Sir John James Cowperthwaite, KBE, CMG
A British civil servant, sent to Hong Kong in 1945 and who rose to become Financial Secretary. Hong Kong then was one of the poorest nations on earth. But Cowperthwaite saw that capitalism was generating wealth without any government help. So he invented positive non-interventionism, an economic philosophy of minimum government. He deliberately didn’t collect statistics so that politicians would not have the information to interfere.
Hong Kong practices positive non-interventionism to this day and has gone from being one of the poorest to being one of the richest nations on earth, despite having no natural resources, as a consequence of this. Deng Xiaoping, the leader of China, saw the outstanding success and decided to do the same for his country. From 1979 he implemented reforms that brought Hong Kong style capitalism to China and their economy boomed, from a grindingly poor agrarian peasant country to now being the source of more than half of the planet’s manufacturing.
Cowperthwaite knew two truths, the first is that everything that government does it does badly, so the less government the better. The second is that government can do very little to improve an economy but can do a great deal to harm it, so capitalism with minimum intervention will always give the best result.
It is hardly surprising that today bronze busts of Cowperthwaite are common in those countries that have become rich by following his economic philosophy.
Baroness Thatcher, LG, OM, PC, FRS
Elected Prime Minister of the United Kingdom in May 1979. She took over a battered and damaged country, the “poor man of Europe”. During Labour’s winter of discontent in 1979 an incredible 29,474,000 working days were lost. Hospitals were picketed to prevent patients getting in, dead bodies were unburied and were stored in shipping containers. The economy was trashed. Britain was in a downwards spiral to oblivion. A huge chunk of the economy was nationalised monopoly industries which were utterly abysmal in everything they did. Execrable service to the public at exorbitant prices whilst making huge losses that had to be funded by the taxpayer.
Thatcher was a keen student of economics and read both the Austrian School and Chicago School academics. She distilled ideas from many different people to come up with her own economic philosophy, Thatcherism. Hers was the first government to apply this knowledge for the good of the country. For instance by using monetarism she reduced inflation from 10.3% to 4.6%.
Thatcher was incredibly brave. Our economy was so incredibly inefficient because it contained millions of non jobs. People, many, but not all, in nationalised industries who were being paid but who were unnecessary. This made everything any business did in Britain uncompetitive internationally, it dragged the country down. Thatcher exposed all of these industries to competition from the market, both internally within Britain and globally. Often by denationalisation but often by other means, big bang in the City broke up many cartels and “old school tie” networks, for instance. This, inevitably, led to mass unemployment as the non jobs were shaken out of the system. But it also created many new jobs as the economy started to boom. It also laid the foundations (not built on by Gordon Brown) for our current competitiveness in the world and our great national prosperity.
Margaret Thatcher was incredibly popular for bringing so much wealth to so many people. She won three consecutive elections with big majorities. And her economic policies, Thatcherism, were copied around the world by virtually every country (even Cuba is starting to do it now). This brought greatly increased wealth and quality of life to billions of people
Cowperthwaite and Thatcher had such huge impacts on the quality of life of so many billions of people that no other economist comes remotely close. They are the creators of our modern age of luxury for all, luxury we now take for granted. We must be very careful to remember the lessons and not lose sight of what brought us here. Also there is room for us to make even greater progress by applying these proven methods even more. The market and capitalism generate all the wealth on earth, we should not let government get in their way.