The Last Colonial Massacre: Latin America in the Cold War by Greg Grandin
Afterword: An Interview with Naomi Klein
Many readers will know Chile as the fi rst place where the direct relationship between neoliberal economics and torture became evident. But the backstory to Friedman’s involvement with the Pinochet government is less well known. Years ago, when I heard the phrase “the Chicago boys,” I thought it referred to North Americans who had gone to Chile and worked with Pinochet. And that was true to some extent, because Friedman himself did travel to Chile in 1975 and meet with Pinochet. But the real Chicago boys, as you have written in Empire’s Workshop, were the Chileans who had studied at the University of Chicago. To a large extent, that was not just an academic program but the U.S. government’s attempt to change the ideological landscape of Latin America. It started in the 1950s, when a great deal of concern in Washington centered on the so- called pink economists and the notion that Latin America was moving very far to the left.
One strategy, devised by USAID, was to bring large numbers of Chilean students to the University of Chicago, which was then considered a very ex- treme institution. In the United States, the Chicago economics department was seen as way out there. Friedman was always complaining about how marginal he was, how the Keynesians at Harvard and Yale had a monopoly on political infl uence. He and his colleagues saw themselves as a band of rebels on the fringes, working with these Latin American students, who were brought into what was practically a cult for extreme capitalism. The students were trained as ideological warriors—their tuition was paid for by the U.S. government and later by the Ford Foundation—and then sent back home to battle the “pinks.” It started with Chile, but it later expanded to Argentina, Brazil, Mexico.
But it failed. Even though millions of dollars were spent on their educa- tion, these ideological warriors fl opped. They went back to Chile in the 1960s and they had their little journals and the economics pages of newspapers and they published papers. But the political debate had moved so far to the left that they were irrelevant to it. The idea that the U.S. State Department was somehow going to convert Chile to Friedmanism, to a form of capitalism that was more radical than anything that had been attempted in the United States, was clearly absurd.
This initial failure is important because we’re so often told that capitalism, or this radical form of capitalism, has triumphed around the world because there was a battle of ideas, and the Friedmanites won. When Friedman died last year, we heard an unrelenting celebration of this supposedly peaceful battle that his side won. They won in Latin America, they won in Russia, they won in China—or so we are told. But from the very beginning, from the very fi rst laboratory, the Friedmanites lost badly when it was peaceful. But then, of course, the Chicago boys came back, after Salvador Allende’s overthrow, this time with tanks. And it was in this brutal, anti- democratic context that they “won.”
I’ve come to think of the War on Terror as playing the same kind of role as a really over- hyped market bubble, much like the dot- coms of the late 1990s. This new economy was announced after September 11. The business prospectus was this: the U.S. government will do whatever it takes to make the country “secure” at home; we will fi ght a war against evil every- where, forever.
From a business perspective, this is tremendously reassuring because in- vestors are always looking for predictability and sustainability, and the Bush administration has delivered it. It has created a $200 billion market in home- land security and declared that the demand will never end. In other words, if you sink your money in this industry, if you supply “security” products to meet the demand they have created, it’s a safe bet. The government, while launching this new economy, also acts as its venture capitalist, providing unlimited funding to whoever can come up with the newest gadget to make us safe or to wage war abroad.
The Department of Homeland Security is a great example of this. It is not a governmental agency in the traditional sense, but rather an empty shell that exists only to hand out money to private contractors to produce products that the government then buys.