The news of the year 2011 has been dominated by economics.  I would venture to guess that 2011’s top ten news stories will include at least 5 that concern the world economy.  Of those, most, if not all, will be stories associated with government action or inaction related to economic woes.

In all the writing and investigation about failed economies, busted budgets, bank failures, austerity measures and the like, one story seems to have been lost in the noise.   Though most governments continue to  struggle to “solve” economic problems, you will rarely see a story about Sir Jonathan Cowperthwaite who died in January of 2006.   In 2011, we note that five years have passed since his death and yet it appears no government has yet learned from his legacy.  This should be news.

Who was Sir Jonathan Cowperthwaite?

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Cowperthwaite presided over what may be the most significant economic miracle of our time.  From 1961 to 1971, he was Hong Kong’s Financial Secretary.  He set the plan, developed the policies and administered the finances of the British Colony in the critical post war years.  During his reign, Hong Kong’s people benefitted greatly.  Real wages increased by half in ten years.  Poverty, as measured by the number of households below the poverty line, dropped by a third.  All this was done while Hong Kong was being overrun by refugees from Mainland China, large numbers of whom were aged or ill.  After his time in office, his policies were largely followed until Hong Kong was absorbed into China in 1997.  Hong Kong was known for its strong economy, free trade and minimal government intervention in the economy.  Blame Sir Jonathan Cowperthwaite.

How did he do it?  Basically, he and the British Colonial Government got out of the way.  As he described his philosophy, “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.”

Sir Jonathan Cowperthwaite will be missed.  The fact that almost all governments have failed to learn from him is a tragedy of the first order.

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