Tag Archives: Mont Pelerin Society

The Calculus of Their Consent: Gary Becker, Pinochet, and the Chicago Boys

5 May

The economist Gary Becker has died. Kieran Healy has a great write-up on Foucault’s engagement with Becker; Kathy Geier has a very smart treatment of, among other things, feminist critiques of Becker’s theory of the family. And some more personal reminiscences of taking a class with Becker.

Kathy mentions this article that Becker wrote in 1997 about the Chicago Boys who worked with the Pinochet regime. Becker’s conclusion about that episode?

In retrospect, their willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile.

No real surprise there. Many free-marketeers, including Hayek, either defended the Pinochet regime or defended those who worked with it.

But the Becker piece reminded me of that infamous Mont Pelerin Society (MPS) conference in Viña del Mar in 1981, about which I wrote at length two summers ago. The MPS is an organization of economists, philosophers, and assorted action intellectuals and businessmen dedicated to spreading the free market gospel across the globe. In the late 1970s, at the height of Pinochet’s repression, Hayek and a few grandees from Chile began discussions  about holding the MPS’s annual conference in the seaside city where the coup against Allende had been planned. The purpose in meeting there would prove avowedly propagandist. As the organization’s own newsletter later acknowledged, the conference provided participants with an opportunity

for becoming better acquainted with the land which has had such consistently bad and misrepresenting press coverage (and, perhaps for that reason, it was appropriate to have Reed Irvine, head of Accuracy in Media as one of the first speakers in the first session).

Becker was originally targeted or slated to speak on a conference panel titled “Education, Government or Individual Responsibility?” His name appears on an early agenda with a “T” next to it. For “tentative.” But Becker either never confirmed or pulled out. No matter: Milton and Rose Friedman, along with James Buchanan and Gordon Tullock, were there to show the flag—and the calculus of their consent.

When Hayek Met Pinochet

18 Jul

 

In case you missed my five-part series on Hayek in Chile, here are the links:

  1. Hayek von Pinochet: In which we learn what our protagonist had to say about one of history’s tyrants.
  2. But wait, there’s more: Hayek von Pinochet, Part 2: In which we learn what our protagonist had to say about South Africa and what Ludwig von Mises had to say about fascism.
  3. Friedrich del Mar: In which we ask the question: Did Hayek make the decision to convene a meeting of the Mont Pelerin Society in Viña del Mar?
  4. The Road to Viña del Mar: In which we answer the question: Did Hayek make the decision to convene a meeting of the Mont Pelerin Society in Viña del Mar?
  5. Viña del Mar: A Veritable International of the Free-Market Counterrevolution: In which we learn what Hayek’s associates had to say about Pinochet’s Chile and its lessons for Reagan’s America.

Or, as the song says:

When an irresistible force such as you
Meets and old immovable object like me
You can bet as sure as you live
Something’s gotta give, something’s gotta give,
Something’s gotta give.

When an irrepressible smile such as yours
Warms an old implacable heart such as mine
Don’t say no because I insist.
Somewhere, somehow,
Someone’s gonna be kissed.

So en garde who knows what the fates have in store
From their vast mysterious sky?
I’ll try hard ignoring those lips I adore
But how long can anyone try?

Fight, fight, fight, fight, fight it with all of our might,
Chances are some heavenly star spangled night
We’ll find out as sure as we live
Something’s gotta give, something’s gotta give,
Something’s gotta give.

Postscript: Jesse Walker, an editor at Reason, is one of the few libertarians to grapple with some of this material. Have a read. And, in case you missed it, here’s Greg Grandin on Allende, explaining what the right thought was so dangerous about the democratically elected Marxist president of Chile.

Viña del Mar: A Veritable International of the Free-Market Counterrevolution

17 Jul

This is the second in a two-part post.  Part 1 is here.

• • • • •

The 1981 Mont Pelerin Society (MPS) meeting at Viña del Mar was “one of the largest and most successful regional meetings” (p. 1) the MPS had ever held, claimed Eric Brodin, author of an eye-opening report for the MPS newsletter.

