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After Kasten lost his seat to Russ Feingold in 1992, Ryan became a speechwriter for the right-wing think tank Empower America, which was founded by Jeane Kirkpatrick and Jack Kemp. As a foreign policy adviser to Reagan in 1980 Kirkpatrick famously defended the rape, murder, and torture of four American Catholic missionaries (three of whom were nuns and one a lay missionary) at the hands of El Salvador's government forces, claiming "the nuns were not just nuns. The nuns were also political activists." Kirkpatrick went on to become Reagan's UN Ambassador. Kemp, who Ryan recently identified [11] as a key mentor, was also a major supporter of U.S. funding to El Salvador's military government.

https://www.alternet.org**/2012/**08/us-funded-death-squads-el-salvador-casts-shadow-over-gop-ticket/

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Amidst reports that Mitt Romney launched Bain Capital with funds from investors tied to 1980s Salvadoran death squads, his new running mate Rep. Paul Ryan (R-WI) is getting foreign policy briefings from a man who actively covered-up some of the worst atrocities committed by those same death squads. The GOP's vice-presidential candidate also earned his political stripes working under neoconservative Republicans who funnelled billions in U.S. aid to those military hitmen. Though the war in El Salvador was just one chapter in history, Romney and Ryan's relationship with that war may provide a snapshot into their worldview.

Between 1979 and 1992, an estimated 75,000 people were killed in the conflict in El Salvador and countless others were "disappeared" or displaced, an astonishing number for a country the size of Massachusetts. A United Nations Truth Commission estimated that the right-wing, military-led government was responsible for 85 percent of the violence while the left-wing insurgency fighting against vast economic and political inequality, including farmers, teachers, priests and union activists, was responsible for only 5 percent. Much of the violence was attributable to clandestine military or paramilitary death squads, which committed countless assassinations and acts of brutal violence against suspected political dissidents.

Recent reports suggest that some of the same members of the Salvadoran oligarchy that backed the death squads gave Romney the startup funds for Bain Capital.

Romney's Early Bain Capital Funders Tied to Salvadoran Death Squads

Last week, the Huffington Post's Ryan Grim and Cole Stangler reported on how Romney went to Miami in 1983, at the height of El Salvador's civil war, to raise $9 million from Salvadoran expatriate families to start Bain Capital. This seed money amounted to 40 percent of Bain's startup funds. Although Romney claimed that he had vetted the backgrounds of the investors, some of their families had been identified by the U.S. ambassador and others as closely tied to either death squads or death squad leader and ARENA Party founder Robert d'Aubuisson (known as "Blowtorch Bob" for his use of blowtorches to torture political prisoners).

D'Aubuisson was later found responsible for ordering the assasination of Salvadoran Archbishop Oscar Romero, a prominent advocate for the poor and critic of the Salvadoran government (who the Vatican has now placed in the process of canonization to become a saint). In the United States, though, the Reagan administration foreign policy team would actively deny d'Aubisson's involvement in the assassination, as well as the Salvadoran government's involvement in other human rights atrocities, so as to justify a heavy flow of military aid to the country's government as part of Reagan's Cold War-era policy to suppress any chance of another Cuba emerging in Latin America. A key player in those official denials was Elliot Abrams, an Assistant Secretary of State under President Ronald Reagan who still boasts that he "supervised U.S. policy in Latin America and the Caribbean."

In recent months, Abrams has been advising Romney's Vice Presidential candidate Paul Ryan on foreign policy.

Abrams Key Denier of Human Rights Abuses by Salvadoran Government

Of the Romero assasination, Abrams told the Washington Post in 1993 that "anybody who thinks you're going to find a cable that says that Roberto d'Aubuisson murdered the archbishop is a fool." But as the Post noted in that same article, the U.S. Embassy sent at least two such cables to Washington fingering d'Aubuisson — the December 21, 1981 cable, for example, describes: "A meeting, chaired by Maj. Roberto d'Aubuisson, during which the murder of Archbishop Romero was planned. During the meeting, some of the participants drew lots for the privilege of killing the archbishop."

But Abrams is perhaps best known for denying one of the worst atrocities of the war, the massacre at El Mozote, where in December 1981 U.S-trained government soldiers marched into a village and murdered around 800 civilians, many of whom were women and children. The men were tortured before being shot, and girls as young as 10 were raped before having their throats slit. Abrams, who at the time was Assistant Secretary of State for Human Rights and Humanitarian Affairs, dismissed reports published in the New York Times and Washington Post about the massacre, telling a Senate committee tasked with certifying the Salvadoran government's human rights record that the reports of deaths "were not credible" and suggesting the guerrillas had "significantly misused" the stories for propaganda. The U.N. Truth Commission later confirmed the newspapers' reports on the massacre, and the Salvadoran government (which elected its first left-wing president ever in 2009) officially apologized for the event in December of last year.

