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Harberger: A Deadly Naivete

TORTURE AND INDUSTRY

We may agree that the poor should be helped, but who are the poor? Is income a test? Most graduates students are poor by that standard. We want to help alleviate the human sufferings connected with unemployment without inducing people to go casually and habitually "on the dole"--as many do. We want to see to it that the needy have an adequate standard of medical care, but who is to say that the long waiting lines observed in the public clinics of many countries do not perform a quite useful function in restricting the beneficiaries of a free service to people who are really poor and really ill?

All that need be said here is that distributional weights, as commonly understood in out professional literature, simply do not enter these dimensions.... In the end, then, we cannot condemn as crass or unfeeling the idea our profession's moving towards-a consensus based on the traditional criterion of efficiency. (Journal of Political; Economy, April 1978).

Harberger goes on the Blind faith, belied by reality, that pursuit of the "efficiency criterion" will somehow produce national prosperity and political liberty. His students know better. Pablo Barona, president of the Central Bank of Chile, said the fact that "more than 90 per cent of the people are against our policies is proof that the model is working" (The New York Times, December 8, 1976).

The effects of the policies this economic model requires--among them the lowering of trade protection, the deregulation of interest rates, the private domination of agriculture and industry--have worsened the living conditions of the majority of Chileans. According to a 1979 report of the Inter-Church Committee on Human Rights in Latin America:

The economic model has produced increased misery for the majority of the Chilean population. Real unemployment is estimated between 20 and 30 per cent. [The government distorts these figures by not counting as unemployed those on the Minimum Employment Program, which pays a meager $26 per month.] Inflation continues to undercut the real incomes of working people. Cuts in government support for health, housing, education and social services reduce their social wage.

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A dramatic illustration of the social consequences of the economic model is the widespread malnutrition in today's Chile. Per capita intake of calories and proteins has decreased seriously since the military came to power. The attitude of the military authorities towards this social msiery is as shocking as the statistics. Admitting that "221,000 children are living in extreme poverty, which implies undernourishment," the minister of health commented that "those children are not a source of power, but a dragging weight."

THE FAILURE OF HARBERGER and the Chicago School is in one sense epistemological. They have constructed a metaphor for how the world can be made to work-the market economy-but the metaphor doesn't fit the world. As a result, Harberger is unable to connect political repression with his economic policies. He dismisses the connection as "absolute nonsense. There is not a single component of Chile's economic policy that has not flourished under a democratic regime."

Harberger is not the person to lead the intellectual community into new theoretical realms. His is a set and anachronistic view of the world. If he comes to the HIID, he will train a multitude of foreign and American students in his way of thinking. "The thing Harvard can do is to train students from all parts of the world in the science and arts of good economics," he says. The "Chicago Boys" will become the "Harvard Boys."

If he comes, he will probably ally the HIID with military governments strong enough to carry through his policies. "You need a strong government to make strong changes of any kind," he says, nothing that it is difficult to advise a country where "the economic policies keep changing all the time like a strobe light."

In addition, countries looking for a more human approach will shun the HIID. If Harberger comes, he will give advice that will contribute to brutal political repression and to economic injustice. Harvard would make a worthier and wise decision if it chose someone who would encourage a ferment of ideas, and someone with the breadth of imagination to envision an approach that will help put an end to the suffering and starvation.

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