July 17, 2025 • 44 mins
On September 11, 1973, a coup overthrew the democratically elected Chilean president, Salvador Allende. This marked the beginning of the Pinochet dictatorship and up to that date, Los Chicago Boys wrote out the 500 page plan that became known as the brick. The economic plan for the new regime. Then throughout the dictatorship, Pinochet elevated Chicago boys to higher positons. But who were they, how did it start? In this episode, Cristina tells Carmen about the Chicago Boys, the School of Chicago and their ties to right wing dictatorships in Latin America.
If you have topic suggestions, feel free to email Historiasunknownpodcast@gmail.com or use the contact us form on the website https://www.historiasunknown.com/contact/
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Music Credit: Hustlin (Instrumental) by Neffex
Sources:
The Shock Doctrine by Naomi Klein
https://en.wikipedia.org/wiki/Chicago_Boys
https://en.wikipedia.org/wiki/Chicago_school_of_economics
https://www.promarket.org/2021/09/12/chicago-boys-chile-friedman-neoliberalism/
https://americasquarterly.org/article/fifty-years-on-the-chicago-boys-remain-difficult-to-discuss/
https://thebeautifultruth.org/the-basics/what-is-the-friedman-doctrine/
https://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm
https://en.wikipedia.org/wiki/Milton_Friedman
https://en.wikipedia.org/wiki/Shock_therapy_(economics)
Become a supporter of this podcast: https://www.spreaker.com/podcast/historias-unknown--6253658/support.
If you have topic suggestions, feel free to email Historiasunknownpodcast@gmail.com or use the contact us form on the website https://www.historiasunknown.com/contact/
Want ad free episodes? And weekly bonus episodes? Support Historias Unknown on Patreon https://www.patreon.com/HistoriasUnknownPodcast
Follow on social media:
Instagram: https : //www.instagram.com/historiasunknown/
Threads: https://www.threads.net/@historiasunknown
Music Credit: Hustlin (Instrumental) by Neffex
Sources:
The Shock Doctrine by Naomi Klein
https://en.wikipedia.org/wiki/Chicago_Boys
https://en.wikipedia.org/wiki/Chicago_school_of_economics
https://www.promarket.org/2021/09/12/chicago-boys-chile-friedman-neoliberalism/
https://americasquarterly.org/article/fifty-years-on-the-chicago-boys-remain-difficult-to-discuss/
https://thebeautifultruth.org/the-basics/what-is-the-friedman-doctrine/
https://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm
https://en.wikipedia.org/wiki/Milton_Friedman
https://en.wikipedia.org/wiki/Shock_therapy_(economics)
Become a supporter of this podcast: https://www.spreaker.com/podcast/historias-unknown--6253658/support.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Hi everyone, This is Carmen and Christina. This is Istois
Unknown in podcast where we've talked about Latin American history,
sometimes the torrible and deals with heavy topics like racism, corruption,
and genocide. But more than that, it's also about resistance,
power and community. What are we what are we talking
about today? Well, Carmen, in episodes sixty one through sixty five,
(00:29):
we discussed Allende, the coup that overthrew him, Yeah, which
was orchestrated by the US, which put dictator Pinochet into power,
which marked the beginning of his decades long dictatorship. Yeah,
that ended in nineteen ninety. And I realized that in
those episodes I completely skipped over the Chicago Boys. I
(00:51):
really only mentioned their name. Oh that's right, yeah, yeah,
And they were a big part of this, But I
just I was already doing so much research that I
didn't I couldn't add them on. And a while ago,
like almost two years ago, maybe I posted a video
about the School of Americas on both TikTok and Instagram.
(01:13):
But on TikTok somebody commented, can you talk about the
Chicago School or the School of Chicago, And I was like,
oh yeah, And then I forgot about it completely until
right now because I was reading The Shock Doctrine by
Naomi Klein, and first of all, the book talks about
so much. It's such an important read, especially in these times.
(01:34):
But it reminded me to finally do an episode on
the Chicago Boys because they're a big part of the book.
And again, I never explained it in those episodes. I
just said who. I just said, like, they did the
economy stuff and they sucked. I think maybe this That's
all I said. Okay, I was just going to remember
do you remember the context in which they were mentioned
(01:54):
in those episodes in a sentence where I was like,
and he put the Chicago Boys in charge of like
the economy you plan for his dictatorship. And that was
about it. That's all I said. If I even said
that much, I honestly can't remember. I think you said
that because I do. They're not in my notes. Oh
I do remember that you mentioned that they were had
something to do with the economy. M hm, So who
(02:17):
were they? They were a group of Chilean economists who
studied at the University of Chicago under Milton Friedman. Do
you know the name? Yeah, that sounds very familiar, and
at first glanced this may seem completely right, like, oh,
it's just some people from Chile studying in the United States.
(02:41):
And for those who don't know, because I needed the refresher,
I know I heard the name, but I didn't know
anything else. Milton Friedman. Yeah, I recognize the name, and
I'm like trying to remember for the left of me,
why what specifically I know him from. I know somewhere.
It's something in the economics world, obviously, but that's all
I remember. Yeah, anyway, moving on, So Milton Friedman. He
(03:04):
was an American economist and statistician. He even received the
nineteen seventy six Nobel Memorial Prize in Economic Scientists for
his research on consumption analysis, monetary history and theory, and
the complexity of stabilization policy. Stabilization policy. That doesn't sound
good though to me, writing sounds like an expert in
(03:26):
destabilizing economies. You don't say, all right, I downe foretold Okay.
In nineteen seventy he wrote a New York Times essay
called a Freedman doctrine. The social responsibility of business is
to increase its profits, a theory that argues that the
main responsibility of a business is to maximize the revenue
(03:47):
and increase returns to shareholders. Basically, no company is obligated
to engage in social responsibility. And sure whatever if this
is only applied to businesses, yeah, okay, but governments and
country I don't know about that, right, because, like if
you wanted to, if you went and colonized the country,
you have a responsibility to the people, to me to
(04:09):
a society. If you want to be in charge of society,
you need to care for the people in the society.
Things like that, right, Yeah, Like countries or governments are
not businesses should not be ran like businesses. That's not
how things work or should work, right, And so his
little theory should have really only been ever applied to businesses.
But I will add here that it should be no surprise.
(04:34):
But guess what group of people love Milton Friedman and
the Chicago Boys, the right wing A specific group tech bros.
Do you give up? Oh wow, so I'm just way off. No, No,
I mean some tech brows probably fall under this too. Capitalists, Libertarians,
all libertarians. Wow, I just don't think about them, right,
(04:55):
I forget things. Do you remember that story of that
liberty are in town and it went to shit so
fast town. Yeah, they had a libertarian town so in
the US, and then basically no one was picking up
the garbage because they no one you forget even and
I think bears ended up overrunning the town. Wow, No,
(05:18):
I don't remember where it was. I remember they tried
to start like a society on a boat or some
shit like that. And oh, that didn't work out for
them either. It never works out. Yes, libertarians love his
school of thought. Under Milton Friedman, the Chicago Boys learned
to emphasize neoliberal principles. They advocated for free markets, deregulation,
(05:41):
and privatization and presented these as solutions to countries and
economic crisis, which how in what world? But we know
you and I know, yeah, that neoliberalism is never the answer. Yeah,
that's why they were so fucked right now. Even then, though,
you'll find people that still celebrate the Chicago Boys and
(06:04):
Milton Freedmen. No way, of course. But let's go back
to the beginning for a second. Where did this start?
Milton Freedman, he is considered a second generation member of
the Chicago School of Economics, but because he's one of
the biggest reasons this was so widely implemented in Latin America.
(06:24):
I'm not worrying about anyone else in this episode. I
don't care. He along with the other main person who
was teaching the Chicago Boys who then went to Chile first.
That guy's George Stigler, and so together they were the
leading scholars of the Chicago School. And like I said earlier,
they were all for the free market, like literal, unregulated
ultimate level capitalism. They saw Keynesian economics as their ultimate enemy.
(06:52):
And for those that don't remember, like myself, because I
forgot everything we learned and ap economic I know these terms,
but I don't remember what exactly. Like I know, I
heard the word yeah because again Ipie econ everything went
in and out my ear and I was like, I
don't know, I don't care. Yeah. Anyway, basically the most
basic basic explanation, Canadian economists justify government intervention through public
(07:16):
policies that achieve full employment and price stability. Okay, so
like all the stuff, yeah, all the stuff FDR did
to get the US out of Keynesian Yeah, and they
hated it, right, that makes sense to me that aspecting
and they were like the leading economists in the US
(07:36):
basically back then too, like because the US they did
a lot of funding programs. Obviously Republicans always cut that back, right,
but like that was like a fundamental thing, like create
programs that create jobs things like that. Anyway, So yeah,
they hated I FDR and everything he did during the
Great Depression. This includes Milton Friedman, who most likely got
(07:58):
his free marketing ideals from his parents, who were immigrants
from Hungary. They arrived in the US in their early teens,
and they were really hard working, like pull yourself up
by the bootstraps type people and then kick the ladder
down you're there, so no one else can climb up
with their boots that I got my Yeah, And that's
what it feels like when you read what they did. Right,
(08:21):
So they bought they bought a garment factory in Broadway,
New Jersey, and this factory had an apartment which they
lived in. And Milton Friedman himself wrote that today this
factory would have been called the sweatshop. So they were
paying their workers' pennies while they made profit. Right when
(08:44):
was this and during this time when this is all
pre the Great Depression? Okay, well I know back then
they had people working like dogs. Oh yeah, during that
was my next sentence. Basically during this time period, Marxist
ideals and anarchists and then that's their words were influencing
(09:05):
workers to demand their rights and to demand weekends off.