These and other denials helped justify another ten years of United States funding for the Salvadoran military and its death squads. The tiny country would receive $6 billion from the U.S. over the course of its civil war, making it the second-highest recipient of U.S. aid behind Israel during that period, despite mounting death tolls and continued atrocities.

abrams has remained unrepentant about U.S. policy in El Salvador, calling it"one of fabulous achievement." He was convicted in 1991 of two misdemeanors for unlawfully withholding information from Congress during the Iran-Contra scandal but was pardoned by the first President Bush.

Abrams, Neocons Passing the Torch to VP Pick Ryan

This week,The Daily Beast first reported that Abrams' latest act is advising Republican GOP candidate Ryan on foreign policy. Abrams told the website Ryan "knows more about foreign policy than people may think, in view of his concentration on the economy." Other right-wing foreign policy experts toldThe Daily Beast that despite Ryan's professed fiscal conservatism, he, like Reagan, supports spending billions or trillions to preserve U.S. military power and international influence.

Ryan has long been mentored by neoconservative Republican leaders who advanced U.S. policy in El Salvador. His first job in D.C. was as an aide to Sen. Bob Kasten of Wisconsin, a cheerleader for sending billions to El Salvador's brutal military government and who in the 1980s chaired the Senate foreign operations appropriations subcommittee responsible for approving those funds.

After Kasten lost his seat to Russ Feingold in 1992, Ryan became a speechwriter for the right-wing think tank Empower America, which was founded by Jeanne Kirkpatrick andJack Kemp.As a foreign policy adviser to Reagan in 1980 Kirkpatrick famously defended the rape, murder, and torture of four American Catholic missionaries (three of whom were nuns and one a lay missionary) at the hands of El Salvador's government forces, claiming "the nuns were not just nuns. The nuns were also political activists." Kirkpatrick went on to become Reagan's UN Ambassador. Kemp, who Ryan recently identified as a key mentor, was also a major supporter of U.S. funding to El Salvador's military government.

Even if Romney can distance himself from the death squad-linked Salvadoran investors that provided the seed money for his vast wealth, Ryan's political upbringing and his being mentored by a man of Abrams' pedigree makes it clear that the tragedies of El Salvador's civil war and this dark chapter in U.S. history will continue to cast a shadow over the Romney – Ryan campaign.

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http://en.wikipedia.org/wiki/Jeane_Kirkpatrick

http://www.rightweb.irc-online.org/profile/Kirkpatrick_Jeane_1926-2006

The first woman to serve as U.S. ambassador to the United Nations and an important intellectual leader of the neoconservative political faction, Jeane J. Kirkpatrick passed away on December 7, 2006. She was a fierce anti-communist whose writings on dictatorships for Commentary magazine in the late 1970s caught the eye of Ronald Reagan, prompting him to nominate her to the UN ambassador post. Kirkpatrick went on to become a proponent of the post-Cold War neoconservative agenda, which emerged in the 1990s and helped shape the preemptive and antiterror foreign policies of the George W. Bush administration.

Upon Kirkpatrick's death, the Wall Street Journal editorial page-a key outlet for neoconservative opinion-opined in an obituary that Kirkpatrick's ability to "use words as weapons" made her a particularly effective diplomat and political operative. Comparing Kirkpatrick to another erstwhile

 neoconservative-aligned ambassador to the United Nations, John Bolton, the Wall Street Journal argued that Kirkpatrick's "no-nonsense bluntness" in defending U.S. interests at the UN Security Council made Bolton "sound like Little Bo-Peep." The Journal also highlighted Kirkpatrick's role, together with a number of other high-profile neoconservatives and like-minded anti-communists, in forming the second incarnation of the Committee on the Present Danger (CPD) in the late 1970s, quoting her rationale for creating the CPD, an oft-heard neoconservative refrain: "We were concerned about the weakening of Western will" (Wall Street Journal, December 11, 2006).

In a laudatory article written a few months before her death, the right-wing Washington Times highlighted Kirkpatrick's conversion from Democrat to Republican, which took place after she took up the post of UN ambassador under President Reagan. The newspaper pointed to Kirkpatrick's famous phrase, coined during the 1984 Republican National Convention: "blame America first," which would become a hallmark of anti-liberal rhetoric. Repeating the by then familiar neoconservative argument that the Democrats had abandoned the vigorous anti-communism of Harry Truman and Sen. Henry "Scoop" Jackson, Kirkpatrick said: "When Marxist dictators shoot their way into power in Central America, the San Francisco Democrats don't blame the guerrillas and their Soviet allies. They blame United States policies of 100 years ago. But then they always blame America first" (Washington Times, May 15, 2006).

