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.”