The Chile Project - by Sebastian Edwards

About the Book

"After a modest increase in Metro fares in Santiago, Chile, last October, twenty Metro stations were simultaneously set on fire. The fare increase was the tipping point of years of social malaise. Days later there were more than a million protesters on the streets. The people of Chile were rejecting low pensions, highway tolls, school segregation, low-quality education, and poor public-health services-the result of decades of neoliberalism. Chile was the prototype for neoliberal policies, first set up under the dictatorship of Augusto Pinochet with the first-hand guidance of economists from the University of Chicago. Under neoliberalism Chile was long seen as an exemplary developing economy, and a testament to the power of privatization and free trade. But all was not well. Sebastian Edwards tells the story of how Chile went from being the posterchild of market-oriented reforms and capitalist modernization to a nation rocked by violence and political upheaval. He narrates the origins of neoliberalism and the role of the 'Chicago boys' in designing and implementing these reforms. He explains the tension between poverty reduction and income inequality, which led to seething discontent under the surface of strong economic numbers. The book tells the story of the signature policies first enacted in Chile that came to define the neoliberal way more broadly: the replacement of a traditional pension system with a privately managed system of individual savings accounts, openness and globalization, the fiscal rule, the taming of inflation, and austere health, education, and environmental policies. As Chile now sets out to draft a new constitution, and other countries come to terms with the same set of policies, all under the looming specter of reactionary populism, the book is an authoritative and important assessment of the success of neoliberalism at a pivotal moment in its history"--

Book Synopsis

How Chile became home to the world's most radical free-market experiment--and what its downfall suggests about the fate of neoliberalism around the globe

In The Chile Project, Sebastian Edwards tells the remarkable story of how the neoliberal economic model--installed in Chile during the Pinochet dictatorship and deepened during three decades of left-of-center governments--came to an end in 2021, when Gabriel Boric, a young former student activist, was elected president, vowing that "If Chile was the cradle of neoliberalism, it will also be its grave." More than a story about one Latin American country, The Chile Project is a behind-the-scenes history of the spread and consequences of the free-market thinking that dominated economic policymaking around the world in the second half of the twentieth century--but is now on the retreat.

In 1955, the U.S. State Department launched the "Chile Project" to train Chilean economists at the University of Chicago, home of the libertarian Milton Friedman. After General Augusto Pinochet overthrew socialist president Salvador Allende in 1973, Chile's "Chicago Boys" implemented the purest neoliberal model in the world for the next seventeen years, undertaking a sweeping package of privatization and deregulation, creating a modern capitalist economy, and sparking talk of a "Chilean miracle." But under the veneer of success, a profound dissatisfaction with the vast inequalities caused by neoliberalism was growing. In 2019, protests erupted throughout the country, and in 2022 Boric began his presidency with a clear mandate: to end neoliberalismo.

In telling the fascinating story of the Chicago Boys and Chile's free-market revolution, The Chile Project provides an important new perspective on the history of neoliberalism and its global decline today.

Review Quotes

"An outstanding review of the rise and fall of the pro-market consensus and the neoliberal project undertaken in Chile since the 1970s. . . .The book's prose is so well-crafted, it reads almost as fluidly as a novel."---Pablo Paniagua, Public Choice

"Edwards has provided a comprehensive book on a complicated period of Chilean economic history. I recommend it to any interested in Chile, economic history in a broad sense, and for those who are looking for an unbiased view of the Chicago Boys and their influence."---Maximilian Magnacca, The Society of Professional Economists

"A Financial Times Best Book of the Year: Economics"

"Edwards tells this complex and controversial story superbly."---Martin Wolf, Financial Times

"A book that has been badly needed."---David R. Henderson, Financial and Economic Review

"The book presents a magnificent account of Chilean economic policies from the 1950s to the present day, and it will be an invaluable source for students of economic policy."---David Gallagher, Times Literary Supplement

"[Edwards] is one of those rare economists who can explain economic policy in simple and understandable language. He is a good writer and has an eye for a telling anecdote. . . .The Chile Project offers a cautionary tale for policymakers of all political and ideological stripes about the perils of unintended consequences."---Bruce Caldwell, Literary Review

"[An] absorbing, mystifying tale of how neoliberal economics took root in the Southern Hemisphere only to be uprooted."---Michael M. Rosen, National Review

"An excellent book. . . . This is the only book on this topic where I feel I am finally getting to the bottom of what happened. . . . Milton Friedman's famed visit really was quite modest, contrary to what you sometimes hear. Nonetheless he was so persuasive he really did convince Pinochet to proceed with the shock therapy version of reform. . . . Strongly recommended, one of the must-reads of the year."---Tyler Cowen, Marginal Revolution

"A fascinating insider intellectual history of the policies and personalities behind Chile's economic development in recent decades."---Richard Feinberg, Foreign Affairs

"

Meticulous. . . . Marked by Edwards's firm grasp of regional politics and lucid explanations of economic theory, this is a valuable primer on a complex subject.

"-- "Publishers Weekly"

"Detailed yet accessible. . . . A closely argued study of the merits and demerits of free market economics in action."-- "Kirkus Reviews"

About the Author

Sebastian Edwards is the Henry Ford II Distinguished Professor of International Economics at the University of California, Los Angeles, and a former chief economist for Latin America and the Caribbean at the World Bank. His many books include American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold (Princeton) and Crisis and Reform in Latin America: From Despair to Hope.