Friedrich Del Mar*: More on Hayek, Pinochet, and Chile

11 Jul

In my first post about Hayek and Pinochet, I quoted a statement that I had written in the Nation in 2009 and had repeated in my book The Reactionary Mind:

Hayek admired Pinochet’s Chile so much that he decided to hold a meeting of his Mont Pelerin Society in Viña del Mar, the seaside resort where the coup against Allende was planned.

The Mont Pelerin Society (MPS) was a group of intellectuals and activists that Hayek helped found after World War II to advance the cause of the free market. In recent years, it has become the subject of some great new scholarship; judging by the fall catalogs it looks likely to be an even hotter topic in the future. Hayek was president of the MPS from 1947 to 1961 and honorary president after that.

I had learned about the meeting in Viña—and Hayek’s role therein—from Naomi Klein and Greg Grandin.

Once my Hayek von Pinochet post came out, a Hayek enthusiast began questioning—among other things—my claim about Hayek’s role in the Viña meeting on Twitter.

Truth is: this was the first time I had heard anyone question the claim about Hayek and Viña, but I decided to follow it up.

I emailed a past president of the MPS, who informed me that a regional meeting such as this one would have been proposed by local members of the Society to the Board, which would have had to have given its approval. My informant wasn’t sure if Hayek was on the board in 1981—honorary presidents, he said, weren’t usually on the board—and he also told me that the Chileans to whom I might pose some questions were “not around.”

So far, so nothing. I emailed a few scholars about the meeting, but didn’t hear back from them.

Then I stumbled across this 1979 letter from Hayek to Joaquin Reig, an MPS regular from Spain who wanted to organize a regional meeting in Madrid. In the letter, Hayek makes plain his preferences for the meeting’s location:

I believe I mentioned to you that I would rather like to have the meeting take place at Salamanca, but that may be, as you pointed out, impracticable. But I want still strongly to urge that we have there a one day public meeting entirely devoted to “The Spanish Origins of Economic Liberalism!”

For several years, Hayek had been growing increasingly excited about the possibility that “the basic principles of the theory of the competitive market were worked out by the Spanish scholastics of the 16th century.” For reasons still obscure to me, he seemed positively ecstatic about the notion that “economic liberalism was not designed by the Calvinists but by the Spanish jesuits.” (In his History of Economic Analysis, Schumpeter also had argued “that the very high level of Spanish sixteenth-century economics was due chiefly to the scholastic contributions.” But it didn’t seem to transport him in the way it did Hayek.)

Hayek insisted that the conference be shipped for a day 132 miles northwest of Madrid in order “to celebrate at Salamanca”—the university town where this specific branch of early modern natural law theory was formulated—”the Spanish origins of liberal economics.”

He got his way: the MPS members dutifully got into their buses and, like medieval penitents following their shepherd, made their pilgrimage to the birthplace of free-market economics. According to one participant:

A particular memory was of a small group accompanying Hayek descending from the newer Gothic Cathedral down a circular stairs to the older Romanesque Cathedral and encountering a small group accompanying Lord Lionel Robbins ascending the stairway. Hayek and Robbins engaged in a conversation, and then the respective parties continued their tours of the cathedrals.

Clearly, whether he was in or out of office, Hayek’s voice held sway at the Society.

But still no word on Hayek and Viña.

Then earlier today I got a copy of this cache of documents, the originals of which are housed in the archives at the Hoover Institution at Stanford, where the papers of both Hayek and the MPS reside.

The documents don’t establish who came up with the idea—or initiated the effort—of holding the 1981 MPS meeting at Viña.  An announcement stamped December 1980 merely states:

At a recent General Meeting at the Hoover Institution, our Society decided to hold a Regional meeting in Chile in November of 1981. Preliminary arrangements have already been made for this Meeting with the cooperation of distinguished economists and business leaders of the country.

In regard to those arrangements our President Dr. Chiaki Nishiyama has approved the nomination of an Executive Committee for the Regional Meeting, made up as follows: Paulo Ayres (Brazil), Ramón Díaz (Uruguay), Alberto Benegas Lynch Jr. (Argentine[sic]), Carlos Cáceres (Chile) and Pedro Ilbáñez (Chile) as President; Hernán Cortes acting as the Committee’s Secretary.

