Even after bribes from the CIA, Salvador Allende was elected President of Chile through his policies of nationalizing important industries such as mining and telephone. In 1973, the shock came when President Allende was overthrown in a military coup led by army general Augusto Pinochet. The CIA entrusted multiple ‘Chicago Boys’, free market economists, to create a reform manual which was then delivered to General Pinochet’s military leaders just days before the coup. Though no actual civilian protests occurred, 3,500 civilians were arrested and imprisoned. As stated in the Report of the Chilean National Commission on Truth and Reconciliation, “Roundups became routine in the countryside and raids were common.” (Berryman, 132) Thus creating a state of fear as some people were killed on random and even disappeared. Plans from the CIA were delivered to President Nixon that would use ensuing economic and political turmoil to overthrow Allende, and cement free trade and privatization of important industries. As the economy crashed and inflation reached a staggering 375%, Friedman flew to Chile and advised that the free market therapy must be administered in order for it to have full effects. He called for more immediate cuts to government spending, regulations like price controls, and more …show more content…
He had the support of unions and of the common population because of his promises for democracy and an economy that focused on national industries. Shock this time didn’t come as a surprise but it came through the transfer of power. The preceding communist government and its effective mismanagement of the Polish economy left a massive dent including an inflation rate that topped 600%. In the words of Jeffrey Sachs himself, “Then I said that there was one huge issue that was on everyone's mind: the crushing $40 billion of foreign debt that Poland owed to the world.” (Sachs, 120) As a result of this debt, Poland saw severe food shortages for its people and it also developed a thriving black market. Foreseeing no such aid to Poland, the IMF and the US “…saw Poland’s problems through the prism of the shock doctrine” (Klein, 221) and called for debts to be repaid, offering more aid only on the condition that it should implement free market changes, and open up its economy to foreign investment and privatization. Sachs suggested that Poland delay debt payments, sell government holdings and privatize national industries to stimulate its