Here’s a question someone asked me recently: What city that you’ve visited surprised you the most?
My answer was Santiago, Chile. Based on all the terrible things I’d heard from people like Naomi Klein about the horrors inflicted on the economy by the “Chicago Boys”, I was expecting to see a lot of poverty and a little bit of wealth. Instead, I saw a vibrant city with a large and prosperous middle class. Also, a great little jazz club.
I learned two important lessons there. First, ideologues like Naomi Klein will lie flagrantly to advance their agendas. Second, an economic policy that tries to “get prices right” by reducing distortions (in Chile’s case, slashing and equalizing tariff rates), using sound cost-benefit analysis to evaluate government projects, and otherwise being generally inclined toward “free-market” policies can bring prosperity to a vast majority of the population. And the wealth created can be used to help the few who don’t otherwise share in the benefits of liberalization.
Most surprisingly of all, it seems that ordinary Chileans hold economists in their highest esteem, presumably having seen what that profession has done for them when given a major say in public policy. Lawyers? Not so much.
Anyway, that was my answer to the question. What’s yours?