For brief context, Milton Friedman once met the Chilean autocrat for an hour, and following that meeting wrote him a two-page letter in which he proposed means by which the Chilean government (then under the control of the military dictator) could improve Chile’s economy. Furthermore, the Chilean economics ministry was heavily influenced by “the Chicago boys”, a handful of young Chilean economists who had participated in an exchange programme that had enabled them to study at Chicago University under Friedman and his colleagues. The consequence was that Chile adopted relatively liberal economic policies while at the same time suffering political tyranny.
The controversy surrounding this has several strands, not least the fact that both economic liberalism and nationalist/military dictatorship are frequently described as “Right Wing”, and here they appeared to march hand in hand. Ignoring for the moment the fact that the confusion is derived from the limited analysis resulting from trying to impose a bipolar model on a multifaceted world (I hare argued that a tripolar model provides a better explanation, but ultimately any model is bound to be limited in comparison to the complexity of the real world), there is undoubtedly uncontrolled glee that those on the “Left” who oppose both fascism and economic freedom should find some apparent link between the two – the smoking gun of “conservative” politics. And to be fair, with the abundance of opportunities for liberals to point to countries where socialism and tyranny have coexisted, one can understand their relief at having at least one counter-example.
Friedman of course denied any such link, as both Tristan’s and Brian Doherty’s articles make clear. For most, however, the main criticism of Friedman is not that his policies brought great harm to the people of Chile – an argument that only a few die-hard anti-capitalists make, and which requires a refusal to compare long-term growth rates and poverty reduction among South American nations. Rather, the criticism is that Friedman was willing to talk to Pinochet at all, that he advised him, and that he did not take the opportunity to criticise the regime. Doherty sympathises with this:“He did not choose this as an opportunity to upbraid Pinochet for any of his
repressive policies, and many of Friedman’s admirers, including me, would have
felt better if he had… Friedman’s decision to interact with officials of
repressive governments creates uncomfortable tensions for his libertarian
admirers; I could, and often do, wish he hadn’t done it.”
This raises the question, previously raised by Richard Nixon and relevant today in the context of Iran and North Korea: To what extent should we engage with unpleasant regimes? Should we trade with the Soviet Union? Or isolate the Taliban? (You will note that I am assuming a degree of consistency that does not apply in practice, as the juxtaposition of these two examples make clear).
On the one hand, the argument is that we should make a stand and show our disgust for these regimes. They are evil and we should have nothing to do with them; indeed, we are complicit in their crimes if we work with or associate with them. A secondary argument is that the wealth created strengthens the regime. We have seen this in the past with calls to boycott South African and Israeli oranges, and more recently with calls for British businesses to disinvest from the Sudan and Myanmar.
The counter argument is that it is engagement that weakens these regimes by showing the citizens that there is a better alternative. If the Soviet Union was such a worker’s paradise, why did the workers have to eat American butter? And once the workers were trading the Red Army uniforms they were given during conscription (which the United States had long ago stopped imposing on its citizens – thanks in part to a campaign by Milton Friedman) for Levi jeans and other western products which to us are common but to them remained luxuries, could the end be far away? By comparison, sanctions generally hit the poorest first – it was in Soweto rather than in Cape Town that the pain of the South African boycott was felt hardest – and also empower the dictators – it was not the West that starved a million Iraqis with an inadequate Oil for Food programme, but the fact that the $46bn worth of imports were distributed by Saddam’s henchmen based on political criteria rather than need.Friedman’s argument was in the same vein. Whether he approved of Pinochet’s regime or not (and his writings represent one of the strongest and most eloquent explanations of the benefits of freedom written in the 20th century), he knew that he would not prevent a single disappearance by castigating the tyrant, either to his face or in writing. But by proposing an alternative economic model that empowered citizens and created prosperity, he would not only alleviate the suffering that resulted from poverty, but also create the conditions where political freedom would flourish. For both Friedman and Hayek (his contemporary and another liberal economist and philosopher, though they theories of the two differed) demonstrated that tyranny is an inevitable consequence of central planning, while political oppression is far harder (perhaps impossible) to sustain if the economic levers of control are not in the hands of the state.
Another study (the citation for which I can never find) has noted that there is a correlation between wealth and political activism; that as citizens become richer the likelihood of protest in the face of political oppression increases. If so, enriching the people is itself a weapon in the armoury of freedom. And as for the claim that the wealth strengthens the regime, it is worth noting that Pinochet may have done better by his people economically than his interventionist neighbours, but he still lost the 1988 plebiscite in which he sought to renew his term in office. The liberal economic policies in Chile did not earn him praise; they merely unleashed a taste for freedom.
There are no hard-and-fast rules, of course, and sometimes it may be necessary to isolate a dictator or make a stand. But by-and-large is seems that engagement is more effective than sanctions. And if there is one thing of which we should be sure, it is that ideas should always be shared. This holds powerful lessons for today’s governments: sanctions in Cuba, Iran and North Korea have undoubtedly lengthened and deepened poverty, while failing to undermine and perhaps buttressing their terrible regimes. The same may very well be true of the Sudan and Myanmar, and should cause us to question calls for a boycott of the 2008 Olympics in China.
Friedman was right to offer his wisdom to all who would listen (and he advised Communists in China and Yugoslavia as well as fascists in Chile and Brazil). He was not showing his support for the regime; just trying to help its people in the only way he could. In other theatres, in other ways, we should try to do the same.
