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What's the monetarist criticism of the austrian theory of the business cycle?
- Thread starter Daal
- Start date
Quote from nevadan:
Or one whose only response to ideas that don't match his own is to smear the author
Well how about the fact that he advised Pinochet on a free trade system. I dunno seems like a big big BIG black mark on his reputation.
He had great theories but d*mn, that was a revelation that economists have problems applying hypothetical ideas to real life.
Well, Pinochet did lay the foundation for Chile's economic growth...Quote from Hydroblunt:
Well how about the fact that he advised Pinochet on a free trade system. I dunno seems like a big big BIG black mark on his reputation.
He had great theories but d*mn, that was a revelation that economists have problems applying hypothetical ideas to real life.
quote from Hydroblunt:
Well how about the fact that he advised Pinochet on a free trade system. I dunno seems like a big big BIG black mark on his reputation.
OK. I'll bite. What did he tell Pinochet and when did he tell him? I've been Googling and don't find much as a direct reference to Sennholz and Pinochet. Lots of CIA, Nixon, etc.
Quote from eusdaiki:
Well, Pinochet did lay the foundation for Chile's economic growth...
LOL. Dunno about economic, but the dissapearing people growth, definitely. I hear that he definitely grew the torture tactics list as well.
Note that after Pinochet, the economic policy had to be revised with socialist aspects.
Quote from nevadan:
OK. I'll bite. What did he tell Pinochet and when did he tell him? I've been Googling and don't find much as a direct reference to Sennholz and Pinochet. Lots of CIA, Nixon, etc.
Search on Chicago Boys, search more on Pinochet, Miracle of Chile, etc.
Here are some Wikipedia links:
http://en.wikipedia.org/wiki/Milton_Friedman
http://en.wikipedia.org/wiki/Augusto_Pinochet#Economic_policy
http://en.wikipedia.org/wiki/Miracle_of_Chile
The immediate economic affects were pretty bad. The political, holy crap, when I first read about this stuff years ago, I think I had a nightmare.
I don't dislike Milton Friedman, he had a lot of great ideas but he also had a lot of flaws in them. He did keep revising as time went on, but when applied to real life, he was just another economist. They work partially on small scale, special areas, like Hong Kong, Estonia & UAE, but not on a large real world scale.
Laissez faire/free trade capitalism is not really what you think. The fiascos in Russia in the early to late 1990s is probably one of the best laissez faire examples to date. Can you really expect anything else when you have quotes such as "Greed is good" be the anthem of capitalism.
There's no doubt that he did horrible things and violated human rights repeatedly. However, on the economic front he did implement [or rather allowed] open market reforms and privatizations that laid the ground for Chile to become the most developed country in latin america. Most of his economic reforms are still in place, and the reforms that had been done to his system where aimed at reinforcing social securities.Quote from Hydroblunt:
LOL. Dunno about economic, but the dissapearing people growth, definitely. I hear that he definitely grew the torture tactics list as well.
the main difference between Chile and most SA countries is Chile's right wing inclination [as opposed to the leftist inclinations found almost everywhere else in S.A.] that started with Pinochet's regime.
Quote from eusdaiki:
There's no doubt that he did horrible things and violated human rights repeatedly.
Talk about an understatement. Pinochet is at the top of the list of human rights violations, and that is not easily earned in this crazy world. Milton Friendman is even critisized for suggesting authotarian techniques in order to execute the policy, hence, a big black mark on his reputation. I personally think Milton is a bit guilty of the crimes that occured there, he had a duty to interfere, yet he abstained from the subject completely. He was a key influence on Pinochet's regime, later he tried to defend himself by stating he was misinterpreted. Coward's excuse in my opinion.
However, on the economic front he did implement [or rather allowed] open market reforms and privatizations that laid the ground for Chile to become the most developed country in latin america. Most of his economic reforms are still in place, and the reforms that had been done to his system where aimed at reinforcing social securities.
I only partially agree. Note that without heavy SOCIALIST revisions, the original economic policy was a disaster.
There was a heavy influx of foreign loans that stimulated the economy after the first initial recession. Once that charade was up, the 2nd recession ensued. In terms of wage growth, inflation, income distribution and unemployment, the economic policy was a disaster. Small businesses were destroyed, poverty was at record levels while oligarchs and global corporations profited.
I also believe that the human rights violations by Pinochet and the junta were partially motivated by the economic problems on top of the political paranoia. There were a lot of people out on the streets, dead broke in poverty and that simply is not good for the nation's stability, military regime or not. I doubt this is the economic "success" that is desired by anyone except the top 1%.
I partially agree because some policies enacted by Pinochet made sense and were the right thing. But the whole package was a nightmare, it turned out to be "hell on earth" for many. If anything, Chile's current economic situation shows that a combination of capitalist & socialist concepts seems to make the best recipe. Europe is full of nations with similiar structures.
Thanks for the links Hydroblunt. Interesting reading, although very grim. From what I can see so far ideas that any Austro-libertarian economist might have presented to Pinochet were thoroughly ignored. The results of monetarist policy combined with Hayek's so-called benevolent dictator produced poor results indeed.
I'm not sure I'd classify post-communist Russia as a fair experiment in free markets though.
I'm not sure I'd classify post-communist Russia as a fair experiment in free markets though.
Damn monetarians.Quote from Hydroblunt:
Talk about an understatement. Pinochet is at the top of the list of human rights violations, and that is not easily earned in this crazy world. Milton Friendman is even critisized for suggesting authotarian techniques in order to execute the policy, hence, a big black mark on his reputation. I personally think Milton is a bit guilty of the crimes that occured there, he had a duty to interfere, yet he abstained from the subject completely. He was a key influence on Pinochet's regime, later he tried to defend himself by stating he was misinterpreted. Coward's excuse in my opinion.