Two hundred and thirty men and women from 23 countries attended, making it a veritable International of the free-market counterrevolution. It featured such luminaries, as I reported, as James Buchanan, Gordon Tullock, Milton and Rose Friedman, and Reed Irvine. (For a complete list of attendees, which included higher-ups in the Pinochet regime, corporate heads and bankers, and US officials, see pp. 16ff of this pdf of archival material from the Hoover Institution).

The inevitable backdrop to the Viña conference was the bad rap “the often maligned land of Chile” was getting in the international media. The conference provided its participants with an opportunity “for becoming better acquainted with the land which has had such consistently bad and misrepresenting press coverage (and, perhaps for that reason, it was appropriate to have Reed Irvine, head of Accuracy in Media as one of the first speakers in the first session.”) (pp. 1-2)

Propaganda and PR were thus essential to the mission of the conference. Despite the fact that the media was banned from the Viña proceedings, the organizers made sure to trot out selected dignitaries from the US and Europe for select interviews. One of the critical themes at Viña—“the limitations of democracy,” which featured a paper by James Buchanan—got special notice in the press; Buchanan also gave an interview on the topic. Other themes like “the Morality of Capitalism” and “Education: State or Private” got equal billing. (p. 2)

But the real propaganda target at Viña was the visitors themselves, that international brigade of free-market luminaries who were lavished with the kind of special treatment pilgrims to the Soviet Union once received (for a complete schedule of the conference, including excursions and entertainment, see pp. 1-11 and pp. 10-11).

According to Brodin:

[Conference organizer] Pedro Ibáñez made an excellent choice when he called for assistance the TRES organization whose charming and sophisticated “ladies in Fuchsia” were always on hand to provide services of many kinds (p. 1).

The visitors met with top government ministers and the head of the Central Bank of Chile, and had a session at the Centro de Estudios Publico in Santiago, a public policy institute that was “concerned with the lack of a sense of moral philosophy in the classical tradition of Adam Smith’s The Theory of Moral Sentiments in contemporary economics” and that was “supported by the heavy-weights in classical liberalism in Chile including Sergio de Castro, Juan Carlos Mendes (former budget director), Jorge Cauas (former Minister of Finance) and others” (p. 5).

Conference participants took in the opera (Rossini) and “enroute to the vineyard estate of Pedro Ibáñez” made a pit stop at the Escuela de Cabaileria, “the equestrian training grounds of the Chilean army” (pp. 5, 3).

Having been, in its time, trained by the Germans, one could see in the choice of both music and formations, the influence of the old Prussian cavalry traditions. A ride in a horse drawn landau proved popular with a few lucky ones (p. 3).

The sessions themselves, particularly those featuring the Chileans, were designed to inculcate in the visitors the sense that Chile, Hayek, and Friedman were one and the same. Freely mixing metaphors from the movement, Ibáñez said that with the election of Allende (p. 51),

we were no longer free to choose: after forty years of socialist recklessness [Allende had been a government minister as early as 1939] only one road remained open to us—“Friedmanism”—always provided that we had a government strong and courageous enough to establish it.

Chile has regained her liberal traditions and therefore come closer to the spirit of Mont Pelerin.

Message received. As Brodin reported (p. 11):

The laboratory conditions of today’s Chile, with its bold economic programs, some with which both an Adam Smith and a Milton Friedman could identify, is worth a dispassionate and careful study.

And like the pilgrims to the Soviet Union, the travelers came away with a sense that if there was a dark cloud on the horizon, it lay not over the land they visited but the home to which they were to return.

According to Brodin, it might be true that “Chile’s bold and radical economic reforms” were, as a Fortune article put it, the “Brave New World of Reaganomics” (pp. 5-6).

But even David Stockman, in his most ambitious budget cutting dreams, could not envision what is politically possible in the land of Augusto Pinochet. The Fortune article claims that in Chile, “the market’s invisible hand is an iron fist.”…

But what is politically possible in authoritarian Chile, may not be possible in a republic with a congress filled with “gypsy moths” for whom political expediency often takes precedence over economic realities, especially in an election year.

Far from turning a blind eye to the tyranny of Pinochet, the MPS freely acknowledged it. And far from diminishing the stature of Chile’s free-market counterrevolution, Pinochet’s tyranny was held up as a point in Chile’s favor—at least in comparison to America, whose electoral democracy might prove a major obstacle on the road to Mont Pelerin.

