At the height of the Cold War, the far-right economics department of the University of Chicago, with the support of the U.S. government, recruited students from then democratic Chile. When General Augusto Pinochet seized power in 1973, he hired these “Chicago boys” to apply their extreme free-market fundamentalism to the Chilean economy. Remarkably, the left-of-center democratic governments that succeeded Pinochet’s regime after 1990 maintained many of those market-friendly prescriptions. Edwards, a Chilean-born economist with a Ph.D. from the University of Chicago, narrates a fascinating insider intellectual history of the policies and personalities behind Chile’s economic development in recent decades. But he struggles to explain the unanticipated popular uprising in 2019 against this doctrinal “neoliberalism” with which he largely sympathizes. Although the economic model had generated strong growth, reduced extreme poverty, and expanded the middle class, Edwards now finds that many policymakers neglected stark, persistent inequalities; corporate collusion had eroded free-market competition; and public policy may have gone too far in interjecting market competition into education, health care, and retirement pensions. Looking forward, Edwards suggests that Chile may yet find a more sustainable middle road as a European-style social democracy, with less spectacular economic growth but greater social cohesion.
