Development and Underdevelopment in the History of Economic Thought

Revisiting the birth of neoliberalism in South America: Pedro G. Beltrán, Rómulo Ferrero and the conservative economic development blueprint in Peru

Castillo Garcia Cesar, New School for Social Research

The Chicago Boys' experiment is a well-known case in the history of South American neoliberalism that was publicly supported by members of the Mont Pèlerin Society (MPS). Yet, there are antecedents of the MPS participation in spreading neoliberal ideas in the region and bringing Latin American economists into its network. I intend on shading light on the role MPS previously had in spreading neoliberalism before the 1970s. Even before Hernando de Soto became a prominent ordoliberal intellectual, the Peruvian economists Pedro G. Beltrán and Rómulo Ferrero maintained contact with the MPS. Furthermore, they kept friendship bonds with figures as Ludwig von Mises, Henry Hazlitt, and Fritz Machlup. This paper demonstrates that both Beltrán and Ferrero promoted a conservative economic development blueprint. I do this by studying their contributions as policymakers and public intellectuals. These economists were associated with the Peruvian economic miracle of the 1950s and 1960s, which MPS members praised as a case of the successful application of free-market policies in Third World countries. I also argue that the participation of Beltrán supports the hypothesis that the conflation of both neoliberalism and authoritarian politics took place in Peru in the fifties. These experts framed three economic institutions that have persisted until present times: the predominant dyad of fiscal austerity and monetary stability, the preferential treatment of (foreign) private investment, and the focus on the consumer/entrepreneur as the beneficiary of public policy. Thus, this reveals the structural interconnection between the reproduction of capital and non-democratic politics in Peruvian capitalism.


Keywords: Mont Pelerin Society, economic development, economic policy, technocracy