The Mighty Wurlitzer Plays On

Jennifer Burns, Milton Friedman, and Socially Acceptable Apologies for Pinochet

When the Mont Pelerin Society met in January 2020, Latin America was a focus of special attention. One guest of honor was Paulo Guedes, Jair Bolsonaro’s Economics Minister. Neither Guedes’ remarks, nor Niall Ferguson’s introduction of Guedes, have been made public. But we do have access to at least some of what the MPSers said about Chile. During the “opening conversation,” George Shultz—a veteran of the University of Chicago econ department and the Nixon administration—recalled proudly that his Chicago Boys had “produced the only really good economy in Latin America…it was sensational.” But Shultz was troubled by recent events: “Chile is in turmoil. And I think it’s one of the most troubling things around the world…that the ideas worked, have been there, and people are objecting to them.” There was a whole panel on the Chilean protests, during which the right-wing Chilean Axel Kaiser warned that “Chile is the epicenter in this worldwide ideological battle.” Arnold Harberger, perhaps the US economist most closely involved with the Pinochet regime, called for government intervention against militant protestors: “it is utterly essential that those people who actually did that be identified, found, tried, and imprisoned.”

Sharing the program with the likes of Guedes and Harberger was Stanford historian Jennifer Burns, presenting her research on Milton Friedman. Her talk in 2020 did not touch on Chile. But with her forthcoming biography of Friedman now complete, we can consider how much critical distance Burns has been able to maintain from her confreres at the MPS. The answer: not much.

One detail is especially telling. At one point in her forthcoming Friedman biography, which I have seen as a digital review copy, Burns writes:

The development economist Paul Rosenstein-Rodan, a self-identified “center left man” who called himself “violently opposed to Friedman’s theories and policies” nonetheless told a UN official “under the catastrophic economic earthquake circumstances, the [Pinochetista] economic policy is necessary.” Rosenstein-Rodan had worked for the pre-Allende Chilean government and knew the country well. Later he wrote of Allende’s monetary policy: “Any undergraduate economics student would have known better.” (Burns, 372)

Funny story about Paul Rosenstein-Rodan. He was indeed an important figure in the history of development economics, whose 1944 article is credited with introducing the “big push” model for industrializing countries. Rosenstein-Rodan also “may have been a CIA agent,” according to the late economist Lance Taylor, a Rosenstein-Rodan student who worked in Chile in the late 1960s. Whatever the specific nature of the relationship, no one disputes that Rosenstein-Rodan oversaw an institution, MIT’s Center for International Studies, which had been founded by the CIA and continued to receive CIA funding.

Who cares? The CIA gave away lots of money, much of it to people with interesting things to say (or paint). But Rosenstein-Rodan was directly and personally involved in covert US intelligence operations against Allende. This puts him in a special category: as far as I know, Jackson Pollock wasn’t on the scene during the Greek Civil War or the 1948 elections in Italy. But it just takes a keyword search in FRUS, the State Department’s invaluable edited collection of declassified documents, to confirm Rosenstein-Rodan’s role in Chile in September-October 1970, when the US government (including Ambassador Edward Korry) was pulling out all the stops to prevent Allende’s electoral victory from giving way to an actual Allende government.¹ With such a distinctive last name, Rosenstein-Rodan is easy to research.

It gets even better. Almost immediately after bombing the presidential palace and rounding up the troublemakers, the Pinochet regime launched a public relations offensive. In “late 1973,” the junta signed up with Worden and Company, a DC-based outfit which also did PR for the Somoza dictatorship in Nicaragua. Among other services, Worden helped the Chilean ambassador by “reprinting and disseminating statements favorable to the junta.” As it turns out, “the embassy's favorite was one written by MIT economist Paul Rosenstein-Rodan.” Not only was Rosenstein-Rodan a CIA collaborator. Not only was he personally involved in anti-Allende plotting. The specific article Burns cites was a staple of Pinochet’s post-9/11 propaganda. One of the men who founded the CIA, Frank Wisner, once referred to his media operations as a “Mighty Wurlitzer,” a pipe organ capable of grinding out any tune he decided the audience needed to hear. Wisner came to a sad end, but he might be happy to know that the organ is still echoing in academic history in 2023.