Hayek’s name appears nowhere on this announcement—except on the letterhead (“Honorary President”). The announcement does add that “leading Members of Mont Pelerin are assiting [sic] us in organizing the meeting, deciding on the programme and inviting the main speakers and discussants.” But it doesn’t specify who those leading members are.

But then I found this follow-up announcement, dated June 1981:

Final arrangements for the event were approved at a recent meeting of the Executive Committee for the Regional meeting attended by our President Dr. Chiaki Nishiyama and our Honorary President, Professor Friedrich von Hayek.

So it seems that Hayek did attend the meeting that approved the “final arrangements” for the Viña conference. So much for the Hayek enthusiast who also had tweeted at me:

Whether Hayek formally voted at that meeting or not remains unclear. Given his interventions two years earlier in the Salamanca affair, however, it’s hard to conclude that he didn’t play a significant role. At a minimum, he didn’t veto the meeting place, which he could easily have done. And he most likely had a hand in those final arrangements, which included the adoption of a program and a tentative list of speakers.

The list is of interest in its own right. It’s a veritable who’s who of mid- to late-century conservatism and libertarianism: William F. Buckley (on “Freedom of Expression and Misinformation of the Western World”); George Gordon Tullock and George Stigler (on “Decentralization and Municipal Autonomy”); James Buchanan (“Direct or Indirect Taxation. New Approach to Taxation Policies”); Martin Anderson (“Social Security, A Road to Socialism?”), with Thomas Sowell as a discussant; Irving Kristol (“Ethics and Capitalism”); Milton Friedman (“Monetary System for a Free Society”); and Friedrich von Hayek (“Democracy, Limited or Unlimited?”)

In the end, several of these tentative’s,  including Hayek and Buckley, proved to be no’s. On the final agenda, however, some new names appeared. One of them was Gary Becker—with a “t” next to his name. Tentative.

In the last few months, I’ve been engaged in an ongoing battle with the libertarians about their lack of interest in workplace freedom. The operating assumption of those conversations seems to be that however indifferent libertarians are to coercion in the private sphere, when it comes to the state, they’re the real deal. Yet here we have some of the leading lights and influences of the movement —Tullock and Buchanan were listed as “confirmed” speakers; not sure yet what happened with Becker—convening in the very place where the Pinochet regime launched its bloody rule.

There is a large discourse on the left of intellectuals and activists trying to come to terms with their erstwhile support for Stalinism and revolutionary tyranny. Indeed, a great deal of 20th century intellectual history is driven by that discourse, with entire literatures devoted to the Webbs in Russia, Sontag in Vietnam, Foucault in Iran. Yet where is the comparable discourse on the right of intellectuals coming to terms with their (or their heroes’) support for Pinochet, Salazar, and the like? With the exception of John Gray, I can’t think of a single apostate from—or adherent of—the right who’s engaged in such a project of self-examination: not breast-beating or mea culpas, but really looking at the relationship between their ideas and their actions. Now there’s a road to serfdom that’s yet to be mapped.

I’ve now ordered a whole bunch of additional documents from the Hoover Institute.  I’ll keep you posted on what I find. In the meantime…

* The title of this blog comes from Tim Barker.

 

Update (12:15 pm)

Because sharp and smart readers like Kevin Vallier have misinterpreted this, I wanted to clarify something about my post.  In bringing up the Salamanca story, I was not trying to make the case that there was any connection between Hayek’s interest in Spanish Scholasticism and his support for Pinochet. I was trying to establish a very different point: despite not being the head of the Mont Pelerin Society, Hayek could and did intervene in decisions about where its regional meetings were held.  Sorry if that was unclear.

