Chicago Boys
Encyclopedia
The Chicago Boys were a group of young Chile
an economists
most of whom trained at the University of Chicago
under Milton Friedman
and Arnold Harberger
, or at its affiliate in the economics department at the Catholic University of Chile. The training was the result of a "Chile Project" organised in the 1950s by the US State Department and funded by the Ford Foundation
, which aimed at influencing Chilean economic thinking. The project was uneventful until the early 1970s. The Chicago Boys' ideas remaining on the fringes of Chilean economic and political thought, even after a 500-page plan based on the Chicago School's ideas called the Ladrillo -- "The Brick" -- was presented as part of Jorge Alessandri's call for alternative economic platforms for his 1970 presidential campaign. Alessandri rejected Ladrillo, but it was revisited after the 1973 Chilean coup d'état on 11 September 1973 brought Augusto Pinochet
to power, and became the basis of the new regime's economic policy. Eight of the 10 principal authors of "The Brick" were Chicago Boys.
Juan Gabriel Valdés
, Chile's foreign minister in the 1990s, described the Chile Project as "a striking example of an organized transfer of ideology from the United States to a country within its direct sphere of influence... the education of these Chileans derived from a specific project designed in the 1950s to influence the development of Chilean economic thinking." He emphasised that "they introduced into Chilean society ideas that were completely new, concepts entirely absent from the 'ideas market'".
(the organization which would become USAID), met with Theodore Schultz
, chair of the University of Chicago
economics department, and came up with a plan to counter the developmentalism
of which Chile was a leading example. "What we need to do is change the formation of the men, to influence the education, which is very bad", Patterson had previously told a colleague. The plan was simple - to send Chileans to train at the University of Chicago's economics department. Patterson initially approached the University of Chile, the country's leading university, to set up an exchange program, but was turned down after the dean demanded input into who in the US would be training his students. Unwilling to permit this, Patterson went instead to the much more conservative Universidad Católica, which had no economics department at all, and accepted the program. In 1956 that School signed a three-year program of intensive collaboration with the Economics Faculty of the University of Chicago (the "Chile Project").
The program was funded by the Ford Foundation
and saw the creation of the Center for Latin American Studies at the University of Chicago, at which 100 Chileans pursued advanced degrees from 1957 to 1970. In 1965 the programme was opened to other Latin American countries, with a presence particularly from Argentina, Brazil and Mexico. The programme saw 40-50 graduate students in the department at any one time, around a third of the total - and compared to just 4 or 5 Latin American students in other comparable programmes. An internal review from the Ford Foundation found that "although the quality and impact of this endeavour cannot be denied, its ideological narrowness constituted a serious deficiency". It nonetheless continued to fund the program.
A number of the program's graduates took up posts in the Catholic University's economics department; by 1963 12 of 13 faculty members were Chile Project graduates, "rapidly turning it into their own little Chicago School in the middle of Santiago". Program graduates - whether of the Chicago School itself or of the Santiago offshoot - became known as the "Chicago Boys".
Only some of them went later for postgraduate studies at the University of Chicago, where they enrolled in Arnold Harberger
's Latin American Finance Workshop and Milton Friedman's Money and Banking Workshop. The whole group was heavily influenced by the Chicago School of Economics
, and especially by the writings and public policy proposals of Milton Friedman. Their proposals were not central to Chilean political debate until 1973, where the debate focused on how best to take developmentalism
forward and all three major political parties in the 1970 elections favoured nationalization of the copper mines. The first reforms were implemented in three rounds - 1974-1983, 1985, and 1990.
n graduates from the University of Chicago around the same period. These economists continued to shape the economies of their respective countries, and include people like Mexico
's Francisco Gil Díaz
, Fernando Sanchez Ugarte, Carlos Isoard y Viesca, Argentina
's Adolfo Diz
, Roque Benjamín Fernández, Carlos Alfredo Rodríguez
, Fernando de Santibañez and Ricardo Lopez Murphy
as well as others in Brazil
, Peru
, Uruguay
, Costa Rica
, and Panama
.
Other military regimes of the seventies, such as the Ernesto Geisel
presidency in Brazil, followed a radically different economic orientation, based upon the idea of overcoming underdevelopment through government spending and centralized planning.
