchi, La Transformación Económica, 63.
24. De Castro, El Ladrillo, 31.
25. Hayek, “Principles of a Liberal Social Order,” 367.
26. DIPRE, Somos Realmente Independientes, 324.
27. Piñera, “Dar un Golpe de Timón,” 7.
28. Büchi, La Transformación Económica, 237.
29. ODEPLAN, Eficiencia Económica Para el Desarrollo Social, 8.
30. Clark, “State and the Making of Capitalist Modernity,” 242.
31. DIPRE, Somos Realmente Independientes, 382.
32. De Castro, El Ladrillo, 32, 50. A former BHC executive and Minister of Finance commented that the new generation of business people perceived themselves as in opposition to the old business elite and as responsible for transforming the mentality and role of business people in the country. Rolf Lüders, interview with author, 19 July 2011, Santiago, Chile.
33. Silva, State and Capital in Chile, 107–8.
34. Calculated from Dahse, Mapa de la Extrema Riqueza; Mizala, Segmentación del Mercado de Capitales, 6–8.
35. Rozas, La Concentración del Poder, Appendix 19.
36. Silva, State and Capital in Chile, 145.
37. Dr. Cecilia Montero, former President of the Chilean Association of Sociologists and researcher at the Corporation for Latin American Studies (CIEPLAN), interview with author, 29 July 2011, Santiago, Chile; Mizala, Segmentación del Mercado de Capitales, 10; Sánchez, “Análisis y Perspectivas de la Inversión en Chile,” 8.
38. Louie Lefeber, founding Director of the Centre for Latin America and the Caribbean (CERLAC) and author of the Alliance for Progress Report on Chile, interview with author, 5 April 2011, Toronto, Ontario.
39. Rozas, La Concentración del Poder, 62–3. This pattern is indicative of business groups in what Schneider refers to as the hierarchical market economies (HMEs) of Latin America.
40. Rozas, La Concentración del Poder, Appendix 18.
41. See Teichman, Politics of Freeing Markets, 80.
42. Büchi, La Transformación Económica, 292.
43. Williamson, “Chile’s Debt Conversion Program,” 472–3; Haindl, Chile’s Resolution of the External Debt Problem, 42.
44. Fernández Jilberto, “Origin and Formation of Economic Groups,” 198–200.
45. The Chicago Boys similarly benefitted from two institutions set up by moderates within the regime, prior to the consolidation of Chicago Boy power within the state: ProChile, which was founded to develop contracts for exports in foreign markets and helped finance an export-promotion fund, and Chile Foundation (a partnership between the Government of Chile and the ITT Corporation), which introduced and/or developed many of the most significant new agro-export lines, including salmon, wine, asparagus, and blueberries. On the developmentalist roles of ProChile and Chile Foundation, see Alvarez and Crespi, “Exporter Performance and Promotion Instruments,” 239–40; Agosín et al., Industrial Policy in Chile, 30.
46. See ODEPLAN, El Mercado Crediticio.
47. Ministerio de Agricultura, Modernization of National Agricultural Activities, 227–9.
48. Kay, “Globalization, Peasant Agriculture and Reconversion,” 20.
49. Undurraga, “Transformaciones Sociales y Fuentes de Poder,” 207.
50. DIPRE, Somos Realmente Independientes, 354–5.
51. Thrift, Knowing Capitalism.
52. Huneeus, “Technocrats and Politicians,” 490–500.
53. See Mönckeberg, El Negocio de las Universidades.
54. Pollack, New Right in Chile, 62–4.
55. Undurraga, “Instrucción, Indulgencia y Justificación,” 156–8.
56. Cited in Campero, Los Gremios Empresariales, 299.
57. Arriagada, Los Empresarios y La Política, 83–6.
58. Campero and Valenzuela, El Movimiento Sindical, 113–4.
59. Quoted in Kurtz, Free Market Democracy, 70.
60. Büchi, La Transformación Económica, 117.
61. Valenzuela, Political Brokers in Chile.
62. De Castro, El Ladrillo, 54.
63. Oxhorn, Organizing Civil Society, 194.
64. Braun, Economía Chilena, 26.
65. Nef, “Chilean Model: Fact and Fiction”; Fairfield, Private Wealth and Public Revenue; Carlin, “Decline of Citizen Participation.”
66. Büchi, La Transformación Económica, 65.