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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