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What Should (Knightian) Economists Do? James M. Buchanan's 1980 Visit to Chile

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  • Andrew Farrant

Abstract

Although Milton Friedman and Arnold Harberger became involved with Pinochet's Chile in the mid‐1970s, an increasingly influential body of scholarship argues that James M. Buchanan was similarly eager to provide Pinochet's dictatorship with advice. Buchanan reportedly had a heavy influence on the development of Chile's 1980 Constitution and similarly helped to design Chile's binomial electoral system. Buchanan's seeming willingness to advise Pinochet's dictatorship provides a stark contrast to his longstanding advocacy of Frank Knight's view that democracy is “government by discussion” and Buchanan's oft‐repeated insistence that democratic consensus trumps economic expertise. This article draws upon a wealth of largely ignored archival evidence and Chilean primary source material to engage and evaluate whether Buchanan—a Knightian economist par excellence—abandoned his advocacy of “government by discussion” and provided early 1980s advice that helped Pinochet's regime of “institutionalized terror” (Valdes , p. 30) design a constitution that would chain any subsequent Chilean democracy.

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  • Andrew Farrant, 2019. "What Should (Knightian) Economists Do? James M. Buchanan's 1980 Visit to Chile," Southern Economic Journal, John Wiley & Sons, vol. 85(3), pages 691-714, January.
    • Handle: RePEc:wly:soecon:v:85:y:2019:i:3:p:691-714
    DOI: 10.1002/soej.12323
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    Cited by:

    1. Kuehn, Daniel, 2024. "Review of “The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism” by Sebastián Edwards," SocArXiv v62k3_v1, Center for Open Science.
    2. Kuehn, Daniel, 2024. "Review of “The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism” by Sebastián Edwards," SocArXiv v62k3, Center for Open Science.
    3. Alain Marciano, 2020. "Buchanan, Popular Myths, and the Social Responsibility of Economists," Southern Economic Journal, John Wiley & Sons, vol. 86(4), pages 1613-1629, April.
    4. Sergio Mariotti, 2021. "Forging a new alliance between economics and engineering," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(4), pages 551-572, December.

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