CHILE: Free-Market Travail

The Chilean coup that overthrew Salvador Allende in late 1973 replaced one set of economic ideologues with another. The Marxists who strove for total regulation of the economy have been succeeded by a group of policymakers known as the "Chicago Boys." Reason: they ardently embrace the free-market teachings of University of Chicago Economist Milton Friedman, who visited Chile for six days last year to counsel them.

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...

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