33 Responses to “Friedrich Del Mar*: More on Hayek, Pinochet, and Chile”

  1. Shane Taylor July 11, 2012 at 9:02 am #

    The most fascinating part of this history, for my obsessions, is the link between Spanish scholastics in the 16th century and the romance of autonomous markets. Economist Erik Reinert, a smart critic of market liberalism, is fond of citing Francis Bacon on the degeneracy of scholasticism:

    “Surely, like as many substances in nature which are solid do putrefy and corrupt into worms;–so it is the property of good and sound knowledge to putrefy and dissolve into a number of subtle, idle, unwholesome, and (as I may term them) vermiculate questions which have indeed a kind of quickness and life of spirit, but no soundness of matter or goodness of quality. This kind of degenerate learning did chiefly reign amongst the schoolmen, who having sharp and strong wits, and abundance of leisure, and small variety of reading, but their wits being shut up in the cells of a few authors (chiefly Aristotle their dictator) as their persons were shut up in the cells of monasteries and colleges, and knowing little history, either of nature or time, did out of no great quantity of matter and infinite agitation of wit spin out unto us those laborious webs of learning which are extant in their books. For the wit and mind of man, if it work upon matter, which is the contemplation of the creatures of God, worketh according to the stuff and is limited thereby; but if it work upon itself, as the spider worketh his web, then it is endless, and brings forth indeed cobwebs of learning, admirable for the fineness of thread and work, but of no substance or profit.”

    • Corey Robin July 11, 2012 at 9:09 am #

      Hi Shane. I agree. Do you know any more about this Scholastic obsession among the Austrians.

      • Kevin V July 11, 2012 at 9:24 am #

        There’s actually quite a bit on this. Here’s a Kindle version of one of the first connections: http://www.amazon.com/The-School-Salamanca-1544-1605-ebook/dp/B005CRQ91U

        There’s also a discussion here: http://www.amazon.com/The-Church-Market-Catholic-Economics/dp/0739110365/

        But if you search Google Scholar, you should find stuff pretty quickly. The connection to Salamanca is important for a number of reasons.

        (1) Libertarians see their movement as deeply integrated with economic science. To find a previously unknown origin of economic science is thus exciting in its own right.

        (2) The Spanish Scholastics help to connect a commitment to free markets with a commitment to natural law in moral and political theory. Libertarians are often attracted to natural law views for a number of historical and philosophical reasons.

        (3) A number of libertarians are Roman Catholics and they’re often dismayed by the anti-commercial attitudes in Roman Catholic tradition, so they love the Spanish Scholastics as a counterpoint. This will not explain why non-Catholic Hayek liked them though.

        (4) I would be very wary of drawing a connection between Hayek’s excitement about Spanish Scholasticism and his – putative – support for Pinochet. I seriously doubt if there’s a connection given what I know about the origins of Hayek’s interests.

      • Shane Taylor July 11, 2012 at 10:23 am #

        Unfortunately, no. It may be worth asking Reinert, who has an email address posted here:

        http://www.othercanon.org/board/about-Reinert.html

      • Bob July 11, 2012 at 11:50 am #

        Margorie Crice-Hutchinson wrote a dissertation on the School of Salamanca under Hayek at the LSE in the 1940s.

        http://en.wikipedia.org/wiki/Marjorie_Grice-Hutchinson

        http://en.wikipedia.org/wiki/School_of_Salamanca

      • Bob July 11, 2012 at 12:06 pm #

        Hayek had an obsession with ideas & the history of ideas.

        Eg he was a book collector & worked on many history of ideas projects.

        He shared this love of book collecting with Laski & Keynes, who he loved to talk with about it.

        You are off track if you don’t get that the man came out of a scientific background & a botany background where the family tree of various species were of intense scientific interest.

        Hayek carried over that way of thinking to the realm of ideas.

  2. swallerstein July 11, 2012 at 9:08 am #

    Among the executive committee for the meeting is Carlos Caceres.

    Caceres was president of the Central Bank, interior minister as well as finance minister for Pinochet.

    Here is Wikipedia on him (in Spanish).

    http://es.wikipedia.org/wiki/Carlos_C%C3%A1ceres_Contreras

  3. Corey Robin July 11, 2012 at 9:35 am #

    Thanks for those, Kevin. The first cite Hayek discusses in that letter, so I knew about it. A few questions/comments. I always thought Hayek was a Catholic, no? Or do you just mean he wasn’t practicing? I think your second explanation re the interest in Scholasticism is on target; on FB I suggested something similar myself. Though how do they square the “just price” tradition with their economic subjectivism? I definitely was not suggesting — and I hope it didn’t seem that way — that there was a connection between Hayek’s enthusiasm about Scholasticism and his support for Pinochet. I was bringing that whole story up primarily because of what it shows about decision-making within the MPS. Lastly, I don’t think it’s really up for grabs that Hayek supported Pinochet. If you read the piece by Farrant et al, which Cowen links to (I had a pdf of it up for a while; I’ll put it back up soon), it’s pretty clear where he stood.

