Libertarianism, the cure for our financial problems

Sir John James Cowperthwaite KBE CMG
Bust of Sir John James Cowperthwaite

There are two different ways to run a society, socialism and libertarianism.

With libertarianism people are allowed to keep most of the money that they earn, they can then make their own choices about spending it on the goods and services that they want and need. The government provides services that individuals cannot provide for themselves, like national defence. And there are safety nets for those in society who are genuinely unable to provide for themselves.

It is with libertarianism that the United States of America grew to become the richest and most powerful nation on earth. Something that two successive profligate spending presidents have done their best to destroy.

With socialism people give a lot of what they earn to the state. In the UK this is currently about 50% on average with income tax, national insurance, VAT, excise duty and all the stealth taxes. The state then decides what goods and services to provide to that person. Usually under this system the state spends more than it can tax and has to borrow the difference, racking up huge debts that the citizens are liable for and which need huge interest payments.

It is pretty obvious that libertarianism works a whole lot better than socialism, people are just so much better than the state at spending their own money. And the state is incredibly inefficient at supplying anything, so the less that they supply the better the economy works.

It is mainly socialism that has dragged Great Britain down from being the richest nation on earth and that has destroyed many of our traditional industries.

In the real world libertarianism produces amazing results. In China (supposedly a communist country!) the private sector is 80% of the economy and the state is just 20%. And their commercial success is such that they now produce half of all the world’s manufactured goods. Many developing nations are following this model. But the Chinese copied it from Hong Kong.

In 1961 an Britain, John James Cowperthwaite, became financial secretary of Hong Kong, then a very poor colony with no resources other than its workforce. He invented and implemented “positive non interventionism” a highly libertarian management of the economy. This worked like magic and between 1961 and 1997 Hong Kong’s gross domestic product grew to be 180 times bigger! From being a very poor nation the people of Hong Kong now have a GDP per capita (PPP) of $45,736 whilst in Britain we manage just $35,843. They are richer than us and continue to become even richer whilst we wallow in socialist inefficiency. And their MAXIMUM income tax rate is 15%.

Britain is a socialist country with a socialist government whose idea of reform is to slightly reduce the level at which they borrow and spend. What we really, really need is freedom for individuals to make money and to keep it to spend and invest as they think best. This means getting rid of great swathes of the state, the presumption should be that the state is best owning nothing and doing nothing and thus should only do the minimum necessary for the state to operate. Then we too can have a 15% top rate of income tax.

In China an Britain, Sir John James Cowperthwaite, is a hero for the wealth that his ideas have bought them. They make busts of him to celebrate this. I suggest that George Osborne buys one of these busts, puts it on his desk and uses it for inspiration.

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3 Comments


  1. As you don’t know what socialism is, your comparison with libertarianism is, at best, ridiculous.

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  2. Jojo and gary if from the same source are a known parasites. Can’t win using facts so they will simply attack the messenger.

    The difference between socialism and Communism is the former get a loan in every one else’s name and squanders everyone into debt slavery. When they have made everyone debt slaves, they get these faulty robots to “take the streets” and declare the debt does not actually exist.

    The Communists in China have totally embraced this modest man’s ways. It’s the revolution. This time they have improved the wheel. Even Libertarianism needs a strong hub of law.

    It is a stretch of the imagination to think this man, (JJC) was a Liberal compared to the clueless shame that pervades the party now.
    Same for “Labour”. The old lot kept out foreigners so there were no stresses on housing, jobs and job security. There is no social in modern Socialism, no liberal in modern Liberals and the Conservatives conserve what? Even UKIP, where Nigel Farage is on the fisheries committee and never turns up to divide and rule. There’s no UK in UKippers.

    Thinking of fisheries:-
    How can you farm an area with no field boundaries amongst several farmers. Grabbed too many sheep? Throw the dead ones back in the field. Who’s ate my carrots? There’s too much foot traffic on these fields. Mind if I dump my garbage on your side of the field… I’m not asking.

    Cowperthwaite is one of my all time hero’s. He was no coward trying to please everyone and creating a misery for all in the process. 20% tax on income. That’s it. If the Governance had no money in the kitty, it wasn’t spent nor took out loans. Sanity.

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