Chile stands out as an example of achievements only possible when people commit to freedom and free markets.Now, not that George Bush was so hot, he wasn't, God knows, but do you remember what happened when he noted the obvious, that Social Security was on the ropes, and proposed to privatize a little, just a little, of the system? Do you remember how he was demonized for that? Do you remember how that tiny bit of privatization was denounced as a "risky scheme?"
It boasts the highest per capita GDP in South America and the third highest in the Western Hemisphere. Last December it became the first South American country to be invited to join the exclusive club of the world’s top industrialized nations, the OECD – Organization for Economic Cooperation and Development.
But back just a little less than 40 years ago, Chile was a typical, poor South American nation, with intrusive government and sluggish growth.
How was it transformed?
Read a short essay called “How the Power of Ideas Can Transform a Country,” by one of the leaders that made it happen – Jose Pinera.
He relates how, in the mid- 1950s, the Catholic University of Chile signed a cooperation agreement with the Department of Economics of the University of Chicago, then home to the world’s top free market economists, including the legendary Milton Friedman.
Thus began the education of a generation of young Chileans in the wisdom of economic freedom. Beginning in the late 1970s, these young leaders, with newly minted PhDs, helped implement new economic reforms in Chile protecting private property and promoting free trade.
A graph showing annual economic growth in Chile over the last hundred years looks like a hockey stick. From the early part of the twentieth century until 1980, the line is flat, averaging less than one percent growth per year. But beginning 1980, growth takes off in a vertical surge, averaging over 4% per year.
One of the most sweeping reforms, done by Jose Pinera, then Chile’s Minister of Social Security, was the transformation of Chile’s government Social Security system, identical to what we now have in the U.S., to a system of individually owned private retirement accounts. Chile’s payroll tax based government system was broken and bankrupt, as ours is today.
The reform, enacted in November 1980, restored the solvency of Chile’s retirement system and brought personal ownership and wealth to Chilean workers. After 30 years, these personal accounts have averaged annual returns of 9.2% above inflation.
Tell it to the Chileans. Their retirement system appears to be working. Ours is in the red, so I understand, this snappin' year!
Just to drive the point home: leftist crap doesn't work. Never has, never will.
On the other hand, if a person's ever considered trying to emigrate to a country where economic freedom is not an epithet, Chile has to be considered.