    • Kevin V July 11, 2012 at 10:03 am #

      I did read the piece and I don’t think its so clear that Hayek supported Pinochet, especially given Farrant and Co.’s hedge at the end of the piece: “Accordingly, we think it harsh to view Hayek’s ‘personal statement’ as providing evidence that Hayek approved of the policies adopted by the Pinochet regime” though they hedge their hedge towards the end of the paragraph. So the piece does not warrant the claim that Hayek “supported Pinochet,” as that is much too ambiguous.

      For what its worth, my take is that Hayek’s concern that Allende was expropriating capital clouded his vision, something much easier to do with an eighty year old man (if Hayek were sixty or even seventy, this argument would be out of bounds. But damn, he was old). Note that when Buchanan and others read The Fatal Conceit, the copy prior to Hayek’s death, they were pretty seriously concerned by its low quality, so I think that’s evidence of important mental decline. But I do think there’s an important moral failing on Hayek’s part made easier by the fact that the classical liberal justification for democracy was basically always instrumental and not intrinsic. I would say most libertarians have that view today – if they think democracy is justified at all. In fact, even many quasi-libertarians have this view, like Riker. So if you think democracy has bad consequences in some cases, then its hard not to support a king or a dictator in some cases. This comes from one of the few libertarians who think that political rights can be given a more-than-instrumental justification.

      Hayek was a cultural Catholic but not a religious believer, to my knowledge. The Spanish Scholastics thought the market price WAS the just price.

      • Corey Robin July 11, 2012 at 10:12 am #

        No, I know that about the Scholastics; that’s obviously the whole point about the Austrians’ enthusiasm. I guess my question was slightly different. How do they reconcile the underlying foundationalism of the just price tradition with the subjectivism? I obviously need to read these links, but I’m curious.

      • Corey Robin July 11, 2012 at 10:14 am #

        Also, I don’t buy the old man school. He supported Salazar earlier on. He also makes a point of saying he won’t listen to people from Amnesty International. I recognize they weren’t quite the blue ribbon panel back then (in the eyes of people like Hayek) that they have since become. But the information was all there. Also he was actively involved, as Karin Fischer and others have shown, in the constitutional processes of 1980 in Chile, so he was a player there.

      • Kevin V July 11, 2012 at 10:37 am #

        I don’t know about Salazar, so you may be correct there. As for the SS’s, my suspicion is that the reconciliation is to be found in the SS’s eudaimonism, such that all value must be grounded in individual ends. But eudaimonism’s conception of ends are partly subjectivist and partly objectivist in the sense that while ends of rational creatures are subjective as in agent-relative and based on an individual’s ends, they are objective in that there are facts about what is in fact conducive to an agent’s achieving her final end, regardless of what she values in the real-world.

        Now all of this is obscured by the fact that the SS’s do not make a sharp fact-value distinction like Austrians do (regardless of the Scholastic connection through Menger back to Brentano, and so on). But I imagine that Austrians would say that the SS’s were precursors in that they though value was rooted in *human valuings* and not in the intrinsic properties of objects (such that the just price for a thing is the aggregate intersection of valuings by buyers and sellers). Then they might or might not accept the SS’s moral theory but still emphasize that this ethical theory is not a proper part of economic science.

        But I don’t expect economists to do metaethics well.

  4. Pat July 11, 2012 at 10:51 am #

    I think you’ll be interested in Angus Burgin’s upcoming intellectual-historical monograph on the Mont Pelerin Society:

    http://www.hup.harvard.edu/catalog.php?isbn=9780674058132

    • Corey Robin July 11, 2012 at 10:54 am #

      Yep, I linked to it in my post.

