Hong Kong: Statist at Heart?
By Bryan Caplan
Hong Kong has had the freest economy in the world since 1970, the earliest year covered by the Economic Freedom of the World data set. Indeed, it’s higher now under the Communists than it was in 80’s! And it’s hard to deny that Hong Kong has been an economic miracle since World War II. So even though Hong Kong was not a democracy before the Communist takeover, it’s very tempting to believe that the people of Hong Kong would have voted to retain (if not initially adopt) the free-market policies they had.
“Public Attitude toward Laissez Faire in Hong Kong,” a fascinating but overlooked 1990 paper by Lau Siu-kai and Kuan Hsin-chi (Asian Survey 30(8): 766-81, available on Jstor with subscription) shows this is just wishful thinking. Admittedly, the public in Hong Kong strongly supports the label of laissez-faire (literally translated as “noninterventionist economic policy”). When asked how they felt about the laissez-faire policy of the Hong Kong government, 1.8% strongly disagreed, 22% disagreed, 54% agreed, and 3.5% strongly agreed. I doubt you’d see numbers like that in the U.S.
But it turns out that Hong Kong’s support for laissez-faire is only skin-deep. As soon as you ask people their opinions about specific interventionist policies – all of which, note the authors, “have either not been performed by the government or performed only very light or rarely,” they show their true statist colors. A few examples:
Functions SD D A SA Legislate minimum wage .8% 33.3% 54.3% 3.3% Control price of daily necessities .5% 26% 59.8% 8.6% Tax rich more to reduce economic inequality .3% 15.9% 57.8% 16.9% Protect local industry against .5% 13.9% 70.7% 4.8% foreign competition (SD="strongly disagree"; D="disagree"; A="agree"; SA="strongly agree")
To be blunt, it looks like the lack of democracy under British rule was a key component of Hong Kong’s ascent. The policies worked wonders, but they never became democratically self-sustaining. In politics, people often resist policy change just because “things have always been this way,” even if the results were never very good. But free-market policies apparently labor under a greater political handicap. Even if “we’ve always left these things to the free market,” even if leaving things to the free market has worked in the past, it just isn’t enough to win over public opinion.
Countless market-oriented intellectuals idolize Hong Kong but I’ve never heard of, much less met, a Hong Kong libertarian. Google confirms my impression, returning no relevant hits for “Hong Kong libertarian.” I’d like to think, then, that Hong Kong’s problem was a shortage of libertarian intellectuals to transform freedom by default into freedom on principle. But sadly, I suspect that wouldn’t have been enough either.