The Shock Doctrine Page #2

began sponsoring students form Chile and the rest of South America

to study free market economics with Milton Friedman.

The University of Chicago had an agreement

with the Catholic Univesity of Chile

through which a great many Chilean students came to the University of Chicago

they were trained by us and recieved PhD

These students went back and tought in Chile.

The economics department of the Catholic University in Santiago

became a little Chicago School.

Arnold Harberger, the economist in charge of the program

described himself as a "seriously dedicated missionary".

In 1970, Salvador Allende's Popular Unity government

won the election on a platform of nationalisation of large sectors of the economy.

Chile's phone company was majority owned by US corporation ITT.

ITT headed the attempts to stop Allende to become president

it had the support of president Richard Nixon in the White House.

I was not ther, but i can

tell you what we now know to be a fact.

He ordered the CIA to prevent Allende from assuming the presidency.

Indeed, they tried to get me to lean on the chilean military

right after Allende was elected.

Despite the efforts of the CIA, Allende sworn in as president.

Richard Nixon ordered the CIA director to make the economy sream.

El Sr. Nixon es presidente de los EE.UU.

y yo soy Presidente de Chile.

yo no tendr un termino despectivo

contra el Sr. Nixon ...

mientras el Sr. Nixon respete

al Presidente de Chile.

Preparations began for the military coup.

Chilean "Chicago boys" started to work on

an 500 pages economic blueprint called "The brick".

With the US funding, everyting was done

to destabilize the economy.

Truck drivers went on strike,

bringing factories and shops to a standstill.

There was a failed coup atempt in june 29 of 1973.

And then on september the 11, with Pinochet General leading the army.

Assault began on the presidential palace.

El Shock de la guerra

Chile had enjoyed 41 years of uninterupted peaceful demoracy rule

that now was violently overthrown.

Pinochet and his supporters described the coup as a war.

It was certainly designed to look like one.

It was a Chilean precursor of the "Shock and awe"

Salvador Allende

Las fuerzas armadas y de orden slo

bajo la inspiracin patritica ...

de sacar al pas del caos ...

que en forma aguda lo estaba precipitando

el gobierno marxista de Salvador Allende.

"Chicago boys" delivered their economic blueprint "The brick" to Pinochet.

In the days that followed

more than 13.000 oponent were arrested and imprisoned.

Thousands of prisoners were held in the National Stadium. Many were tortured.

Chile became notorious around the world.

- Cuntas personas?

- Diez mil

LA DOCTRINA DEL SHOCK

At the begining of november, 5.000 prisoners were released.

The 900 they left behind, were transfered to other detention centers.

Less than a mont later FIFA allowed Chile

to play a World Coup cualifying in the very same stadium.

Their oponents, the Soviet Union, refused to play there

then, Chile were allowed to score into an open goal

and went trhrough to the 1974 World Coup finals.

El Shock econmico

With the population in shock

Pinochet imposed the policies recomended by the "Chicago boys".

removal of price controls, the sell of statal companies

the removal of import barriers and cuts to the government expenditure.

Friedman later openly acknowledge the importance of the Chilean experiments.

It was the first case in which you had a movement towards comunism

which was replaced by a movement towards free market.

It didn't work. A year later, inflation was 375% per year.

The highest in the world.

So in march 1975, Arnold Harbenger and Milton Friedman flew into Santiago.

He used a phrase that had never before been used

in a real world economic crisis.

He called for "Shock treatment"

He said that he was like a doctor

that was going to help a country that was suffering an epidemic.

And he was simply prescribing the medicine.

Friedman wrote that General Pinochet was simpatheticly attracted

to the idea of the shock treatment.

but was clearly distressed at the temporary unemployment it might cause.

It rapidly became clear that Friedman's economic policies

benefited the wealthy at the expense of the poor.

It was calculated that a family triying to live on the average wage

had to spend 74% of its income on bread.

Items such as bus fares or milk became luxuries.

Pinochet got rid of free milk in school

a move that ? controversial policy of the young education ministry in Britain

who would later become his friend.

In order to enforce these economic policies

there had to be an enemy to fear.

tampoco creo que

se haya ...

triunfado totalmente

sobre el marxismo.

el marxismo es como un fantasma.

cuesta mucho tomarlo ...

mejor dicho,

no se puede tomar.

Friedman and Harberger argued that free market economies

went hand in hand with freedom and democracy.

But in Chile

where their ideas were implemented whithin the context of a military dictatorship

the opposite was true.

Many in latinamerica saw a direct connection

between the economic shoks that empobrished millions of people

and the epidemic of torture inflicted on those who believed in a different kind of society.

One of those was Orlando Letelier.

Letelier had been Allende's ambassador on Washington.

He spent a year on one of Pinochet's prisons.

Before being exiled back to America.

Imgenes de archivo de origen

In 1976, Letelier wrote:

"The economic plan has had to be enforced

and in the Chilean context, that could only be done by the killing of thousands,

the stablishment of concentration camps all over the country

and the jailing of more than 100.000 persons in 3 years."

Less than a month later, Letelier was killed by a car bomb.

A powerful bomb, today tore trhough a car

that was driving along. Washington's usually quiet embassy road

The chilean was Orlando Letelier

who also had been foreign minister in the last months

of the late Salvador Allende's marxist regime

Michael Townley, a member of Pinochet's secret police

was behind the bombing.

He'd entered the US on a false passport with the knowledge of the CIA.

Michael buenas noches, la opinion del poder

judicial chileno hay confianza en el?

Mira yo confio plenamente

en la justicia chilena ...

como patriota, y luchador antimarxista

y juntista por sobre todas las cosas.

Despite his confidence, Townley was extradited to the US

and convicted for Letelier's murder.

Pinochet ruled Chile as a military dictator for 17 years.

But in a franc interview Harberger remained in denial.

You can not have a repressive government for long

within a genuinely free economic system.

In the same year was Orlando Letelier's murder

Milton Friedman was awarded the Novel price of Economics.

You people have such a distorted idea of what went on

Let me tell you some facts

Number one, I was offered two honorary degrees

by universities in Chile, before I went there

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