AMARTYA SEN ECON
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6 26 MUCH TALK
The "Miracle of Chile" was a term used by economist Milton Friedman to describe the reorientation of the Chilean economy in the 1980s and the effects of the economic policies applied by a large group of Chilean economists who collectively came to be known as the Chicago Boys, having studied at the University of Chicago where Friedman taught. He said the "Chilean economy did very well, but more importantly, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society."*[1]
The junta Friedman referred to was the military government that came to power in a 1973 coup d'état, which came to an end in 1990 after a democratic 1988 referendum removed Augusto Pinochet from the presidency.
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:{:{Some economists (such as Nobel laureate Amartya Sen) have argued that the experience of Chile in this period indicates a failure of the economic liberalism posited by thinkers such as Friedman, claiming that there was little net economic growth from 1975 to 1982 (during the so-called "pure Monetarist experiment").}:
After the catastrophic banking crisis of 1982, the state controlled more of the economy than it had under the previous socialist government, and sustained economic growth only came after the later reforms that privatized the economy, while social indicators remained poor.[4] The OECD economist Javier Santiso described this reorientation as "combining neo-liberal sutures and interventionist cures".[5]}:
...Democracy
Commenting on his statement about the "Miracle", Friedman says that "the emphasis of that talk was that free markets would undermine political centralization and political control."[29] Friedman stated that "The real miracle in Chile was not that those economic reforms worked so well, but because that's what Adam Smith said they would do. Chile is by all odds the best economic success story in Latin America today. The real miracle is that a military junta was willing to let them do it."[30] Friedman said the "Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society."[29]
Current Chilean economy
Main article: Economy of Chile
According to the 2015 Index of Economic Freedom (of the Heritage Foundation, Fraser Institute and WSJ), Chile's economy is the 7th freest.[31] Chile is ranked 1st out of 29 countries in the Americas and has been a regional leader for over a decade. Chile's annual GDP growth was 3.2% in 2008 and had averaged 4.8% from 2004 to 2008.[20]
The percent of total income earned by the richest 20% of the Chilean population in 2020 was 51.6%, while the percent of total income earned by the poorest 20% of the Chilean population was 5.5%, with the middle 60% of the population earning 42.9% of total income.[20] Chile's Gini index (measure of income distribution) was 44.9 in 2020, compared to 24.7 of Denmark (most equally distributed) and 74.3 of Namibia (most unequally distributed). Chile's inequality as measured by the Gini coefficient has generally been decreasing since 1990.[20]
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~ KLEIN
Part 1 begins with a chapter on psychiatric shock therapy and the covert experiments conducted by the psychiatrist Ewen Cameron in collusion with theCentral Intelligence Agency. The second chapter introduces Milton Friedman and his Chicago school of economics, whom Klein describes as leading a laissez-faire capitalist movement committed to creating free markets that are even less regulated than those that existed before the Great Depression.
Part 2 discusses the use of "shock doctrine" to transform South American economies in the 1970s, focusing on the coup in Chileled by General Augusto:{Pinochet and influenced by a prominent group of Chilean economists that had been trained at the University of Chicago in the Economics department, funded by the CIA, and advised by Milton Friedman. Klein connects torture with economic shock therapy.}:
WIKI TALK
«That war—what many Chileans understandably see as a war of the rich against the poor and middle class —is the real story of Chile's economic "miracle." By 1988, when the economy had stabilized and was growing rap idly, 45 percent of the population had fallen below the poverty line.5 0 The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent.5 1 Even in 2007, Chile remained one of the most unequal soci eties in the world —out of 123 countries in which the United Nations tracks inequality, Chile ranked 116th, making it the 8th most unequal country on the list.52 If that track record qualifies Chile as a miracle for Chicago school econo mists, perhaps shock treatment was never really about jolting the economy into health.
Perhaps it was meant to do exactly what it did —hoover wealth up to the top and shock much of the middle class out of existence.» Taken from Naomi Klein, The Shock Doctrine. Second part, thrid chapter "the myth of the chilean miracle" it has got three notes with references attached: Interview with Alejandro Foxley conducted March 26, 2001, for Commanding Heights: The Battle for the World Economy, www.pbs.org. Constable and Valenzuela, A Nation of Enemies, 219. 52. Central Intelligence Agency, "Field Listing—Distribution of family income —Gini index," World Factbook 2007, www.cia.gov. —Preceding unsigned comment added by 129.206.196.46 (talk) 14:01, 21 March 2010 (UTC)
Congratulations on being able to read and recite 'The Shock Doctrine'. A few things, 'shock therapy' is a figment of Ms. Klein's imagination, the entire concept was invented by her from a mis-characterization of a letter by Friedman to Pinochet. Also, notice how miss Klein changes the measurement mid stream, at first she says that "45 percent of the population had fallen below the poverty line" by 1988, but then when looking at the 2007 measurements its all about equality of income distribution. Why doesnt she compare 1980's poverty to 2007 poverty? Because in 2007 Chile's poverty rate had fallen to 18.2% [1] which flies in the face of Klein's thesis. Yes, the rich did get richer in Chile (CIA world factbook lists Chile as 15th most unequal, not 8th) but the poor also got richer, lifting a lot of poor Chileans into the middle class that Klein claims was destroyed.
You also kind of have to wonder why Klein chooses 1988 as the year to measure poverty, Im sure it had nothing to do with the economic crisis that had befallen all of south america in the 80s. These are just a few of the criticisms that can be leveled against 'shock doctrine', and by no means the most important. You should try scrutinizing Klein and her work, if you do you will likely find that her work does not survive. Bonewah (talk) 14:14, 22 March 2010 (UTC)
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