One last twist. Burns’ deployment of Rosenstein-Rodan as a progressive critic of Allende closely resembles the invocation of the same authority (indeed the same exact sources) in Sebastian Edwards’ The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism, published earlier this year. In Edwards’ version:

According to Paul Rosenstein-Rodan, a progressive economist and one of the world authorities on economic development, the collapse of the Chilean economy during 1970–73 was the result of Allende’s socialist policies…Rosenstein-Rodan also expressed his critical views in private correspondence…Even if doubts remain on the extent of the CIA’s support to Pinochet and his coconspirators, it is clear that, as Foucault and Rosenstein-Rodan, among others, have noted, Allende’s economic policies were a failure. (Edwards, 64, 68).

Here, again, is Burns’ discussion:

The development economist Paul Rosenstein-Rodan, a self-identified “center left man” who called himself “violently opposed to Friedman’s theories and policies,” nonetheless told a UN official “under the catastrophic economic earthquake circumstances, the [Pinochetista] economic policy is necessary.” Rosenstein-Rodan had worked for the pre-Allende Chilean government and knew the country well. Later he wrote of Allende’s monetary policy: “Any undergraduate economics student would have known better.” (Burns 372)

The sources cited by Edwards here are Rosenstein-Rodan’s 1974 article, “Why Allende Failed,” as well as an archival source: Paul Rosenstein-Rodan to Gerhard Tintner, MFAHI [i.e. Milton Friedman Papers], Box 189, Folder 1. What does Burns cite? The 1974 article as well as Rosenstein-Rodan to Tintner, June 26, 1975, box 189, folder 1, Milton Friedman Papers.

The only difference in their discussion of these sources is that Burns has less patience for critics of Pinochet than Edwards does. Where Edwards refers to Gerhard Tintner as “a German econometrician…who would be extremely critical of Friedman’s involvement with the junta” (Edwards 64), Burns calls him an “Austrian econometrician” whose “indictment” of Friedman was “even more hysterical” than the “wrath” of Andre Gunder Frank (Burns 373).² Burns’ word choice reveals how closely her authorial voice tracks the point-of-view of her subject. Friedman himself, in response to Tintner, described Tintner’s letter as “hysterical.” It may be inevitable for historians to develop some kind of attachment to their subjects, but to use the exact same adjective to describe the exact same letter is quite remarkable.

It doesn’t take much to imagine that Edwards or his book alerted Burns to Rosenstein-Rodan’s potential as a left-of-center Allende critic (and, by extension, as an alibi for Friedman). Burns cites Edwards’ work at several points, including an extended quote about how well the Pinochet economic model worked out in the end. Edwards is also among those Burns thanks “For sundry primary sources, sharing of unpublished work, and other helpful assistance” (Burns 553).

It would be difficult to prove that Burns inherited the Rosenstein-Rodan alibi from Edwards. But one inheritance is beyond question: Sebastian Edwards is a member of one of Chile’s richest families. Among his kinsmen was Agustín Edwards Eastman, the oligarch whose embassy to Nixon in September 1970 resulted in Nixon ordering Richard Helms and the CIA to “instigate a military coup in Chile, a heretofore democratic country” (Helms’ words). It should go without saying that the sins of the clan do not attach to the scion.³ But part of the historian’s value-add is supposed to be our practice of source criticism. If it were just that Rosenstein-Rodan had intelligence connections, or just that Edwards came from an oligarchic family, it might not be worth noting. But the combination of the two is, or should be, arresting.

If nothing else, we can say this: Burns sought to defend (or, minimally, to mitigate) Friedman’s record on Chile by attacking Allende. The evidence she came up with was an article written by an anti-Allende CIA associate, popularized by the Pinochet regime itself, and quite possibly passed on to her by a member of one of the richest (and, overwhelmingly, anti-Allende) families in Chile.

(Friedman, seen above with Pinochet, “remained focused on the omelet rather than the eggs.”)

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For the sake of argument, imagine that everything I said in the first section is ad hominem and irrelevant. After all, even a CIA collaborator who worked actively against Allende, and whose article was a staple of Pinochet’s own PR efforts, can be right sometimes. And it’s not difficult to believe that there was room for improvement in Allende’s macroeconomic management.⁴ Granting all that, Burns’ discussion of Chile remains disturbing and revealing.