Like that's how Milton's father said it. It's just wild
for me that, like they really expect you to do
the work, and that's what they want to go back to,
you know, just work, work, work, no life. You're basically
are little workers and that's it. Yeah, yeah, And so
(09:26):
eventually the factory went under, and of course Milton's father
blamed the Marxists and the workers who wanted free market. Baby,
sometimes you win, sometimes you lose. But of course this
mark Milton Friedman's childhood, and after he graduated high school,
he had his eyes sent on becoming a mathematician, but
(09:46):
then he went with economics. And all of this is
during the middle of the Great Depression when he's in college.
And so while other economists, while other young economists saw
FDR's New Deal as life saving measures and they were,
Milton Friedman and his wife described what FDR's New Deal
did as quote job creation programs, or they said the
(10:09):
following about it job creation programs such as the WPA,
the Works Progress Administration CCC, the Civilian Conservation Group in
case you don't remember what those acronims were from, I
don't remember either, and the PWA the Public Works at
Administration appropriate responses to the critical situation, but not the
price and wage fixing measures. So they thought the work
(10:31):
programs were good, but they didn't think the price and
wage fixing measures of the National Recovery Administration and the
Agricultural Adjustment Administration were necessary. So they didn't. Okay, they
didn't think it wasnt so anything that stopped the market,
according to them, and stopped prices from like doing whatever, right,
Like it's like interfering in the free market. Yes. Yes.
(10:55):
He would later say that the new Deal was the
wrong cure for the wrong disease. I'm like, bitch, what
does that mean? It helped the United States? Like, wow, well,
I think they meant the free market what have you
eventually fixed everything? Yeah, that's what they meant. The federal
and according to him, the Federal Reserve was to blame,
and unregulated, unregulated capitalism was the answer that would have
(11:19):
fixed everything. Okay, just what I said. Yeah, and then
in nineteen forty six, Milton Friedman began to teach economic
theory at the University of Chicago, where he taught for
the next thirty years, and there he taught his school
of thought, the free market. You know, that's why it
later he was a pioneer of this. Basically, Freedman and
(11:41):
his followers used models and statistics to prove that this
would work better than any Keynesian economics or any other
existing economic theories principles. But they had no way to
prove it because nowhere in the world was this taking care.
I was just going to say, like, real life is
not like statistics, Like that's not how it works as
much as you wanted to. Yeah, And they had nowhere
(12:03):
to actually carry out their theories until until, yes, until Chile,
Oh my god, and the Chile Project ridiculous. So Argentina,
Chile and other Latin American countries had been closing the
gap between the poor and the wealthy for a while,
(12:25):
usually through leftist governments like Peron in Argentina, at events
in guatemalac and Allende and Chile, And can you tell
me what all of those hadn't come in they? Uh?
Did they tried to kill all of themen. They were
all overthrown all of them. Sorry, I can't remember that word,
but oh it's fine. I knew where I knew where
(12:47):
you were going. I just wanted you to be the
one to say it. But I'm sorry, let me down.
But that's okay. Yeah. And of course the wealthy they
didn't like this, because do we This work of closing
that gap between the poorland wealthy often involved nationalizing industries
(13:07):
where outsiders currently had the little greedy fingers in giving
land back and these companies, we would lose money if
these governments kept going right, so Q the CIA and
the toppling of democratically elected governments to supposedly fight communism.
(13:29):
So in nineteen fifty three, two Americans met in Santiago,
Chile to discuss this growing problem of THEIRS, the nationalization
of industries, these governments, these leftist governments being elected workers
demanding rights. And before anyone says ayend, there wasn't an
office until way later than this meeting nineteen fifty three.
I know, but like this type of like covert work,
(13:54):
two topple institutions, it begins decades before actual cups take place.
Plus there was a time because he ran for president
three times. I think it was before he won. I
don't remember if TV won, and he was in the
Senate too, right, and I don't remember if he won
on the third or fourth time that he ran. But
so like he was gaining more and more followers at
(14:16):
supporters every time he ran, and more support for these
leftist ideas, and so he was identified as a threat
even back then. Yes, they could see where the tides
were going. And so thus this meeting in nineteen fifty
three between these two American men in Santiago, Chile. These
two men were all Beyond Patterson, the director of the
(14:37):
US International Cooperation ADAMAN in Chile. And side note but
this is the predecessor to the US AID. Oh yes,
and Theodore Schulz, the chairman of the Department of Economics
at the University of Chicago, again where Milton Friedman was teaching. Okay,
(14:58):
so these two men were both concerned with these growing
leftist movements in Chile and the economists participated in these
movements and how it affected their profits. Apparently they called
this pink economists. I've heard that before. I think they're
meaning just leftists policies like leftists economists, because like, if
you google that right now, it shows up like queer people.
(15:22):
But that's not what it meant back then. So I
think that's what I inferred, at least that that's what
they guess. That would make sense to me. Yeah, and like,
of course the book I was reading didn't really explain
what it was. They just assumed because it was written
in and seven. So we're like, bitch, I'm dumb. I
don't know. Yeah, but that's my guess. So one of
them told the other quote, what we need to do
(15:43):
is change the formation of the men to influence the education,
which is very bad. Say that again. What we need
to do is change the formation of the men, formation
of the men. So the way these men think, okay,
we need to influence their education because right now it's
bad because they keep coming up with these pink economists. Okay, okay,
(16:04):
I see, yes, yes, So both men already believed the
US wasn't doing enough to fight Marxism, which they were
again intervening everywhere, right and together, the men came up
with a plan that would be called the Chile Project.
This was their plan. The US government would pay to
(16:25):
send Chi then students to study economics at the University
of Chicago, which at the time was considered the most
anti pink So that's why I thought pink men left. Yeah,
because it was the most conservative school at the time.
I don't know if it still is. Maybe it's like
because you know how red it was, like the red scare,
like communist color or whatever. Like maybe pink because these
(16:47):
were like students. I don't know, oh, maybe, and Theodore
Schulz and Milton Friedman would be paid to travel to
Santiago to conclude research into the economy and to train
students in the Chicago school ways. And when al Beyond
Patterson approached the dean of the University of Chile and
(17:08):
offered a grant on top of the program, the dean
declined why because he saw the program for what it was,
US intervention. It was basically telling the US telling Chile
what their top students should be learning. Yeah, and then
dictating that education. And so yeah, he was like, no, no, no, no,
(17:32):
thank you. But do you know but do you know
who Albion went to next, who then said, yes, Milton, No,
Milton is his colleague in this. Oh my god, so
each other? What other university would he go to that
wasn't the University of Chile but in Chile. Yes, yes,
(17:57):
I don't know. I'll tell you, okay. The dean of
Chile's Catholic University, Oh my god, I should have known that. Yeah,
I thought you were. You know, your brain's not here today. No,
I'm just kidding. And if you recall from the Chile
episodes we did again, like sixty one through sixty five
or something like that, the Catholic Church was one of
(18:18):
the biggest supporters of Pinochet. They were very conservative and
they wanted to maintain that. Yeah, so of course they
said yes. Also, the Catholic University at the time had
no economics departments either, and so they said yes so fast.
They were like yes, like in media. Yes, And this
is the official birth of the Chila Project. And the
(18:41):
program would only be open to select students. And this
was intentional because they wanted to produce quote, ideological warriors
who would win the battle of ideas against Latin America's
pink economists. Wow, yes, yes and quote. The CHEEA project
officially launched in nineteen fifty six with one hundred students
pursuing advanced degrees at the University of Chicago. Their tuition
(19:03):
and expenses all paid for by US taxpayers and some
US foundations, but mostly taxpayers. Wow. Ten years later the
program would also accept students from all of Latin America,
but three countries saw the most participants. Do you want
to try and gas those or no? No? Okay Aargentina, Brazil,
(19:24):
and Mexico. I was going to say, Afgentina, that's one
of them. Yeah, And the Ford Foundation further funded this program,
and then this led to the Center for Latin American
Economics Studies to be placed at the University of Chicago.
