1. The Chicago model runs aground

The radical economic reforms pursued by the Chicago Boys in Chile during the late 1970s sought to entirely reverse not only the policies of the Allende administration but those of its predecessors as well. Traditional strategies such as import substitution and industrialization were deemed detrimental, whereas liberalization and the privatization of virtually everything was celebrated as beneficial.

Even the healthcare system underwent privatization. Although corporations nationalized under Allende, such as Chile's key copper firms, were not returned to their original owners, these changes did not feed into a broader strategy of industrial development. For many of the Chicago Boys, such initiatives towards industrial development echoed the economics of the Soviet Union.

Economic crisis resulted in a wave of anti-Pinochet protests

However, this model eventually hit a rough patch, culminating in a massive economic crisis in Chile in the early 1980s. This led to the dismissal of some of the Chicago Boys from office, and their model was somewhat discredited. Yet, their ideas had become so embedded in the Chilean policy debate that they continued to wield influence.

Their power extended overseas, with Chile emerging as a poster child for neoliberal transformation for other countries. The United States and the United Kingdom looked upon these developments favorably, and intellectuals at the University of Chicago, including figures like Milton Friedman, celebrated Chile as a model to emulate.

An indexed guide to the Santiago Boys universe