How Inequality Tore Chile’s Free Market Success Story Apart
Chile was the poster child for economic growth and poverty eradication — until the yawning inequality created by its market-friendly policies sparked an intense backlash
If you want a glimpse of the future, head to Santiago. Until recently, the Chilean capital was the beating heart of an economy lauded for its rapid growth rate and the speedy eradication of poverty, a place so successful it was called an “economic miracle” and made a poster child for development by economists who urged others countries to replicate “the Chile model.” Yet the city welcomed the new decade with intense protests, as millions marched in its streets to protest rising inequality and the unaffordability of daily life. This ongoing tumult represents a fall from grace that we need to understand, since many other emerging economies are heading down the path first beaten by Chile.
Santiago is by far the biggest economic hub in Chile: With a population of 5.2 million it is home to a third of the Chilean population, is 10 times the size of the next largest city (Antofagasta), and is the source of almost half of the country’s economic output. A poor country in the 1970s, Chile had a national income per person half of that in Argentina…