In this program, there were fifty Latin American students studying
(19:44):
graduate level economics at all times, and it achieved what
it wanted in ten years. This extremely conservative school was
the place for Latin Americans to study economics and then
they would return to their countries and shape policies there decades.
Under this program, students were taught disdain for policies that
(20:06):
alleviated poverty. The first group of students that returned to
Chile were quote even more freedman nights than Freedman himself. Wow,
so not good. No, Then these students that returned to
Chile became professors of economics at the Catholic University, where
(20:27):
they trained even more Chilean students in this school of
thought to do more influencing. Yes, and by nineteen sixty three,
twelve of the thirteen full time faculty members at the
University of the Catholic University in Chile were graduates of
the Chicago School. Wow. Students who graduated from the program,
(20:49):
whether they were in Chicago or in Santiago at the
Catholic University became known as Los Chicago Boys. Then, with
USAID money, they went on to set up similar programs
as far as Colombia, but also at Jentina, Brazil, Uruguay.
At first glance, this plan to influence Latin America was
(21:09):
very slow going, like it even seemed to be failing.
They're like, where are they, When are they going to
start becoming more conservative? When are they going to let us? Yeah?
But then in nineteen seventy Chile elected Salvyende, like we
know from all those episodes, and all three major political
parties in chileg were in favor of nationalizing the copper mines,
(21:30):
which at the time were controlled by US mining companies.
These companies had invested over one billion dollars in the
last few years before nineteen seventy and their profit was
seven point two billion, damn And so yeah, they were like,
we don't want this to be nationalize. That's what we
make money. And then when all seemed like all hope
(21:52):
was lost, Nixon was elected in the US and we
know what this means. He gave the CIA the order
to make the quote Chilean economy scream end quote. And
like we discussed in the Chile episodes, they flooded money
into anti Allende propaganda. They also created policies that would
(22:13):
hurt the Chilean economy under Allende, like denying loans. And
this is on top of the CIA's like pouring money
into this like this is also US mining companies along
with the International Telephone and Telegraph Company Purina, like the
Dog Food and Bank of America and Pfizer. They formed
(22:34):
a committee whose sole purpose was to get Agenda to
back off nationalizing industries by making him face economic lapse.
That was a Britain goal, and their plans included blocking
loans to Chile, having US private banks do the same,
delayed buying any theme from Chile for six months, and
(22:54):
so on, but Allenda was still holding the majority of
the support in Chile despite all of this Wow and
then because their plans were working too slow again, the
Catholic University became one of the meeting places for the
planning of the coup. Orlando Science, president of the National
(23:16):
Association of Manufacturers, then recruited top Chicago Boys to design
alternative programs to government programs like financial or economic one
economic ones, and then they would pass these programs, these
planned programs onto the armed forces. The Chicago Boys, led
by Sejo de Gastro and Serjo Unduruga, who knew that
(23:39):
said he was such a cursed name, they held weekly
secret meetings where they discussed how to remake their country
into neoliberal lines. And so they, along with the majority
of these companies and the military, planned the overthrow of Allende.
(24:00):
And they, I'm sure we said it in the somewhere
in the five six episodes that we did, but they
received seven to five percent of their funding from the CIA,
and by the time the coup was said to take place,
the Chicago Boys had a five hundred page economic program
to guide the junta. And the junta we said in
those episodes, but they were the three military heads that
(24:22):
would govern Chile, but then Pinochet took charge. But that's
the junta. This five hundred page program was known as
The Brick. It was put together by ten principal authors,
and eight of those ten were Chicago Boys University of
Chicago graduates. And although the military was responsible for the
physical overthrow of Agenda, the military part of the fighting.
(24:46):
This was an equal partnership between the army and the
Chicago Boys. Each page of those five hundred pages of
the Break was approved by someone in the military by
September eleventh, nineteen seventy three. Because when you look up
the Chicago Boys first, the one they're celebrated two people
try to make it seem like they didn't know that
(25:07):
this was going to be a dictatorship, or that they
didn't know they by landed. They knew they worked together
all along. Yeah. So, following the coup, Pinochet named several
Chicago Boys as senior economic advisors, including Steel Castro. During
the first year and a half of his regime, Pinochet
followed all of the rules laid out by the Chicago Boys.
(25:28):
He privatized state owned companies, not all of them, but
most of them. He let in foreign imports, he eliminated
price controls, and he cut government spending that was not
the military, and that was instead increased. The Chicago Boys
insisted that without government involvement in all of these areas,
the natural laws of economics would bring equilibrium and inflation
(25:50):
would go down. Stupid yeah, because within the year inflation
had risen three hundred and seventy five percent. It was
at the time the highest in the world. Wow. Unemployment
hit record levels because free trade was flooding the country
with cheap imports. People were losing their jobs. But the
Chicago Boys insisted that it was because the rules of
(26:13):
their program weren't being followed with the right amount of strictness.
So they advised even more cuts and more privatization, and
Pinotet did it. And the only people benefiting from this
was foreign companies. Of course, Yes, that's why they wanted this.
Those were planned all long. Oh yeah, one hundred percent.
(26:36):
At this point, even previous business owners in Chile that
had cheered for the overthrow Byende were starting to want
his return because they knew it was still better. Damn.
It was so bad that they brought in Milton Friedman
himself in nineteen seventy five, so he could fix the problem,
but he was also stupid. Well, Milton freedman solution was
(26:57):
something called the shock treatment, and shock treatment or shock
therapy is a group of policies intended to be implemented
at the same time, all at the same time, a
bunch of different policies, all implemented at the same time,
to liberalize, liberalize the economy. And that's like the economic
version of shock treatment. But then like the overall now
(27:20):
known like term or term or known definition for shock
therapy is for governments to put out a bunch of changes,
not just financial changes, but a bunch of changes at
the same time to like overwhelm people that might want
to guy studying is now they were calling it when yeah,
(27:42):
when he was announcing executive orders. Yeah, I forget what
they call liberals like flooding the system or some shit
like that. Yeah, that's that's a term that kept going around.
And so shock treatment is what Milton Friedman described this,
but like the financial version, but it's really all the same. Yeah,
(28:02):
but he really thought it was going to help. I
don't know. He advised the cutting of government spending by
another twenty five percent in six months. And then he
said that unemployment, the unemployment problem would only last months
at most. And then he returned to the US and
he wrote about Pinochet in such a nice fashion, even
though at the time it was already known that he
(28:24):
had stadiums full of preous torturing. Yes, and the disappearances
it was like already speculated worldwide. So but he wrote, quote,
the general was sympathetically attracted to the idea of a
shock treatment, but was clearly distressed at the possible temporary
unemployment that might be caused. And it's like, please, Pinochet
(28:46):
didn't care about the people. He just cared how it
would make him look. But he didn't care that his
people would be out of work. He was again everyone
knew he was massacrering, committee massacres and torturing in the stadiums,
but this didn't matter to Milton Friedman. He willingly went
to go to a country in a dictatorship and a
right wing dictatorship and advised them, Yeah, and this wasn't
(29:09):
the only one. He went to uruway, he went to Argentina. Gone,
he went to like a couple more in like Asia,
like whow And of course this didn't matter to the
Chicago boys either, right. Pinochet was all in on Milton
Friedman's plan, and he fired the economic minister and then
gave that job to said hell Castro, So the like
(29:30):
main Chicago boy at this point, and said hell Castro,
then filled the ranks with even more Chicago boys, and
together they privatized more than five hundred state owned companies
and banks. By nineteen eighty three, one hundred and seventy
seven thousand industrial jobs were gone. That is a lot.
(29:51):
Unemployment reached twenty percent, the highest in Chile. Do you
know what that unemployment was during Nayenda? Do you remember
three percent? So they it was way less, That's all
I remembered. And why less compared to twenty percent? Yeah,
and this unemployment lasted years, not months. Unlike what Milton
Friedman said. What happened. Basic things like bread cost a
(30:14):
chi Land family seventy four percent of their income, and
Pinochet simply told chi Lands to forego luxury items. And
do you know what he considered a luxury item, oh,
basic necessities? Milk? Milk. Wow, there's also a milk program
where kids received milk at school. That was one of
the first things cut wo Yeah, but no, the Chicago
(30:37):
Boys continued despite all of this. The public school system
was replaced by vouchers and charter schools. Kindergarten was privatized.
That's what they're trying to do here every This is
what they've already done in New Orleans after Hero Get Katrina.
But it's so true what they say about fascism being it.
What do they say, It's something turned inward. It's going
(30:58):
to come home. I don't know what they say, but basically,
to me, it's gonna come home. The US has been
perpetrators night perpetrators, has been the person behind installing these
fascist governments elsewhere to their benefit. But eventually it's going
to get to the point where it has to happen here,
and that's where we are. So kindergarten was privatized, cemeteries
(31:21):
were privatized, healthcare privatized, Social Security privatized. My god. And
the argument for this system, for those who still believe
it works, including libertarians, say that if a country can
hold out in the short term, then the long term
is better. But that's not true. It's literally the same
(31:44):
thing they're fucking saying right now. It's gonna get worse
until it gets better or something like that. It's gonna
get worse until it gets worse and worse and worse
and worse. It's not going to get better unless we fight.
