On September 11, 1973, Chilean air force jets bombed the presidential palace in Santiago. A democratically elected government collapsed in a matter of hours. And waiting in the wings was a small group of economists with a radical blueprint and, until that moment, no country willing to let them use it.
Their story began nearly two decades earlier. In the mid-1950s, the U.S. State Department — backed by the Ford and Rockefeller Foundations — launched what became known as the Chile Project: a deliberate effort to train Latin American economists in free-market thinking at the University of Chicago. Between 1957 and 1970, roughly one hundred Chilean students made that journey north, studying under Milton Friedman, whose conviction that markets should be free and governments should stay small would shape an entire generation of technocrats. When these economists returned home, however, their ideas found little traction. In 1969, a group led by Sergio de Castro drafted an exhaustive 189-page blueprint for a conservative presidential candidate. He rejected it as too extreme. Chile's democracy had no appetite for such sweeping transformation.
The coup changed everything. General Augusto Pinochet's military junta lacked economic expertise of its own, so it turned to the Chicago-trained economists. By 1975, they occupied senior government positions and began implementing what critics would later call shock therapy — steep austerity measures, dramatic cuts to public spending, rapid privatization of state enterprises, trade liberalization, and broad deregulation. Milton Friedman himself visited Santiago that year and met with Pinochet — a moment that, regardless of intent, lent the program a kind of intellectual legitimacy it might otherwise never have claimed.
The human cost was immediate and severe. Unemployment surged past 25 percent as industries buckled under sudden liberalization. At the same time, Pinochet's regime used systematic repression to silence any opposition: more than 3,000 people were killed, tens of thousands were tortured, and hundreds of thousands were driven into exile. The Chicago Boys were redesigning a national economy in an environment where there was no congress to debate their policies and no civil society free enough to push back.
The economic picture grew complicated over time. Inflation that had once exceeded 350 percent fell sharply, and GDP growth led some observers to speak of a Chilean miracle. But in 1982, a severe financial crisis exposed the model's fragility — the government was forced to rescue failing private banks, a direct contradiction of the free-market ideology it claimed to champion. The state, it turned out, had never fully left the room.
Yet what emerged over the following decades was undeniably significant by conventional measures. Per-capita income grew more than sixfold over forty years. The poverty rate fell from above 50 percent to below 5 percent. Successive governments — socialist, Christian democratic, and conservative alike — preserved the core architecture the Chicago Boys had built, suggesting the model had become, as some scholars called it, 'El Modelo': not a political preference but a national framework.
The legacy, though, remains fiercely contested. The inequality baked into that framework proved stubborn and explosive: by the early 2000s, 28 percent of national income was concentrated among Chile's wealthiest citizens. In 2019, mass street protests erupted across the country — a delayed reckoning with a social contract that had been rewritten without public consent. Fifty years on, the central question the Chicago Boys left behind is one no data set fully resolves: whether the growth Chile achieved required authoritarianism to impose it, and whether any democratic society would — or should — ever accept the same terms.
