Who Is Responsible for Chile's Resilience?

Chile has weathered the earthquake well by most accounts, but little credit has gone to outgoing president Michelle Bachelet. The most pointed critiques center on her hesitation to deploy the military to Concepcion, which fell prey to rampant looting shortly after the quake.

Instead the tragedy has renewed debate on Chile’s past. In an op-ed in The Wall Street Journal, Bret Stephens states that the spirit of Milton Friedman was “surely hovering protectively over Chile in the early morning hours” of February 27, and thanks to him the country has endured a tragedy that would have been “an apocalypse” elsewhere. Friedman, along with a group of Chilean free-market minions who would come to be known as “the Chicago Boys” sold the Pinochet regime on opening the market to world trade, laying the foundation for Chile’s rapid growth over the past generation. Stephens argues that Chile’s wealth—evidenced by the many brick homes throughout the country—helped inure it. Additionally, he correlates the enforcement of building codes to national wealth.

Others take the flip side of the coin, crediting socialist president Salvador Allende. Naomi Klein notes that Chile’s current building codes were created in 1972, a year prior to Pinochet’s coup. And the creation of the codes were, in fact, anathema to the unfettered market approach of Friedman & Co. Instead of spawning wealth throughout Chile, Klein opines that the free marketeers set about dismantling the public sphere in Chile and creating rapid growth that also produced a tenfold increase in unemployment and the emergence of massive shantytowns.

Both arguments seem a bit overblown. Is it not possible that Chile’s development is a byproduct of market forces and sound regulation? The key elements of a prosperous nation were bequeathed to a democratic Chile in 1990, and pragmatic nurturing from policymakers with a long-term perspective has aided Chile ever since.