What is short term is what I'm wondering, because in
ten years Chile was worse than it had ever been,
(32:06):
and you can still find people saying the same thing
I just said. How if a country can hold that
short term the launchm will be better. I know you
just said. They're saying it about here right now, but
they've also been saying it about Argentina and Milay, of course,
because that is one libertarian ass government. He cut so much,
the inflation has gone up so high since he took office.
(32:26):
And also who was he friends with Trump? Yeah? And Israel.
So But back to the nineteen eighties and Chile. By now,
Chile had a crewed fourteen billion dollars in debt due
to implementing the practices of the Chicago Boys. The economy
(32:47):
crashed in nineteen eighty two, and the only thing that
saved the economy was that Pinochet had not privatized the
copper mind company Godero. He did privatize others, but and
Codelgo generated eighty five percent of Chilis export and that
was the state's steady source of income, the one copper
(33:10):
company that he had not privatized. And what does that
tell you that nationalization of resources is the answer. Yeah,
and the already richest of the rich were the only
ones who got more rich under these policies. Of course,
by nineteen eighty eight, when the economy economy was considered
(33:31):
stabilized by everyone else, forty five percent of Chela's population
was under the poverty line. Wow, that is again a lot.
But the richest ten percent saw their incomes increased by
eighty three percent. Oh my god. Wow. Ridiculous, absolutely ridiculous.
(33:53):
And the effects of the Chicago Boys in Chile can
still be seen today. Milton Friedman went on to advice
similar regimes in Latin America, from Brazil's junta to Agentinas
kunta to Urduai's dictatorship. Like he just went from dictatorship
to dictatorship, advising them that is deplorable, Like you should
(34:17):
be able to It's like, when we what did we
talk about? I think we were talking about Coca Cola
way back, and I think I mentioned because in the
book that I listened to for that episode, they mentioned
the United Fruit Company and someone, some professional whatever was
talking about the United Fruit Company and she's like, if
doing business in a country requires you to work with paramilitaries,
(34:41):
and maybe you shouldn't be doing business there. And it's
like this fool should have had the ethics and morality
to be like, hey, about to work with an authoritarian
dictator who is mastercreing, massacreing, committicilling his people, then maybe
I shouldn't come here to advise them. Like shouldn't that
(35:02):
be a given? You would think, you would think, But no,
And just like in Chile, Chicago boys in other countries
like Argentina, they were giving key positions in Argentina's junta
And like you just said, like personally, it's an extremely
bad look when far right dictatorships love your economic theories
and they're the only ones using them today. Some would
(35:24):
still see what happened in Chile as a success. Sure,
Chile's GDP grew from fourteen billion in nineteen seventy three
to two hundred and forty seven billion in twenty seventeen,
so a lot, but like, what is the true cost?
Because almost thirty percent of all of Chile's income becomes
belongs to one percent. There's not good ratio. Wow, it's
(35:48):
one of the most unequal countries. The student protests we
talked about way back when we talked about Negro Matabacos
and the dogs both times were a direct result of
the Chicago Boys' economic policies, so much so that protesters
were yelling chow Chicago, oh wow in the streets because
(36:10):
they were fighting the privatization of schools and like the
voucher system, if you remember that in those episodes. And
that's literally from this. In his twenty nineteen book Desi
wil Dad or Inequity, former Treasury Minister Nicolas A. Saguirre
wrote Chile was a laboratory for neoliberalism in its most
(36:33):
pure or extreme version. Drastic reforms that would be unthinkable
in a democracy were executed as military orders without criticism
or opposition, and at an enormous social and human cost,
thanks to a dictatorship that used blunt forced to block
any debate and home and yeah, he's right, yep. Pro
(36:54):
or free market people love to point to Chile's raising
GDP as a success, but like again, when you took
a closer look, it's not great, Like, yeah, it's gone up,
but fifty percent of Chilean workers are the best. Didn't
see that any of that. No, only the top top percent.
Like I already said, it's a very unequal country where
one percent of people hold thirty percent of all income
(37:17):
in the whole country. Fifty percent of Chieland workers are
in less than six thousand, three hundred and twenty dollars
per year. Wow. A small number of families in Chile
dominate the economy with companies that include like pharmacies, banking,
and phone services. And in these companies of these families
there has been cases of collusion, tax evasion, illegal payments
(37:39):
to politicians, and consumer fraud which no one ever served
any jailt time for even though they were found guilty
punity mm hm. And everywhere the School of Chicago alumni
the Chicago Boys went, they faced similar numbers. In Argentina,
(38:00):
in nineteen seventy, the richest ten percent of the population
earned twelve times as much as the poorest, but by
two thousand and two, the riches earned forty three times
as much as the porous Wow. And so I guess
if their goal was to increase the gap between the
wealthy and the poor. That they succeeded probably was yeah,
because yeah, that gap grew and only the richest of
(38:23):
the riches benefited from these policies. And that's what happens
in a free market world and where unregulated capitalism is
the norm, that's what happens. And like I said, Argentina
is currently going through the same thing again, but this
time enacted by Melay. Inflation has skyrocketed as a result.
(38:44):
And this brings me to where Carman, you and I
find ourselves today in the US, like many of our
listeners areas because the big beautiful bill that just passed
has very much the same kind of Chicago School principles
that these same governments in Latin America, which were dictatorships,
implemented big cuts to programs that aid the poor. Education cuts,
(39:06):
cuts everywhere, cut cuts, cuts and increases to military funding
or in our case ice. So yeah, that is the
infamous School of Chicago aka Lost Chicago Boys. Wow, the
destabilizers of economies. Yeah, And it's just it baffles me
that they're celebrated by so many, but of course it's
(39:28):
it's the same people infecting us everywhere, like a disease. Yep.
But yeah, unless you have anything else to add, this
brings us to the end of the episode. M I
don't think I have anything to add except that what
is that saying history doesn't repeat itself at rhymes or
(39:51):
some shit like that. But the thing is, I don't
know where it's like full circle, what's like a fitly loop,
like the same happening again and again and again and again. Yep. Yeah,
And it's not that it's repeating, it's that it never
went away and it's just getting bigger. Right. That's yeah,
it's an infinity loop everywhere, right, because like you mentioned
at Quintina is going to do it with me lay
(40:12):
this extreme free market neoliberal whatever. Uh. We're seeing people,
these rich people, rich companies trying to do use Latin
America as their own experiments to enact this kind of stuff.
And we've seen that in Prospera a. I don't know
(40:33):
if it's an island or a city in Onduras, but
it's they're trying to create like modern company towns. I
forgot what they're calling them, like free free something fancy
name to highly find that they're company to company towns.
Like it's not New Yeah, and it's literally like extreme
versions of this yeah. Yeah, And I highly recommend my
(40:57):
main source for this, which was The Shock Doctrine. There
is an other book that's focused on the Chicago Boys,
but honestly, it's very biased towards them, Like they don't
even praise them. Yeah, they like pass over the fact
that they were literally part of the coup and they
were like, like the book even mentions like, did does
Chicago boys know of the violence? It's hard to say,
(41:20):
and it's really not like said he there's evidence, Yeah,
what the top Chicago boy was rising through this position
by Pinochet, Like they knew, There's no way they didn't know,
But the book glazes over that and like gives them
the benefit of the doubt. So I don't recommend that book.
If you want a real picture of what they were doing,
(41:42):
definitely read The Shock Doctrine by Naomi Klein. And it's
also like she uses the Chicago Boys a lot as
an example of this type of thing, but she also
talks about how this type of thing where something happens
where basically a region is destroyed either through war or
through these type of policies, and then free market pro
(42:04):
capitalists companies come in to do the fixing, and instead
they create this hyperinflation like they happened in Iraq. It
happened in New Orleans after Hurricane Katrina. So weren't they
trying to do that also in Puerto Rico after Hurricane Maria. Yeah,
(42:24):
And I don't know if they did or didn't because
I haven't looked into it, but I know Thailand when
there was a and the book also mentions this, but
there was a national disaster in Thailand, and I think
it was the tsunami, and Thailand worked with their government,
never let in outside companies from the US, and they rebuilt.
The fishermen worked with the government to rebuild their own
(42:44):
and they rebuilt. They rebuilt everything for them and it
worked for them. And they even had this group of
survivors from Hurricane Katrina go and see what Thailand has
rebuilt at getting chills just talking about it because the
Hurricane Katrina it was the opposite situation. They were basically abandoned.
