I was recently introduced to a character from recent history by David Farrer of the Libertarian Alliance who is an unlikely hero of the Classical Liberal Revolution and a public servant to boot. I am ashamed to say that I was completely unaware of Cowperthwaite and can only imagine how different life would have been in Britain today he had been in No 10 instead of the social and economic regulating Fabians of both the Labour Party and Conservative Parties lumped under the term Butskillism
Sir John Cowperthwaite KB CBE Financial Secretary to Hong Kong.
Sir John was sent to Hong Kong in 1944 to oversee its economic recovery after the war. What is remarkable about Sir John is that unlike any other colonial Civil Servant he decided on a course of positive non intervention in the economy.
This did not mean that Cowperthwaite sat around doing nothing as P J O’Rourke put it-
“Quite a bit of government effort is required to create a system in which government leaves people alone. Hong Kong’s colonial administration provided courts, contract enforcement, laws that applied to everyone, some measure of national defense…, an effective police force (Hong Kong’s crime rate is lower than Tokyo’s), and bureaucracy that was efficient and uncorrupted but not so hideously uncorrupted that it would not turn a blind eye on an occasional palm-greasing illegal refugee or unlicensed street vendor.”
He took non intervention to such a lengths that he refuse to collect economic data in case it provoked some bureaucrat to start trying to interfere.
“As for the paucity of economic statistics for the colony, Cowperthwaite explained that he resisted requests to provide any, lest they be used as ammunition by those who wanted more government intervention.” Daily Telegraph Obit.
He maintained a rule that Government spending should never exceed 15% of GDP, compare that statistic to Government spending in this country. Milton Friedman was an admirer of Cowperthwaite.
“Direct government spending is less than 15 percent of national income in Hong Kong, more than 40 percent in the United States. Indirect government spending via regulations and mandates is negligible in Hong Kong but accounts for around 10 percent of national income in the United States.
“We are more productive than Hong Kong. But we have chosen, or been led by the vagaries of politics, to devote roughly half of our resources to activities to which Hong Kong devotes 15 or 20 percent. Our higher productivity means that we can produce with 50 percent of our resources the same per capita income as Hong Kong can produce with 80 to 85 percent of its resources.
“The real lesson of Hong Kong for the United States is that we’re using our resources inefficiently. Our government is spending our money to subsidize tobacco and to penalize smoking; to subsidize childbearing and to discourage childbearing; to build new housing and to tear down housing; to subsidize agriculture and to penalize agriculture; and on and on — not to mention converting square miles of forests into billions of paper forms and spending many man-years of labor filling them out and then filing them.”
Hong Kong just did not ‘happen’ it happened because one man held back the wrongheaded interference of both Politicians and the Public Sector. He was however not a complete non interventionist as he presided over a massive expansion of public housing, making the Hong Kong Government one of the largest landlords in the world.
Would that we could persuade our politicians to stop arguing about how to spend the increasing amount of Tax that is levied from us by coercion and to adopt Cowperthwaite’s dictum.
“In the long run, the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralised decisions of a government, and certainly the harm is likely to be counteracted faster.”
Cowperthwaite passed away in 2006, his message ignored by his own country and the west, his legacy however the economic success of Hong Kong, now centrally placed in the strongest region in the world, while Britain and Europe slowly slide into decline and authoritarianism, and asking the East to bail the bankrupt economies of the EU out.
If you want to join with people who think that people like Cowperthwaite and his policies should be admired and emulated please join us in the Libertarian Party.