WHAT ARIZONA CAN LEARN FROM CHILE
January 21, 2010
On January 11, 2010, Chile was officially invited to join the Organisation of Economic Co-operation and Development (OECD). In the early 1970s, Chile's economy was bad. Abject poverty, rampant inflation, and high unemployment were the norm, until Augusto Pinochet on taking control of the country, turned economic policy over to 10 Chilean economists who had been trained at the University of Chicago in the theories of John Locke and Nobel Prize-winning economists F.A. Hayek and Milton Friedman.
What happened next, asks Byron Schlomach, director of the Goldwater Institute's Center for Economic Prosperity?
- The government began selling government-owned businesses, deregulating enterprises, and removing wage and price controls.
- In 1981, Chile's social security system was privatized under the direction of Jose Pinera, who was given the Goldwater Award for Liberty in 2003 and is the brother of Chile's just-elected President Sebastian Pinera.
- These economic policies set the stage for Chile to become South America's most vibrant and successful economy.
Chile's economic experience could be instructive to Arizona policymakers, says Schlomach:
- Government-owned enterprises like stadiums and Phoenix's Sheraton Hotel have become too common.
- The state still owns huge swaths of land that ought to be sold and put to use creating jobs.
- The state should also loosen regulations on wages.
Arizona has the potential to create the most vibrant economy of any state in the union. We just need to be freed to exercise it, says Schlomach.
Source: Byron Schlomach, "What Arizona can learn as Chile joins the OECD," The Goldwater Institute, January 20, 2010.
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