University of Chicago (UC) free market economists have turned up for decades around the world, from the winners’ circle at Nobel ceremonies to hands-on reforming of economic systems in South America. The worldwide move toward more market-oriented reforms during recent decades is often traced back to the terms of US president Ronald Reagan and UK prime minister and Hoover honorary fellow Margaret Thatcher. But they were not the first to turn seriously to markets in the mid–twentieth century in a trend that now stretches across the globe in the era of globalization. Important aspects of market economics suffused the post–World War II reforms in the Asian “tigers” or “dragons”: Japan, South Korea, Taiwan, and Singapore, the only countries in the past half century to leap over the rest of the “developing” world into the developed world.
With support from the Ford Foundation, a program was launched that enabled many Chilean students to pursue graduate studies in economics in the United States, mostly at the UC, and US professors to conduct research from a base at the PUC. Contrary to the common assumption that Friedman was the dominant influence in Chile, a different UC (later University of California at Los Angeles) professor, Arnold Harberger, was in most respects the father of the Chicago boys. His goal was to teach economics fundamentals to students from Chile and demonstrate how economics is linked to the real world.
Milton Friedman and Arnold Harberger, University of Chicago
ReplyDeleteUniversity of Chicago (UC) free market economists have turned up for decades around the world, from the winners’ circle at Nobel ceremonies to hands-on reforming of economic systems in South America. The worldwide move toward more market-oriented reforms during recent decades is often traced back to the terms of US president Ronald Reagan and UK prime minister and Hoover honorary fellow Margaret Thatcher. But they were not the first to turn seriously to markets in the mid–twentieth century in a trend that now stretches across the globe in the era of globalization. Important aspects of market economics suffused the post–World War II reforms in the Asian “tigers” or “dragons”: Japan, South Korea, Taiwan, and Singapore, the only countries in the past half century to leap over the rest of the “developing” world into the developed world.
ReplyDeleteWith support from the Ford Foundation, a program was launched that enabled many Chilean students to pursue graduate studies in economics in the United States, mostly at the UC, and US professors to conduct research from a base at the PUC. Contrary to the common assumption that Friedman was the dominant influence in Chile, a different UC (later University of California at Los Angeles) professor, Arnold Harberger, was in most respects the father of the Chicago boys. His goal was to teach economics fundamentals to students from Chile and demonstrate how economics is linked to the real world.
For two decades neither teaching nor research under the program had any direct policy influence in Chile. But deep and long-standing disorientations throughout society quickly worsened during the Allende period; by September 1973 inflation had reached 1,000%, setting the stage for a military coup. After a year and a half of procrastination, the military government, headed by General and later President Augusto Pinochet, turned the national economy over to the Chicago Boys in 1975. Given a free hand in economic policy, they transformed Chile–not without hitting some potholes along the way--from a failing statist economy into the soundest internationally integrated market economy in Latin America. Even before the Chicago Boys became active players in Chile, Harberger had begun including other Latin Americans in the program; in time those people had an impact around the world. Several Chicago Boys are ministers in the current Chilean government of President Sebastián Piñera.