Unitas

Unitas

Monday, December 28, 2020

Quote of the Week



From Sir John Cowperthwaite

... in the long run, the aggregate of the decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is likely to do less harm than the centralized decisions of a Government; and certainly the harm is likely to be counteracted faster.

More about Sir John:

He arrived in Hong Kong in 1945 and was assigned to the Department of Supplies, Trade and Industry.[2] He was asked to find ways in which the government could boost post-war economic outlook but found the economy was recovering swiftly without any government intervention.[3] He took the lesson to heart and positive non-interventionism became the focus of his economic policy as Financial Secretary.[3] Cowperthwaite built on the economic policies of his predecessors, Arthur Clark and Geoffrey Follows, promoting free trade, low taxation, budget surpluses, limited state intervention in the economy, a distrust of industrial planning, and sound money.[2] It was a policy mix that drew more on Adam Smith and Gladstone than on Keynes and Attlee. However, Cowperthwaite was a pragmatic civil servant rather than a theoretician and he based his policies on his experience, empirical data and what he believed would work in practice.[4] He refused to compile GDP statistics arguing that such data was not useful to managing an economy and would lead to officials meddling in the economy.[5] He was once asked what the key thing that poor countries could do to improve their growth. He replied: “They should abolish the office of national statistics.”[6] According to Catherine R. Schenk, Cowperthwaite's policies helped it to develop from one of the poorest places on earth to one of the wealthiest and most prosperous: "Low taxes, lax employment laws, absence of government debt, and free trade are all pillars of the Hong Kong experience of economic development."[7] The Economic Freedom of the World 2015 Report ranks Hong Kong as both the freest economy in the world, a distinction it has held since this index began ranking countries in 1975, and among the most prosperous.

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