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

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

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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!)




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.


  1. Benedict@Large July 18, 2012 at 12:48 am | #

    A look at Chile 30 years after Hayek, and probably what more or less happens here if our own education “reform” movement succeeds.

    “Make Sure You Don’t Fall: Perspectives on the Recent Social Agitation in Chile, Part One”

  2. Mitchell Freedman July 18, 2012 at 10:30 am | #

    This was delicious to read because for once, we have the sort of analysis that was used against liberals finally applied to right wingers. And lo and behold, there is a better case for proving how right wingers cavort and enable right wing dictators than the cases that continue to attempt to be made against liberals for cavorting with Communists.

    Well done, sir. Well done.

  3. jonnybutter July 19, 2012 at 8:54 am | #

    Reading these posts without checking out at least a little of the multimedia components is like eating your bagel without a schmear – you can do it, but why?

  4. Kel Thuz (@WhoIsKelThuz) March 8, 2014 at 12:06 pm | #

    Funny, we lived in Jaruzelski’s Poland and would gladly move to Pinochet’s Chile at a moment’s notice if we actually were let out by the regime. But we could not be let out. In Chile, on the other hand, many thoroughly evil people, eg. socialists (but I repeat myself) were spared and let free to emigrate and spread lies about Chilean revolution. I say: kill yourselves.

  5. Fernando Muñoz León May 5, 2014 at 4:01 pm | #

    A stray observation: page 6 of the Mont Pelerin pdf contains the proposal for the creation of the most important Chilean think tank, the Centro de Estudios Públicos, established in 1980 by Jorge Cauas and Hernán Cortés (Hayek was its honorary president; see here: and page 7, the idea for the creation of a university, Finis Terrae, by the Chilean economists known as the Chicago Boys. The plan aims for 1983, but it was ultimately created in 1988.

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