DownsizeDC.org
January 30, 2006
If It Can Happen Over There, Why Not Here?
By James Wilson
Last week I learned of the death of Sir John Cowperthwaite, 90. You may ask, “Who?” I certainly did. But I soon found out that this British colonial administrator was one of the unsung heroes of the 20th century. According to the Telegraph, Cowperthwaite was Financial Secretary of Hong Kong throughout the 1960’s, creating “conditions for very rapid growth” and “laying the foundations of the colony's prosperity as an international business centre:”
Cowperthwaite himself called his approach "positive non-intervention". Personal taxes were kept at a maximum of 15 per cent; government borrowing was wholly unacceptable; there were no tariffs or subsidies. Red tape was so reduced that a new company could be registered with a one-page form. Cowperthwaite believed that government should concern itself with only minimal intervention on behalf of the most needy, and should not interfere in business. In his first budget speech he said: "In the long run, the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralised decisions of a government, and certainly the harm is likely to be counteracted faster."
(Let’s remind ourselves that the people of Hong Kong didn’t pay federal, state, and local taxes; the maximum 15% tax rate mentioned above were not just for one layer of government, it was all that they had to pay.) What happened during Cowperthwaite’s ten years as Financial Secretary of Hong Kong? Despite minimal government spending on health and education,“statistics for mortality and disease showed steady improvement,” with
a 50 per cent rise in real wages, and a two-thirds fall in the number of households in acute poverty. Exports rose by 14 per cent a year, as Hong Kong evolved from a trading post to a major regional hub and manufacturing base.
By 1971, when Cowperthwaite retired, the government reported that Hong Kong had become a "stable and increasingly affluent society comparable with the developed world in nearly every respect.” Cowperthwaite was both modest and correct when he said, "I did very little. All I did was to try to prevent some of the things that might undo it." If Cowperthwaite’s policies of small government, balanced budgets, low taxes, and minimal regulation could lead to the rapid turnaround of a previously impoverished urban colony, think of what they could accomplish in an already-wealthy and large country such as ours! Once DC is downsized, the potential for human progress and prosperity is almost beyond comprehension.
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