A Los Angeles Times editorial took a different tack in its assessment of Kirkpatrick's career, choosing to highlight her highly controversial thesis that right-wing "authoritarian" governments are more amenable to democratic reform than left-wing "totalitarian" states. The argument, first laid out in Kirkpatrick's seminal 1979 Commentary magazine article, "Dictatorships and Double Standards," won the attention of several important political figures, including then-presidential candidate Reagan, which led to her nomination as UN ambassador, a post she served from 1981 to 1985. Though it had great influence, Kirkpatrick's argument, which among other things provided a convenient justification for allowing alliances with brutal right-wing dictatorships as part of the U.S. anti-communist crusade in places like Central America, has ultimately proved to be "dead wrong," according to the Los Angeles Times. Pointing to the democratization of numerous post-Soviet states, the Times argued: "Like other reductionist theories, the Kirkpatrick doctrine ran up against the wisdom of H.L. Mencken's observation that 'for every problem, there is a solution that is simple, clean, and wrong'" (Los Angeles Times, December 11, 2006).

Part of Kirkpatrick's motive for writing "Dictatorships and Double Standards" was to question the legitimacy of both the human rights and democracy agenda promoted by then-President Jimmy Carter. She argued that his policies were destabilizing friendly authoritarian regimes-including those of the Shah of Iran and Nicaragua's Anastasio Somoza. Kirkpatrick also insisted that instead of pushing these regimes to reform, the United States should provide them support as allies in the struggle against Soviet communism. Moscow, she argued, was the greater evil, and that in any case "authoritarian" regimes could one day become "democracies," whereas communist "totalitarian" regimes could not. The Carter administration, she argued, focused on governments that "turn out to be mainly those in which non-communist autocracies are under pressure from revolutionary guerrillas . [On the other hand] we seem to accept the status quo in communist nations (in the name of 'diversity' and national autonomy) but not in nations ruled by 'right-wing' dictators or white oligarchies."

In his book The Rise of the Vulcans, James Mann comments that while Kirkpatrick could have argued that the way out of this double standard was for Carter to press for democracy in all nations, not just non-communist autocracies, "In practice, Kirkpatrick's article suggested precisely the opposite solution: that the United States should end this double standard by becoming more tolerant of the status quo in dictatorships that support American policy" (p. 92).

Further, according to Mann, Kirkpatrick's thesis "created underlying tensions" in the neoconservative movement, between those like Paul Wolfowitz who seemed committed to the moral imperative of promoting democracies, and those who, following a means-justify-the-ends logic, were willing to support friendly dictatorships to defeat communism. "[In the 1980s] the neoconservatives struggled to come to grips with the antidemocratic implications of Kirkpatrick's article, sometimes defending it, sometimes ignoring it," Mann wrote. By the start of the new millennium, neoconservatives "had come to espouse ideas directly contrary to those in the article . Kirkpatrick had suggested that democratizing third world countries might take decades or centuries, but by 2002 neoconservatives were seeking democratic change among the Palestinians and in Iraq within no more than a couple years" (Mann, p. 93).

To some degree, Kirkpatrick's views on democracy echoed those of neoconservative progenitor Irving Kristol, who during the early stages of the Vietnam War wrote that the "plain truth is that South Vietnam, like South Korea, is barely capable of decent self-government under the best of conditions. It lacks the political traditions, the educated classes, the civic spirit that makes self-government workable . No amount of American aid, no amount of exhortation, no amount of good advice can change this basic condition . The most we can hope for in South Vietnam is what we have achieved in South Korea; that is, to remove this little, backward nation from the front line of the Cold War so that it can stew quietly in its own political juice" (quoted in Mark Gerson, The Neoconservative Vision, p. 113).

But as Mann points out, despite the equivocal stance on democracy that key neoconservatives had taken during the decades leading up to the end of the Cold War, by the early 1990s it had become the cornerstone of a new neoconservative agenda. Vigorously promoted by the likes of Joshua Muravchik (a former member of the Young People's Socialist League and a scholar at the American Enterprise Institute), democracy quickly replaced anti-communism as a key rationale for an aggressive, interventionist U.S. foreign policy for the post-Cold War era. Kirkpatrick repeatedly associated herself with this new campaign, although with caveats.

At the time of her death, Kirkpatrick was a fellow at the American Enterprise Institute (AEI), where she wrote on human rights, UN reform, and international law. She also used this perch to actively promote policies pushed by the Project for the New American Century (PNAC), a letterhead group based in the same office building as AEI and headed by several neoconservative ideologues, including Irving Kristol's son William Kristol. PNAC played a singular role in championing the invasion of Iraq in response to the 9/11 attacks, arguing in an open letter to President Bush shortly after the attacks that the country should invade "even if evidence does not link Iraq directly to the attack." Kirkpatrick signed her name to this letter, along with a stable of high-profile neoconservatives and/or hardliners, such as Frank Gaffney, Charles Krauthammer, Richard Perle, and Marshall Wittmann.

