Daniel J. Mitchell, columnist and economic scholar at the CATO Institute, was in Vienna for the annual European Resource Bank meeting. During a speech about the economic reform in Chile, specifically the system of personal retirement accounts, Mr. Pinera shared a chart that “conclusively shows why good economic policy makes a difference,” as Mitchell put it.
Below is that very chart, which underscores how much faster the Chilean economy has grown since the communists were ousted in 1975 and replaced by a pro-market government. Subsequently and consequentially, the poverty rate has plummeted from 50 percent to 11 percent.
When emotion-based arguments are removed and raw data are all that reason allows in discussion, pro-free market economic reform always proves to be immensely beneficial to poor and middle-class people, as it has proven to be in Chile.
The following data below are from a couple of years ago, when Mitchell shared this chart on his blog showing how Chile had out-paced Argentina and Venezuela, collectivists. Essentially, Chile’s economic performance is far above average, whether examined in isolation per se, or in comparison with other nations in the region of other economic philosophies.
As Mitchell points out, “The reason for all this success is that Chile didn’t just reform its pension system. As you can see from this Economic Freedom of the World data” in Mitchell’s full bog post, Chile has made improvements in many more, if not all areas of public policy that can be economically measured.