I was there from October 1999-August 2001, and it's crazy to think of all the economic progress the country has made. And it's not just them either. Brazil's economy has quickly been ascending the ranks as they have aggressively pursued oil exploration and drilling off their coasts. Both of those countries owe their growth to the benefit of free markets, but somehow we keep missing this point here in the United States. Even China's explosion in the last decade is directly related to their embracing free market principles rather than the closed economy that they had been favoring for so long.
It's not like Chile was born lucky. Only 30 years ago, it was an impoverished country with per capita GDP of $1,300. Its distant geography, irresponsible neighbors and tiny population were significant obstacles to investment and growth. And its economy, dominated by labor unions, wasn't just closed, but sealed tight.
In the Cato Institute's 1975 Economic Freedom of the World Report it ranked a wretched 71 out of 72 countries evaluated.
Today it's a different country altogether. Embracing markets has made it one of the most open economies in the world, ranking third on Cato's index, just behind Hong Kong and Singapore. Per capita GDP has soared to $15,000.
Besides its embrace of free trade, other reforms — including pension privatization, tax cuts, respect for property rights and cutting of red tape helped the country grow not only richer but more democratic, says Cato Institute trade expert Daniel Griswold.
I was just reading this morning about the cutthroat competition among Google, Amazon, and Apple as they are fighting over competition for wireless communication and how much of a benefit that is to consumers. Think about the cell phone industry and just how much competition has forced the major carriers like Verizon, AT&T, and everyone else to lower their prices and expand coverage and provide better services, and remember that most of this has happened within the last decade. But government regulation and expansion continues to encroach on so many different areas threatening our viability as a nation. We'll see how this plays out as the attempts at health care reform roll forward.
In the meantime, go Chile!