Just when I was thinking I’d like to dance on the old brute’s grave, along comes Greg Palast and does it for me.

The claim that General Pinochet begat an economic powerhouse was one of those utterances whose truth rested entirely on its repetition.

Chile could boast some economic success. But that was the work of Salvador Allende – who saved his nation, miraculously, a decade after his death.

In 1973, the year General Pinochet brutally seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernization, unemployment reached 22%. Real wages declined by 40% under military rule.

In 1970, 20% of Chile’s population lived in poverty. By 1990, the year “President” Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.

Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatized the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatized 212 state industries and 66 banks and ran a fiscal surplus.

Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward … into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor.

Yet, with remarkable chutzpah, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.” Friedman’s sidekick, economist Art Laffer, preened that Pinochet’s Chile was, “a showcase of what supply-side economics can do.”

It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk….

You might argue that Greg Palast is not exactly a dispassionate commentator. But, interestingly, his view is largely supported by Oxford academic Alan Angell’s more detached account:

The second justification is that Pinochet created a model free-market economy. It is certainly true that there was massive privatisation and effective reduction of inflation. But the negative features are huge. The overall growth rate of the seventeen years of his rule was dismal – a little over 2% per annum. He engineered two massive recessions – that of 1975 (which could partly be blamed on the situation he inherited), and one of 1982-83 (which was due entirely to the regime’s economic policies).

There was enormous social suffering – unemployment at its peak was over 30%, and over 40% of the population were in poverty at the end of his regime. His government reduced social spending, with dire consequences for the quality of public health and education. Moreover, despite the commitment to neo-liberalism, the largest state asset, the state copper corporation Codelco, was not privatised, and Pinochet’s regime received colossal financial support from a state company nationalised by the Salvador Allende regime.

I could go on: the much-vaunted pension privatisation is now under attack, the central bank only achieved real independence under democracy. In truth, only after the recession of 1982-83 did the regime adopt sensible macro-economic policies.

It must also be stressed that these economic measures were accompanied by corruption which benefited Pinochet’s supporters – and also, we know now, the man and his family himself. The privatisations were used to reward supporters, and there was little transparency or effective regulation. The rich benefited enormously in Pinochet’s government leaving Chile with the legacy of one of the most unequal income distributions in the world.

The claim that Pinochet ruled for the benefit of the country can no longer be sustained. Undeniably, Chile has seen great economic progress since 1990 but this, I would argue, is the product of the policies of the democratic governments and not the legacy of Pinochet.