John James Cowperthwaite: Government

“If people want consultative government, the price is increased complexity and delay in arriving at decisions. If they want speed of government, then they must accept a greater degree of authoritarianism. I suspect that the real answer is that most people prefer the latter so long, that is, as government’s decisions conform with their own views.”

John James Cowperthwaite

March 27, 1968, page 215.
Official Report of Proceedings of the Hong Kong Legislative Council

People , Decision , Speed

“One trouble is that when Government gets into a business it tends to make it uneconomic for anyone else.”

John James Cowperthwaite

February 27, 1963, page 47.
Official Report of Proceedings of the Hong Kong Legislative Council

Business

“I still believe that, in the long run, the aggregate of the decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is likely to do less harm than the centralized decisions of a Government; and certainly the harm is likely to be counteracted faster. As I said earlier in this debate, our economic medicine may be painful but it is fast and powerful because it can act freely.”

John James Cowperthwaite

March 24, 1966, page 216.
Official Report of Proceedings of the Hong Kong Legislative Council

Pain , Exercises , Decision

“I will not be proposing a course which has been under some public discussion recently — deficit financing. It is wholly inappropriate to our economic situation. In its least extreme form it is based on the theory that additional money generated by a Government deficit (and given currency, as necessary, by use of the printing press) will stimulate consumption and thereby production, in time to match the excess money with goods before real inflationary harm is done. Unfortunately we don't, and can't, produce more than a small fraction of what we consume, and increased consumption would merely mean increased imports without matching exports; and a severe balance of payment crisis, which would destroy Hong Kong's credit and confidence in the Hong Kong dollar; and which we could not cure without coming close to ruining ourselves. Keynes was not writing with our situation in mind. In this hard world we have to earn before we spend.”

John James Cowperthwaite

February 27, 1963, page 50.
Official Report of Proceedings of the Hong Kong Legislative Council

Money , World , Confidence , Time

“Many of our services cost more than do similar services in Europe, because, although we have a substantial quantitative deficiency of public services, the decision-takers and policy-makers, both inside and outside Government as I have said before today, being themselves from the better-off (to use a popular euphemism) sectors of our society, not only demand the highest standards of provision of public services to meet what they consider their own essential needs (for example, in public car parks); but also find it difficult to think of provision for the rest of the population in terms of standards relative to our real total resources.”

John James Cowperthwaite

February 24, 1966, page 72.
Official Report of Proceedings of the Hong Kong Legislative Council

Cars , Thinking , Decision

“Official opposition to overall economic planning and planning controls has been characterized in a recent editorial as "Papa knows best". But it is precisely because Papa does not know best that I believe that Government should not presume to tell any businessman or industrialist what he should or should not do, far less what he may or not do; and no matter how it may be dressed up that is what planning is.”

John James Cowperthwaite

March 30, 1962, page 133.
Official Report of Proceedings of the Hong Kong Legislative Council

“I find odd the view that a Government institution is better placed to evaluate "the technical and financial viability" of a project than a commercial bank. It may well be that our banks are deficient in the kind of expertize required for assessing projects but then what we should be doing is encouraging banks to acquire such expertize or to make use of outside, commercial, expertize. I do not believe in any case that a Government machine can provide a reliable judgement on such matters, an opinion the banking members of the committee appear to have shared, for they have prudently refused to commit themselves to accepting its advice. I myself tend to mistrust the judgement of anyone not involved in the actual process of risktaking.”

John James Cowperthwaite

October 9, 1970, page 117.
Official Report of Proceedings of the Hong Kong Legislative Council

Appearance

“There was a plea from honourable Members relating to the need for formal Gross National Product figures. Such figures are very inexact even in the most sophisticated countries I think they do not have a great deal of meaning, even as a basis of comparison between economies. That other countries make use of them is not, I think, necessarily a good reason to suppose that we need them. But, although I am not entirely clear what practical purpose they would serve in Hong Kong, I am sure they would be of interest. I suspect myself, however, that the need arises in other countries because high taxation and more or less detailed Government intervention in the economy have made it essential to be able to judge (or to hope to be able to judge) the effect of policies, and of changes in policies, on the economy. One of the honourable Members who spoke on this subject, said outright, as a confirmed planner, that he thought that they were desirable for the planning of our future economic policy. But we are in the happy position, happier at least for the Financial Secretary where the leverage exercised by Government on the economy is so small that it is not necessary, nor even of any particular value, to have these figures available for the formulation of policy. We might indeed be right to be apprehensive lest the availability of such figures might lead, by a reversal of cause and effect, to policies designed to have a direct effect on the economy. I would myself deplore this.”

John James Cowperthwaite

March 25, 1970, page 495.
Official Report of Proceedings of the Hong Kong Legislative Council

Hope , Exercises , Thinking , Change

“I largely agree with those that hold that Government should not in general interfere with the course of the economy merely on the strength of its own commercial judgment. If we cannot rely on the judgment of individual businessmen, taking their own risks, we have no future anyway.”

John James Cowperthwaite

March 24, 1966, page 215.
Official Report of Proceedings of the Hong Kong Legislative Council

Future

“Deficit financing proper is rather the process whereby a Government spends more money that it withdraws from the economy by taxation, borrowing, running down reserves, etc.; thereby causing in most circumstances, and very acutely in ours, monetary inflation and severe pressure on the balance of payments.”

John James Cowperthwaite

March 29, 1967, page 249.
Official Report of Proceedings of the Hong Kong Legislative Council

Money

“One of the things that most surprises me about my honourable Friend’s remarks is that he characterizes his proposal for state intervention in, and control of, industry as “innovation and a spirit of adventure” and condemns free private enterprise as “prosaic precedent”. This is a strange paradox. I would put it precisely the other way round. What he advocates is based on the “prosaic precedent” of many of our rivals who have to resort to wooing industry with artificial aids and have had remarkably little success at it. Recent events have shown that enterprising spirits still prefer our economic freedom to the restrictive swaddling clothes offered elsewhere. Possibly I am a romantic in this but I, for one, do not believe that our spirit of adventure is in need of artificial stimulation — nor do I believe that we can afford the wasteful application of our scarce resources which they would entail—we are neither desperate enough, nor rich enough, for such expedients to make economic sense. It is, of course, all the fashion today to cry in any commercial difficulty, “why doesn’t the Government do something about it.””

John James Cowperthwaite

But I would rather go back to the old days when even the most modest attempt by Government to intervene in commerce and industry was rudely rebuffed.
March 27, 1968, page 213.
Official Report of Proceedings of the Hong Kong Legislative Council

Way , Fashion , Sense , Freedom