Neil Monnery on Hong Kong and the Architect of Prosperity

Neil Monnery on Hong Kong and the Architect of Prosperity

08/10/2018 by EconTalk: Russ Roberts

Web player:

Neil Monnery, author of Architect of Prosperity, talks with EconTalk host Russ Roberts about his book–a biography of John Cowperthwaite, the man often credited with the economic success of Hong Kong. Monnery describes the policies that Cowperthwaite championed and the role they played in the evolution of Hong Kong’s economy. How much those policies mattered is the focus of the conversation. Other topics include the relationship between Hong Kong and China and the irony of the challenges Hong Kong faced from U.S. and British protectionism.

Perhaps I have Pratchett on the brain, but all through this episode, I kept thinking of Cowperthwaite in terms of Vetinari quotes.

‘Taxation, gentlemen, is very much like dairy farming. The task is to extract the maximum amount of milk with the minimum of moo. And I am afraid to say that these days all I get is moo.’

And the quote about just because a tyrant can do anything he like, people think he can do anything he likes in the context of the political pressure on him to gradually expand the welfare state.

Also interesting and connected to other things I’ve been reading:

  • the fact that Cowperthwaite micromanaged parking policy (links up with Donald Shoup’s The High Cost of Free Parking)
  • How a fire on Christmas Day meant that public housing is the one area where Hong Kong went for government intervention in the market – which in media coverage right now seems to be a massive failure, and Singapore’s is upheld as the success story
  • Hong Kong taking in (some of) the wretched refugees of China’s cultural revolution and great leap forward; and them becoming magnificent and empowered reminded me very much of both Ankh Morpork and Deirdre McCloskey
  • Cowperthwaite’s Scottish origin reminded me of James Clavell’s Asian Saga. After starting it early this year with Shogun and finding it far too long; and also a little skeptical about reading more Asian settings written by white guys; I felt like dropping the saga. After this episode, I’m tempted to restart.

I appreciated that the episode pointed out that the benefit of lower taxes is not so much some magical sliding around on an efficiency curve, but that it ends tax evasion.

The bit about refusing to compile statistics because the statistics would only create headaches was hilarious. And appointing a committee to find the ideal way to measure GDP was very very Vetinari again.

The discussion on inequality and deciles reminded me of how Raghuram Rajan says that the 90th percentile – 10th percentile comparison is more important than the 1% vs 99%.


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