It was forever changed. Yeah, for the worst. And one
(43:07):
other survivors like cried and was like everyone needs to
follow this. This is what everyone needs to do when
there's a disaster. You cannot let these outside contractors crying.
And yeah, I highly highly recommend the book because wow,
also shadowt to I don't know how she or they
(43:27):
pronounced their name on socials, but on Instagram and antic
talk it's the same. It's like a yeah, okay, I
think I'll put it in the show notes. But she
was like, here's the books I've read to keep me sane,
and it's but it's all like books to inform you
on the situation, and the Shock Doctrine was one of them.
And I was like, oh, I've read some of these,
(43:49):
but I still need to read the Shock Doctriner. And
I was like, I expect you to read it because
I know you'd be reading because she follows us on
StoryGraph and so she's like, I expect to see this
and I did. I read it for these notes, so
shout out out. That was the push I needed, and
also to finally write these notes. And yeah, that was
a one mess. It's already unknown or I hope I
(44:11):
said that wrong. Goodbye everyone, and we hope this was
one mess. Is Studia Unknown for you? Yes? Bye bye.
Astoria Unknown is produced by Carmen and Christina researched by
Carmen and Christina, edited by Christina. You can find sources
for every episode Attoria Unknown dot com and in our
show notes. Creating the podcast has a lot of work,
(44:33):
so if you want to help us out financially, you
can do so by supporting us on Patreon at patreon
dot com. Slash She studied as an own podcast
Hi everyone, This is Carmen and Christina. This is Istois
Unknown in podcast where we've talked about Latin American history,
sometimes the torrible and deals with heavy topics like racism, corruption,
and genocide. But more than that, it's also about resistance,
power and community. What are we what are we talking
about today? Well, Carmen, in episodes sixty one through sixty five,
(00:29):
we discussed Allende, the coup that overthrew him, Yeah, which
was orchestrated by the US, which put dictator Pinochet into power,
which marked the beginning of his decades long dictatorship. Yeah,
that ended in nineteen ninety. And I realized that in
those episodes I completely skipped over the Chicago Boys. I
(00:51):
really only mentioned their name. Oh that's right, yeah, yeah,
And they were a big part of this, But I
just I was already doing so much research that I
didn't I couldn't add them on. And a while ago,
like almost two years ago, maybe I posted a video
about the School of Americas on both TikTok and Instagram.
(01:13):
But on TikTok somebody commented, can you talk about the
Chicago School or the School of Chicago, And I was like,
oh yeah, And then I forgot about it completely until
right now because I was reading The Shock Doctrine by
Naomi Klein, and first of all, the book talks about
so much. It's such an important read, especially in these times.
(01:34):
But it reminded me to finally do an episode on
the Chicago Boys because they're a big part of the book.
And again, I never explained it in those episodes. I
just said who. I just said, like, they did the
economy stuff and they sucked. I think maybe this That's
all I said. Okay, I was just going to remember
do you remember the context in which they were mentioned
(01:54):
in those episodes in a sentence where I was like,
and he put the Chicago Boys in charge of like
the economy you plan for his dictatorship. And that was
about it. That's all I said. If I even said
that much, I honestly can't remember. I think you said
that because I do. They're not in my notes. Oh
I do remember that you mentioned that they were had
something to do with the economy. M hm, So who
(02:17):
were they? They were a group of Chilean economists who
studied at the University of Chicago under Milton Friedman. Do
you know the name? Yeah, that sounds very familiar, and
at first glanced this may seem completely right, like, oh,
it's just some people from Chile studying in the United States.
(02:41):
And for those who don't know, because I needed the refresher,
I know I heard the name, but I didn't know
anything else. Milton Friedman. Yeah, I recognize the name, and
I'm like trying to remember for the left of me,
why what specifically I know him from. I know somewhere.
It's something in the economics world, obviously, but that's all
I remember. Yeah, anyway, moving on, So Milton Friedman. He
(03:04):
was an American economist and statistician. He even received the
nineteen seventy six Nobel Memorial Prize in Economic Scientists for
his research on consumption analysis, monetary history and theory, and
the complexity of stabilization policy. Stabilization policy. That doesn't sound
good though to me, writing sounds like an expert in
(03:26):
destabilizing economies. You don't say, all right, I downe foretold Okay.
In nineteen seventy he wrote a New York Times essay
called a Freedman doctrine. The social responsibility of business is
to increase its profits, a theory that argues that the
main responsibility of a business is to maximize the revenue
(03:47):
and increase returns to shareholders. Basically, no company is obligated
to engage in social responsibility. And sure whatever if this
is only applied to businesses, yeah, okay, but governments and
country I don't know about that, right, because, like if
you wanted to, if you went and colonized the country,
you have a responsibility to the people, to me to
(04:09):
a society. If you want to be in charge of society,
you need to care for the people in the society.
Things like that, right, Yeah, Like countries or governments are
not businesses should not be ran like businesses. That's not
how things work or should work, right, And so his
little theory should have really only been ever applied to businesses.
But I will add here that it should be no surprise.
(04:34):
But guess what group of people love Milton Friedman and
the Chicago Boys, the right wing A specific group tech bros.
Do you give up? Oh wow, so I'm just way off. No, No,
I mean some tech brows probably fall under this too. Capitalists, Libertarians,
all libertarians. Wow, I just don't think about them, right,
(04:55):
I forget things. Do you remember that story of that
liberty are in town and it went to shit so
fast town. Yeah, they had a libertarian town so in
the US, and then basically no one was picking up
the garbage because they no one you forget even and
I think bears ended up overrunning the town. Wow, No,
(05:18):
I don't remember where it was. I remember they tried
to start like a society on a boat or some
shit like that. And oh, that didn't work out for
them either. It never works out. Yes, libertarians love his
school of thought. Under Milton Friedman, the Chicago Boys learned
to emphasize neoliberal principles. They advocated for free markets, deregulation,
(05:41):
and privatization and presented these as solutions to countries and
economic crisis, which how in what world? But we know
you and I know, yeah, that neoliberalism is never the answer. Yeah,
that's why they were so fucked right now. Even then, though,
you'll find people that still celebrate the Chicago Boys and
(06:04):
Milton Freedmen. No way, of course. But let's go back
to the beginning for a second. Where did this start?
Milton Freedman, he is considered a second generation member of
the Chicago School of Economics, but because he's one of
the biggest reasons this was so widely implemented in Latin America.
(06:24):
I'm not worrying about anyone else in this episode. I
don't care. He along with the other main person who
was teaching the Chicago Boys who then went to Chile first.
That guy's George Stigler, and so together they were the
leading scholars of the Chicago School. And like I said earlier,
they were all for the free market, like literal, unregulated
ultimate level capitalism. They saw Keynesian economics as their ultimate enemy.
(06:52):
And for those that don't remember, like myself, because I
forgot everything we learned and ap economic I know these terms,
but I don't remember what exactly. Like I know, I
heard the word yeah because again Ipie econ everything went
in and out my ear and I was like, I
don't know, I don't care. Yeah. Anyway, basically the most
basic basic explanation, Canadian economists justify government intervention through public
(07:16):
policies that achieve full employment and price stability. Okay, so
like all the stuff, yeah, all the stuff FDR did
to get the US out of Keynesian Yeah, and they
hated it, right, that makes sense to me that aspecting
and they were like the leading economists in the US
(07:36):
basically back then too, like because the US they did
a lot of funding programs. Obviously Republicans always cut that back, right,
but like that was like a fundamental thing, like create
programs that create jobs things like that. Anyway, So yeah,
they hated I FDR and everything he did during the
Great Depression. This includes Milton Friedman, who most likely got
(07:58):
his free marketing ideals from his parents, who were immigrants
from Hungary. They arrived in the US in their early teens,
and they were really hard working, like pull yourself up
by the bootstraps type people and then kick the ladder
down you're there, so no one else can climb up
with their boots that I got my Yeah, And that's
what it feels like when you read what they did. Right,
(08:21):
So they bought they bought a garment factory in Broadway,
New Jersey, and this factory had an apartment which they
lived in. And Milton Friedman himself wrote that today this
factory would have been called the sweatshop. So they were
paying their workers' pennies while they made profit. Right when
(08:44):
was this and during this time when this is all
pre the Great Depression? Okay, well I know back then
they had people working like dogs. Oh yeah, during that
was my next sentence. Basically during this time period, Marxist
ideals and anarchists and then that's their words were influencing
(09:05):
workers to demand their rights and to demand weekends off.
Like that's how Milton's father said it. It's just wild
for me that, like they really expect you to do
the work, and that's what they want to go back to,
you know, just work, work, work, no life. You're basically
are little workers and that's it. Yeah, yeah, And so
(09:26):
eventually the factory went under, and of course Milton's father
blamed the Marxists and the workers who wanted free market. Baby,
sometimes you win, sometimes you lose. But of course this
mark Milton Friedman's childhood, and after he graduated high school,
he had his eyes sent on becoming a mathematician, but
(09:46):
then he went with economics. And all of this is
during the middle of the Great Depression when he's in college.
