Thursday, March 4, 2010

Did the Spirit of Milton Friedman Save Chile from Haiti's Fate?

Yes, says Wall Street Journal columnist Bret Stephens in a column published two days ago (here). He argues that General Pinochet's coup and the introduction of Chicago-school principles by economic adviser Milton Friedman transformed the from an economic basket-case to a relative powerhouse in South America - a country that could afford strict building codes for earthquake safety.

Conveniently setting aside the question of whether Milton Friedman would have endorsed strict building codes, Stephens takes a couple of gratuitous shots at Naomi Klein, author of The Shock Doctrine (Picador 2008), one chapter of which is devoted to a critique of economic reforms in Chile under Pinochet. Now, I have no idea whether Ms. Klein's book is any good - I certainly didn't like her January 2009 column in The Guardian (here) calling for a boycott of Israel - but in this week's The Nation (here) she demolishes Stephens's argument in a single sentence:
Chile's modern seismic building code, drafted to resist earthquakes, was adopted in 1972.
That was one year before Pinochet's bloody, CIA-supported coup, and thus prior to any sage advice from Professor Friedman (who, by the way, I revere as an economist, but not so much as a political adviser). It's impressive how a single, simple, clearly stated fact can, sometimes at least, demolish the ideological pretensions of the historically ignorant.

UPDATE: Paul Krugman weighs in on his blog at the NY Times.

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