Description

Hong Kong is a special administrative region of the People’s Republic of China.

Discussion

Overview

Upon the end of the Second World War, the British (re)claimed Hong Kong and declared the port a tariff-free zone for most imports. Minimal restrictions were placed on what was permitted for import.

In 1961, someone well-read in economics, John James Cowperthwaite, became Hong Kong’s Financial Secretary. Cowperthwaite took an incredibly hands-off approach to government compared to today’s standards. He set no economic plan, no industrial subsidies and no domestic objectives. There was, though, an official policy. That policy was “positive non-interventionism”. Under this policy, the government’s default position was to refrain from acting, thereby setting the parameters for a largely free choice economy.

The history of Hong Kong shows how limited government interference in markets, while safeguarding property rights and facilitating free trade can produce great prosperity and, thereby, raise the general standard of living.

Hong Kong and the Legal Principle

The post-war governance of Hong Kong is largely aligned with the Legal Principle.

The approach of Financial Secretary Cowperthwaite meant government was mostly refrained from aggressing.

My own views on all matters of public revenue and public expenditure are conditioned by an acute appreciation of whose is the sacrifice that produces public revenue and to whom accrues the benefit of public spending. — John James Cowperthwaite, Financial Secretary of Hong Kong 1961-1971.

Implementation

• limited regulation
• consistent protection of property rights
• no monopolization of government services (meaning, non-government providers may compete with government agencies).

Resources

• Frisby, Dominic, Daylight Robbery (Penguin, 2022), ch. 2