If Reagan Were Pinochet…Sigh

While I have your attention, I want to highlight two dimensions of that 1981 Mont Pelerin Society (MPS) meeting in Pinochet’s Chile that Hayek helped organize. You can read about the whole affair here: I encourage you to do so; the devil, ahem, really is in the details.

Two points stand out for me. The first is how hard the meeting’s organizers worked to transmit the notion that the ideas of Hayek and Milton Friedman had found a home in Pinochet’s Chile. One of the ways they did so was by seamlessly interweaving the distinctive vocabulary of Hayek and Friedman into their accounts of Pinochet. Pedro Ibáñez, one of the original organizers, told the attendees that with the election of Allende

we were no longer free to choose: after forty years of socialist recklessness [Allende had been a government minister as early as 1939] only one road remained open to us—“Friedmanism”—always provided that we had a government strong and courageous enough to establish it.

…

Chile has regained her liberal traditions and therefore come closer to the spirit of Mont Pelerin.

The second point is the frequent comparisons members of Hayek’s circle made between Pinochet’s Chile and other countries. In a lot of the debate I’ve seen around this issue, the defenders of Hayek von Pinochet tend to invoke Stalin, Pol Pot, or Mao. What’s interesting about that move is that a previous generation of defenders felt no need to go there at all. They actually thought Pinochet’s Chile compared favorably with…Reagan’s America.

But even David Stockman, in his most ambitious budget cutting dreams, could not envision what is politically possible in the land of Augusto Pinochet. The Fortune article claims that in Chile, “the market’s invisible hand is an iron fist.”…

But what is politically possible in authoritarian Chile, may not be possible in a republic with a congress filled with “gypsy moths” for whom political expediency often takes precedence over economic realities, especially in an election year.

That was Eric Brodin, part of the Mont Pelerin inner circle, writing in the MPS newsletter about the meeting in Chile.