The Divide: A Brief Guide to Global Inequality and its Solutions

by Jason Hickel

There was some recovery after 1978, buoyed by speculative finance from abroad, but in 1982 the economy crashed hard: hyperinflation struck again, and unemployment reached 35 per cent. Eventually things got so bad that Pinochet was forced to respond by firing many of the Chicago Boys and renationalising many of the privatised companies and banks.46 In fact, the only reason the economy didn’t fall apart completely was because Codelco, the state copper mining company, had never been privatised and continued to supply 85 per cent of the country’s revenue. It was not until 1988 that the economy recovered, at which point Friedman and the Chicago Boys finally felt they could declare the experiment a success. But a success for whom? The poverty rate was 41 per cent.47 Average wages were 14 per cent lower. The minimum wage was 42 per cent lower. And hunger was widespread, with the food intake of the poorest 40 per cent of the population having plunged from 2,000 calories per day to 1,600.48 Even as late as 1993, GDP per capita was 12 per cent below its pre-coup level. The only people that benefited from the new economic regime were the elite. Banks and foreign investors were having a field day, ‘liberated’ as they were from regulation. And with the incomes of the richest 10 per cent soaring – with their share of the national pie up by 28 per cent – Chile had become one of the most unequal societies in the world.