 Chile was a relatively poor country. I mean, I don't know much about the history, the pre-modern history of Chile. Chile is a resource-rich place, but like the rest of Latin America, Chile was dominated by both left-wing and right-wing governments. There were statuses that believed in central planning, central control that believed in the government ownership of resources, government ownership of companies. It didn't really matter whether it was left or right, and this is the same as true of the regimes in Argentina, where the Peronists, are they left, are they right? What does it even mean in those terms? You can clearly in Brazil say that Lula is a socialist, but even in Brazil's history was the military dictatorship, a left-wing dictatorship, a right-wing dictatorship. It doesn't mean anything in any significant way. All these rulers, whether elected democratically or authoritarians, have almost all of them have been statuses of one form or another, and whether they created crony systems, they all nationalized industries and tried to establish robust, I mean not robust, but minimal welfare rights. Minimal because it was poor, these countries are poor, and there was not a lot of money to redistribute. They had some big corporations, big corporations that are always connected directly to the government. In 1970, Chile elected an explosive Marxist to head the government in Chile, Allende was elected president, and he was a real socialist and a real Marxist, and very much had sympathies with the Soviet Union and had sympathies to the worst of the communist regimes. The economy in Chile was already in bad shape before Allende showed up, but Allende, during the Salvador Allende period, it really spun off and became much worse, inflation picked up, as it did in many parts of the world, and inflation was out of control, and again, he had this affiliation with the communist bloc, I think the U.S. feared his affiliation with the Soviet Union, there was always the Monroe Doctrine of not allowing communists to get really established in the western hemisphere, in the American hemisphere. So in 1973, a few months, well, maybe 1972, Allende appointed Pinochet to head the army, to head up the army a few months after that appointment in 1973, Pinochet basically headed up a coup with the junta, and deposed Allende and they actually ended up committing suicide in the presidential palace, and Pinochet took over with his group, ultimately, he relegated his co-conspirators to some more minor world in government, and Pinochet became the leader of Chile, the unchallenged dictator of Chile. In 1981, there was a constitution, and part of that constitution gave Pinochet an eight-year term with the idea that there would be a referendum at the end of those eight years, which would determine whether he had another eight years after that. We'll get to that later on. Anyway, in 1973, Pinochet takes over, I mean his main focus, Pinochet's main focus is, Scott will love this, Pinochet's main focus was destroying the left, 130,000 people rounded up, many of them killed, there were brutal pictures of people being thrown out of helicopters into the ocean, people machine gunned, a lot of people, thousands of people were tortured by the Pinochet regime, people were hunted down, it was a brutal time, a brutal time for anybody with left-wing sympathies, and while I do not like the left and resent the left and don't agree with much of their policies, I do not believe that killing them and murdering them and imprisoning them and doing away with freedom of speech is ever the solution to such things. Pinochet was a, probably was a standard right-wing Latin American dictator, a statist. He wanted political control, but he also faced a really difficult situation, a really difficult economy, an economy that was struggling, really high rates of inflation, and he needed a solution, he was not going to be able to maintain his position, he knew that unless he found ways to stabilize the economy and actually get it growing. Now there had been a group, I think it was like 30 young people who had gone to the University of Chicago to study economics as part of an exchange program, a Catholic university here in Santiago with the University of Chicago. These students had gone and they had studied with Milton Friedman and others of the Chicago School of Economics, a free market school of economics, a monetized school of economics, and they were now back in Chile and Pinochet turned to them and in 1975 appointed one of them as Treasury Secretary, and then many of them were appointed to positions in various economic positions within the Chilean government, and Pinochet basically gave them a free reign. Over the next from 1975 really until then the Pinochet regime in 1990, so over the 15 year period, they did some amazing things that you could probably only do at least at that time with the dictatorship. They privatized basically 95% of the state owned companies in Chile, they cut government spending dramatically, they cut regulations, they slashed regulations. They did a lot of the things that Millay is talking about doing, a lot of things that Millay would like to do. Millay is of course being challenged in doing it because he is going through, and I think he has to go through, he has to go through the political process, they didn't have to go through the political process, so Pinochet basically backed everything that they did, they basically slashed government spending, slashed regulations. They did something very rare in history really, they privatized Social Security, Jose Piner was the lead behind privatizing Social Security, but they did the kind of economic reforms that you wish every country would do, they did the kind of economic reforms that were hoping Millay will actually do, that he has promised to do, but now is being constrained by the political process in doing, but the Chicago Boys Program, that's what they were called, these graduates of the University of Chicago Economics, the Chicago Boys Program is very much, or very similar to the program that Millay has launched. In Argentina, and