After Salvador Allende’s Popular Unity government won Chile’s elections in the 1970s, a military coup was staged with the support of the CIA and General Augusto Pinochet was named the dictator of the country. Immediately, he was approached by the Chicago Boys who advocated neoliberal ideas of free market capitalism, urging him to privatize state industries, remove barriers to trade, cut public spending and lower taxes. While he had reservations, he accepted these suggestions only to have them be counterproductive to the success of the nation. Inflation reached 375 percent, unemployment was rampant, the masses were hungry and most businesses were closing down. The economy contracted by 15 percent as well, showing that the free market policies were not fit for the state of Chile. In the end, large scale protests resulted in the resignation of General Pinochet and a new government was formed.
“Sometimes democracy must be bathed in blood.”
–Augusto Pinochet