The Chilean Experiment...did it work?

Economics Economics Questions
1

I was reading on wikipedia criticisms of libertarianism, and I stumbled upon this blurb. It said that libertarian policies advised to Chile in the 70s and 80s did great harm to the country. I always thought Chile one of the best in South America (and that it still had a free economy).

Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible (the so-called miracle of Chile). Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws… Chile’s economy became more unstable than any other in Latin America… growth during this 16-year period was one of the slowest of any Latin American country. Worse, income inequality grew severe. The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed. In the absence of market regulations, Chile also became one of the most polluted countries in Latin America. And Chile’s lack of democracy was only possible by suppressing political opposition and labor unions under a reign of terror and widespread human rights abuses.[6]

Either I or they are not looking at something…which one is right.

2

I see several holes in that.

“growth was the slowest of any Latin American country”

You mean it grew naturally, instead of with artificial bubbles?

“Worse, income inequality grew severe”

‘Income inequality’ is nonsense.

“..Chile also became one of the most polluted countries in Latin America”

So what? Could that be because much of Latin America isnt heavily industrialized?

None of this should be surprising, though. By and large, Wikipedia’s main political editors are either social democrats or flat out marxists.

3

and all these decentralizing policies came from a central authority…yeah, no conflict there.

let me guess. the government had companies bid to replace existing services rather than let the market actually provide anything.

But if anything chile made a strong case for freedom of economy. even a little additional freedom and chile’s GDP per capita skyrockets to triple the south american average. Because government interference tends to stifle entrepreneurship first, a relief from that interference has a disproportionate positive impact on a nation’s economy.

4

Well, obviously when a “free market” is instituted by a military dictatorship, then it must be a free market!

But seriously, economics is a priori. Empiricism is inappropriate in the social sciences. Evidence cannot be used to prove or disprove an a priori theory. Any appeal to evidence must be rejected on the grounds that it commits the post hoc ergo propter hoc fallacy. An a priori theory can only be disproven by another a priori theory.

Economics must be addressed at the theoretical level. Appealing to evidence, whether Chile or the USSR, is plainly wrongheaded.