don@allegra.UUCP (08/23/83)
Pinochet took power in Chile in a particularly nasty coup d'etat. It
marked the end of one of Latin America's oldest democracies. People
were hearded into the Santiago soccer stadium, and most of them were
never seen alive again. DINA, Chile's new secret police, drive trucks
equipped with torture devices. Bad news, eh?
Well, not everyone thinks so. Milton Friedman called Pinochet's coup a
"Political Miracle" and a group of his students, known as the "Chicago
Boys" took over the Chilean economy. With their help, Pinochet
balanced the national budget, lowered tariffs, deregulated industry,
lowered inflation, and ushered in strong economic growth. Everyone was
happy (except for various assassinated union leaders, of course)!
>From 1977 to 1982, the Chilean economy was the shining example of
free-market theories. Reagan supporters pointed to Chile as an example
demonstrating that his economic policies would work. Then came a
slight problem. Chile went bust! Banks failed, unemployment rose to
30 percent, and the GNP dropped 14 percent in one year. Today, Chile's
economy is in ruins, suffering the worst crisis since the Great
Depression. You may have noticed on the news that the people down
there are not too happy.
There are two interesting points that come to mind from this story.
First, scientists have guildlines about exerimenting with humans, but
it seems that economics professors can test out their crack pot ideas
on entire countries with no one questioning the ethics of it.
Secondly, any Keysian economist would say "I told you so" in Chile.
Economics is not a simple matter, and there are no simple answers to
the problem of keeping a country's economy stable. History shows that
controls and regulation are needed to prevent the "Boom and Bust"
syndrome.notes@zeppo.UUCP (10/24/83)
#R:allegra:-177800:zeppo:20900001:000:139 zeppo!wk Aug 25 15:32:00 1983 Pinochet came to power in a coup engineered by the CIA at the instigation of our illustrious (read infamous) President Tricky Nixon !!!