The Chicago Boys were a group of Chilean economists who rose to prominence in the 1970s and 1980s. Most were educated at the University of Chicago Department of Economics under influential figures like Milton Friedman, Arnold Harberger, and Larry Sjaastad, or at its academic partner, the Pontificia Universidad Católica de Chile. After returning to Latin America, they assumed key roles as economic advisors in several South American governments, most notably the military dictatorship of Chile (1973–1990), where many attained the highest economic offices. Their free-market policies later influenced conservative governments abroad, including those of Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom.
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In this Dossier
Chicago Boys in the context of Military dictatorship of Chile (1973–1990)
An authoritarian military dictatorship ruled Chile for almost seventeen years, between 11 September 1973 and 11 March 1990. The dictatorship was established after the democratically elected socialist government of Salvador Allende was overthrown in a coup d'état backed by the United States on 11 September 1973. During this time, the country was ruled by a military junta headed by General Augusto Pinochet. The military used the breakdown of democracy and the economic crisis that took place during Allende's presidency to justify its seizure of power. The dictatorship presented its mission as a "national reconstruction". The coup was the result of multiple forces, including pressure from conservative groups, certain political parties, union strikes and other domestic unrest, as well as international factors.
The regime was characterized by the systematic suppression of political parties and the persecution of dissidents to an extent unprecedented in the history of Chile. Overall, the regime left over 3,000 dead or missing, tortured tens of thousands of prisoners, and drove an estimated 200,000 Chileans into exile. The dictatorship's effects on Chilean political and economic life continue to be felt. Two years after its ascension, neoliberal economic reforms were implemented in sharp contrast to Allende's leftist policies. The government was advised by the Chicago Boys, a team of free-market economists educated in the United States. Later, in 1980, the regime replaced the 1925 Constitution with a new constitution in a controversial referendum. This established a series of provisions that would eventually lead to the 1988 Chilean national plebiscite on October 5 of that year.
Chicago Boys in the context of History of Chile
The territory of Chile has been populated since at least 3000 BC. By the 16th century, Spanish invaders began to raid the region of present-day Chile, and the territory was a colony from 1540 to 1818, when it gained independence from Spain. The country's economic development was successively marked by the export of first agricultural produce, then saltpeter and later copper. The wealth of raw materials led to an economic upturn, but also led to dependency, and even wars with neighboring states. Chile was governed during most of its first 150 years of independence by different forms of restricted government, where the electorate was carefully vetted and controlled by an elite.
Failure to address the economic and social increases and increasing political awareness of the less-affluent population, as well as indirect intervention and economic funding to the main political groups by the CIA, as part of the Cold War, led to a political polarization under Socialist president Salvador Allende. This in turn resulted in the 1973 coup d'état and the military dictatorship of General Augusto Pinochet, whose seventeen-year regime was responsible for many human rights violations and deep market-oriented economic reforms. In 1990, Chile made a peaceful transition to democracy and initiate a succession of democratic governments.
Chicago Boys in the context of Berkeley Mafia
The Berkeley Mafia was the term given to a group of University of California-trained economists in Indonesia who were given technocratic positions under the Suharto dictatorship during the late 1960s. They were appointed in the early stages of the New Order administration. Their work focused on promoting free-market capitalism in Indonesia and reversing many of the progressive economic reforms that had been introduced by the Sukarno government. The economic system in place under the New Order regime was termed crony capitalism due to the vast corruption within the country throughout this period. The Berkeley Mafia, like the Suharto dictatorship itself, aligned with the United States during the Cold War.
Sharing significant similarities with the Chicago Boys in Chile (1970s–80s), such as staunch anti-communism, the Berkeley Mafia was not considered to be neoliberal unlike the former.