And so while other economists, while other young economists saw
FDR's New Deal as life saving measures and they were,
Milton Friedman and his wife described what FDR's New Deal
did as quote job creation programs, or they said the
(10:09):
following about it job creation programs such as the WPA,
the Works Progress Administration CCC, the Civilian Conservation Group in
case you don't remember what those acronims were from, I
don't remember either, and the PWA the Public Works at
Administration appropriate responses to the critical situation, but not the
price and wage fixing measures. So they thought the work
(10:31):
programs were good, but they didn't think the price and
wage fixing measures of the National Recovery Administration and the
Agricultural Adjustment Administration were necessary. So they didn't. Okay, they
didn't think it wasnt so anything that stopped the market,
according to them, and stopped prices from like doing whatever, right,
Like it's like interfering in the free market. Yes. Yes.
(10:55):
He would later say that the new Deal was the
wrong cure for the wrong disease. I'm like, bitch, what
does that mean? It helped the United States? Like, wow, well,
I think they meant the free market what have you
eventually fixed everything? Yeah, that's what they meant. The federal
and according to him, the Federal Reserve was to blame,
and unregulated, unregulated capitalism was the answer that would have
(11:19):
fixed everything. Okay, just what I said. Yeah, and then
in nineteen forty six, Milton Friedman began to teach economic
theory at the University of Chicago, where he taught for
the next thirty years, and there he taught his school
of thought, the free market. You know, that's why it
later he was a pioneer of this. Basically, Freedman and
(11:41):
his followers used models and statistics to prove that this
would work better than any Keynesian economics or any other
existing economic theories principles. But they had no way to
prove it because nowhere in the world was this taking care.
I was just going to say, like, real life is
not like statistics, Like that's not how it works as
much as you wanted to. Yeah, And they had nowhere
(12:03):
to actually carry out their theories until until, yes, until Chile,
Oh my god, and the Chile Project ridiculous. So Argentina,
Chile and other Latin American countries had been closing the
gap between the poor and the wealthy for a while,
(12:25):
usually through leftist governments like Peron in Argentina, at events
in guatemalac and Allende and Chile, And can you tell
me what all of those hadn't come in they? Uh?
Did they tried to kill all of themen. They were
all overthrown all of them. Sorry, I can't remember that word,
but oh it's fine. I knew where I knew where
(12:47):
you were going. I just wanted you to be the
one to say it. But I'm sorry, let me down.
But that's okay. Yeah. And of course the wealthy they
didn't like this, because do we This work of closing
that gap between the poorland wealthy often involved nationalizing industries
(13:07):
where outsiders currently had the little greedy fingers in giving
land back and these companies, we would lose money if
these governments kept going right, so Q the CIA and
the toppling of democratically elected governments to supposedly fight communism.
(13:29):
So in nineteen fifty three, two Americans met in Santiago,
Chile to discuss this growing problem of THEIRS, the nationalization
of industries, these governments, these leftist governments being elected workers
demanding rights. And before anyone says ayend, there wasn't an
office until way later than this meeting nineteen fifty three.
I know, but like this type of like covert work,
(13:54):
two topple institutions, it begins decades before actual cups take place.
Plus there was a time because he ran for president
three times. I think it was before he won. I
don't remember if TV won, and he was in the
Senate too, right, and I don't remember if he won
on the third or fourth time that he ran. But
so like he was gaining more and more followers at
(14:16):
supporters every time he ran, and more support for these
leftist ideas, and so he was identified as a threat
even back then. Yes, they could see where the tides
were going. And so thus this meeting in nineteen fifty
three between these two American men in Santiago, Chile. These
two men were all Beyond Patterson, the director of the
(14:37):
US International Cooperation ADAMAN in Chile. And side note but
this is the predecessor to the US AID. Oh yes,
and Theodore Schulz, the chairman of the Department of Economics
at the University of Chicago, again where Milton Friedman was teaching. Okay,
(14:58):
so these two men were both concerned with these growing
leftist movements in Chile and the economists participated in these
movements and how it affected their profits. Apparently they called
this pink economists. I've heard that before. I think they're
meaning just leftists policies like leftists economists, because like, if
you google that right now, it shows up like queer people.
(15:22):
But that's not what it meant back then. So I
think that's what I inferred, at least that that's what
they guess. That would make sense to me. Yeah, and like,
of course the book I was reading didn't really explain
what it was. They just assumed because it was written
in and seven. So we're like, bitch, I'm dumb. I
don't know. Yeah, but that's my guess. So one of
them told the other quote, what we need to do
(15:43):
is change the formation of the men to influence the education,
which is very bad. Say that again. What we need
to do is change the formation of the men, formation
of the men. So the way these men think, okay,
we need to influence their education because right now it's
bad because they keep coming up with these pink economists. Okay, okay,
(16:04):
I see, yes, yes, So both men already believed the
US wasn't doing enough to fight Marxism, which they were
again intervening everywhere, right and together, the men came up
with a plan that would be called the Chile Project.
This was their plan. The US government would pay to
(16:25):
send Chi then students to study economics at the University
of Chicago, which at the time was considered the most
anti pink So that's why I thought pink men left. Yeah,
because it was the most conservative school at the time.
I don't know if it still is. Maybe it's like
because you know how red it was, like the red scare,
like communist color or whatever. Like maybe pink because these
(16:47):
were like students. I don't know, oh, maybe, and Theodore
Schulz and Milton Friedman would be paid to travel to
Santiago to conclude research into the economy and to train
students in the Chicago school ways. And when al Beyond
Patterson approached the dean of the University of Chile and
(17:08):
offered a grant on top of the program, the dean
declined why because he saw the program for what it was,
US intervention. It was basically telling the US telling Chile
what their top students should be learning. Yeah, and then
dictating that education. And so yeah, he was like, no, no, no, no,
(17:32):
thank you. But do you know but do you know
who Albion went to next, who then said, yes, Milton, No,
Milton is his colleague in this. Oh my god, so
each other? What other university would he go to that
wasn't the University of Chile but in Chile. Yes, yes,
(17:57):
I don't know. I'll tell you, okay. The dean of
Chile's Catholic University, Oh my god, I should have known that. Yeah,
I thought you were. You know, your brain's not here today. No,
I'm just kidding. And if you recall from the Chile
episodes we did again, like sixty one through sixty five
or something like that, the Catholic Church was one of
(18:18):
the biggest supporters of Pinochet. They were very conservative and
they wanted to maintain that. Yeah, so of course they
said yes. Also, the Catholic University at the time had
no economics departments either, and so they said yes so fast.
They were like yes, like in media. Yes, And this
is the official birth of the Chila Project. And the
(18:41):
program would only be open to select students. And this
was intentional because they wanted to produce quote, ideological warriors
who would win the battle of ideas against Latin America's
pink economists. Wow, yes, yes and quote. The CHEEA project
officially launched in nineteen fifty six with one hundred students
pursuing advanced degrees at the University of Chicago. Their tuition
(19:03):
and expenses all paid for by US taxpayers and some
US foundations, but mostly taxpayers. Wow. Ten years later the
program would also accept students from all of Latin America,
but three countries saw the most participants. Do you want
to try and gas those or no? No? Okay Aargentina, Brazil,
(19:24):
and Mexico. I was going to say, Afgentina, that's one
of them. Yeah, And the Ford Foundation further funded this program,
and then this led to the Center for Latin American
Economics Studies to be placed at the University of Chicago.
In this program, there were fifty Latin American students studying
(19:44):
graduate level economics at all times, and it achieved what
it wanted in ten years. This extremely conservative school was
the place for Latin Americans to study economics and then
they would return to their countries and shape policies there decades.
Under this program, students were taught disdain for policies that
(20:06):
alleviated poverty. The first group of students that returned to
Chile were quote even more freedman nights than Freedman himself. Wow,
so not good. No, Then these students that returned to
Chile became professors of economics at the Catholic University, where
(20:27):
they trained even more Chilean students in this school of
thought to do more influencing. Yes, and by nineteen sixty three,
twelve of the thirteen full time faculty members at the
University of the Catholic University in Chile were graduates of
the Chicago School. Wow. Students who graduated from the program,
(20:49):
whether they were in Chicago or in Santiago at the
Catholic University became known as Los Chicago Boys. Then, with
USAID money, they went on to set up similar programs
as far as Colombia, but also at Jentina, Brazil, Uruguay.
At first glance, this plan to influence Latin America was
(21:09):
very slow going, like it even seemed to be failing.
They're like, where are they, When are they going to
start becoming more conservative? When are they going to let us? Yeah?
But then in nineteen seventy Chile elected Salvyende, like we
know from all those episodes, and all three major political
parties in chileg were in favor of nationalizing the copper mines,
(21:30):
which at the time were controlled by US mining companies.
