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Wednesday 3 March 2010

After The Quake

Far more severe in magnitude than the Haitian earthquake has been that in Chile last week: this measured 8.8 on the Richter scale, which is very, very bad. Fortunately, the country’s building codes had been drawn up with such events in mind, so the wholesale devastation and loss of life seen in Haiti was not repeated. And Chile is a more advanced and prosperous society.

Fast forward a few days, and the awarding of credit for Chile’s advancement has been made by Rupe’s Wall Street Journal, in the person of hack Bret Stephens, to two men who deserve very little of it: economics quack doctor Milton Friedman, and unapologetic dictator Augusto Pinochet.

Fortunately, Jason Linkins at the HuffPo has assembled and summarised the inconvenient facts, and Friedman is shown in a particularly bad light: his suggested reforms in the mid 70s led to a banking collapse in 1982, unemployment rose as high as 30%, and Pinochet then ended up nationalising banks and industries, together with embarking on a huge job creation plan.

Moreover, the twin engines of Chilean growth, copper and agribusiness, can trace their success back to the intervention of Salvador Allende, deposed in 1973 in the CIA-backed coup which brought Pinochet to power. Allende had nationalised the copper mines – and they have stayed in public hands – and reformed agriculture, this latter not substantially reversed by his successor.

And those building codes, that kept so many structures intact? These date from 1972 – the time of Allende – and were revised in 1993, three years after Pinochet left the stage.

And they have nothing at all to do with Milton Friedman.

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