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THE CHILE PROJECT

Sebastian Edwards

The Story of the Chicago Boys and the Downfall of Neoliberalism

How Chile became home to the world's most radical free-market experiment — and what its downfall suggests about the fate of neoliberalism around the globe

In The Chile Project, Sebastian Edwards tells the remarkable story of how the neoliberal economic model—installed in Chile during the Pinochet dictatorship and deepened during three decades of left-of-center governments—came to an end in 2021, when Gabriel Boric, a young former student activist, was elected president, vowing that “If Chile was the cradle of neoliberalism, it will also be its grave.” More than a story about one Latin American country, The Chile Project is a behind-the-scenes history of the spread and consequences of the free-market thinking that dominated economic policymaking around the world in the second half of the twentieth century—but is now on the retreat.

In 1955, the U.S. State Department launched the “Chile Project” to train Chilean economists at the University of Chicago, home of the libertarian Milton Friedman. After General Augusto Pinochet overthrew socialist president Salvador Allende in 1973, Chile's “Chicago Boys” implemented the purest neoliberal model in the world for the next seventeen years, undertaking a sweeping package of privatization and deregulation, creating a modern capitalist economy, and sparking talk of a “Chilean miracle.” But under the veneer of success, a profound dissatisfaction with the vast inequalities caused by neoliberalism was growing. In 2019, protests erupted throughout the country, and in 2022 Boric began his presidency with a clear mandate: to end neoliberalismo.

In telling the fascinating story of the Chicago Boys and Chile's free-market revolution, The Chile Project provides an important new perspective on the history of neoliberalism and its global decline today.

Sebastian Edwards is the Henry Ford II Distinguished Professor of International Economics at the University of California, Los Angeles, and a former chief economist for Latin America and the Caribbean at the World Bank.
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Published 2023-07-01 by Princeton University Press

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“A fascinating account of how the ‘Chicago Boys' came to dominate Chilean policymaking under Pinochet and beyond. Edwards doesn't hide his own sympathies for their ideas. But even critics of Chicago-style economics will benefit from this finely detailed story about how once-outlandish ideas, scorned by politicians and businesspeople alike, became the established norm.” —Dani Rodrik, author of Straight Talk on Trade "In this well-written, deeply researched, and novel history, Edwards brilliantly shows how free-market economics first won and then lost the war of political ideas." —John H. Cochrane, author of The Fiscal Theory of the Price Level “Liberalism is the strange modern notion that no one should have a master, no one should be a slave to husband or state functionary. Edwards shows from the inside, with massive documentation expressed in vigorous prose, that true liberalism must always be defended rhetorically. The tragedy of Chile, and of some other neoliberalisms, is that the economists whom I and others taught in the 1970s at the University of Chicago went home and made a deal with an authoritarian devil. Imposing liberalism does not produce a culture of liberty. It must grow, as it can, in the human heart.” —Deirdre Nansen McCloskey, author of Why Liberalism Works “The ‘Chicago Boys'—Chilean scholars trained in neoliberal economics in Chicago—are credited and blamed for everything that has gone right and wrong in their country. Sebastian Edwards trains new light on their history and shows how it illuminates everything from the dictatorship of Augusto Pinochet to the nationwide protests of 2019–2020, the election of President Gabriel Boric in 2021, and the unsuccessful constitutional referendum of 2022. A highly original window on fifty years of Chilean political and economic history.” —Barry Eichengreen, author of The Populist Temptation “The Chile Project is outstanding, and the story it tells is filled with important lessons for the future of Latin America, the discipline of economics, and economic policymaking. An insider who writes in a lively way, Sebastian Edwards gives meticulous attention to narrative details and has a deep understanding of economics, the history of economic thinking, and Chilean history. There is no book like it.” —Charles Calomiris, coauthor of Fragile by Design

Quote Praise

"A fascinating insider intellectual history of the policies and personalities behind Chile's economic development in recent decades." —Richard Feinberg, Foreign Affairs "Absorbing, mystifying tale of how neoliberal economics took root in the Southern Hemisphere only to be uprooted." —Michael M. Rosen, National Review "Detailed yet accessible. . . . A closely argued study of the merits and demerits of free market economics in action." —Kirkus Reviews "Meticulous. . . . Marked by Edwards's firm grasp of regional politics and lucid explanations of economic theory, this is a valuable primer on a complex subject." —Publishers Weekly

Review Praise