All in all, the conference was a success. Even so, Brodin signed off on a vaguely plangent note:

The MPS meeting in Viña overlooking the grey chill of the Pacific Ocean, turned out to be for all participants, despite a somewhat too crowded agenda, an exhilerating [sic] program. Muchas gracias to our hosts and we’ll met [sic] in another embattled and much misunderstood city: Berlin in September.

Which prompts of course these two videos (though stay tuned, after you’ve watched, for my postscript!)

 

 

Postscript

A few months after the Viña conference, the Frankfurter Allgemeine Zeitung published a cartoon comparing Pinochet’s Chile to Jaruzelski’s Poland (p. 2).

Hayek was incensed. He fired off a letter to the editor, which was published on January 6, 1982 (p. 1):

I cannot help but protest in the strongest possible terms against the cartoon on page 3 of your publication of the 30th of December equating the present governments of Poland and Chile. It can only be explained by complete ignorance of the facts or by the systematically promoted socialist calumnies of the present situation in Chile, which I had not expected the F.A.Z. to fall for.  I believe that all the participants in the Mont Pelerin Society conference held a few weeks ago in Chile would agree with me that you owe the Chilean government a humble apology for such twisting of the facts.  Any Pole lucky enough to escape to Chile could consider himself fortunate.

Message received.

Note: Many thanks to Thomas Nephew for the expert and speedy translation of Hayek’s letter to the FAZ.

The Road to Viña del Mar

17 Jul

Who decided to hold the November 1981 meeting of the Mont Pelerin Society (MPS) in Viña del Mar, the Chilean seaside resort city by the sea where the 1973 coup against Allende was planned? Was it Friedrich von Hayek, as I claimed in The Nation and The Reactionary Mind?

The short answer is: it’s complicated.

And in that complexity we get a glimpse of Hayek’s intimate involvement in the Pinochet experiment and the deep affinities he and his associates saw between his ideas and the regime’s actions.

That, at any rate, is what I discovered after a week of digging in the archives of Stanford’s Hoover Institution, where the Hayek and the MPS papers are held. This post is Part 1 of my findings; Part 2 will come out later today or tomorrow.

• • • • •

In November 1977, Hayek traveled to Chile to receive an honorary degree from the Universidad Técnica Federico Santa María in Valparaiso. He gave interviews to the media, delivered lectures to professors and the public, and met with businessmen and government officials, including Pinochet himself. (For a copy of Hayek’s itinerary, see pp. 116-17 of this pdf of the archival material.)

The trip had a tremendous impact on the regime, claimed Carlos Cáceres—one of Hayek’s hosts, member of Pinochet’s Council of State, and soon to be a high-ranking minister in the regime—in a letter to Hayek of April 28, 1978 (p. 144):

In several occassions [sic], the President of the Republic as well as the members of the economic committee, have made public statements acknowledging your comments about the chilean economy.

Cáceres thanked Hayek for getting him invited to a meeting of the MPS that was to be held later that year in Hong Kong. “I consider that the topic to be discussed, ‘The Order of Freedom,’ is of extreme importance to what is going on in Chile and in the free world in our days.” Alas, he informed Hayek, he could not go; Pedro Ibáñez, president of the Valparaiso business school where Cáceres was dean, would go instead. While there Ibáñez would “make a formal proposal in order that the 1980 General Meeting [be] held in Chile.”

This is the first mention I’ve found in any of the MPS or Hayek archives of a possible meeting in Chile. Significantly, it’s in a letter to Hayek. My best guess is that Ibáñez and Cáceres originated the idea—perhaps in consultation with Hayek while he was in Chile (the offhand tone suggests Hayek was already familiar with the idea), though that’s speculation.

On July 8, 1978, Ibáñez wrote Hayek (pp. 146-147). Like Cáceres, he affirmed the importance of Hayek’s trip to Chile the previous year: “There is an increasing debate on the new political Institutions. Hence your ideas constantly emerge as frequent subjects of discussion.”

He then turned to the real subject of his letter: the possibility of holding the MPS meeting in Chile.

As I am presently working on my plans to attend the Hong Kong meeting, I feel I should let you know in advance of a request I would like to put before the Board of Mont Pelerin.

