What impelled you to design your private pension system for Chile? “Until 1980 we had the same pension system as most countries in the world. That system was actually created by Chancellor Otto von Bismarck for 19th-century Prussia. He gave people this supposed benefit of an old-age pension funded by payroll taxes instead of creating a system in which people get a pension because they saved responsibly for old age.”   What are the underlying flaws of the Bismarck system? “State-managed pension systems are going bankrupt worldwide because they depend on a lot of workers paying payroll taxes to finance a few retirees. In 19th-century Prussia the average lifespan was 45. Bismarck offered a pension at age 70 [later reduced to 65]. It was a benefit that no one would ever benefit from. Then people began to live longer and the longer you live the more you bankrupt the pension system. It’s quite absurd.”   How is yours different? “I created a completely new system. Instead of sending money into a national pension system that is generally a black hole workers make a payroll deduction of 10% and invest it in a personal retirement savings account. You start in your 20s and cannot touch that money until retirement age. When you save money for 40 years without touching it it grows with compound interest… the most powerful financial force in the universe.” How safe are those private pension funds compared to a state-run pension system? “Each worker chooses from one of six private managers. Each manager is an investment expert supervised by the government and you can always switch managers after giving three months’ notice. The system doesn’t allow you to make speculative investments. You invest in a mix of bonds and stocks which have two credit ratings a history of solvency and are transparently traded. The funds are invested in baskets of up to 10 000 different securities so you have portfolio diversification.”