a period of dramatic economic changes began. The military junta appointed a group of Chilean economists who had been educated in the United States at the University of Chicago. The Chicago Boys advocated laissez-faire, free-market, neoliberal, and fiscally conservative policies, in stark contrast to the extensive nationalization and centrally-planned economic programs supported by Allende, and the import substitution industrialization and structuralist economics supported by Chilean governments since the Great Depression. In a shock therapy, Chile was drastically transformed from an economy with a protected market, with strong government intervention, into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions. Before 1973 the role of the state was to promote investment and industrialization. The Chicago Boys restricted government intervention and public enterprise activities. Businesses and lands expropriated during the presidency of Allende were re-privatized (with the exception of the copper mines). Price controls were abolished, import liberalized, the financial market and capital flows were deregulated. Labor unions were suppressed. Direct taxes and progressive taxes were reduced or abolished while indirect taxes were raised. The central bank raised interest rates from 49.9% to 178%. Thereby inflation could be lowered at the expected price of a sharp recession. When unemployment doubled some public work programmes were installed. Initial support by the business community dried out when contractionary monetary policies and hasty liberalizations caused a drop in manufacturing output of 26% in 1975. The first period advocating a Monetarist shock therapy and “seven Modernisations” is marked by a high rate of business bankruptcies and a significant loss of manufacturing share of GDP. The Chicago Boys argued that this was due to a lack of competitiveness caused by the development strategy supported before 1973. Chilean economist Ricardo Ffrench-Davis counters that the cause for those bankruptcies cannot necessarily be addressed to outright inefficiencies since the severe recessions (around 1973, 1975 and 1981), real interest rates at an average of 38%, hasty import liberalization and an artificially high exchange rate revaluation were the decisive factors of business mortality. After the recession of 1975 the economy expanded from 1977 to 1980 with high growth rates. It made Chile a showcase for Monetarists and economic liberals. Milton Friedman called it in his Newsweek column from January 25, 1982 a Miracle of Chile. Nevertheless, the economic growth rate of the whole 1975–1980 period was below the potential Chilean growth rate. The boom