Architect of Prosperity

Monnery, a former consultant, wrote a biography of John Cowperthwaite, the colonial civil servant who served as Hong Kong's Financial Secretary from 1961 to 1971 and who presided over the policy framework during the territory's fastest growth.

The policy positions Cowperthwaite held are the substance. He refused industrial policy, declining to subsidise or protect any sector on the argument that officials could not identify which industries would succeed and would prevent capital moving to those that did. He kept public spending and taxation very low, resisting pressure to expand both, and insisted on balanced budgets and reserves. He maintained free trade and free capital movement. He refused to intervene in the currency or in prices. He declined to collect detailed national income statistics, on the stated ground that having them would create pressure for officials to act on them.

Monnery presents the outcome: Hong Kong's income per head rose from a fraction of Britain's to exceeding it within a few decades, with the growth coming from manufacturing, trade and later financial services, driven by refugee entrepreneurs and by capital fleeing the mainland.

Monnery is careful to note what Cowperthwaite did do: substantial public housing, which by the 1970s housed a large share of the population, education spending, and the maintenance of a competent and non-corrupt civil service. He also notes the qualifications: government owned all the land, which supplied revenue in place of taxation, and the territory's position as an entrepot for China was specific and not replicable.

The book is admiring and the framing is the free-market case. It gives less weight to the housing policy's scale, to the inequality that persisted, and to the argument that Hong Kong's growth reflected its unique position rather than its policy framework. Readers should treat it as advocacy supported by an interesting record.