translated from Spanish: Joseph Stiglitz: “There was always this dissonance between Chile’s reputation for economic management and poor equality performance”

Nobel Prize-winning economist Joseph Stiglitz referred to Chile’s current situation after the social outburst of 18 October. In the View of the American professor, the situation is “emblematic” as it is something that is happening in many other parts of the world.” Chile was always observed as one of the OECD countries with the highest levels of inequality. And there was always this dissonance between Chile’s reputation for good economic management, good economic growth, and poor equality performance,” he said in an interview with El Mercurio. Many of us were concerned about how this was going to be sustainable. Some thought that, well, each country is different, and perhaps the citizens of one country can accept levels of inequality that in other countries would not accept them. For example, health inequities in the United States would be unacceptable in any European country,” he added. For Stiglitz, Chile has been, in many respects, “a success story,” especially for its economic policies, he says, but he says there were persistent disparities. In his view, many people were concerned, for example, with the privatization of the pension system, “which has not worked very well.” A few years ago there were protests (2011) about the education system, and that was a message that maybe Chile was not giving people opportunities. There has been a lot of discussion and these bold experiments may not have been so well designed and perhaps more ideological than pragmatic. I think what we have seen is that obviously these concerns about Chile by some economists were justified,” he said. The Nobel Prize in Economics was not surprised by the social outburst and said that given the country’s inequality statistics, this looked like it was coming. In addition, he said that the Chilean social outburst “has had a very profound effect on Latin America, and indeed on the whole world.” The discussion in Latin America has often been if they go away from the Chicago boys, to the Chicago boys. And one saw certain problems in some of the countries that went in that direction or in the other. And now, right now, with Argentina and the collapse of the (Mauritius) Macri government project, that version of the Chicago boys, which is not the same, but it’s a version. So, it’s two countries in the Southern Cone where things didn’t go well,” Stiglitz explained to the morning. Despite acknowledging that he does not know enough about the details, Stiglitz stressed that some of the things Chile has done at the macroeconomic level, “its sovereign funds, are among the best,” he said. “Then they have a shock absorber that other countries don’t have. If they went into recession, they’ve got money. They are in a better position than most countries in the world,” he said. The economist’s vision is clear, he says that the capitalist system, the market economy, “must work for the people, it must serve society. And the way it was organized by the Chicago boys didn’t work, it didn’t serve people, it didn’t help the people, it was 1%. That idea is now totally discredited,” he concluded.

Original source in Spanish