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
an economists
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
most of whom trained at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
under Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
and Arnold Harberger
Arnold Harberger
Arnold C. Harberger is a United States economist. Harberger's Triangle, widely used in welfare economics, is named after him.-Life:...
, or at its affiliate in the economics department at the Catholic University of Chile. The training was the result of a "Chile Project" organised in the 1950s by the US State Department and funded by the Ford Foundation
Ford Foundation
The Ford Foundation is a private foundation incorporated in Michigan and based in New York City created to fund programs that were chartered in 1936 by Edsel Ford and Henry Ford....
, which aimed at influencing Chilean economic thinking. The project was uneventful until the early 1970s. The Chicago Boys' ideas remaining on the fringes of Chilean economic and political thought, even after a 500-page plan based on the Chicago School's ideas called the Ladrillo -- "The Brick" -- was presented as part of Jorge Alessandri's call for alternative economic platforms for his 1970 presidential campaign. Alessandri rejected Ladrillo, but it was revisited after the 1973 Chilean coup d'état on 11 September 1973 brought Augusto Pinochet
Augusto Pinochet
Augusto José Ramón Pinochet Ugarte, more commonly known as Augusto Pinochet , was a Chilean army general and dictator who assumed power in a coup d'état on 11 September 1973...
to power, and became the basis of the new regime's economic policy. Eight of the 10 principal authors of "The Brick" were Chicago Boys.
Juan Gabriel Valdés
Juan Gabriel Valdés
Juan Gabriel Valdés Soublette is a Chilean political scientist, diplomat and former minister during Eduardo Frei Ruiz-Tagle precidancy. Between 1973 and 1976 he studied political sciences in Princeton University in United States, there he obtained a Ph.D.-References:...
, Chile's foreign minister in the 1990s, described the Chile Project as "a striking example of an organized transfer of ideology from the United States to a country within its direct sphere of influence... the education of these Chileans derived from a specific project designed in the 1950s to influence the development of Chilean economic thinking." He emphasised that "they introduced into Chilean society ideas that were completely new, concepts entirely absent from the 'ideas market'".
Chile Project
In 1953 Albion Patterson, director in Chile of the US International Cooperation AdministrationInternational Cooperation Administration
The International Cooperation Administration was established by the U.S. State Department Delegation of Authority 85, June 30, 1955, pursuant to EO 10610, May 9, 1955. The predecessor to this administration was the Foreign Operations Administration . Both oganizations coordinated foreign...
(the organization which would become USAID), met with Theodore Schultz
Theodore Schultz
Theodore William Schultz was the 1979 winner of the Nobel Memorial Prize in Economic Sciences....
, chair of the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
economics department, and came up with a plan to counter the developmentalism
Developmentalism
Developmentalism is an economic theory which states that the best way for Third World countries to develop is through fostering a strong and varied internal market and to impose high tariffs on imported goods....
of which Chile was a leading example. "What we need to do is change the formation of the men, to influence the education, which is very bad", Patterson had previously told a colleague. The plan was simple - to send Chileans to train at the University of Chicago's economics department. Patterson initially approached the University of Chile, the country's leading university, to set up an exchange program, but was turned down after the dean demanded input into who in the US would be training his students. Unwilling to permit this, Patterson went instead to the much more conservative Universidad Católica, which had no economics department at all, and accepted the program. In 1956 that School signed a three-year program of intensive collaboration with the Economics Faculty of the University of Chicago (the "Chile Project").
The program was funded by the Ford Foundation
Ford Foundation
The Ford Foundation is a private foundation incorporated in Michigan and based in New York City created to fund programs that were chartered in 1936 by Edsel Ford and Henry Ford....
and saw the creation of the Center for Latin American Studies at the University of Chicago, at which 100 Chileans pursued advanced degrees from 1957 to 1970. In 1965 the programme was opened to other Latin American countries, with a presence particularly from Argentina, Brazil and Mexico. The programme saw 40-50 graduate students in the department at any one time, around a third of the total - and compared to just 4 or 5 Latin American students in other comparable programmes. An internal review from the Ford Foundation found that "although the quality and impact of this endeavour cannot be denied, its ideological narrowness constituted a serious deficiency". It nonetheless continued to fund the program.
