When I first moved to Hong Kong I was wondering whether Hong Kong was really that much of a free market, as it was internationally acclaimed to be.
The obvious truth is that it is not a perfectly free market, but nonetheless the situation here is much better than in the West. At the very least, at least the tax system is simple.
However, the absolute level of freedom is definitely at risk of decreasing in the short term. On a big scale, the new Chief Executive, Leung Chun-Ying, until now mostly an unknown quantity on this point, today made it clearer than ever that he wants to dismantle the Hong Kong’s government’s policy of “positive non-interventionism”. As reported in the dear and quaint old South China Morning Post, he told Xinhua that “The [HK] government proposed the ‘big market, small government’ principle five years ago, but it has not yet got rid of the thinking that has excessively relied on a market-oriented [economy]”. This is clear utilitarianism, where a “market-oriented economy” cannot deliver the ‘results’ desired, whatever those are. (Apparently he wants to “seek change while preserving stability“, as the Big Lychee perceptively summarises it).
Quite apart from the immorality of limiting freedom, state intervention in the market doesn’t even help in achieving the desired goals — unless one of those goals is to, say, increase unemployment — as the utterly predictable and indeed much-predicted effect of the introduction of a minimum wage last year has shown, as another article in the SCMP testifies:
Higher pay ‘bad news for disabled’
Minimum-wage law has left workers with disabilities unable to compete, the results of a survey suggest. It shows that nearly a quarter of them have lost jobs
Almost a quarter of workers with mental or physical disabilities have lost their jobs since the introduction of the minimum-wage law last May, according to a survey.
In the same period, new jobs for mentally and physically handicapped people have dropped by around 20 per cent, the study by the department of social work at Chinese University has found.
“The reasons are unclear, but in reality, the negative employment effect is a fact. The government needs to be concerned about the issue,” said Wong Hung, the leading researcher on the study and an assistant professor in the department.
He said that the government must introduce laws requiring employers to hire those with disabilities, as this was normal practice in developed economies.
Wong called on the government to increase the minimum wage level based on inflationary factors in the past two years, adding that HK$35 an hour would barely meet today’s needs.
The Chinese University study was sponsored by the Central Policy Unit of the Hong Kong government.
So much brilliance there! The minimum wage law prices disabled people out of the job market, so that they can’t learn useful skills; the researcher can’t understand why, even though any undergraduate economist could tell him the reason; Mr/Ms. Wong then demands that employers be forced to accept the higher price by law, just because it’s “normal” amongst other “developed” economies, no matter that their economies are dying; Mr/Ms. Wong then proposes an increase in the minimum wage despite the findings (not to mention that public advocacy is not part of their job description); and then it turns out that the Hong Kong government is paying for all this! It’s too good to stand.
The oh-so-“normal developed economy” bureaucratic organisation that is the Hong Kong Minimum Wage Commission wants to hear your views on what the new minimum wage should be! But don’t worry, they’re experts and scientific and stuff and you’re not, especially if you’re a business owner or hard-working individual who just wants to negotiate your wage freely, so ultimately you’re just going to accept whatever they decide is the right level. Capiche?
(But at least Hong Kong is still a world leader in that most delectable way to annoy big and powerful and tax-hungry countries: company incorporation).