Monday, June 03, 2019

Lion Rock 27, Conduct and HK is not a corporation

Two nice articles last year by Nick Sallnow-Smith, former Chairman of the Lion Rock Institute. I like them, reposting but slightly clipped.

2018-07-24 / Nick Sallnow-Smith

For the high summer months of July and August I want to offer a pair of articles. The first entitled as above, the second will ask the question “Is Hong Kong a Commune?” (Spoiler alert – the answer in both cases is “no”!)

Now before you answer testily “of course not” to the question I pose, let me offer some thoughts on why I believe many people discuss our city as if it were a corporation. The first step in the erroneous chain of reasoning is to treat Hong Kong as a single entity. It is commonplace to read of Hong Kong’s “lack of competitiveness”; or that Hong Kong is “too expensive”. Some businesses may not be competitive in their segment, some items may be too expensive. Yet others may be very competitive and some very cheap. Hong Kong is not a singularity. But the metaphor of the corporation goes beyond this. Think of the many times you have read comments about Hong Kong’s “workforce”. A company has a “workforce” whereby people are contracted to provide a specific service for a salary. Hong Kong does not employ us. We have entered into no contract with the state. Yet the Administration regularly wrings its metaphorical hands about how to get more housewives/the elderly into the “workforce”, as if the city has a contract to fill and does not have the labour to complete it. The demographic debate is couched in the same terms. “We” need to boost fertility so that the “workforce” does not age too rapidly.

Education policy is framed in the same way. Are our universities producing the right graduates for “Hong Kong’s” purposes? But what are those purposes? The unspoken assumption is that the city’s purposes are somehow unitary and reflect a consensus. This is an error. In a free society, each citizen can have purposes but the city cannot. If the Administration attempts to impose unitary purposes on the rest of us, this is tantamount to a totalitarian society. What each child wishes to study, what direction they wish to follow in life, whether at my age I wish to work or not, whether a mother wishes to take a paid job or not: these are all free choices (or should be). Their aggregate effect should be what characterises Hong Kong, not a top down imposed blueprint.

It grieves me when I see business chambers routinely pleading with Government to come up with a “vision” for the future, with a better “plan” for Hong Kong to make it “competitive”, to give it a “purpose”. Perhaps because in their own businesses these questions make complete sense, they are tempted to project onto public policy the same way of thinking. What they miss is that if a monolithic top down “vision” is imposed on the city, many businesses’ own visions will become much more difficult to achieve. If you are in the IT sector and fail to win a subsidy while you competitor does, for example….

The political consequence of this is that, rather than making their own decisions about their lives, many citizens spend their time and energy fighting over what the top down policy should be. How the Board of Directors is selected becomes a huge issue, as it should be in a true corporation. Questions of where the minimum wage should be set; how much the MPF deduction should be; whether bus fares should rise; whether Uber/AirB&B should be “permitted” , what should be taught in government schools and so on? Political division and dissension about any top down policies of this sort is inevitable.

In a real corporation, if you as shareholder do not like the direction taken by the appointed Board, you can sell your shares and invest elsewhere. In a city you cannot do so. You have no exit (unless you have money and a foreign passport).

The metaphor of a corporation for a city is not only wrong but dangerous. Instead of COHK (the Corporation of Hong Kong), let’s please think of ourselves as COHK (the Community of Hong Kong).

2018-06-26 / Nick Sallnow-Smith

You will have to be patient for a couple of paragraphs before I arrive at explaining the title for my thoughts this month. My route to it begins with a quick reprise of the difference between “natural law” and what I will term “code law”, for the purposes of this piece.

By natural law, I mean those restrictions which have arisen in virtually every human society, and without which a community could not survive in the longer term: prohibitions against murder, theft and fraud. At root, these rules are based on every free human being able to do with his own body and personal possessions what he feels is in his best interests, without interference from others. It is the root of freedom. Therefore the only restriction on you as a free citizen is not to coerce others. In the words of Leonard Reed: “anything peaceful”.

It would be a rare human being who would feel such natural laws were “unjust”. Indeed that is why they are called, and feel, “natural”. By contrast, many laws invented by legislators will regularly be regarded as “unjust” by some, yet not by others (take for example those laws here that make Uber illegal). Code law like this usually involves the state coercing at least some in the community (in my example, Uber drivers) to favour other groups. All taxes do this as well.

From a libertarian viewpoint, this is not acceptable and indeed not “just”. However, at least this type of law can be clearly defined (though it often is not) and therefore predictable. One can regret it but at least manage one’s life around it. This typically applies to all regulations as well as statutes (although in many sectors in Hong Kong interpreting the meaning of the multitude of regulations can involve turning to expert consultants to find out what you are permitted to do or not). They may be regrettable but are at least predictable. Our daily lives as citizens are constrained as to what we are “permitted to do” by our government but at least if we stay within those boundaries we can relax. Or at least we could; no longer I fear….

Life is made productive and enjoyable by making our own contributions, not by spending time and energy blaming others for any social outcomes that do not please us. My hope is that more of us might “conduct” ourselves by focussing on the freedoms of the former rather than on limitations of the latter.

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