Burns is basically perplexed that so many people criticized Friedman for his support of Pinochet.⁵ She sees the criticism as something in need of special explanation, rather than a reasonable response to a very famous person supporting the violent overthrow of a democratic government. Thus her disdainful explanation of the backlash as “the result of a highly motivated and organized network, a sort of pre-Twitter mob of the global left, seizing upon a celebrity to gain greater visibility” (Burns 376-377, emphasis added). Then, feeling generous, Burns allows that there might have been more going on than just clout-chasing: “Underlying the protest was a profound philosophical and political question, perhaps the central problem of the age.” Burns continues:

Allende powered the dream that socialism in the poorest countries did not need a violent revolution to succeed. It was possible, his supporters believed, to radically redistribute private property, economic power, and political power within the bounds of a constitutional, democratic system. Socialism did not require a Stalin, a Mao, a Pol Pot. But if the vía Chilena was impassable—the dream must die. As Rosenstein-Rodan summarized, the fall of Allende “has been taken as proof that socialism and democracy are incompatible, that only a dictatorship can impose socialism.” Blaming nefarious outsiders let the dream live. Even better, blaming Friedman might redeem the bloodstained legacy of Marxism. Empirically, the death toll of Pinochet’s dictatorship was incommensurate with the millions killed in Stalinist-style Communist regimes.⁶ It was an Orwellian mind trick of sorts, impugning capitalism for the very sins that were so deeply embedded in the Communist project. And finally, stigmatizing capitalism as authoritarian foreclosed any need to think seriously about how Friedman’s ideas might actually work in practice—or how actually existing socialism might not. (Burns 377, emphases added.)

This passage renders Burns’ commitments clear. She is not a centrist historian trying, admirably, to be scrupulously fair to the right-wing figures she studies. Nor is she a detached apolitical scholar. She is personally invested in defending Friedman against criticism. She makes the leap—unusual in an academic intellectual biography—to psychologizing Friedman’s critics. She accuses them of “Orwellian mind tricks” in order to delude themselves and others into holding positions that no rational person would hold. If a leftist historian wrote this way about right-wingers, people would complain (perhaps with justification) of ideological bias. Is it acceptable to write this way if your targets are on the Left? Similarly, it would be pretty unusual to encounter a Stanford historian, in a highly sympathetic biography of a Stalinist, brushing off the question of atrocities with the glib remark that their subject “remained focused on the omelet rather than the eggs.” But that’s how Burns writes about Friedman and Chile.

Finally, what Burns writes here is actually in conflict with what Rosenstein-Rodan wrote. Bracketing hermeneutical questions about bad faith that might attach to Rosenstein-Rodan’s interventions regarding Chile, let us consider the plain text that the economist produced. What Rosenstein-Rodan wrote, and what Burns quotes, is that the fall of Allende “has been taken as proof that socialism and democracy are incompatible.” For Rosenstein-Rodan, however, the rest of the sentence goes: “but the Chilean experience offers no proof of that.” He was not saying “the dream must die,” but the exact opposite! For Burns to accurately invoke Rosenstein-Rodan for his criticism of Allende, then misleadingly invoke him in order to further criticize anti-Pinochet activists, suggests that Burns does not see the Rosenstein-Rodan essay as an actual source of information about Chile or socialism. It is just a club with which to beat the critics of Friedman, whose fights are apparently now his biographer’s as well.

Thirty years ago, US historians worried that they had ignored conservatism because so many historians were liberals:

while historians have displayed impressive powers of imagination in creating empathetic accounts of many once-obscure areas of the past, they have seldom done so in considering the character of conservative lives and ideas. That has no doubt been a result in part of a basic lack of sympathy for the Right among most scholars.

We now have occasion to consider the opposite problem: can we still count on historians of the Right to maintain critical distance from their subjects?