you know, let's hope that the results are similar, that is that the Argentinian economy does as well as the Chilean economy has done since 1975. It is worth noting that it wasn't easy, Chile went through some really hard times as these reforms were being put in place. Its economy had years where it shrunk in 1981 during kind of the global recession that afflicted the United States as well during the early part of the Reagan administration, you know the Chilean economy shrunk significantly, and you know, so it's not that you can impose these free market reforms and cut spending and deregulate and everything just, boom, happens. It takes time and the adjustment for some people, many people, can be very painful. Ultimately during the Pinochet years the economy grew at about three percent a year on average, some years much higher, some years as I said shrunk, shrunk, and the real benefits of the Chicago Boys reforms were actually captured by governments after Pinochet, that is 15 years after the Chicago Boys started. So from 1990 on the Chilean economy grew at seven percent, which is dramatic and that's how it became the richest country on a per capita GDP basis in Latin America. So one of the lessons and one of the things to pay attention to in terms of what happens in Argentina is that it's not going to be all roses, and I think again Millet has a pretty good economics team around him, I think he knows what he's doing, he is an economist himself, and I think everything that he is proposing doing from an economic perspective are the right things fundamentally to do, but you know it doesn't just result in readjustment and everything starts rising and everything starts getting better, and this is part of the dangers, the dangers that bad things happen. His reforms get blamed on it and everything is reversed since Millet, not like Pinochet, Millet has to get re-elected, has to get re-elected in four years, and in 2025 there are parliamentary elections and I think that if he really wants to have these reforms go through, if he really wants the reforms to be implemented, he's going to have to do very very well in the parliamentary elections, he's going to have to form a coalition around these ideas in parliamentary elections so that he does not get vetoed by parliament as he has been so far. So in Chile's case in 1981 some of the Chicago boys were fired because of this big recession that happened, but basically these reforms continued into the 1990s and as I said 95% of the companies were privatized. It is true that given the nature of authoritarianism, not only did that result in just horrific violations of individual rights, horrific treatments of people who were sent to prison and tortured and murdered, so that is definitely horrific. But in addition to that, you know there's a lot of cronyism, so privatization, privatization can go a variety of different ways, but you get a sense that if a dictatorship of an authoritarian is managing the process of privatization, even if the economy is not in the right place and the economy is not in the right place, then there's a huge amount of capitalism that if a dictatorship of an authoritarian is managing the process of privatization, even if the economists have the best of intentions, the Chicago boys have the best of intentions, it's not surprising that family members and relatives and close associates and friends of the ruling junta of the dictatorship are going to get some of the juicy prizes, some of the juicy properties out of a privatization and that cronyism is going to dominate. And I think one of the things that are holding Chile back from even being a bigger success and one of the things holding Chile back today as it has turned leftwards over the last decade or so, particularly over the last few years, we'll talk about that again later, is this legacy of cronyism the idea that some people benefited from those privatizations, from the liberalizations disproportionately and not based necessarily on merit, that there is vast inequality in Chile, not surprising, but that the inequality maybe was not earned, that inequality to some extent resulted from the cronyism. So Chile as I said from 1990 continued to grow substantially, it had several presidents democratically elected. I will mention this about Pinochet to his credit, I mean he was a brutal dictator and deserves condemnation on every front, but when it came time to have a referendum about whether he should have another eight years or not, he could have not had the referendum, he could have just like most dictators just continued to rule and he went through with the referendum. Now he was convinced he would win, he was convinced he would win, there's actually an Argentinian movie, a dramatization, I think it's called No and basically what Pinochet did is he had a referendum and you could vote yes to continue with Pinochet, oh no, and I think Pinochet's complete surprise, the people of Chile voted no, they voted against him, they voted to kick him out even though the economy had done really really well in the late 1980s and Chile was starting to really benefit from all those reforms, they voted him out and again he could have ignored them, he held all the levers of power and Pinochet stepped aside and there was an election held and somebody won, I don't think it was even his candidate but they continued the reforms and they continued, they didn't undo the reforms and Chile benefited by enormously from those reforms, by the way the movie is called No as I said and it's definitely worth watching, it's a good movie, it's in Spanish, it was made in Chile and I think it's definitely worth watching. So, referendum was held, Chile became a democracy, presidents have been elected since, I don't know if I said before five years and for the most part they have preserved many of the reforms that we're engaged in, I'd say the one area where Chile has reverted is on the welfare state, I mean it's very hard given altruism, given morality to sustain a small welfare state and the welfare state is significantly has grown in Chile and is growing right now quite a bit.