Wrong Kong

A trail of thought that got lost somewhere... not that you would care. But I'll post it anyway.

Hong Kong has been consistently voted the "freest economy in the world." In other words, this means minimal intervention in the economy by the government, a move coined "positive nonintervention" that is so admired by the likes of Milton Friedman (and other U of C economists, I'm sure).

If you cared to read the above link, you will easily find the reason why Hong Kong is so successful: lots of big money merchants who fled from Shanghai to HK from communism being able to do whatever they want with their money and resources with minimal intervention. This is consistent with capitalism theories on the most efficient use of money leads to the best developments in the economy. Note that the key ingredient: big money people fleeing to Hong Kong.

Yet nowadays, when I read newspapers in Hong Kong, there are complaints about everything: more freedom in elections, social services not enough, support for low income families not enough, healthcare not enough, too much pay for civil servants, too much collusion among big businesses, more support on education, reduce monopoly prices on electricity and transportation, focus on urban development undermines cultural sites, etc etc.

Therein lies one of the biggest ironies of my home country... if you are keeping tab: freest economy, limited political freedom, a very free press, and too much freedom in certain sectors of the economy.

The aforementioned complaints breaks down into this:
1. More political freedom
2. Spend more to support lower class, health care, education, etc
3. Don't collude with big business

In other words...
1. Government give us more political freedom
2. Government spend more on lower class
3. Government to suppress big business

The Hong Kong government is the favorite target of Hong Kong people (media?). I cannot argue with point 1 and 2. Note that the same people asking for 1 have been asking for the last 10 years without much push (real push... everybody wants it mentally... but nobody is moving for it... such is the Chinese culture). Those who want 2 also oppose an increase in tax to pay for it. Hm.

The next favorite son to blame: greedy big businesses. This is where I get most confused. As I wrote above, the success of Hong Kong has been the result of government not interfering with big business. Now people want the reverse. Part of the reason is that big business equals Chinese government (think about THAT irony!!) due to all the money that is made in the mainland. Part of the reason is us consumers don't want to be screwed over. Big business (read: China) is taking over and making us give them all our money!

What about the reverse: big business also gives us a lot of employment and money to spend! In fact, many economists oppose tax brackets because it encourages (in US anyway) people to play with deductibles and miss the tax bracket. Also dangerous is that it discourages business from spending the additional income on its employees because they have to pay taxes.

I wonder what the solution is. Increased government intervention runs against what made Hong Kong. At the same time, no intervention will fuel more cries from the people (media?). I believe the HK government should focus on education and healthcare. All the commercial stuff leave it up to the people and the media - they seem to have enough free time to protest against businesses. And perhaps they ought to know: it is not because the government is useless and passive (it could be... I just don't know), but also should consider that their passivity has propelled Hong Kong to its current prosperity.

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