Interesting article here shared by a friend, Andrew Work, co-founder of Lion Rock Institute (LRI), a free market think tank in Hong Kong. He is also the CEO and Publisher of New Work Media, which publishes Harbour Times, among others.
When Andrew was Executive Director of LRI, he would often mention to us Mr. John Cowperthwaite, the main architect of Hong Kong's free trade, free market philosophy and public policy. Today, Andrew posted this article in his facebook page, No Statistics, No Mischief
by Andrew Ferguson, about the man.
Reposting portions of it here, original article is 2,000+ words. I like this story, hope you will enjoy it too.
... The name is familiar to economic historians, academics in
postcolonial studies, specialists in the tax policy of the Far East, and avid
libertarians, but less well known to normal people. Cowperthwaite was a
lifelong government bureaucrat who should be lionized by anyone who loathes and
fears bureaucracies. In 1945, as a member of His Majesty’s colonial
administrative service, he was sent to Hong Kong, which was then (and remained
until 1997) a British protectorate. Hong Kong was in bad shape at the end of
the war. Things only got worse when hundreds of thousands of refugees streamed
in as the Chinese Revolution raged next door.
Cowperthwaite rose through the ranks and became financial
secretary of the colony in 1961. For the next 10 years he had near-total
control over the economic laws and regulations governing Hong Kong. By the time
he left office, in 1971, the number of Hong Kongers in poverty had dropped by
two-thirds, average wages had risen 50 percent, and Hong Kong had gone from one
of the poorest places on earth to one of the richest.
Hong Kong’s rise seems almost miraculous today, and
surely the envy of any maker of economic policy. (US Fed) Chairman Yellen,
unlike Cowperthwaite, is a determined advocate of the redistribution of wealth
and other governmental manipulations that are guaranteed to make us happier,
healthier, and more wonderful generally….
Cowperthwaite took as financial secretary…. keeping a
flat income tax rate of 15 percent, deregulating nearly every enterprise that
caught his attention, nullifying labor laws, and dismantling barriers to
imports and exports—are things that Yellen, as Fed chairman, couldn’t do even
if she wanted to, which she wouldn’t.
Instead, Chairman Yellen should contemplate another of
Cowperthwaite’s initiatives. Asked once what the greatest and farthest-reaching
policy of his tenure was, he replied: “I abolished the collection of
statistics.” If only in this regard, Chairman Yellen, who will sit atop a vast
apparatus built primarily for the gathering of statistics, could do us all a
favor by following the Cowperthwaite Way. It’s true that there will suddenly be
many unemployed economists wandering around Washington, D.C. But this is only
one of the potential benefits.
Cowperthwaite wasn’t anti-intellectual; he did not scorn
statistics. The figures gathered by the International Monetary Fund are the
most eloquent testimony to Hong Kong’s achievement in the Cowperthwaite era. As
far as he knew, in his day statistics were being compiled all over the colony.
He just didn’t want to know what they were. More precisely, he didn’t want
other economic policymakers to know he knew what they were. He refused to allow
government money to be spent cooking them up. Otherwise, he reasoned, “I might
be forced to do something about them.”
The connection between statistics and mischief is
indissoluble. He explained himself to a gathering of legislators who were
pressing him for figures on the colony’s gross domestic product—a term of art
that everyone uses but no one can usefully define…
At other times Cowperthwaite suggested the causality
works the other way around: Statistics themselves are what create, or at least
justify, high taxation and other interventions in the economy. In a way it’s a
supply-side problem, if you’ll forgive the expression. Say’s law tells us that
supply creates its own demand. A supply of statistics will spontaneously
generate a flock of people who will want to study them, and who, having studied
them, will reach conclusions about them, and then, still worse, will want to
shape their conclusions into government policy that will tug the citizenry this
way or that, distracting workers and businessmen alike from the important task
of minding their own business.
One of the honourable Members who spoke on this subject
said outright, as a confirmed planner, that he thought that [economic
statistics] were desirable for the planning of our future economic policy. But
we are in the happy position, happier at least for the Financial Secretary,
where the leverage exercised by Government on the economy is so small that it
is not necessary, nor even of any particular value, to have these figures
available for the formulation of policy. We might indeed be right to be
apprehensive lest the availability of such figures might lead, by a reversal of
cause and effect, to policies designed to have a direct effect on the economy.
I would myself deplore this….
Stripped of his numbers an economist would have to resort
to the old home truths about how the world works: If you tax something you get
less of it; as a general rule an individual manages his own affairs better than
his neighbor can; it’s rude to be bossy; the number of problems that resolve
themselves if only you wait long enough is far larger than the number of
problems solved by mucking around in them. And the cure is often worse than the
In the long run, the aggregate of the decisions of individual
businessmen, exercising individual judgment in a free economy, even if often
mistaken, is likely to do less harm than the centralized decisions of a
Government; and certainly the harm is likely to be counteracted faster.
Somehow the most successful practical economist of the
twentieth century knew this was true, and he didn’t have to work out a single
Andrew Ferguson is a senior editor at
Lion Rock 5: Free Will vs. Power Over Others, December 26, 2012
Lion Rock 11: Barun Mitra on Democracy, Reading Salon 2013, October 28, 2013
EFN Asia 31. Friends in the Asian Free Market Movement, November 07, 2013