Shortly after this letter was published, Kirkpatrick wrote an article for the Chronicle of Higher Education in which she expanded on her reasons for why the United States should go to war in response to 9/11. She wrote: "It would be a very serious mistake for the United States not to respond with force. I do not usually ever advocate the use of force to solve problems. I just think that this is a major challenge, and that we're forced to, in order to protect our civilization. And I mean our civilization. I don't just mean American civilization, I mean modern civilization. What they are targeting is modern civilization" (Chronicle of Higher Education, September 28, 2001).

In an interview a few months before her death, Kirkpatrick seemed to backtrack on her initial enthusiasm for the Bush administration's interventionist war on terror and contradicted the sentiments of many neocon ideologues, like Max Boot of the Los Angles Times and the Washington Post's Charles Krauthammer, both of whom have argued that the United States should embrace an imperialist mission. Saying that Bush's foreign policies are "a little too interventionist for my taste, frankly," Kirkpatrick said that the country did not "have an obligation to engage in a new imperialism" and that she was "skeptical of nation-building. It is extremely difficult for one nation to seriously remake another nation." However, she also added, "I am very much in favor of [Bush's] actions in Afghanistan and have not opposed them in Iraq" (Washington Times, May 15, 2006).

Kirkpatrick also actively worked with a number of groups (several that emerged in the wake of 9/11) that have advocated the democracy thesis as an important rationale for an expansive war on terror, including the Foundation for the Defense of Democracies, a group run by former New York Times writer Clifford May that claims to be the "only nonpartisan policy institute dedicated exclusively to promoting pluralism, defending democratic values, and fighting the ideologies that drive terrorism." Kirkpatrick also served in varying capacities for such neoconservative-driven groups as Freedom House, the Jewish Institute for National Security Affairs, the Ethics and Public Policy Center, and Empower America. Earlier, in the 1970s and 80s, Kirkpatrick was associated with the Coalition for a Democratic Majority, Midge Decter's Committee for the Free World, and the fanatical Cuban American National Fund, which was founded by anti-Castro Cuban émigré Jorge Mas Canosa.

Kirkpatrick's books include The Withering Away of the Totalitarian State, Legitimacy and Force, The Reagan Phenomenon, Dictatorships and Double Standards, Dismantling the Parties, Reflections on Party Reform and Party Decomposition, The New Presidential Elite, Political Woman, and Leader and Vanguard in Mass Society: A Study of Peronist Argentina.

Affiliations

https://www.counterpunch.org/2006/11/17/the-road-from-serfdom/

Milton Friedman had no idea that his six-day trip to Chile in March 1975 would generate so much controversy. He was invited to Santiago by a group of Chilean economists who over the previous decades had been educated at the University of Chicago, in a program set up by Friedman’s colleague, Arnold Harberger.Two years after the overthrow of Allende, with the dictatorship unable to get inflation under control, the “Chicago Boys” began to gain real influence in General Augusto Pinochet’s military government. They recommended the application of what Friedman had already taken to call “shock treatment” or a “shock program” ­ immediately halting the printing of money to finance the budget deficit, cutting state spending twenty to twenty-five percent, laying off tens of thousands of government workers, ending wage and price controls, privatizing state industries, and deregulating capital markets. “Complete free trade,” Friedman advised.

Friedman and Harberger were flown down to “help to sell” the plan to the military junta, which despite its zealous defense of the abstraction of free enterprise was partial to corporatismand the maintenance of a large state sector. Friedman gave a series of lectures and met with Pinochet for 45 minutes, where the general “indicated very little indeed about his own or the government’s feeling.” Although he noted that the dictator, responsible for the torture of tens of thousands of Chileans, seemed “sympathetically attracted to the idea of a shock treatment.”

Friedman returned home to a firestorm of protest, aggravated by his celebrity as a Newsweek columnist and ongoing revelations about Washington’s and corporate America’s involvement in the overthrow of Allende. Not only hadNixon, the CIA, and ITT, along with other companies, plotted to destabilize Allende’s “democratic road to socialism,” but now a renowned University of Chicago economist, whose promotion of the wonders of the free market was heavily subsidized by corporations such as Bechtel,Pepsico, Getty, Pfizer, General Motors, W.R. Grace, and Firestone,was advising the dictator who overthrew him on how to complete the counterrevolution at the cost of skyrocketing unemployment among Chile’s poor. 

