El ladrillo (English: The Brick) is a study considered the base of many of the economic policies followed by the military dictatorship that ruled Chile from 1973 to 1990.
[2] With the purpose of lifting the economy to a track of steady, faster growth, and alleviating the tensions from the suffering lower class, the new administration, represented by Jorge Alessandri and Augusto Pinochet, supported a group of domestic professionals and economists to figure out a series of systematic economic policies.
[5] They aimed to convince the administration of the progressive ideas, whose goal it was to help the country out of economic stagnation and build long-term steady, strong growth later on.
[7] Besides, one feature of this collection that cannot be ignored is that under the support of the military regime, it put great emphasis on the coordination and coherence of policies in various sectors of the economy and made no compromise with a gentle and gradual reform.
Based on the utopian Marxist blueprint, the country took over huge monopolies and latifundia, redistributed the income to other parts of the society, and controlled the market price along with the interest rate.
[9] The intention of using government intervention to resolve economic problems resulted in reverse consequences and distorted the economy to one that was highly dependent on administrative control.
The inflation induced by the centralized economic plan also exacerbated the conflicts between capitalists and workers because of the diminishing purchase power of salaries.
[14] However, such an atmosphere has no good for economic development because individual efforts were ignored and the government faced huge information cost to enact concrete policies for different production sectors.
Moreover, it is also important to maintain a certain amount of foreign exchange reserves to stabilize people's expectations, thereby stimulating investment in export industries.
[19] The monetary policy should ensure proper currency liquidity, which is conducive to commodity transactions, and have stabilizing prices, full employment, and maintaining high economic growth as its aims.
[20] Other policies include building a free capital market, privatizing the system of provision, social security, and public health,[21] etc.