“The inherent vice of
capitalism is the unequal sharing of blessings. The inherent virtue
of Socialism is the equal sharing of miseries.”
Winston S. Churchill
Having spent the last two weeks in Dongguan, the need to escape the constant and very wearying airborne pollution has led me into taking a trip 70 miles South to the former British colony of Hong Kong. As I sit here in the Hebe Haven Yacht Club comfortably pondering the direction of this particular post, I find gazing thoughtfully across a quiet and pleasant harbour in one of the quieter recesses of the New Territories. This place does indeed have a very British feel to it, as one looks around it becomes immediately apparent that the majority of the guests are ex-pats though, given their ages, one would guess the majority have only come to Hong Kong in the last few years. The place feels quite swanky and the clientèle well-heeled, even if many of them seem to be wearing yachting plimsolls at the moment.
Although times are challenging generally, my impression of Hong Kong is one of long term success. Indeed, it seems that the economy here has been happily growing for at least the last fifty years or so. Way back in the early sixties, the former Crown colony was fortunate enough to have been the used as something of a petri dish for an economic experiment. It was largely overseen by one John James Cowperthwaite, a British civil servant who was given the role of Financial Director for Hong Kong in 1961. He remained in this position for the next decade during which time the colony went from being something of economic basket case to a thriving, successful and wealthy enclave within which opportunity and entrepreneurship thrived.
One may wonder exactly what it was that Cowperthwaite did in order to instigate such a miracle? Strangely, the answer to that question is better given by highlighting what he chose not to do than by illustrating any changes that he instigated. Cowperthwaite believed that for economy to succeed the most beneficial thing that a given governing authority could do was simply get out of the way. He was convinced that a positive attitude of non-intervention was the best thing a government could do to further economic growth. Famously, he even went so far as to instruct his civil servants not to collect statistics for fear that such an operation would lead to them being tempted to interfere. Essentially, this was laissez-faire capitalism at its most blatant. The subsequent success is hard to argue with.
In this view, the essential job of governance is to defend a country if necessary, ensure that basic law and order is upheld (the prevention of force being used by one citizen or group of citizens on another) and, apart from such fundamentals, interfere with the economic life of the society as little as possible.
It is interesting to compare the results with another location that was going through similarly drastic changes at the time, which also had a huge and unfriendly neighbour on its doorstep, but chose the polar opposite system to laissez-faire capitalism. Cuba, after the revolution of 1959, adopted socialism, centralism and government controlled economic policies. Today, it is clear that the experiment has not gone well. The country went from being being successful, if somewhat corrupt, economy to the current complete disaster whereby the very fabric of the infrastructure is in constant danger of complete collapse.
Personally, to admit that state interference in economics doesn’t work comes hard to me. From the time I became interested in politics as a very callow youth (my callowness was legendary) I had, up until recent times, always favoured left-wing views, sometimes despite the evidence of my own experiences. It has taken a long, long time for me to realise that my idealism is not supported by the facts.
Many, many moons ago, on one of my earliest adventures, I had visited the former Soviet Union. This was a couple of years before its eventual collapse but it was all too obvious even then that the basic standard of living was far, far below that which we were enjoying in the West. The people of the USSR also suffered constant strictures and controls as ‘the Party’ succumbed, as is so often does in socialist or communist states, to the paranoid temptation to meddle and interfere with every aspect of people’s existence.
Despite this experience, over the years my idealistic sympathies continued to be socialist but, as I looked around one’s own society and others that I experienced on various sojourns, it was becoming clearer and clearer that socialism was often the cause of economic woes rather than the cure.
Perhaps in recent times the most obvious example of this is that of Venuzuela, an oil and mineral rich country blessed with superbly arable farmlands to boot. It seemed to be an almost ideal country for a long term socialist experiment. Amidst much flag waving and sloganising, the government of Hugo Chavez was held up by the left of an exemplar of what such policies could achieve. Unfortunately, as has invariably happened time and time again, the inevitable control-freakery, the corruption, the de-motivation of the work force, and all the other evils of socialism set in. Currently Venezuela is on the edge of anarchy with daily food shortages and disintegration of even the basic structure of the society.
One fears that the lesson will be short-lived and much the same thing will happen again. As ever, it will be launched in a flurry of flag waving, drum banging and worthy idealism, but end in societal and economic collapse, despotism and violence. At some stage the realisation has to set in: socialism simply does not work.
Such lessons as Hong Kong were not lost on a certain Deng Xiao Ping, effectively the Chinese leader following the demise of Mao Tse-Tung in 1976. Deng had witnessed first hand the previous three decades of stagnation, starvation and idealistic but useless posturing and the damage it had done to China under Mao. He gazed across the border to the miracle of Hong Kong, drew the obvious conclusions, and decided to create the very first special economic zone in Shenzhen, Guangdong Province in 1979. The experiment was so successful that it was rolled out across the rest of China over the next two decades and led to the freeing of countless millions of people from the grinding poverty that they had experienced previously under communism. Of course, being nominally the “Communist” Party of China, the leaders couldn’t admit the reality, so to this day we hear the endless verbiage about this experiment being a step on the road to a socialist utopia but… beyond the tiresome rhetoric, the current crop of leaders understand the underlying reality.
Back in the Hebe Haven Yacht Club, the waitress brings a fresh cup of Americano to finish off what has been a very pleasant lunch. The view is wonderful, tiny boats bobbing about the harbour with islands dotting the bay beyond, the surrounding comfortable and the spot ideal to reflect on such matters. Perhaps, as we started this week’s effort with a quote from a very influential 20th century British politician, it would be fitting to let him have the last word too (although this particular pearl of wisdom may be apocryphal, there are many versions on the internet):
“If a man is not a socialist by the time he is 20, he has no heart. If he is not a capitalist by the time he is 40, he has no brain.”
