Caught Between a Rock and a Hard Place
By Amy Willis
Had you ever heard of John Cowperthwaite before this episode? This week’s guest, author Neil Monnery, dubbed him the Architect of Prosperity, and he’s not alone in his admiration. Cowperthwaite was the British civil servant who served in Hong Kong in the post-war era, and is widely credited with fostering Hong Kong’s tremendous economic success, in such stark contrast to its closest neighbor, China, to whose control it was returned in 1997. Hong Kong found itself, as Monnery describes, between a rock and a hard place.
So who was this man we so seldom hear about? What were the ideas and plans he favored, and how did they enable Hong Kong to trhive?
1- Monnery describes how Hong Kong became an important exporter of textiles and yarn, which caused political challenges, especially for U.S. and the U.K. What was the nature of the challenge they faced as ostensibly free trade nations?
2- Monnery says that one of Cowperthwaite’s key beliefs was not to provide welfare to the middle class and the rich. Why? Monnery also notes that Hong Kong did provide public goods under Cowperthwaite, including education and housing. How was this consistent with this key belief?
3- Roberts quotes Cowperthwaite from Monnery’s book: “I cannot myself see any grounds for the belief that a twenty-four hour domestic water supply is an inalienable right of civilized man. It may be, if he can afford it and is prepared to pay the price.” To what extent do you find this a reasonable political statement? How likely is it that a politician today would be able to make the same argument? Explain.
4- What was “the dog that doesn’t bark,” under Cowperthwaite, according to Monnery? (Hint: You might want to have a look at this Econlib article by David Henderson.)
5- Many of Cowperthwaite’s tax policies were discussed throughout the conversation. Which did you find most interesting, and why?
6- Cowperthwaite is described as a “bureaucrat’s bureaucrat.” As Roberts asked Monnery, what was success for him? What were the incentives he faced? To what extent does Cowperthwaite’s administration suggest a model for good governance? Explain.