      • Pat July 11, 2012 at 11:14 am #

        Ah, crafty. I see now.

  5. Corey Robin July 11, 2012 at 11:02 am #

    Thanks, Kevin. It’s that second half of your sentence — “they are objective in that there are facts about what is in fact conducive to an agent’s achieving her final end, regardless of what she values in the real-world” — that makes it hard for me to see how they reconcile the SS with their subjectivism. The first half doesn’t, to my mind, do nearly as much work as perhaps the Austrians might have thought. Anyway, I’m going to look into these texts some more. The other difficulty, to my mind, is that so much of the social rights tradition in Latin America comes directly out of the Salamanca School. I haven’t read this piece, but the abstract gives some sense: http://muse.jhu.edu/login?auth=0&type=summary&url=/journals/human_rights_quarterly/v025/25.2wright_carozza.html.

    Not that one can’t derive the market principles Hayek et al seek to derive from the Scholastics but that the tradition is so politically volatile and lethal — from their point of view — that it would seem an inauspicious place to look. But then again, maybe that’s the point!

    • Bob July 11, 2012 at 2:17 pm #

      The point in the first instance is to get the cringe right — to understand the empirical problem and come up twitch a continent causal mechansim to explain the pattern.

      The the idea is to investigate the hsitory of ideas as historians, not as political hacks.

      It’s curious that you can’t image or relate to that.

      • Bob July 11, 2012 at 2:18 pm #

        science , not “cringe”

        IPad fail

  6. John July 11, 2012 at 11:05 am #

    Corey,

    I believe it is Gordon Tullock, not George Tullock. Correct?

    • Corey Robin July 11, 2012 at 11:10 am #

      Grrr, you’re right. I spent 10 minutes on that last night, thinking I was reading the wrong thing. I must have just confused Gordon Tullock with George Mason, where he taught. Thanks for the correction.

  7. Jude July 11, 2012 at 2:57 pm #

    Of interest, I think. I just found an interview with Pinochet in the NYT from Nov 26th, 1975 by C. L. Sulzberger. He writes “It is often said the monetarist theories of Prof. Milton Friedman and his Chilean acolytes are the mode. However, President Pinochet told me: ‘The Friedman philosophy cannot be applied effectively here although many of his suggestions to us were interesting.'”

    • Corey Robin July 11, 2012 at 4:50 pm #

      1975 is usually considered, among historians and analysts of the Chilean regime, to be the turning point when the Chicago Boys began to consolidate their hold on the economy. Prior to that, the junta was somewhat divided, though all the research shows that Pinochet himself provided protection and a berth to the Friedmanites. After that, though, they had a much freer hand.

      • wohlstet July 12, 2012 at 2:28 am #

        1975 is, indeed, the turning point, but the victory of the Chicago Boys was by no means a lock. So let me introduce a little contingency back into history.

        There were three main factions on the Chilean Right and any one of them could have ended up dominant: 1) Nationalists, who favored a strong state modeled on the 1830’s dictatorship of Diego Portales, an ethos grounded in an idealization of Señorial life on the big haciendas, a military ready to engage Argentina, Peru or Bolivia (some would put Pinochet in this group); 2) Neo-liberals, basically the Friedmanites in the Universidad Catolica’s Economics Department; the Murdoch-like El Mercurio newspaper empire, the country’s biggest, and a few officers in the navy; 3) and the most interesting and dynamic group, the ‘Gremialists’ or Corporatists, founded in the Universidad Catolica Law school by Jaime Guzman, Catholic integralist and admirer of Franco, key figure in the overthrow of Allende.