The New York Times identified Friedman as the “guiding light of the junta’s economic policy,” while columnist Anthony Lewis asked: if “pure Chicago economic theory can be carried out in Chile only at the price of repression, should its authors feel some responsibility?” At his university, the Spartacus Youth League pledged to “drive Friedman off campus through protest and exposure,” while the student government, replicating their own version of the Church Commission hearings that was just then investigating US crimes in Chile, convened a “Commission of Inquiry on the Friedman/Harberger Issue.” Everywhere in the press the name Friedman was paired with the adjectives “draconian” and “shock,” with small but persistent protests dogging the professor at many of his public appearances.

In letters to various editors and detractors, Friedman downplayed the extent of his involvement in Chile, fingering Harberger as more directly involved in the mentoring of Chilean economists. While defensive, he nevertheless reveled in the controversy and the frisson of being ushered into speaking engagements via kitchens and back doors to avoid demonstrators. He enjoyed exposing the double standard of “liberal McCarthyism,” pointing out that he was never criticized for giving similar advice to Red China, the Soviet Union or Yugoslavia. In recounting an episode when a man was dragged out of the Nobel award ceremony after shouting “down with capitalism, freedom for Chile,” Friedman delighted in noting that the protest backfired, resulting in his receiving “twice as long an ovation” than any other laureate.

Friedman defended his relationship with Pinochet by saying that if Allende had been allowed to remain in office Chileans would have suffered “the elimination of thousands and perhaps mass starvation . . . torture and unjust imprisonment.” But the elimination of thousands, mass hunger, torture and unjust imprisonment were what was taking place in Chile exactly at the moment the Chicago economist was defending his protégé. 

Allende’s downfall came because he refused to betray Chile’s long democratic tradition and invoke martial law, yet Friedman nevertheless insisted that the military junta offered “more room for individual initiative and for a private sphere of life” and thus a greater “chance of a return to a democratic society.” It was pure boilerplate, but it did give Friedman a chance to rehearse his understanding of the relationship between capitalism and freedom.

Critics of both Pinochet and Friedman took Chile as proof positive that the kind of free-market absolutism advocated by the Chicago School was only possible through repression.So Friedman countered by redefining the meaning of freedom. Contrary to the prevailing post-WWII belief that political liberty was dependent on some form of mild social leveling, he insisted that “economic freedom is an essential requisite for political freedom.” 

More than his monetarist theorems, this equation of “capitalism and freedom” was his greatest contribution to the rehabilitation of conservatism in the 1970s. Where pre-New Deal conservatives positioned themselves in defense of social hierarchy, privilege, and order, post-WWII conservatives instead celebrated the free market as a venue of creativity and liberty. Such a formulation today stands at the heart of the conservative movement, having been accepted as commonsense by mainline politicians and opinion makers. It is likewise enshrined in Bush’s National Security Strategy, which mentions “economic freedom” more than twice as many times as it does “political freedom.”

While he was in Chile Friedman gave a speech titled “The Fragility of Freedom” where he described the “role in the destruction of a free society that was played by the emergence of the welfare state.” Chile’s present difficulties, he argued, “were due almost entirely to the forty-year trend toward collectivism, socialism and the welfare state . . . a course that would lead to coercion rather than freedom.” The Pinochet regime, he argued, represented a turning point in a protracted campaign, a tearing off of democracy’s false husks to reach true freedom’s inner core. “The problem is not of recent origin,” Friedman wrote in a follow-up letter to Pinochet, but “arises from trends toward socialism that started forty years ago, and reached their logical ­ and terrible ­climax in the Allende regime.” He praised the general for putting Chile back on the “right track” with the “many measures you have already taken to reverse this trend.”

Friedman understood the struggle to be a long one, and indeed some of the first recruits for the battle of Chile were conscripted decades earlier. With financial funding from the US government’s Point Four foreign aid program and the Rockefeller Foundation, the University of Chicago’s Department of Economics set up scholarship programs in the mid-1950s with Chile’s Catholic and public universities. About one hundred select students between 1957 and 1970 received close, hands-on training, first in an apprenticeship program in Chile and then in post-graduate work in Chicago. In principle, Friedman and his colleagues opposed the kind of developmental largesse that funded the exchange program as a market distortion, yet they took the cash to finance their department’s graduate program. But they also had a more idealistic purpose.

