Word: chiles
(lookup in dictionary)
(lookup stats)
Dates: during 1970-1979
Sort By: most recent first
(reverse)
Reflecting Friedman's antipathy to government intervention in the economy, Chile has sold many state companies to private investors at bargain prices. The swollen bureaucracy has been slashed drastically to reduce government spending. Some price controls have been lifted. Tariff restrictions are gradually being eased, in the hope that foreign competition will force local industry to become more efficient...
...intent was to throw the economy into an ice-cold bath of free competition-and the result has been to turn business blue. Inflation raged at 340% last year. Industrial production has fallen so sharply that Chile's total output of goods and services last year was 20% below 1974. Unemployment, low during the Allende days of ample government payrolls, is now at least...
Friedman himself does not defend the results. Says he: "It's absurd to talk about Chile as if it is an important test of my ideas. I don't even know if they have been carrying out my policies." His colleague Arnold Harberger complains that the Chileans have in fact been violating a prime tenet of Friedmanism: that a nation's money supply should expand at a steady but moderate pace. The Chilean money supply jumped 27.5% in this year's first quarter alone. The Chicago Boys retort that they have cut down as rapidly...
...controversy brings up the deeper question of whether Friedman's theories are really applicable to a poor, inflation-ridden country. Says one Chilean university economist: "In an underdeveloped country like Chile it is less possible to have a free-market economy than it is in a developed one. It is a question of size and scale." It is also a question of history: since the 1930s the government has tightly controlled key parts of the Chilean economy. Prices and wages have traditionally been set by the government; the major industries have long been monopolies. Competition, the present Chilean government...
Allende period and the drop in the price of copper, Chile's chief moneymaker, from an average of 930 per Ib. in 1974 to a disastrous 560 in 1975 (it has since recovered...