Jennifer Burns: belief

Transcript context

…Oh, yes. I can talk about that, for sure. He actually didn’t do that much, which is interesting. I’ll get a little bit granular. Basically, Pinochet takes over in a country where the state sector has expanded dramatically, and inflation — I think it’s almost 600 percent. I could be wrong. It’s hundreds of percent. It makes our stress about 6 percent inflation — really puts it in perspective. When the junta comes in, they basically keep doing everything they’ve been doing in terms of state control of the economy. They reprivatize a little bit, but they don’t really know what to do. Say the socialist governor of the mine is replaced by a military governor of the mine, and then nothing is improving economically. About a year, a year and a half in, there’s a changing of the guard internally in the Chilean regime. A group of economists — several of whom did have Chicago training — basically are able to get the ear of the dictator and say, “Look, we need to do things differently. We need to reprivatize. We need to open markets to international trade, and we need to do all this stuff.” Pinochet basically says, “Okay, let’s do it.” It’s at that point that they’re like, “Let’s bring in Milton Friedman.” Then Friedman comes in. The policy has been decided, and basically, his role is to speak to what I jokingly call the Chilean deep state. He goes around and he meets with all the military functionaries who will carry out these policies. He explains in his very lucid way, here’s why this is the right medicine for Chile. He does interviews. He meets a lot of different people. He meets Pinochet very briefly. He tells him, “You have to cut spending to cut inflation.” He also reportedly says, according to someone who is in the meeting, “If you give the people economic freedom, eventually, it’s going to mean political freedom.” Apparently, Pinochet is like, “Yeah. yeah, whatever. Sure.” What I found in the records that I read, the big question that everyone had for Friedman was, “This is going to be too painful. We can’t do this. This is going to hurt too many people.” Even in the military regime, they are worried. “If we cut all the state supports that have been created, and we try to stop printing money and stop inflation, this is going to cause a huge amount of economic pain.” Friedman’s like a broken record. “Yes, but you have to do this, and the quicker you do it, the quicker it’ll be over. Cut the spending, provide emergency economic support, and you’ll get through it.” Basically, he uses the metaphor of cutting off a dog’s tail, which is a horrific metaphor, but he says, “You’ve got to do it all at once. You can’t drag it out.” I would say his function is to certify and explain a policy change that has already happened. He is basically a big name flown in to tell everybody, “Here’s a new program. Here’s why it’s going to work. Let’s get psyched and do it.” He’s not the mastermind in any way. hat has already happened. He is basically a big name flown in to tell everybody, “Here’s a new program. Here’s why it’s going to work. Let’s get psyched and do it.” He’s not the mastermind in any way. The real reason his presence there is so controversial is the Nobel Prize, which is awarded, I think, about a year later. The really unfortunate part is, the Nobel Prize announcement comes just a few weeks after Pinochet’s goons have assassinated a regime critic on the streets of Washington, DC. They blow up his car on the streets of Washington, DC. Then a couple weeks later, Friedman wins the Nobel Prize. Now, there’s no connection between these events, but it appears that these right-thinking people of the Western world are patting the dictator on the head. That’s how it’s framed. Nobody cares about what’s happening in Chile. Look, they’re celebrating this economist who’s somehow responsible for what has happened. It all gets mushed together to make a political point. What’s the future of Milton Friedman, say, 30, 40 years from now? Where will the reputation be? University of Chicago is no longer Friedmanite, right? We know that. There are fewer outposts of Friedmanite-thinking than there had been. Will he be underrated or somehow reinvented or what?…

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