A number of the program's graduates took up posts in the Catholic University's economics department; by 1963 12 of 13 faculty members were Chile Project graduates, "rapidly turning it into their own little Chicago School in the middle of Santiago". Program graduates - whether of the Chicago School itself or of the Santiago offshoot - became known as the "Chicago Boys".
Only some of them went later for postgraduate studies at the University of Chicago, where they enrolled in Arnold Harberger
Arnold Harberger
Arnold C. Harberger is a United States economist. Harberger's Triangle, widely used in welfare economics, is named after him.-Life:...
's Latin American Finance Workshop and Milton Friedman's Money and Banking Workshop. The whole group was heavily influenced by the Chicago School of Economics
Chicago school (economics)
The Chicago school of economics describes a neoclassical school of thought within the academic community of economists, with a strong focus around the faculty of The University of Chicago, some of whom have constructed and popularized its principles...
, and especially by the writings and public policy proposals of Milton Friedman. Their proposals were not central to Chilean political debate until 1973, where the debate focused on how best to take developmentalism
Developmentalism
Developmentalism is an economic theory which states that the best way for Third World countries to develop is through fostering a strong and varied internal market and to impose high tariffs on imported goods....
forward and all three major political parties in the 1970 elections favoured nationalization of the copper mines. The first reforms were implemented in three rounds - 1974-1983, 1985, and 1990.
Chile
Some key Chilean Chicago Boys were:- Jorge Cauas (Minister of Finance, 1975–1977)
- Sergio de Castro (Minister of Finance, 1977–1982)
- Pablo Barahona (Minister of Economy, 1976–1979)
- José PiñeraJosé PiñeraJosé Piñera is the architect of Chile's private pension system based on personal retirement accounts. Piñera has been called "the world's foremost advocate of privatizing public pension systems" as well as "the Pension Reform Pied Piper"...
(Minister of Labor and Pensions, 1978–1980, Minister of Mining, 1980–1981) (although his PhD is from Harvard) - Hernán BüchiHernán BüchiHernán Büchi Buc is a Chilean economist and politician. He served as Minister of the Treasury under the government of Augusto Pinochet between 1985 and 1989.After the recession of the early 1980s, Büchi's appointment as Finance Minister in 1985:...
(Minister of Finance 1985 - 1989) (although he did his MBA in Columbia UniversityColumbia UniversityColumbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
) - Alvaro Bardón (Minister of Economy, 1982–1983)
- Juan Carlos Méndez (Budget Director, 1975–1981)
- Emilio Sanfuentes (Economic advisor to Central Bank)
- Sergio de la Cuadra (Minister of Finance, 1982–1983)
- Miguel KastMiguel KastMiguel Kast Rist was a German born Chilean economist of the Chicago Boys group. He was most known for his role in public policies, where he promoted a greater focus of resources toward the needy....
(Minister of Planning, 1978–1980) - Martín Costabal (Budget Director, 1987–1989)
- Juan Ariztía Matte (Private Pension System Superintendent 1980-1990)
- Maria Teresa Infante (Minister of Labor 1988-1990)
- Joaquín LavínJoaquín LavínJoaquín José Lavín Infante is a Chilean politician and economist. He is a member of the Independent Democrat Union party and former mayor of Santiago and Las Condes municipalities of capital Santiago...
(Minister of Education, 2010–2011, Minister of Planning 2011-present) - Cristián Larroulet (Minister of General Secretariat to the Presidency [SEGPRES], 2010–present)
- Juan Andrés FontaineJuan Andrés Fontaine TalaveraJuan Andrés Fontaine Talavera is the Chilean Minister for the Economy, Development, and Reconstruction under President Sebastián Piñera.-Biography:...
(Minister of Economy, 2010–2011)
Elsewhere in Latin America
Although the largest and most influential group of so-called Chicago Boys was Chilean in origin, there were many Latin AmericaLatin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
n graduates from the University of Chicago around the same period. These economists continued to shape the economies of their respective countries, and include people like Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
's Francisco Gil Díaz
Francisco Gil Díaz
Francisco Gil Díaz is a Mexican economist who served as Secretary of Finance in the cabinet of President Vicente Fox and currently serves as regional chairman of Telefónica for Mexico and Central America....
