ABSTRACT
Currency stabilization and foreign financial advice in Chile have often gone hand in hand. But long-term stability has been rare or has been achieved only at considerable expense. Albert Hirschman, in his insightful survey of the causes and remedies of inflation in Chile, suggests that foreign financial advisors often aim too high and bring about the demise of their reforms themselves (Hirschman 1994: 133-46). The history of Chile’s interactions with financial advisors or money doctors seems to prove this fact without question. The failure of the financial regimes worked out for the Andean country by the foreign experts that it chose to employ began in the nineteenth century. The early history has cast a long shadow. The demise of convertibility in 1878, a key symbol of financial orthodoxy and a liberal economy, symbolized for many Chileans the unreliability of foreign advisors. However, critics of CourcelleSeneuil likely chose to blame the nation’s first money doctor in order to avoid tackling such contentious issues as raising property taxes to avoid deficits. Things did not improve with time: the failed return to gold of 1898 ushered in an era of long-term inflation in the Andean country (Fetter 1931).