Starting in the 1950s, Latin America, particularly the southern cone countries of Argentina, Chile, and Brazil, had become a laboratory for developmentalist economics. Social scientists, such as the Argentine Raúl Prebisch from his position as head of the UN’s Economic Commission on Latin America, expanded Keynesianism ­ after John Maynard Keynes, who elaborated the dominant post-WWII economic framework that envisioned an active role for the state in the workings of the market — beyond its focus on managing countervailing cycles of inflation and unemployment to question the terms of international trade. Chronic inflation, according to Prebisch and other Latin American economists, was understood not to be a reflex of any given country’s irresponsible monetary system but a symptom of deep structural inequalities that divided the global economy between the developed and the undeveloped world. Volatile commodity prices and capital investment reinforced first world advantage and third world disadvantage.

Economists and politicians from across the political spectrum accepted the need for state planning, regulation, and intervention. Such ideas not only drove the economic policies of developing nations, but echoed throughout the corridors and conference rooms of the UN and the World Bank, as well as in the non-aligned movement’s 1973 call for a New International Economic Order.

It was the Chicago School’s vision of hell, the New Deal writ large across the world stage. These ideas “fell like a bomb” on those who had long stood against Keynesianism at home only now to see its authority spread globally. The Chilean scholarship program was intended to counter such a vision. “University of Chile economists have been followers of Keynes and Prebisch more than of Marx,” wrote former University of Chicago president and State Department director of overseas education programs William Benton, and “the Chicago influence” will “introduce a third basic viewpoint, that of contemporary ‘market economics.'”

Students returned to Chile not just with a well-rounded education in classical economics but with a burning dedication to carry the faith to benighted lands. They purged the economics departments of their universities of developmentalists and began to set up free-market institutes and think tanks ­ the Center for Social and Economic Studies, for example, and the Foundation for Liberty and Development ­funded, as their counterparts in the US were, by corporate money.They understood their mission in continental terms, committed, as Chicago alum Ernesto Fontaine put it, “to expand throughout Latin America, confronting the ideological positions which prevented freedom and perpetuated poverty and backwardness.”

The program, which brought up students from universities in Argentina as well, is an example of the erratic nature of both public and private US diplomacy, conforming as it does to competing power interests within American society. At the same time that Kennedy was promoting Alliance for Progress reform capitalism, he was training and funding the men and institutions that would constitute the continent’s dense network of death squads. 

At the same time that Chase Manhattan, Chemical, Manufacturers Hanover, and Morgan Guaranty were promoting, through the establishment of the Trilateral Commission, a more conciliatory economic policy in the third world, they were cutting off credit to Chile, making, in accordance with Nixon’s directive, its economy “scream.” And at the same time that every American president from Truman to Nixon was embracing Keynesianism, the University of Chicago’s Economics Department, with financial support from the US government, had turned itself into free-market madrassa that indoctrinated a generation of Latin American economists to spearhead an international capitalist insurgency.

Throughout the turbulent 1960s and 1970s, though, the revolution seemed to be forever deferred. In the late 1960s, the Chicago Boys had drawn up the platform of Allende’s nationalist opponent in the 1970 election, which included many of the proposals that eventually would be implemented under Pinochet. But Allende won, so Chile had to wait. In the meantime, the military junta in Brazil, which took power in 1964, had invited Friedman in 1973 down for advice, which it took for awhile. 

A severe recession and skyrocketing unemployment followed. Friedman pronounced this first application of “shock therapy” an “economic miracle.” But the generals, wisely it seems, demurred, returning to its state-directed program of industrialization that, while failing to curb inflation, did lower unemployment and lay the foundations for Brazil’s current economic dominance of Latin America. 

Richard Nixon too, early in his first term, showed promise, but then he raised tariffs, introduced wage and price controls and, with an eye to the 1972 election, declared himself a Keynesian and opened up the money spout. Nixon was an “enormous disappointment,” reflected Friedman.

That left Pinochet, not the most reputable of characters but willing to go the distance.Chile became, according to Business Week, a “laboratory experiment” for taming inflation through monetary control, carrying out, said Barrons, the “most important modifications implemented in the developing world in recent times.” American economists may have been writing “treatises” on the “way the world should work, but it is another country that is putting it into effect.”

A month after Friedman’s visit, the Chilean junta announced that inflation would be stopped “at any cost.” The regime cut government spending twenty-seven percent, practically shuttered the national mint, and set fire to bundles of escudos. The state divested from the banking system and deregulated finance, including interest rates. It slashed import tariffs, freed prices on over 2000 products, and removed restrictions against foreign investments.

Pinochet pulled Chile out of a number of alliances with neighboring countries intended to promote regional industrialization, turning his country into a gateway for the introduction of cheap goods into Latin America. Tens of thousands of public workers lost their jobs as the government auctioned off, in what amounted to a spectacular transfer of wealth to the private sector, over four hundred state industries.Multinationals were not only granted the right to repatriate one hundred percent of their profits, but were given guaranteed exchange rates to help them do so. In order to build investor confidence, the escudo was fixed to the dollar. Within four years, nearly thirty percent of all property expropriated not just under Allende but under a previous Alliance for Progress land reform was returned to previous owners. New laws treated labor like any other “free” commodity, sweeping away four decades of progressive union legislation. Health care was privatized, as was the public pension fund.

