Political Philosophy

The Real Chicago Boys

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From City Journal:

“Pinochet had no clue about economics,” Lüders recalls, “and our country was in a desperate situation.” But when Pinochet asked Friedman, who had helped mold Chicago’s economics department, to provide solutions for hyperinflation, the great economist proposed just the right cure: monetary control. Harshly criticized in the U.S. for his “collaboration” with the dictator, Friedman responded by asking whether he should have let the patient—the Chilean economy—die instead.
 
Lüders admits that he and his fellow academics relished the chance to devise a new economic model on a blackboard and observe the results. At first, those results weren’t much to brag about. In the early 1980s, external shocks, capital flight, declining prices for copper (the main Chilean export at the time), and excessive trust in the market’s self-correcting mechanisms caused many glitches—and a severe recession.
 
Beginning in 1985, however, the more pragmatic Hernán Büchi, who served as finance minister under Pinochet, helped correct the errors through tighter control of capital flows into and out of the country. Though he holds a degree from Harvard, Büchi is still deemed a Chicago boy in a land where that city’s name has become a generic term for free-market economists. “The economic solutions we provided for Chile had nothing extraordinary about them,” Lüders says. “We privatized the companies, which had been nationalized by the Socialist Allende regime. We stabilized the currency. We opened the borders to trade. The strong Chilean tradition of entrepreneurship took over from there.”

(Thanks to Val Dorta for the link.)

Becker and Posner on Gun Control

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Can Gun Control Laws be Effective? Becker

Gun Control–Posner’s Comment

I find their arguments here disappointing, mostly because they beg the question by assuming that the net effects of gun ownership are negative. Nonetheless the exchange is thoughtful and worth reading, as are the critical comments (particularly those of John Lott, who points out the error in the central assumption about costs).

And With Whom Do We Agree?

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Here’s a test on opinions. I think it is interesting but I’m too lazy to do this in a very thorough or thoughtful way. (The fact that I seemed to agree with Ron Paul as often as with Romney and more often than with McCain does make me wonder a bit about my sanity.) Another, which requires less thought, was taken by my daughter’s economic class today.

Quote of the Day

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I think that a better approach for convincing the judge to get tougher would be to show more clearly the parallels between the quasi-religious views that lie behind today’s progressive agenda and the thinking behind past mistakes. In my view, they are linked by faith in unproven scientific fads, faith in technocratic elites, and faith that those who share progressive ideology have superior wisdom and moral standing that justifies ruling over others. I believe that the best way to insulate oneself against romanticizing the state is to recognize these faiths and their dangers.

–Arnold Kling, reviewing Jonah Goldberg’s Liberal Fascism.

Quote of the Day

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In reality, the case for libertarianism is based on the flaws of government as well as the virtues of the market. To justify the modern activist state, it’s not enough to show that the market has shortcomings; you must also prove that the government can A) solve those problems, and B) do so without introducing worse problems of its own. Libertarians contend that government is systematically inferior to the private sector despite the fact that latter has significant flaws. In my view, for example, there is good reason to believe that government is likely to fail more often than the market because the quality of government is greatly undermined by the widespread and rational ignorance of voters; by contrast, market participants have stronger incentives to become informed about the goods and services they purchase and are therefore less likely to make serious mistakes.

–Ilya Somin