Winston S. Churchill
Having spent the last two weeks in Dongguan, the need to escape the constant and very wearying airborne pollution has led me into taking a trip 70 miles South to the former British colony of Hong Kong. As I sit here in the Hebe Haven Yacht Club comfortably pondering the direction of this particular post, I find gazing thoughtfully across a quiet and pleasant harbour in one of the quieter recesses of the New Territories. This place does indeed have a very British feel to it, as one looks around it becomes immediately apparent that the majority of the guests are ex-pats though, given their ages, one would guess the majority have only come to Hong Kong in the last few years. The place feels quite swanky and the clientèle well-heeled, even if many of them seem to be wearing yachting plimsolls at the moment.
Although times are challenging generally, my impression of Hong Kong is one of long term success. Indeed, it seems that the economy here has been happily growing for at least the last fifty years or so. Way back in the early sixties, the former Crown colony was fortunate enough to have been the used as something of a petri dish for an economic experiment. It was largely overseen by one John James Cowperthwaite, a British civil servant who was given the role of Financial Director for Hong Kong in 1961. He remained in this position for the next decade during which time the colony went from being something of economic basket case to a thriving, successful and wealthy enclave within which opportunity and entrepreneurship thrived.
One may wonder exactly what it was that Cowperthwaite did in order to instigate such a miracle? Strangely, the answer to that question is better given by highlighting what he chose not to do than by illustrating any changes that he instigated. Cowperthwaite believed that for economy to succeed the most beneficial thing that a given governing authority could do was simply get out of the way. He was convinced that a positive attitude of non-intervention was the best thing a government could do to further economic growth. Famously, he even went so far as to instruct his civil servants not to collect statistics for fear that such an operation would lead to them being tempted to interfere. Essentially, this was laissez-faire capitalism at its most blatant. The subsequent success is hard to argue with.
In this view, the essential job of governance is to defend a country if necessary, ensure that basic law and order is upheld (the prevention of force being used by one citizen or group of citizens on another) and, apart from such fundamentals, interfere with the economic life of the society as little as possible.
It is interesting to compare the results with another location that was going through similarly drastic changes at the time, which also had a huge and unfriendly neighbour on its doorstep, but chose the polar opposite system to laissez-faire capitalism. Cuba, after the revolution of 1959, adopted socialism, centralism and government controlled economic policies. Today, it is clear that the experiment has not gone well. The country went from being being successful, if somewhat corrupt, economy to the current complete disaster whereby the very fabric of the infrastructure is in constant danger of complete collapse.
Personally, to admit that state interference in economics doesn’t work comes hard to me. From the time I became interested in politics as a very callow youth (my callowness was legendary) I had, up until recent times, always favoured left-wing views, sometimes despite the evidence of my own experiences. It has taken a long, long time for me to realise that my idealism is not supported by the facts.
Many, many moons ago, on one of my earliest adventures, I had visited the former Soviet Union. This was a couple of years before its eventual collapse but it was all too obvious even then that the basic standard of living was far, far below that which we were enjoying in the West. The people of the USSR also suffered constant strictures and controls as ‘the Party’ succumbed, as is so often does in socialist or communist states, to the paranoid temptation to meddle and interfere with every aspect of people’s existence.
Despite this experience, over the years my idealistic sympathies continued to be socialist but, as I looked around one’s own society and others that I experienced on various sojourns, it was becoming clearer and clearer that socialism was often the cause of economic woes rather than the cure.
Perhaps in recent times the most obvious example of this is that of Venuzuela, an oil and mineral rich country blessed with superbly arable farmlands to boot. It seemed to be an almost ideal country for a long term socialist experiment. Amidst much flag waving and sloganising, the government of Hugo Chavez was held up by the left of an exemplar of what such policies could achieve. Unfortunately, as has invariably happened time and time again, the inevitable control-freakery, the corruption, the de-motivation of the work force, and all the other evils of socialism set in. Currently Venezuela is on the edge of anarchy with daily food shortages and disintegration of even the basic structure of the society.
One fears that the lesson will be short-lived and much the same thing will happen again. As ever, it will be launched in a flurry of flag waving, drum banging and worthy idealism, but end in societal and economic collapse, despotism and violence. At some stage the realisation has to set in: socialism simply does not work.
Such lessons as Hong Kong were not lost on a certain Deng Xiao Ping, effectively the Chinese leader following the demise of Mao Tse-Tung in 1976. Deng had witnessed first hand the previous three decades of stagnation, starvation and idealistic but useless posturing and the damage it had done to China under Mao. He gazed across the border to the miracle of Hong Kong, drew the obvious conclusions, and decided to create the very first special economic zone in Shenzhen, Guangdong Province in 1979. The experiment was so successful that it was rolled out across the rest of China over the next two decades and led to the freeing of countless millions of people from the grinding poverty that they had experienced previously under communism. Of course, being nominally the “Communist” Party of China, the leaders couldn’t admit the reality, so to this day we hear the endless verbiage about this experiment being a step on the road to a socialist utopia but… beyond the tiresome rhetoric, the current crop of leaders understand the underlying reality.
Back in the Hebe Haven Yacht Club, the waitress brings a fresh cup of Americano to finish off what has been a very pleasant lunch. The view is wonderful, tiny boats bobbing about the harbour with islands dotting the bay beyond, the surrounding comfortable and the spot ideal to reflect on such matters. Perhaps, as we started this week’s effort with a quote from a very influential 20th century British politician, it would be fitting to let him have the last word too (although this particular pearl of wisdom may be apocryphal, there are many versions on the internet):
“If a man is not a socialist by the time he is 20, he has no heart. If he is not a capitalist by the time he is 40, he has no brain.”
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