GNP plummeted thirteen percent, industrial production fell 28 percent, and purchasing power collapsed to forty percent of its 1970 level. One national business after another went bankrupt. Unemployment soared.

Yet by 1978 the economy rebounded, expanding thirty-two percent between 1978 and 1981. Though salary levels remained close to twenty percent below what they were a decade previously, per capita income began to climb again. Perhaps even a better indicator of progress, torture and extrajudicial executions began to taper off. With hindsight, however, it is now clear that the Chicago economists, despite the credit they received for three years of economic growth, had set Chile on the road to near collapse.

The rebound of the economy was a function of the liberalization of the financial system and massive foreign investment. That investment, it turns out, led to a speculative binge, monopolization of the banking system, and heavy borrowing. The deluge of foreign capital did allow the fixed exchange rate to be maintained for a short period. But sharp increases in private debt ­ rising from $2 billion in 1978 to over $14 billion in 1982 — put unsustainable pressure on Chile’s currency. Pegged as it was to the appreciating US dollar, the value of the escudo was kept artificially high, leading to a flood of cheap imports. While consumers took advantage of liberalized credit to purchase TVs, cars, and other high-ticket items, savings shrank, debt increased, exports fell, and the trade deficit ballooned.

In 1982 things fell apart. Copper prices plummeted, accelerating Chile’s balance of trade deficit. GDP plunged fifteen percent, while industrial production rapidly contracted. Bankruptcies tripled and unemployment hit 30 percent. Despite his pledge to hold firm, Pinochet devalued the escudo, devastating poor Chileans who had either availed themselves to liberalized credit to borrow in dollars or who held their savings in escudos. The Central Bank lost forty-five percent of its reserves, while the private banking system collapsed. The crisis forced the state, dusting off laws still on the books from the Allende period, to take over nearly seventy percent of the banking system and reimpose controls on finance, industry, prices and wages.Turning to the IMF for a bailout, Pinochet extended a public guarantee to repay foreign creditors and banks.

But before the crisis of 1982, there were the golden years between 1978 and 1981. Just as the international left flocked to Chile during the Allende period, under Pinochet the country became a mecca for the free-market right. Economists, political scientists, and journalists came to witness the “miracle” first hand, holding up Chile as a model to be implemented throughout the world. Representatives from European and American banks poured into Santiago, paying tribute to Pinochet by restoring credit that was denied the heretic Allende. The World Bank and the Inter-American Development Bank extolled Chile as a paragon of responsibility, advancing it 46 loans between 1976 and 1986 for over $3.1 billion.

In addition to money men, right-wing activists traveled to Chile in a show of solidarity with the Pinochet regime.Publisher of the National Review William Rusher, along with other cadres who eventually coalesced around Reagan’s 1976 and 1980 bids for the Republican nomination, organized the American-Chilean Council, a solidarity committee to counter critical press coverage in the US of Pinochet. “I was unable to find a single opponent of the regime in Chile,” Rusher wrote after a 1978 pilgrimage, “who believes the Chilean government engages” in torture. As to the “interim human discomfort” caused by radical free-market policies, Rusher believed that “a certain amount of deprivation today, in the interest of a far healthier society tomorrow, is neither unendurable nor necessarily reprehensible.”

Friedrich von Hayek, the Austrian émigré and University of Chicago professor whose 1944 Road to Serfdom dared to suggest that state planning would produce not “freedom and prosperity” but “bondage and misery,” visited Pinochet’s Chile a number of times. He was so impressed that he held a meeting of his famed Société Mont Pélérin there. He even recommended Chile to Thatcher as a model to complete her free-market revolution. The Prime Minister, at the nadir of Chile’s 1982 financial collapse, agreed that Chile represented a “remarkable success” but believed that Britain’s “democratic institutions and the need for a high degree of consent” make “some of the measures” taken by Pinochet “quite unacceptable.”

Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a “transitional period,” only as long as needed to reverse decades of state regulation. “My personal preference,” he told a Chilean interviewer, “leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism.” In a letter to the London Times he defended the junta, reporting that he had “not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.” Of course, the thousands executed and tens of thousands tortured by Pinochet’s regime weren’t talking.

Hayek’s University of Chicago colleague Milton Friedman got the grief, but it was Hayek who served as the true inspiration for Chile’s capitalist crusaders. It was Hayek who depicted Allende’s regime as a way station between Chile’s postwar welfare state and a hypothetical totalitarian future. Accordingly, the Junta justified its terror as needed not only to prevent Chile from turning into a Stalinist gulag but to sweep away fifty years of tariffs, subsidies, capital controls, labor legislation, and social welfare provisions — a “half century of errors,” according to finance minister Sergio De Castro, that was leading Chile down its own road to serfdom.

