To first understand the Chicago Boys, one needs to look at the economic conditions of the late Allende years. In the late 1960s up until the coup d'etat there was extreme inflation and a lack of the goods necessary for survival. This state of affairs allowed for conservative economists, referred to as gremialistas, to take over the Chilean academic world in the late 1960s. The most prominent faction of the gremialistas were those who has been educated at the University of Chicago during the 50s and 60s and their disciples, known collectively as the Chicago Boys. Almost immediately after the coup, Pinochet's government appointed both Chicago Boys and Christian Democrats (a moderately conservative economic school) to positions of power in the regime. Within a year, however, the Chicago Boys had overtaken the Christian Democrats to become the dominant influence on Chilean economic policy.

The main factors in the Chicago Boys' ability to oust the Christian Democrats had to do with their ties to the military, their superior ability to argue, and their more radical stance combined with Pinochet's hubris. While the coup was occurring on September 11, 1973, a group of Chicago Boys were publishing a document called "the brick," a plan they had spent months working on that would reverse the Marxist policies of Allende's administration. Because several prominent members of the Chicago Boys were sailors and thus had connections to members of the Chilean Navy, they were able to quickly disseminate and promote their economic plan, leading to their speedy appointments to government positions and general military favor. This military favor didn't automatically translate to political dominance, however. About a month into the new regime, Pinochet wasn't yet sold on either the Chicago Boys' or the Christian Democrats' economic plans, particularly with regards to devaluing currency, so he had them debate. Apparently the education they received at the University of Chicago paid off, because the Chicago Boys, lead by who would soon become Chile's economics minister, Sergio de Castro, blew the Christian Democrats out of the water, and the regime agreed to devalue the Chilean peso. Immediately following this action, consumer goods returned, but their prices skyrocketed, keeping them out of the hands of the poor. After this pretty radical change, the regime decided to proceed more cautiously with economic reform, but the slow changes didn't reduce inflation by much and unemployment was at an all-time high. Once again, the Chicago Boys, led by de Castro, were able to talk Pinochet into implementing more radical free-market policies. Part of the appeal of these radical policies had to do with the fact that Pinochet wanted to be remembered for something revolutionary, and Friedman economics were unlike anything ever seen in Latin America. Similarly, he was a military man, and swift action coincided with his military sensibilities (we're talking about a guy who implemented a new government within a day here). Once Pinochet agreed to follow the Chicago Boys' plan this time, almost all of the Christian Democrats were kicked out of the government, and the Boys had complete control.

At first, the radical free-market policies caused what is known as the "Chilean Miracle." After a few months of economic downturn caused by abrupt change, Chile's economy boomed as the supply of currency and public spending was cut and foreign currency flowed in. This foreign currency was almost entirely in the form of loans from Western countries that supported the end of Marxist policies, however, something that would be part of Chile's economic downfall. Before the downfall, however, inflation dropped from 900% in 1973 to 65% in 1979, the fiscal deficit was non-existent, employment rates, exports, and growth rates were up. The Chicago Boys didn't have complete control over the economy, however. Chile's largest industries, including copper and energy, were still controlled by the state, and Pinochet refused to let that change, no matter what de Castro said.

Despite the Chicago Boys' ostensible success, they were slowly phased out during the 1980s as Pinochet became more interested in the idea of political liberalism. As aforementioned, Pinochet wanted to be remembered for something revolutionary, and his revolutionary vision involved the eventual total freedom of choice (depending on how you define freedom; I'm using it in the neoliberal sense) for the Chilean people and the modernization of the country. The Boys were staunch believers in a repressive government due to its ability to easily impose economic reforms, and as Pinochet began to appoint younger neoliberals, the Chicago Boys moved on to working for large corporations. Their policies continued to have a lasting effect on Chile's economy, however, and eventually played a part in its economic collapse. The 1980s saw a worldwide recession, and as Chile had little to no economic regulation, it was particularly sensitive to world market turns. The Chicago Boys and de Castro were still in power during the beginning of the recession in the 1980s, and instead of implementing some sort of economic stability, they continued to borrow foreign capital and keep the market unregulated. By 1982, Pinochet realized that the Chilean economy was in trouble and dismissed de Castro and with him went much of the Chicago Boy ideology. This action was too little, too late though, and as foreign interest rates and oil prices skyrocketed and copper prices declined, Chile's economy shrank by 14.2% in 1982. The 1980s is known as the "Lost Decade" in Latin American history due to the extreme economic downturn seen throughout meso and South America during those years, but Chile had the worst economic crisis out of every Latin American country in the 80s. This catastrophe lead to nationwide protests and, in response, the Chilean government taking on the debt that its private companies had incurred, seizing control of most of its banks and much of its private industry, and allowing for limited collective bargaining. The general policy was still fairly conservative, but the Chicago Boys' idealism was ousted about a decade after it began.