Chile hurts itself by moving away from free markets

See Latin America’s ‘Oasis’ Descends Into Chaos: What happened to Chile? Its elites lost confidence in the principles that underlay its success by Axel Kaiser. He is a scholar at Adolfo Ibañez University in Santiago. Excerpts:

"The economic pain started with the antimarket reforms of the previous government under Socialist President Michelle Bachelet, from 2014-18. Ms. Bachelet increased corporate taxes by 30%; signed a law banning the replacement of workers on strike, thereby dramatically increasing the costs of labor; increased public spending at three times the economic growth rate; and unleashed armies of regulatory bureaucrats on the private sector.

Capital investment fell in each year of her term. Such a consistent reduction in investment hasn’t happened since data was first collected, in the 1960s. Economic growth collapsed from an annual average of 5.3% under the previous government of Mr. Piñera (2010-14) to 1.7% under Ms. Bachelet. Real wage growth took a 50% hit. (In his campaign for president in 2017, Mr. Piñera promised to bring back better times. So far he has failed to deliver.)"

"Over the past 20 years, intellectuals, media personalities, business leaders, politicians and celebrities in this Latin American nation have marketed the myth that Chile is an extreme case of injustice and abuse. It began at the universities, where progressive ideologues spread the idea that there was nothing to feel proud about when it came to Chile’s social and economic record. According to this aggressively egalitarian narrative, “neoliberalism” had created a society of winners and losers in which neither group deserved the position in which it found itself.

Ms. Bachelet’s second term and her social justice-driven agenda were the inevitable result."

"The central problem is that a large proportion of the elites who run key institutions—especially the media, the National Congress and the judiciary—no longer believe in the principles that made the country successful."