These companies had invested over one billion dollars in the
last few years before nineteen seventy and their profit was
seven point two billion, damn And so yeah, they were like,
we don't want this to be nationalize. That's what we
make money. And then when all seemed like all hope
(21:52):
was lost, Nixon was elected in the US and we
know what this means. He gave the CIA the order
to make the quote Chilean economy scream end quote. And
like we discussed in the Chile episodes, they flooded money
into anti Allende propaganda. They also created policies that would
(22:13):
hurt the Chilean economy under Allende, like denying loans. And
this is on top of the CIA's like pouring money
into this like this is also US mining companies along
with the International Telephone and Telegraph Company Purina, like the
Dog Food and Bank of America and Pfizer. They formed
(22:34):
a committee whose sole purpose was to get Agenda to
back off nationalizing industries by making him face economic lapse.
That was a Britain goal, and their plans included blocking
loans to Chile, having US private banks do the same,
delayed buying any theme from Chile for six months, and
(22:54):
so on, but Allenda was still holding the majority of
the support in Chile despite all of this Wow and
then because their plans were working too slow again, the
Catholic University became one of the meeting places for the
planning of the coup. Orlando Science, president of the National
(23:16):
Association of Manufacturers, then recruited top Chicago Boys to design
alternative programs to government programs like financial or economic one
economic ones, and then they would pass these programs, these
planned programs onto the armed forces. The Chicago Boys, led
by Sejo de Gastro and Serjo Unduruga, who knew that
(23:39):
said he was such a cursed name, they held weekly
secret meetings where they discussed how to remake their country
into neoliberal lines. And so they, along with the majority
of these companies and the military, planned the overthrow of Allende.
(24:00):
And they, I'm sure we said it in the somewhere
in the five six episodes that we did, but they
received seven to five percent of their funding from the CIA,
and by the time the coup was said to take place,
the Chicago Boys had a five hundred page economic program
to guide the junta. And the junta we said in
those episodes, but they were the three military heads that
(24:22):
would govern Chile, but then Pinochet took charge. But that's
the junta. This five hundred page program was known as
The Brick. It was put together by ten principal authors,
and eight of those ten were Chicago Boys University of
Chicago graduates. And although the military was responsible for the
physical overthrow of Agenda, the military part of the fighting.
(24:46):
This was an equal partnership between the army and the
Chicago Boys. Each page of those five hundred pages of
the Break was approved by someone in the military by
September eleventh, nineteen seventy three. Because when you look up
the Chicago Boys first, the one they're celebrated two people
try to make it seem like they didn't know that
(25:07):
this was going to be a dictatorship, or that they
didn't know they by landed. They knew they worked together
all along. Yeah. So, following the coup, Pinochet named several
Chicago Boys as senior economic advisors, including Steel Castro. During
the first year and a half of his regime, Pinochet
followed all of the rules laid out by the Chicago Boys.
(25:28):
He privatized state owned companies, not all of them, but
most of them. He let in foreign imports, he eliminated
price controls, and he cut government spending that was not
the military, and that was instead increased. The Chicago Boys
insisted that without government involvement in all of these areas,
the natural laws of economics would bring equilibrium and inflation
(25:50):
would go down. Stupid yeah, because within the year inflation
had risen three hundred and seventy five percent. It was
at the time the highest in the world. Wow. Unemployment
hit record levels because free trade was flooding the country
with cheap imports. People were losing their jobs. But the
Chicago Boys insisted that it was because the rules of
(26:13):
their program weren't being followed with the right amount of strictness.
So they advised even more cuts and more privatization, and
Pinotet did it. And the only people benefiting from this
was foreign companies. Of course, Yes, that's why they wanted this.
Those were planned all long. Oh yeah, one hundred percent.
(26:36):
At this point, even previous business owners in Chile that
had cheered for the overthrow Byende were starting to want
his return because they knew it was still better. Damn.
It was so bad that they brought in Milton Friedman
himself in nineteen seventy five, so he could fix the problem,
but he was also stupid. Well, Milton freedman solution was
(26:57):
something called the shock treatment, and shock treatment or shock
therapy is a group of policies intended to be implemented
at the same time, all at the same time, a
bunch of different policies, all implemented at the same time,
to liberalize, liberalize the economy. And that's like the economic
version of shock treatment. But then like the overall now
(27:20):
known like term or term or known definition for shock
therapy is for governments to put out a bunch of changes,
not just financial changes, but a bunch of changes at
the same time to like overwhelm people that might want
to guy studying is now they were calling it when yeah,
(27:42):
when he was announcing executive orders. Yeah, I forget what
they call liberals like flooding the system or some shit
like that. Yeah, that's that's a term that kept going around.
And so shock treatment is what Milton Friedman described this,
but like the financial version, but it's really all the same. Yeah,
(28:02):
but he really thought it was going to help. I
don't know. He advised the cutting of government spending by
another twenty five percent in six months. And then he
said that unemployment, the unemployment problem would only last months
at most. And then he returned to the US and
he wrote about Pinochet in such a nice fashion, even
though at the time it was already known that he
(28:24):
had stadiums full of preous torturing. Yes, and the disappearances
it was like already speculated worldwide. So but he wrote, quote,
the general was sympathetically attracted to the idea of a
shock treatment, but was clearly distressed at the possible temporary
unemployment that might be caused. And it's like, please, Pinochet
(28:46):
didn't care about the people. He just cared how it
would make him look. But he didn't care that his
people would be out of work. He was again everyone
knew he was massacrering, committee massacres and torturing in the stadiums,
but this didn't matter to Milton Friedman. He willingly went
to go to a country in a dictatorship and a
right wing dictatorship and advised them, Yeah, and this wasn't
(29:09):
the only one. He went to uruway, he went to Argentina. Gone,
he went to like a couple more in like Asia,
like whow And of course this didn't matter to the
Chicago boys either, right. Pinochet was all in on Milton
Friedman's plan, and he fired the economic minister and then
gave that job to said hell Castro, So the like
(29:30):
main Chicago boy at this point, and said hell Castro,
then filled the ranks with even more Chicago boys, and
together they privatized more than five hundred state owned companies
and banks. By nineteen eighty three, one hundred and seventy
seven thousand industrial jobs were gone. That is a lot.
(29:51):
Unemployment reached twenty percent, the highest in Chile. Do you
know what that unemployment was during Nayenda? Do you remember
three percent? So they it was way less, That's all
I remembered. And why less compared to twenty percent? Yeah,
and this unemployment lasted years, not months. Unlike what Milton
Friedman said. What happened. Basic things like bread cost a
(30:14):
chi Land family seventy four percent of their income, and
Pinochet simply told chi Lands to forego luxury items. And
do you know what he considered a luxury item, oh,
basic necessities? Milk? Milk. Wow, there's also a milk program
where kids received milk at school. That was one of
the first things cut wo Yeah, but no, the Chicago
(30:37):
Boys continued despite all of this. The public school system
was replaced by vouchers and charter schools. Kindergarten was privatized.
That's what they're trying to do here every This is
what they've already done in New Orleans after Hero Get Katrina.
But it's so true what they say about fascism being it.
What do they say, It's something turned inward. It's going
(30:58):
to come home. I don't know what they say, but basically,
to me, it's gonna come home. The US has been
perpetrators night perpetrators, has been the person behind installing these
fascist governments elsewhere to their benefit. But eventually it's going
to get to the point where it has to happen here,
and that's where we are. So kindergarten was privatized, cemeteries
(31:21):
were privatized, healthcare privatized, Social Security privatized. My god. And
the argument for this system, for those who still believe
it works, including libertarians, say that if a country can
hold out in the short term, then the long term
is better. But that's not true. It's literally the same
(31:44):
thing they're fucking saying right now. It's gonna get worse
until it gets better or something like that. It's gonna
get worse until it gets worse and worse and worse
and worse. It's not going to get better unless we fight.
What is short term is what I'm wondering, because in
ten years Chile was worse than it had ever been,
(32:06):
and you can still find people saying the same thing
I just said. How if a country can hold that
short term the launchm will be better. I know you
just said. They're saying it about here right now, but
they've also been saying it about Argentina and Milay, of course,
because that is one libertarian ass government. He cut so much,
the inflation has gone up so high since he took office.
(32:26):
And also who was he friends with Trump? Yeah? And Israel.
So But back to the nineteen eighties and Chile. By now,
Chile had a crewed fourteen billion dollars in debt due
to implementing the practices of the Chicago Boys. The economy
(32:47):
crashed in nineteen eighty two, and the only thing that
saved the economy was that Pinochet had not privatized the
copper mind company Godero. He did privatize others, but and
Codelgo generated eighty five percent of Chilis export and that
was the state's steady source of income, the one copper
(33:10):
company that he had not privatized. And what does that
tell you that nationalization of resources is the answer. Yeah,
and the already richest of the rich were the only
ones who got more rich under these policies. Of course,
by nineteen eighty eight, when the economy economy was considered
(33:31):
stabilized by everyone else, forty five percent of Chela's population
was under the poverty line. Wow, that is again a lot.
