MercoPress. South Atlantic News Agency

Milton Friedman, father of Chile's biggest economic revolution

Milton Friedman, one of the world's best-known economists and winner of the 1976 Nobel Prize for Economics, died of heart failure last Thursday in San Francisco.

Friedman, who founded the Chicago School of Economics, was known for his contributions to microeconomics and economic history worldwide, but also as a pioneer of economic liberalism.

In Chile, Friedman has long been associated with the free market economic model the country adopted during the early years of the dictatorship of General Augusto Pinochet.

Two years after Pinochet overthrew Salvador Allende and took control of the country, the dictatorship was unable to deal with inflation in Chile. Friedman visited the country in 1975. For the preceding ten years, he had been lecturing students from Chile's Catholic University as part of an exchange program with the University of Chicago. At the time of his visit to Chile, these students, who became known as the "Chicago Boys," began to occupy important positions in Chile's government.

The Chicago Boys were responsible for applying what Friedman called a "shock program" to Chile's economy. They halted the printing of money to finance the budget deficit, cut state spending, laid off tens of thousands of government workers, ended wage and price controls, privatized state industries, and deregulated capital markets.

Essentially, Friedman and the Chicago Boys were responsible for making Chile's economy operate on free-market principles.

Friedman was criticized in the U.S. for his involvement with Pinochet, although he never actually advised the dictator in an official capacity. At a conference in Viña in the 1980s, Friedman tried to distance himself from the Pinochet regime.

"I would like to express publicly the fact that a free-market economy must be accompanied by democracy," he said. "That's the only way it can subsist in the long term."

While the economist often tried to downplay his role in Chile's economic reforms, he remains closely associated with the economic liberalization that became known as the "Chilean Miracle." Friedman's economic ideas went on to influence world leaders, including Ronald Reagan and Margaret Thatcher.

Friedman often said that his success was merely due to "a series of accidents." The world-famous economist had humble beginnings. He was born in Brooklyn in 1912, into a Jewish family of Ukrainian immigrants, who then moved to New Jersey when his father died. Friedman won a scholarship to the University of Rutgers, which he supplemented by waiting tables.

In 1938, Friedman married Rose Director, also an economist. Along with Rose's brother, the pair formed a club that was highly influential in liberal circles, and which eventually became the prestigious Chicago School of Economics.

Friedman published a number of influential works, most notably his "Essays in Positive Economics" in 1953 and "Capitalism and Freedom" in 1962.

The economist won the Nobel Prize for Economics in 1976, "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy."

Friedman is survived by his wife and two children. The Santiago Times