Saturday, November 03, 2007

Thoughts on Friedman and Chile

Milton Friedman is often accused by leftists of having collaborated with the Pinochet regime in Chile. Friedman and (American) libertarians defend him by claiming that he only provided abstract, universal policy advice and that the implementation of Friedmanesque policies resulted in the democratization of Chile.

This debate recently flared up on a few left-libertarian blogs (Mutualist Blog and Freedom Democrats), leading me to develop an opinion on this issue, which I figure is worth reprinting:

It seems that the damning act was his 1982 Newsweek article (which I can't find online), in which he publicly lauded the Pinochet regmine for the economic policies. From what I can piece together, at that point, the Chilean people had been suffering economic deprivation for much of Pinochet's regime--first with the assault on inflation and then with a recession brought on by international conditions. For the Pinochet regime to get the endorsement of a Nobel-prize winning economist at that point would have been a meaningful propaganda victory: just as people would have been most likely to abandon the Pinochet regime, the wise-man (Friedman) comes in and says "you are on the right track." This seems to have been a lapse of judgement equal to those of the communists who defended the USSR in the early 20th century.

This analogy is strengthened by his apparent support for "shock therapy" (supposedly recommended in his policy proposals to Pinochet) -- the drastic restructuring of the economy without concern for the severe hardship that it would cause. This attitude is reminiscent of the USSR's drive to industrialize regardless of the price paid by the people, and the drastic reforms called for in Harry Browne's presidential platform.

Both his praise for Pinochet and his endorsement of drastic, painful changes suggest that Friedman had a certain top-down bias that I find fundamentally incompatible with liberty and democracy (by which I mean including regular people in the governance of society, not simple majoritarianism). Perhaps Friedman was just reflecting the mainstream bias of his society, or he was blinded by his own influence among powerful people--but it's really disturbing. Too often libertarians simply reject these criticisms of Friedman, and hold him up as an icon of liberty. Failure to heed these criticisms and integrate them into libertarian thought will continue to marginalize the movement.

P.S. I don't blame Friedman for what his students did, and I don't blame his students for taking an opportunity to improve their country (assuming that they weren't explicitly trying to transfer wealth to the elite). I don't blame him for giving a lecture in Chile, or even for writing a list of policy proposals specifically for Pinochet's Chile (except to the extent that this was supposedly congratulatory towards Pinochet). Finally, I don't believe that his economic policies are incompatible with democracy, though his recommended implementation of these policies may have been.


gator80 said...

Mr. Alias,
You may wish to do a bit more research into whether Milton Friedman "endorsed" the Pinochet regime and supported shock therapy "without concern for the severe hardship it would cause." Reading some of Friedman's writings would help. With some actual facts you may come to a different conclusion.

Anonymous said...

Hello Adam,
i just stumbled upon your text when i was searching for friedman an the shock therapy.
for information, how involved friedman was in chile, i recommend "the shock doctrine" by naomi klein.