, Fernando Sanchez Ugarte, Carlos Isoard y Viesca, Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
's Adolfo Diz
Adolfo Diz
Adolfo César Diz was an Argentine economist who served as President of the Central Bank of Argentina from 2 April 1976 until 27 March 1981.-Life and times:...
, Roque Benjamín Fernández, Carlos Alfredo Rodríguez
Carlos Alfredo Rodríguez
Carlos Alfredo Rodríguez was born in Argentina in 1947, he obtained his undergraduate degree in Economics from the University of Buenos Aires in 1969, and the Ph.D. from The University of Chicago in 1973. Between 1973 and 1978, he taught at Columbia University in New York...
, Fernando de Santibañez and Ricardo Lopez Murphy
Ricardo López Murphy
Ricardo Hipólito López Murphy is an Argentine economist and politician.-Career:López Murphy was born in Adrogué, Buenos Aires Province. He attended the National University of La Plata, where he was awarded the title of "Licenciado en Economía" in 1975...
as well as others in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
, Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...
, Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....
, and Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
.
Other military regimes of the seventies, such as the Ernesto Geisel
Ernesto Geisel
Ernesto Beckmann Geisel, was a Brazilian military leader and politician of German descent who was President of Brazil from 1974 to 1979.-Early life and family:...
presidency in Brazil, followed a radically different economic orientation, based upon the idea of overcoming underdevelopment through government spending and centralized planning.
See also
- Miracle of ChileMiracle of ChileThe "Miracle of Chile" was a term used by free market Nobel Prize winning economist Milton Friedman to describe liberal and free market reorientation of the economy of Chile in the 1980s, 1990s and the purported benefits of his style of economic liberalism...
- Berkeley MafiaBerkeley MafiaThe Berkeley Mafia was term given to a group of U.S.-educated Indonesian economists whose efforts brought Indonesia back from dire economic conditions and the brink of famine in the mid-1960s. They were appointed in the early stages of the 'New Order' administration. Almost three decades of...
- Jeffrey SachsJeffrey SachsJeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...
- John Perkins
- Augusto PinochetAugusto PinochetAugusto José Ramón Pinochet Ugarte, more commonly known as Augusto Pinochet , was a Chilean army general and dictator who assumed power in a coup d'état on 11 September 1973...
- Universidad del DesarrolloUniversidad del DesarrolloUniversidad del Desarrollo is a Chilean private university. Its main campus is in Concepción, with a secondary campus in the same city, and two more in Santiago.-History of Universidad del Desarrollo :...
- The Shock Doctrine
Further reading
- Valdés, Juan Gabriel (1995), Pinochet's Economists: The Chicago School of Economics in Chile, Cambridge, Cambridge University PressCambridge University PressCambridge University Press is the publishing business of the University of Cambridge. Granted letters patent by Henry VIII in 1534, it is the world's oldest publishing house, and the second largest university press in the world...
. ISBN 0-521-45146-9 - Constable, Pamela, and Arturo Valenzuela (1991), A Nation Of Enemies: Chile Under Pinochet, New York, W.W. Norton. ISBN 0-393-30985-I
- Fontaine Aldunate, Arturo (1988), "Los Economistas y el Presidente Pinochet", Zig Zag
External links
- Video clip - Chicago Boys and Pinochet, on PBS
- Is Chile a Neoliberal Success? analysis of Chicago Boys' policies in Dollars & SenseDollars & SenseDollars & Sense is a magazine dedicated to providing left-wing perspectives on economics.Published six times a year since 1974, it is edited by a collective of economists, journalists, and activists committed to the ideals of social justice and economic democracy.It was initially sponsored by the...
magazine - Audio clip - 'Chicago Boys' Leave Lasting Legacy on Chile's Economy, National Public Radio
- How the Chicago Boys Wrecked the Economy An Interview with Michael Hudson by Mike Whitney
- The Chicago Conspiracy - A film about the influence of the Chicago Boys and radical currents in Chile against their legacy