On January 1st, Jair Bolsonaro will take office as Brazil’s 38th president. He will do so on a platform chock full of brash and heavy-handed social policies, yet one underpinned by ultraliberal economics and the vesting of extensive power into the hands of economist Paulo Guedes, a University of Chicago graduate.
In 1973, General Augusto Pinochet seized power in Chile after a military coup. While imposing his brutal regime on the Chilean people, General Pinochet also handed the reins of the country’s economy to a group of economists, fresh off the plane from the very same University of Chicago.
While there are plenty of caveats, the comparisons between the two are too close to resist.
The Chicago school of economics
The foundations for Chile’s economic experiment date back to 1950s U.S. and the establishment of a school of American economic liberalism within the University of Chicago. Led by Milton Friedman and George Stigler (both of whom would later go on to win the Nobel Prize in Economics), the Chicago School became known around the world as the hub of liberal economic thought.
Opposed to the state intervention of the New Deal and Marshall Plan, the group’s economic theory was based on the maxim that when left to its own devices (read, without any intervention from the state), the market would take care of itself.