1. The FRUS documents indicate that Rosenstein-Rodan was involved with “Track I” of the covert US effort to prevent the Chilean legislature from confirming Allende as president on October 24. Within the Nixon administration, these efforts were differentiated from “Track II,” which aimed directly at instigating a military coup. But, as one of the leading researchers on the topic has written, “The historical distinction between Track I and Track II—that the first favored a constitutional approach and the second focused on a military coup to block Allende—is inaccurate. Track I quickly evolved to focus on a military takeover as well—what the CIA’s deputy director for covert operations (DDP) Tom Karamessines called ‘a quiet and hopefully nonviolent military coup.’” As we saw in yesterday’s post, the anti-Allende group believed that “a constitutional way out...doesn't preclude violence—spontaneous or provoked.” The major distinction was that Track II involved direct support for marginal right-wing malcontents in the Chilean military. By contrast, Track I was “an interlocking political action and propaganda campaign designed to goad and entice [outgoing president Eduardo] Frei” into “lead[ing] the military coup himself” or at least “act[ing] in a manner which will not only exacerbate climate for a coup but which will actively precipitate it.” Edward Korry, the US ambassador in Santiago, made Rosenstein-Rodan part of this “Rube Goldberg contraption,” for example when Korry “had [Rosentein-Rodan] go to Frei earlier October 3rd to try instill some fight.” Intellectual historians may be interested thar Rosentein-Rodan also helped pass a message to Frei from the French philosopher Jacques Maritain, “who is Frei’s ideological Guru [and who] told Frei that PDC [the Chilean Christian Democratic Party] must oppose Marxism.”

2. Burns’ description of Frank—a “renegade” whose “checkered career at Chicago [was] made nearly untenable by his open Marxism”—suggests her close identification with Friedman’s point of view.

3. Indeed, Sebastian Edwards seems about as objective regarding the Allende-Pinochet years as you can reasonably expect from someone with his background. Patrick Iber’s TNR review of The Chile Project gives you a sense: “In Chile, the Edwards surname is as famous as it gets; a bit like being a Rockefeller in the United States. The family scion, Agustín Edwards Ossandón, a railroad baron and banker, was the richest man in nineteenth-century Chile. His great-great-grandson, Agustín Edwards Eastman, owned and published the conservative newspaper of record, El Mercurio, and, after Allende’s election, lobbied the Nixon administration to remove him. But not everyone in the extended family agreed: Sebastian…was a college student at the University of Chile during the Allende years, and a supporter of the government…Among those killed and disappeared [after September 11] were Edwards’s friends. He tried to stay out of sight, quietly burning books and documents in his home in those first days.”

4. I’ve found it useful to grapple with Alec Nove, “The Political Economy of the Allende Regime” (1986), which sadly does not appear to be easily available online. Like Rosenstein-Rodan, Nove had spent time in Chile and was critical of Allende’s policies. The difference was in their attitudes before the Allende experiment was physically liquidated: Nove had volunteered his time and energy to help the Allende government, while Rosenstein-Rodan had conspired against it.

5. Even without looking beyond Burns’ book, the evidence is clear that Friedman did support the coup and the dictatorship. Pinochet was not his first-best solution (an easy concession to make), but the dictatorship was unequivocally superior to the democracy that had preceded it. As Burns quotes Friedman saying, “There is at least one thing to be said for the military junta—there is more chance of a return to a democratic society.”

6. Stalin died in 1953 and Friedman won his controversial “Nobel Prize” in 1976. It is by no means self-evident that Friedman’s mid-1970s critics were obsessively displacing memories of the Gulag, as opposed to focusing with good reason on contemporary US-sponsored atrocities in their own hemisphere. As the eminently respectable Latin American historian John Coatsworth once wrote:

Between the onset of the global Cold War in 1948 and its conclusion in 1990, the US government secured the overthrow of at least twenty-four governments in Latin America, four by direct use of US military forces, three bymeans of CIA-managed revolts or assassination, and seventeen by encouraging local military and political forces to intervene without direct US participation, usually through military coups d’état. These actions enhanced the capacity of US leaders to shape events throughout the region by making intervention a credible threat, even in countries where it had not yet occurred. As a consequence, for over forty years, Latin Americans were ruled by governments more conservative (and thus reliably anti-Communist) than Latin American voters were inclined to elect or than US citizens themselves would have been inclined to tolerate.

The human cost of this effort was immense. Between 1960, by which time the Soviets had dismantled Stalin’s gulags, and the Soviet collapse in 1990, the numbers of political prisoners, torture victims, and executions of nonviolent political dissenters in Latin America vastly exceeded those in the Soviet Union and its East European satellites. In other words, from 1960 to 1990, the Soviet bloc as a whole was less repressive, measured in terms of human victims, than many individual Latin American countries.