EDWARD L. GLAESER casually identifies the entire field of economics with the particular branch of “trickle down’’ theorizing associated with the University of Chicago, where Glaeser himself received his training (“In economists’ paradise, lessons for US,’’ Op-ed, Dec. 19).
The Chicago Boys were retained first by the murderous Pinochet regime and later by its successors, in order to implement fiscal prudence and growth. Glaeser approves of the success of “economics’’ in taming the “public leviathan,’’ but is disappointed by its “besetting weakness - tolerating massive inequality.’’
Economics is a field that by nature is divided along ideological lines; Milton Friedman’s followers at Chicago represent merely one viewpoint. The Chicago Boys believe not just in “toleration’’ of inequality, but that such inequality is central to maintain the “efficiency’’ of its own rather extreme version of the business-oriented society. Consequently, as Glaeser puts it, “policy ideas that would be hard to pursue in the United States have become a reality in Chile.’’
Unfortunately, the Chilean “reality’’ turned out to be a disaster for all but the very wealthy. We should be glad that these ideas would be hard to pursue here.
But economics can also prevent massive inequality. Keynesian, or “demand side’’ economics, has a long and relatively successful role in this respect. Had economists such as Joseph Stiglitz, Paul Krugman, or Robert Reich (to name just a few) been consulted, the Chileans might have had a fairer economic system along with fiscal prudence and growth.
Only with the official embrace of the Chicago School by Reagan and his successors has economic inequality become respectable - and inevitable - both in Chile and in the US.