I sincerely feel that there are good valid reasons to consider Chile as the place for the 1980 meeting of the Society. Economic as well as political developments in my country may be worth reviewing and analyzing on the spot.

Needless to say, a group of top economists, business leaders and government officials would be only too glad to co-operate and welcome the members of the Society.

I can assure you that the Chilean group could arrange an interesting and appropriate programme, including of course entertainment of such a distinguished group.

Although Chile might be considered by some people to be at the end of the world, I doubt whether Hong Kong is really any closer!

If you share my view regarding the above, do you think I could count on your support and backing, when the time comes to set forth this suggestion to the Board of the Society?

Looking forward to meeting you at Hong Kong…

I haven’t been able to find any response from Hayek to Cáceres or Ibáñez in the archives.

But here’s what we know: A full three years before the MPS meeting was held in Viña del Mar, and a full two years before the MPS Board voted to hold it there, Hayek—who was honorary president of the MPS and a board member—was  brought in on ground-level discussions by what seem to be the two originators of the idea. I was not able to find any other record of a high-level MPS official being consulted; from the point of view of the Chileans, Hayek was the man to convince.

Also note Ibáñez’s promise that the Pinochet regime would be involved in the meeting. Clearly the Chileans thought that, for Hayek, the government’s presence was a feature, not a bug. Note as well that Ibáñez emphasized not only the economic but also the political significance of the Chilean setting (many of Hayek’s—and Milton Friedman’s—defenders think the free marketeers’ sole interest in Chile had to do with economics rather than politics.)

The subject doesn’t come up again in the archives until December 1980, when the Board announced that the MPS decided at the “recent General Meeting” (p. 1) to hold a regional meeting in Viña del Mar in November 1981. Hayek was at that meeting: in fact, as he explains in a letter to Edwin Feulner, treasurer of the MPS and also head of the Heritage Foundation, he personally had the MPS change the general meeting dates to September 7-12 so that he could attend (p. 6).

Subsequent to that decision, the Board—including Hayek—was closely involved in the planning and financing of the Viña conference. On December 2, 1980, Ibáñez sent MPS President Chiaki Nishiyama the first rough draft of the program and asked him for his “comments and observations” (p. 44). On December 16, he sent the same draft to Feulner and said, “I will much appreciate your comments, suggestions and if necessary your criticisms to what I propose above. The programme is totally tentative” (p. 46). On April 10, 1981, he wrote to Feulner that the planning committee of the Viña conference would be meeting in Santiago on April 24 and that Hayek and Nishiyama would attend (Hayek already had informed Cáceres on February 17 that he would attend; see p. 156). Ibáñez added that Hayek and the Chileans would “discuss the Speakers responses (fairly good) members attending, agenda, guests to be invited, etc.” He also promised to send Feulner the third draft of the agenda (p. 47).

At that April 24 planning meeting, Hayek discussed with the Chileans the contents of the Viña program and the financing. According to Cáceres, “a number of decisions were adopted concerning the topics to be dealt with and the speakers and panelists who it was thought should take part in the debates” (p. 12). Nishiyama promised the Chileans that the MPS would provide anywhere from twenty to forty thousand dollars in funding (p. 13). That promise would later prove to be a source of controversy between the Chileans and the Board because of the size and cost of the Viña meeting and because of Nishiyama’s promise to fund part of it (pp. 9-10). In the end, MPS gave the Chileans $30,000 to fund the meeting (pp. 59, 63).

After Hayek left Chile, Cáceres wrote him (on May 27, 1981), once again extolling the impact of his visit on the country (p. 161).

It was a rewarding and unforgettable experience to talk to you about so important and relevant contemporaneous political problems. The press has given wide coverage to your opinions and I feel no doubt that your thoughts will be a clarifying stimmulous [sic] in the achievements of our purposes as a free country.

So, Hayek was in on the decision—from the beginning—to hold the meeting in Viña, and he also played a large role in planning the meeting and in discussing its finances.

In my next—and final post—I look at the Viña meeting itself. Hear the Mont Pelerin Society kvell to its members: “Even David Stockman…could not envision what is politically possible in the land of Augusto Pinochet.”

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.

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