Friday, July 16, 2010

The Economist Declares Hong Kong Experiment Over

Great cities are always an accident, in the sense Aquinas would use the term. Rome, London, New York, Hong Kong, none should have been, but all became great.  Talk about being at the right place at the right time: Hong Kong was a rock, a desolate semi-usuable harbor when Britain picked up the Island and Kowloon in perpetuity as compensation for some putative loss the British experienced colonializing China.  Several decades later China ceded the New Territories beyond Boundary Road up to Shumchun to Britain on a 99 year lease.  That lease was up in 1997, and facing reality, Britain returned the whole shebang to the Communist China.

The accidental part was when Britain gained Hong Kong, it was uninteresting enough to turn over to perceived second-string administrators, Scotsmen.  These Scotsmen had received laissez faire ideas from the French, who had inherited the ideas from Spanish Scholastics who were working out a philosophy of commerce and industry, based in natural rights and freedom, and laid the foundation of modern free market economics.

Scotsman Adam Smith was the moral philosopher whose Wealth of Nations is largely assumed to be the fountainhead of free market ideas, but only marginally so.  Smith's magnum opus was a survey of all sorts of economic ideas of various nations, including communism, but it was the relatively new idea of economic freedom that was the exciting part of his work, and especially to those fomenting revolution in US and France.

One problem with economic debate is terms are so wildly adapted.  What to call markets free of government intervention?  Free markets?  Few people using the term admit to non-interference, almost all "free marketers" see some role for government, but that is a contradiction in terms.  Radical free marketers abhor capitalism as much as communism, because one is retail and the other wholesale of the same rotten system.  Shall we call it anarchy? Anarchy is good, but extremely few people use it in its technical sense.  Kropotkin railed against the division of labor, that result of the just distribution of goods and services, the precise measure of true wealth in a free market, so don't expect any unanimity among radicals. Also, just about any true anarchist will settle for panarchy, because it is good enough (and very close to what we have now anyway.)  

Hong Kong was formed about the same time as USA by people with the same philosophy (we now call this branch of philosophy by the specialized term "economics," Greek for household management.)  The difference is Hong Kong stayed on course while USA quickly degenerated into a capitalist nightmare of expansion, colonialism and conquest. (See Morton Horwitz) We all enjoy the fruits of empire, cell phones, nice cars, well-wired homes, but ask the people who came up short in the bargain, like the Iroquois trying to use their passports to play lacrosse in Manchester, and you will learn another side of the story.  USA went too far the last few decades, as all empires do, and invaded Vietnam (a people who defeated Genghis Khan and all comers since) and now the graveyard of empires, Afghanistan.

But Hong Kong stayed true to its founding.  Thomas Sowell in The Economics & Politics of Race notes that as a rule, relative wealth among blacks in USA can be traced back to the colonies from which they migrated.  Those from British colonies are relatively wealthy, those from French colonies are relatively poor.  How come?  The British share power with the locals, the French do not.  Haiti is poor, Bermuda is rich.

What to make of Hong Kong that has surpassed its colonial masters in GDP?  We see a philosophy grounded in a monotheistic image moving across the world westward and ending up in Hong Kong.  With just about every race on earth living in Hong Kong in peace and prosperity, it is not British administration that can be praised, but the idea of free markets, which in Hong Kong is proven to be universal.  No one owns the truth, and the truth is free people live in peace and prosperity.  

Hong Kong is often compared to Singapore.  But one must not forget other countries like San Marino, Lichtenstein, Andorra, Panama, even the Vatican, Switzerland with a population relatively equal to Hong Kong. These are all small countries, relative free, no offensive capability (even if some defensive capability) relatively solid currencies, multilingual, and unlikely histories of formation.  It may be empirical that to be free you must be small and indefensible.

Hong Kong belongs to the world, now under the aegis of the Communist Party of the Peoples Republic of China.  Within the party there are intense debates about what to do with Hong Kong.  Under Deng Xiaoping, circa 1980, the good of Hong Kong was replicated in several special economic zones, and even India followed suit to some degree, recognizing the dynamism of free markets.

If Hong Kong was ever an experiment, the results are in, freedom works. That experiment is hardly over, as the contours of freedom are tested by those whose methods are "probe, where there is steel, withdraw." Progressives offer street theatrics like minimum wage to advance their agenda, and arrest freedom's progress. Instead of the seven million people of Hong Kong every day setting a minimum wage as a result of countless transactions, progressives propose several dozen people elected, in a dubious fashion, will decide.  Once society agrees to a small group of people who get to pick winners and losers, what we know as government, the polity will degenerate quickly. Note it is not the poor, young, or immigrant in Hong Kong clamoring for minimum wage, since none of them expect to stay around long at the bottom rung.  It is the liberally educated foreignor, or those locals educated in Western Elite universities, desiring to be relevant to their alma mater, who clamor for "justice" (and a big fat sinecure to lead the poor.) The Russian revolutionaries were distressed to find the poor they so yearned to help were in fact the most reactionary element in society.  If the poor in Hong Kong had any say so, they would not change a thing. Poverty in Hong Kong is temporary, and largely voluntary. Minimum wage is one element of many that locks people permanently into place.

What will save Hong Kong is competition.  At any point during the Maoist era, China could have seized Hong Kong within hours, but Hong Kong was a valuable asset to the Communist Party.  As USA degenerates into an empire of torture, war, secret arrests, snooping, bailouts and so on, USA will need a Hong Kong just as the communist party had one in the original Hong Kong.  Where will the spoilers deposit their ill gotten gains, after alienating Switzerland?  Where will a Dick Cheney get proper heart care now that we have rationing of ever more deleterious service?  Where will Americans go to breathe easy, think clearly, speak freely and relax, in the coming decades, when their poverty makes them unwelcome visitors worldwide? USA will need a new Hong Kong, a Xin Xiang Gang.  I'd say carve out this special economic zone from what some people call Cascadia: Seattle, Tacoma and the Olympic peninsula.  Of course the issue of secession has been settled in USA, violently, so it would have to be so this new Hong Kong would be a negotiated arrangement, a tit for tat, an inescapable conclusion for the powers that be in post-freedom America.   新香港: 乐在此 爱在此!


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