Economists: can we trust them?

Economists: can we trust them?

October 28, 2019 0 By Michel Santi

Chile is the only Latin American country that is a member of the OECD, and not long ago it was still being cited as an example to follow because of its success and economic recovery. It is, however, just the latest victim to date of a neoliberalism whose ravages have now become universal. Chile’s fall is indeed just the latest trophy for the neoliberals who hold the 2007-2008 financial crash in their list of assets, which still affects us to this today courtesy of the negative interest rates and the debilitating austerity imposed on Europe.

Chile had been getting good press though. Thanks to the impulses of the Gods of the neoliberals – the World Bank –,it had actively bestowed upon its labour market such a flexibility that the country’s trade unions –now useless – suffered a fatal dent to their albeit charitable ability to mediate. The country’s good governance was presented as the example to follow for the other countries of Latin America, Eastern Europe and certain countries of Southeast Asia, likewise regarding its system of ‘à la carte’ pensions where everyone would contribute as much as they could, placing their war chest in speculative investments. Implemented by the brother of the current president of Chile, who is also a member of one of the country’s wealthiest families, this Chilean pension scheme now finds itself in total ruins, unable to transfer monthly allocations of more than $300 to the intended beneficiaries, in a country where price indexes are only slightly lower than those in the USA. This is not without having along the way helped to enrich the whole cast of economic actors who have obviously greatly profited from the exorbitant fees levied on the savings of future pensioners.

Chile can therefore thank the neoliberal economists because it has now also become the champions of inequality on a continent that is already deeply divided by the shocking disparities in wealth. The poorest 5% in Chile have the same income as the poorest 5% in Mongolia, while the 2% richest in Chile are as rich as the richest 2% in… Germany! This country, where basically everything is privatised, including the water and electricity supply, and where pensions are as unreliable as a casino, is –as a matter of course– the country that houses the most billionaires relative to GDP, and at the same time the country that manages to impose an increase in the cost of underground train tickets, recently causing civil unrest and dozens of deaths by police bullets.

This is where the economists of the orthodoxy have brought us. They have now infiltrated every nook and cranny and are eating away at governments’ functions as regulatory bodies, and singing the praises of deregulation.They are the apostles of enormous tax cuts and the great defenders of unfettered markets that they have appointed as the judges of peace and order. Thanks to them, we are now living in a grand contradiction where our world – much richer than in the 1970s – is also much more vulnerable to financial crashes. A world that isn’t afraid to show off its indefensible wealth inequities, a world where politicians are subjugated by economists and financiers, a world where efficiency has distorted equality. The economy – that is meant to serve the prosperity of the masses – has thus now become an ideology manipulated by ayatollahs.