But the richest ten percent saw their incomes increased by
eighty three percent. Oh my god. Wow. Ridiculous, absolutely ridiculous.
(33:53):
And the effects of the Chicago Boys in Chile can
still be seen today. Milton Friedman went on to advice
similar regimes in Latin America, from Brazil's junta to Agentinas
kunta to Urduai's dictatorship. Like he just went from dictatorship
to dictatorship, advising them that is deplorable, Like you should
(34:17):
be able to It's like, when we what did we
talk about? I think we were talking about Coca Cola
way back, and I think I mentioned because in the
book that I listened to for that episode, they mentioned
the United Fruit Company and someone, some professional whatever was
talking about the United Fruit Company and she's like, if
doing business in a country requires you to work with paramilitaries,
(34:41):
and maybe you shouldn't be doing business there. And it's
like this fool should have had the ethics and morality
to be like, hey, about to work with an authoritarian
dictator who is mastercreing, massacreing, committicilling his people, then maybe
I shouldn't come here to advise them. Like shouldn't that
(35:02):
be a given? You would think, you would think, But no,
And just like in Chile, Chicago boys in other countries
like Argentina, they were giving key positions in Argentina's junta
And like you just said, like personally, it's an extremely
bad look when far right dictatorships love your economic theories
and they're the only ones using them today. Some would
(35:24):
still see what happened in Chile as a success. Sure,
Chile's GDP grew from fourteen billion in nineteen seventy three
to two hundred and forty seven billion in twenty seventeen,
so a lot, but like, what is the true cost?
Because almost thirty percent of all of Chile's income becomes
belongs to one percent. There's not good ratio. Wow, it's
(35:48):
one of the most unequal countries. The student protests we
talked about way back when we talked about Negro Matabacos
and the dogs both times were a direct result of
the Chicago Boys' economic policies, so much so that protesters
were yelling chow Chicago, oh wow in the streets because
(36:10):
they were fighting the privatization of schools and like the
voucher system, if you remember that in those episodes. And
that's literally from this. In his twenty nineteen book Desi
wil Dad or Inequity, former Treasury Minister Nicolas A. Saguirre
wrote Chile was a laboratory for neoliberalism in its most
(36:33):
pure or extreme version. Drastic reforms that would be unthinkable
in a democracy were executed as military orders without criticism
or opposition, and at an enormous social and human cost,
thanks to a dictatorship that used blunt forced to block
any debate and home and yeah, he's right, yep. Pro
(36:54):
or free market people love to point to Chile's raising
GDP as a success, but like again, when you took
a closer look, it's not great, Like, yeah, it's gone up,
but fifty percent of Chilean workers are the best. Didn't
see that any of that. No, only the top top percent.
Like I already said, it's a very unequal country where
one percent of people hold thirty percent of all income
(37:17):
in the whole country. Fifty percent of Chieland workers are
in less than six thousand, three hundred and twenty dollars
per year. Wow. A small number of families in Chile
dominate the economy with companies that include like pharmacies, banking,
and phone services. And in these companies of these families
there has been cases of collusion, tax evasion, illegal payments
(37:39):
to politicians, and consumer fraud which no one ever served
any jailt time for even though they were found guilty
punity mm hm. And everywhere the School of Chicago alumni
the Chicago Boys went, they faced similar numbers. In Argentina,
(38:00):
in nineteen seventy, the richest ten percent of the population
earned twelve times as much as the poorest, but by
two thousand and two, the riches earned forty three times
as much as the porous Wow. And so I guess
if their goal was to increase the gap between the
wealthy and the poor. That they succeeded probably was yeah,
because yeah, that gap grew and only the richest of
(38:23):
the riches benefited from these policies. And that's what happens
in a free market world and where unregulated capitalism is
the norm, that's what happens. And like I said, Argentina
is currently going through the same thing again, but this
time enacted by Melay. Inflation has skyrocketed as a result.
(38:44):
And this brings me to where Carman, you and I
find ourselves today in the US, like many of our
listeners areas because the big beautiful bill that just passed
has very much the same kind of Chicago School principles
that these same governments in Latin America, which were dictatorships,
implemented big cuts to programs that aid the poor. Education cuts,
(39:06):
cuts everywhere, cut cuts, cuts and increases to military funding
or in our case ice. So yeah, that is the
infamous School of Chicago aka Lost Chicago Boys. Wow, the
destabilizers of economies. Yeah, And it's just it baffles me
that they're celebrated by so many, but of course it's
(39:28):
it's the same people infecting us everywhere, like a disease. Yep.
But yeah, unless you have anything else to add, this
brings us to the end of the episode. M I
don't think I have anything to add except that what
is that saying history doesn't repeat itself at rhymes or
(39:51):
some shit like that. But the thing is, I don't
know where it's like full circle, what's like a fitly loop,
like the same happening again and again and again and again. Yep. Yeah,
And it's not that it's repeating, it's that it never
went away and it's just getting bigger. Right. That's yeah,
it's an infinity loop everywhere, right, because like you mentioned
at Quintina is going to do it with me lay
(40:12):
this extreme free market neoliberal whatever. Uh. We're seeing people,
these rich people, rich companies trying to do use Latin
America as their own experiments to enact this kind of stuff.
And we've seen that in Prospera a. I don't know
(40:33):
if it's an island or a city in Onduras, but
it's they're trying to create like modern company towns. I
forgot what they're calling them, like free free something fancy
name to highly find that they're company to company towns.
Like it's not New Yeah, and it's literally like extreme
versions of this yeah. Yeah, And I highly recommend my
(40:57):
main source for this, which was The Shock Doctrine. There
is an other book that's focused on the Chicago Boys,
but honestly, it's very biased towards them, Like they don't
even praise them. Yeah, they like pass over the fact
that they were literally part of the coup and they
were like, like the book even mentions like, did does
Chicago boys know of the violence? It's hard to say,
(41:20):
and it's really not like said he there's evidence, Yeah,
what the top Chicago boy was rising through this position
by Pinochet, Like they knew, There's no way they didn't know,
But the book glazes over that and like gives them
the benefit of the doubt. So I don't recommend that book.
If you want a real picture of what they were doing,
(41:42):
definitely read The Shock Doctrine by Naomi Klein. And it's
also like she uses the Chicago Boys a lot as
an example of this type of thing, but she also
talks about how this type of thing where something happens
where basically a region is destroyed either through war or
through these type of policies, and then free market pro
(42:04):
capitalists companies come in to do the fixing, and instead
they create this hyperinflation like they happened in Iraq. It
happened in New Orleans after Hurricane Katrina. So weren't they
trying to do that also in Puerto Rico after Hurricane Maria. Yeah,
(42:24):
And I don't know if they did or didn't because
I haven't looked into it, but I know Thailand when
there was a and the book also mentions this, but
there was a national disaster in Thailand, and I think
it was the tsunami, and Thailand worked with their government,
never let in outside companies from the US, and they rebuilt.
The fishermen worked with the government to rebuild their own
(42:44):
and they rebuilt. They rebuilt everything for them and it
worked for them. And they even had this group of
survivors from Hurricane Katrina go and see what Thailand has
rebuilt at getting chills just talking about it because the
Hurricane Katrina it was the opposite situation. They were basically abandoned.
It was forever changed. Yeah, for the worst. And one
(43:07):
other survivors like cried and was like everyone needs to
follow this. This is what everyone needs to do when
there's a disaster. You cannot let these outside contractors crying.
And yeah, I highly highly recommend the book because wow,
also shadowt to I don't know how she or they
(43:27):
pronounced their name on socials, but on Instagram and antic
talk it's the same. It's like a yeah, okay, I
think I'll put it in the show notes. But she
was like, here's the books I've read to keep me sane,
and it's but it's all like books to inform you
on the situation, and the Shock Doctrine was one of them.
And I was like, oh, I've read some of these,
(43:49):
but I still need to read the Shock Doctriner. And
I was like, I expect you to read it because
I know you'd be reading because she follows us on
StoryGraph and so she's like, I expect to see this
and I did. I read it for these notes, so
shout out out. That was the push I needed, and
also to finally write these notes. And yeah, that was
a one mess. It's already unknown or I hope I
(44:11):
said that wrong. Goodbye everyone, and we hope this was
one mess. Is Studia Unknown for you? Yes? Bye bye.
Astoria Unknown is produced by Carmen and Christina researched by
Carmen and Christina, edited by Christina. You can find sources
for every episode Attoria Unknown dot com and in our
show notes. Creating the podcast has a lot of work,
(44:33):
so if you want to help us out financially, you
can do so by supporting us on Patreon at patreon
dot com. Slash She studied as an own podcast
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