The power of economic liberty

Hemingway & Gellhorn is an HBO biopic film about the love story and lives of two great 20th century journalists and novelists, Martha Gellhorn (1908-1998) and Ernest Hemingway (1899-1961). Gellhorn was no stranger to war, hunger, and disease—all of which she insisted on seeing with her own two eyes. In 1937, she was in Madrid and witnessed the dark end of the Spanish Civil War. In 1938, she was in Prague as millions of displaced Czechs, who were escaping from the Sudetenland after the Munich Agreement, crowded the train stations in search of food and shelter. In 1945, she accompanied the US Seventh Army as it liberated the Dachau concentration camp from the homicidal Nazis.

Gellhorn was one of the world’s first female war correspondents and feminists, as well as a force of nature. Her articles are invariably powerful and insightful. In her 1978 memoir, Travels with Myself and Another, she wrote about accompanying her new husband, Ernest Hemingway, on a trip to a war-torn Hong Kong in 1941. The city was on the front line, with the imperialist Japanese slowly gaining ground against Chiang Kai-shek’s Chinese Nationalists. Landing by plane in Hong Kong, she penned the following impressions of a starving city:

“The streets were full of pavement sleepers at night. The brothels were small square wood cubicles, lining a narrow passage; $2 a night per man per girl. The crimes were street vending without a license, and a fine no one could pay. These people were the real Hong Kong and this was the most cruel poverty, worse than any I had seen before. Worse still because of an air of eternity; life had always been like this, always would be. The sheer numbers, the density of bodies, horrified me. There was no space to breathe, these crushed millions were stifling each other.”

“When finally I visited a dank ill-lit basement factory where small children carved ivory balls within balls, a favorite tourist trinket, I could not bear to see any more. I had a mild fit of hysterics.”

“They look about 10 years old,” I shouted at the UC [Unwilling Companion = Ernest Hemingway]. ‘It takes three months to make one of those damned things, I think it’s eight balls within balls. They’ll be blind before they’re twenty. And that little girl with her tortoise. We’re all living on slave labor! The people are half starved! I want to get out, I can’t stand this place!’”

“UC considered me thoughtfully. ‘The trouble with you, M, is that you think everybody is exactly like you. What you can’t stand, they can’t stand. What’s hell for you has to be hell for them. How do you know what they feel about their lives? If it was as bad as you think they’d kill themselves instead of having more kids and setting of firecrackers.’”

“From agonizing over the lot of my Chinese fellow men, I fell into a state of hysterical disgust with hardly a pause. ‘WHY do they all have to spit so much?’ I cried. ‘You can’t put your foot down without stepping on a big slimy glob! And everything stinks of sweat and good old night-soil!’ The answer of course could be that spitting was due to endemic tuberculosis, and as for the stink, I had seen where and how the people lived. I knew I was being contemptible.”

Shortly after Gellhorn and Hemingway left, the city surrendered to the Japanese. British rule returned after the surrender of the Japanese in August 1945. Two years later, a young Scottish civil servant named John Cowperthwaite arrived in the colony to oversee its war torn economic development.

Sir John James Cowperthwaite (1915-2006), was the Financial Secretary of Hong Kong from 1961 to 1971. His introduction of free market economic policies are widely credited with turning postwar Hong Kong into a thriving global financial center. He was asked to find ways in which the government could boost the postwar economy but found it recovering swiftly without any government intervention. He took the lesson to heart and “positive non-interventionism” became the focus of his economic policy. “I came to Hong Kong and found the economy working just fine. So, I left it that way.” He refused to collect economic statistics to avoid officials meddling in the economy. His policies helped it to develop from one of the poorest places on earth to one of the wealthiest and most prosperous: “Low taxes, a business-friendly regulatory environment, a lack of state subsidies, lax employment laws, absence of government debt, and free trade are all pillars of the Hong Kong experience of economic development.”

Cowperthwaite’s hands off approach meant he was in daily battle against Whitehall and Westminster. The British government insisted on higher income tax in Singapore; when they told Hong Kong to do the same, Cowperthwaite refused. He was an opponent of giving special benefits to business: when a group of businessmen asked him to provide funds for a tunnel across Hong Kong harbor, he argued that if it made economic sense, the private sector would come in and pay for it. It was built privately. His economic instincts were revealed in his first speech as Financial Secretary: “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 centralized decisions of a government, and certainly the harm is likely to be counteracted faster.”

The 2018 Index of Economic Freedom ranks Hong Kong as both the freest economy in the world, a distinction it has held since this index began ranking countries over 20 years ago, and among the most prosperous places on earth.

While Hong Kong has its share of problems—not least is the Chinese government’s crackdown on freedom of speech—Hong Kong’s success has been astonishing. In 1950, an average citizen of the city earned 35 percent as much as an average citizen of Hong Kong’s colonial master, Great Britain. In 2017, an average citizen of Hong Kong earned 37 percent more than a typical Briton. The poverty that Gellhorn bemoaned is gone—thanks to economic freedom and peace.

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Topics: artha Gellhorn , Ernest Hemingway , John James Cowperthwaite , Economic liberty , economy

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