Advertisements

The Man Behind the Hong Kong Miracle

freeman-HK

Some of us just write about libertarian ideas. This guy actually made them public policy for millions.

[Also see our EXCLUSIVE companion article “UNDERNEATH the “Hong Kong Miracle”]

For The FreemanLawrence W. Reed writes: Three cheers for Hong Kong, that tiny chunk of Southeast Asian rock. For the twentieth consecutive year, the Index of Economic Freedom—compiled by The Wall Street Journal and the Heritage Foundation—ranks Hong Kong (HK) as the freest economy in the world.

“Maybe this is why socialists don’t like to talk about Hong Kong: It’s not only the freest economy, it’s also one of the richest.”

Though part of mainland China since the British ceded it in 1997, HK is governed locally on a daily basis. So far, the Chinese have remained reasonably faithful to their promise to leave the HK economy alone. What makes it so free is music to the ears of everyone who loves liberty:  Relatively little corruption. An efficient and independent judiciary. Respect for the rule of law and property rights. An uncomplicated tax system with low rates on both individuals and business and an overall tax burden that’s a mere 14 percent of GDP (half the U.S. rate). No taxes on capital gains or interest income or even on earnings from outside of HK. No sales tax or VAT either. A very light regulatory touch. No government budget deficit and almost nonexistent public debt. Oh, and don’t forget its average tariff rate of near zero. That’s right—zero!

“Over a wide field of our economy it is still the better course to rely on the nineteenth century’s ‘hidden hand’ than to thrust clumsy bureaucratic fingers into its sensitive mechanism.”

— Sir John James Cowperthwaite, 1962

This latest ranking in the WSJ/Heritage report confirms what Canada’s Fraser Institute found in its latest Economic Freedom of the World Index, which also ranked HK as the world’s freest. The World Bank rates the “ease of doing business” in HK as just about the best on the planet. Read the rest of this entry »

Advertisements