“To us, it was a revolution,” said government economist Miguel Kast, an Opus Dei member and follower of both Hayek and American Enterprise Institute theologian Michael Novak. The Chicago economists had set out to affect, radically and immediately, a “foundational” conversion of Chilean society, to obliterate its “pseudo-democracy” (prior to 1973, Chile enjoyed one of the most durable constitutional democracies in the Americas).

Where Friedman made allusions to the superiority of economic freedom over political freedom in his defense of Pinochet, the Chicago group institutionalized such a hierarchy in a 1980 constitution named after Hayek’s 1960 treatise The Constitution of Liberty. The new charter enshrined economic liberty and political authoritarianism as complementary qualities. They justified the need of a strong executive such as Pinochet not only to bring about a profound transformation of society but to maintain it until there was a “change in Chilean mentality.” Chileans had long been “educated in weakness,” said the president of the Central Bank, and a strong hand was needed in order to “educate them in strength.” The market itself would provide tutoring: When asked about the social consequences of the high bankruptcy rate that resulted from the shock therapy, Admiral José Toribio Merino replied that “such is the jungle of . . . economic life. A jungle of savage beasts, where he who can kill the one next to him, kills him. That is reality.”

But before such a savage nirvana of pure competition and risk could be attained, a dictatorship was needed to force Chileans to accept the values of consumerism, individualism, and passive rather than participatory democracy. “Democracy is not an end in itself,” said Pinochet in a 1979 speech written by two of Friedman’s disciples, but a conduit to a truly “free society” that protected absolute economic freedom. Friedman hedged on the relationship between capitalism and dictatorship, but his former students were consistent: “A person’s actual freedom,” said Finance Minister de Castro, “can only be ensured through an authoritarian regime that exercises power by implementing equal rules for everyone.” “Public opinion,” he admitted, “was very much against [us], so we needed a strong personality to maintain the policy.”

Jeane Kirkpatrickwas among those who traveled to Chile to pay respect to the pioneer, lauding Pinochet for his economic initiatives.“The Chilean economy is a great success,” the ambassador said, “everyone knows it, or they should know it.” She was dispatched byReagan shortly after his 1981 inauguration to “normalize completely [Washington’s] relations with Chile in order to work together in a pleasant way,” including the removal of economic and arms sanctions and the revocation of Carter’s “discriminatory” human rights policy.Such pleasantries, though, didn’t include meeting with the relatives of the disappeared, commenting on the recent deportation of leading opposition figures, or holding Pinochet responsible for the 1976 carbomb execution of Orlando Letelier, Allende’s ambassador to the US, in Washington’s Dupont Circle— all issues Kirkpatrick insisted would be resolved with “quiet diplomacy.”

Setting aside the struggles surrounding religion, race, and sexuality that give American politics its unique edge, it was in Chile where the New Right first executed its agenda of defining democracy in terms of economic freedom and restoring the power of the executive branch. Under Pinochet’s firm hand, the country, according to prominent Chicago graduate Cristián Larroulet, became a “pioneer in the world trend toward forms of government based on a free social order.” Its privatized pension system, for example, is today held up as a model for the transformation of Social Security, with Bush having received advice from Chilean economist José Piñera, also a Chicago student, on how to do so in 1997. Pinochet “felt he was making history,” said Piñera, “he wanted to be ahead of both Reagan and Thatcher.”

Friedman too saw himself in the vanguard. “In every generation,” he is quoted in his flattering New York Times obituary, which spares just a sentence on his role in Chile, “there’s got to be somebody who goes the whole way, and that’s why I believe as I do.”

And trailblazer both men were, harbinger of a brave and merciless new world. But if Pinochet’s revolution was to spread throughout Latin America and elsewhere, it first had to take hold in the United States. And even as the dictator was “torturing people so prices could be free,”as Uruguayan writer Eduardo Galeano once mordantly observed, the insurgency that would come to unite behind Ronald Reagan was gathering steam.

Today, Pinochet is under house arrest for his brand of “shock therapy,” and Friedman is dead. But the world they helped usher in survives, in increasingly grotesque form. What was considered extreme in Chile in 1975 has now become the norm in the US today: a society where the market defines the totality of human fulfillment, and a government that tortures in the name of freedom.

GREG GRANDIN teaches Latin American history at NYU and is the author of the Empire’s Workshop: Latin America, The United States, and The Rise of the New Imperialism, from which this essay has been excerpted. He can be reached at: gjg4@nyu.edu

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