Hong Kong Tinkering With Success

Milton Friedman's hypothesis that freedom is a prerequisite for human prosperity was very difficult to refute whenever he pointed to Hong Kong. This was a small country with very little natural resources but thrived as a colony in the last half of the 20th Century. And because empirical facts will beat ideology, few people would refute the claim that there is a connection between freedom and prosperity. Hong Kong elevated the role of enterprise to such a degree that its highest political governor bears the title of Chief Executive.

The Economist shows that Hong Kong is now adopting a series of policies that would be a reversal of what its free market credentials have been. Starting with the introduction of a minimum wages, there is an industrial policy in place and other regulations that show that the size of government is growing steadily. At the same time, the maintenance of state-favoured monopolies in gambling and subsidies to entertainment industries.  With the exception of the laws to sensibly regulate monopoly power, I am unsure that these regulations, populist as they are, would be good for Hong Kong's growth. Much Just as the article claims, the country that comes closest to truly open markets is gradually ending the experiment and teachers of economics will be the poorer for it.