What Arizona can learn as Chile joins the OECD

On January 11, Chile was officially invited to join the Organization of Economic Cooperation and Development (OECD). Chile will be the OECD’s 31st member and its first from South America. The OECD is largely made up of the world’s richest and most stable economies and Chile’s invitation to join the club wasn’t always a given. In the early 1970s, Chile’s economy was a basket case not unlike Haiti’s before last week’s earthquake. Abject poverty, rampant inflation, and high unemployment were the norm. There is no denying that Augusto Pinochet was a detestable tyrant, but he did one thing right after he took control of the country: he turned economic policy over to 10 Chilean economists who had been trained at the University of Chicago in the theories of John Locke and Nobel Prize winning economists F.A. Hayek and Milton Friedman. The government began selling government-owned businesses, deregulating enterprises, and removing wage and price controls. In 1981, Chile’s social security system was privatized under the direction of Jose Pinera, who was given the Goldwater Award for Liberty in 2003 and is the brother of Chile’s just-elected President Sebastian Pinera. These economic policies set the stage for Chile to become South America’s most vibrant and successful economy.

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