the chilean miracle

Pinochet held power for 17 years, and during that time he changed political direction several times. The country's period of steady growth that is held up as proof of its miraculous success did not begin until the mid-eighties - a full decade after the Chicago Boys implemented shock therapy and well after Pinochet was forced to make a radical course correction. Chile's economy crashed: its debt exploded, it faced hyperinflation once again and unemployment hit 30 per cent - ten times higher than it was under Allende. The main cause was that the piranhas, the Enron-style financial houses that the Chicago Boys had freed from all regulation, had bought up the country's assets on borrowed money and run up an enormous debt of $14 billion.

The situation was so unstable that Pinochet was forced to do exactly what Allende had done: he nationalised many of these companies... The only thing that prevented Chile from complete economic collapse in the early eighties was that Pinochet had never privatised Codelco, the state copper mind company nationalised by Allende. That one company generated 85 per cent of Chile's export revenues.