In August 1976, The Nation published an essay that rocked the US political establishment, both for what it said and for who was saying it. “The ‘Chicago Boys’ in Chile: Economic ‘Freedom’s’ Awful Toll” was written by Orlando Letelier, the former right-hand man of Chilean President Salvador Allende. Earlier in the decade, Allende had appointed Letelier to a series of top-level positions in his democratically elected socialist government: ambassador to the United States (where he negotiated the terms of nationalization for several US-owned firms operating in Chile), minister of foreign affairs, and, finally, minister of defense.
Then, on September 11, 1973, Chile’s government was overthrown in a bloody, CIA-backed coup led by General Augusto Pinochet. This shattering event left Allende dead in the smoldering presidential palace and Letelier and other “VIP prisoners” banished to a remote labor camp in the Strait of Magellan.
After a powerful international campaign lobbied for Letelier’s release, the junta finally allowed him to go into exile. The 44-year-old former ambassador moved to Washington, DC; in 1976, when his Nation essay appeared, he was working at the Institute for Policy Studies (IPS), a left-wing think tank. Haunted by thoughts of his colleagues and friends still behind bars, many facing gruesome torture, Letelier used his newly recovered freedom to expose Pinochet’s crimes and to defend Allende’s record against the CIA propaganda machine.
This kind of activism was having an effect. Pinochet faced universal condemnation for his human-rights rec ord, which became impossible to ignore: the mass disappearances and executions of leftists (more than 3,200 dead by the end of the junta’s rule); the imprisonment of tens of thousands of people; the complete bans on political protest and dissenting political activity; the murder of beloved artists like Víctor Jara; the roughly 200,000 people forced into exile.
What frustrated Letelier, a trained economist, was that, even as the world gasped in horror at reports of summary executions in the national stadium and the pervasive use of electroshock in prisons, most critics were silent when it came to Chile’s economic shock therapy—the brutal methods used by the “Chicago Boys” to turn Chile into the very first laboratory for Milton Friedman’s fundamentalist version of capitalism. Indeed, many who condemned Pinochet’s human-rights record heaped praise on the dictator for his bold embrace of free-market fundamentals, which included rapid-fire privatization, the elimination of price controls on staples like bread, and attacks on trade unions.
Letelier set out to explode this comfortable elite consensus with a litany of factual evidence and persuasive rhetoric. He argued that the junta wasn’t pursuing two separate, easily compartmentalized projects—one a visionary experiment in economic transformation, the other a grisly system of torture and terror. There was, in fact, only one project, in which terror was the central tool of the free-market transformation. “Repression for the majorities and ‘economic freedom’ for small privileged groups are in Chile two sides of the same coin,” Letelier wrote.