        In 1970, Guzman realized two things his fellow ultras didn’t: 1) that the root problem wasn’t Allende, but the institutional frame which made his election possible, and: 2) that the task ahead—overthrowing a democratic order in the name of protecting democracy—could only be accomplished by a mass social movement modeled on the one that had brought the Marxists to power. An inspired insight. Bottoms-up organizing was not the style of an elite that conducted its politics over lunch at the Club de La Union, or in the hallways of the Senate. Nor of the CIA, which was throwing money at every moribund right-wing organization it could find without any sense, as yet, of where the dynamic center of opposition to Allende was arising. Women? Students? Shopkeepers? Truckers? Professional guilds? Only Guzman was able to imagine their insurrectionary potential (or defend it with terms like ‘the autonomy of intermediate bodies’) He wasn’t the only one on the Right to orchestrate events. He simply framed them better, wove acts of right-wing terrorism into the fringes of a narrative entitled ‘A Democratic People Raises its Fists to Resist Marxism’, a heroic story which foregrounded housewives of the Barrio Alto brandishing empty pots, high schoolers shouting ‘no’ to brainwashing disguised as educational reform, shopkeepers who no longer kept shop, doctors who no longer doctored, truckers who no longer trucked. The authoritarian order slouching to be born needed to be redefined as a higher, more authentic mode of democracy in order to capture the social-imaginary, and this is what Jaime Guzman, with his formidable dialectical skills, his appeals to ‘natural law’, his prim but seductive politeness, accomplished so well on television, most famously as a frequent panelist on Channel 13’s, Now we improvise, where he turned Pirandellian pirouettes around whichever hapless Socialist deputy minister was sent to explain the government’s line.

        His work earned him the job of Pinochet’s resident political theorist and also the task of authoring the 1980 Constitution. As a corporatist and Catholic integralist, he began as both anti-Marxist and anti-Liberal. Eventually, during the economic doldrums of 1975, he accommodated his economic ideas to those of the free-marketers waiting in the wings, something that others in the ‘corporatist’ movement were never able to do. He added his considerable voice to the chorus that wanted to hand the economy over to the Chicago Boys and Pinochet, not much interested in economics, went along with it. But it could have gone another way. If General Leigh of the Air Force, for example, had emerged as the dominant figure of the military junta, we might have seen a state active in the economy. In the end, given the worldwide triumph of neo-liberalism and the fervor of Chicago boys, a Chilean version was probably in the cards. But maybe not in 1975.

        As The Reactionary Mind might put it: deference has to be reinvented. Privilege, to maintain itself, always needs to find a new rationale. Or rather: divine favor, the old rationale, has to be re-baptised. In Chile, and everywhere else on earth, it’s now called ‘the verdict of the market’. I admit at the time that I didn’t see it coming, the successful repackaging of a feeble landowning elite (the dinosaur of the Chilean polity) into the cutting-edge winners of an entrepreneurial contest open to all. Neither did the American technocrats of the Alliance for Progress who worked to consign this elite to the dustbin of history so they could offer a ‘non-communist’ path to reform. And neither did Jaime Guzman, a man who more than any other, arguably, facilitated the transformation which allowed a majority of the country, once known as the unjustly-excluded, to be re-categorized as losers, something that troubled him enough that he suggested to Hayek in 1981, during the second visit to Chile, that, in line with the tenets of Catholic charity, the state should engage in a minimal amount of re-distribution for the very poor.

        “Absolutely not,” said Hayek.

        (Note: aside from personal observation—I was in Chile during the coup—most of my sources are in Spanish but I’m happy to provide them to anyone interested. Two key works are ‘Nacionalistas y gremialistas’ by Veronica Valdivia and ‘El pensamiento politico de Jaime Guzman’ by Renato Cristi, which has a picture of Carl Schnitt on the cover.)

  8. jonnybutter July 11, 2012 at 8:00 pm #

    I almost choked (with laughter) watching the video. Priceless. It proves in a few blissful minutes that value cannot always measured in money.

  9. El Mono Liso July 11, 2012 at 9:22 pm #

    “I can’t think of a single apostate from—or adherent of—the right who’s engaged in such a project of self-examination: not breast-beating or mea culpas, but really looking at the relationship between their ideas and their actions. ”

    I would say the reason for this is that, while the atrocities of the left are a thing of the past, right-wing atrocities are being perpetrated left and right, so why discredit those ideologies if they still need to be pulled out once in a while to put the troublemakers in line? I mean, you have to occasionally pull out reasons why we are killing innocents as “collateral damage” from remotely piloted drones. Ideas about the clash of civilizations, the Christian West vs. the pagan East, etc. still need to be kept around, so why spend time trying to reflect on their ill effects? That would be bad for imperial morale.

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Trackbacks/Pingbacks

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