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John James Cowperthwaite

John James Cowperthwaite

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Published by Paul Richardson
Cowperthwaite was Colonial Administrative Office Financial Secretary for Hong Kong. Under his stewardship great things happened. Read and get a feel for how he did it.
Cowperthwaite was Colonial Administrative Office Financial Secretary for Hong Kong. Under his stewardship great things happened. Read and get a feel for how he did it.

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Published by: Paul Richardson on Aug 14, 2012
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John James Cowperthwaite
Cowperthwaite had a long career for the British Colonial Administrative Office (1941
 1971) almost all of it in Hong Kong. He was Financial Secretary of Hong Kong from
1961 to 1971. He was asked after WWII to develop a plan for ―juicing‖ economic growth
in Hong Kong. He looked at the situation and found it was growing rapidly at the timeand felt any intervention would do more harm than good. Following are some quotesfrom his time as Financial Secretary from Legislative Council proceedings as reported inWikiQuotes. As you look at the quotes you will be amazed at his approach compared to
more ―modern‖ Keynesian prescriptions. There can’t be any doubt that his approach
was very effective and sensible. Anyone who plans to vote in November should ponder this information.
Official Report of Proceedings of the Hong Kong Legislative Council 
I am confident, however old-fashioned this may sound, that funds left in the hands of the public will come into the Exchequer with interest at the time in the future whenwe need them.
February 28, 1962, page 51.
The fact that previous generations have handed down to us a substantial publicheritage by way of roads, port, etc. almost completely free of debt, seems to me toimpose some limitation on the validity of the theory that by borrowing we should, or could, pass on the burden of development to the next generation.
February 28, 1962, page 55.
An infant industry, if coddled, tends to remain an infant industry and nevergrows up or expands.
March 30, 1962, page 131.
Official opposition to overall economic planning and planning controls has beencharacterized in a recent editorial as "Papa knows best". But it is precisely becausePapa does not know best that I believe that Government should not presume to tellany businessman or industrialist what he should or should not do, far less what hemay or not do; and no matter how it may be dressed up that is what planning is.
March 30, 1962, page 133.
Over a wide field of our economy it is still the better course to rely on the nineteenthcentury's "hidden hand" than to thrust clumsy bureaucratic fingers into its sensitivemechanism. In particular, we cannot afford to damage its mainspring, freedom of competitive enterprise.
March 30, 1962, page 133.
One trouble is that when Government gets into a business it tends to make ituneconomic for anyone else.
February 27, 1963, page 47.
I will not be proposing a course which has been under some public discussionrecently
deficit financing. It is wholly inappropriate to our economic situation. In itsleast extreme form it is based on the theory that additional money generated by aGovernment deficit (and given currency, as necessary, by use of the printing press)will stimulate consumption and thereby production, in time to match the excessmoney with goods before real inflationary harm is done. Unfortunately we don't, andcan't, produce more than a small fraction of what we consume, and increasedconsumption would merely mean increased imports without matching exports; and asevere balance of payment crisis, which would destroy Hong Kong's credit andconfidence in the Hong Kong dollar; and which we could not cure without comingclose to ruining ourselves. Keynes was not writing with our situation in mind. In thishard world we have to earn before we spend.
February 27, 1963, page 50.
I am also, I must confess, a little sceptical of the theory that we have a right, if wecould, to pass on our capital burden to future generations. I remarked last year inthis context that our predecessors had not passed any significant part of their burden on to us.
March 29, 1963, page 134.
We enjoy a considerable net inflow of capital and I am sure that a condition of itscoming, and staying, is that it is free to flow out again. It is also important for HongKong's status as a financial centre that there should be a maximum freedom of capital movement both in and out.
March 29, 1963, page 134.
I should like to begin with a philosophical comment.
I do not think that when oneis speaking of hardships or benefits one can reasonably speak in terms ofclasses or social groups but only in terms of individuals.
March 29, 1963, page 135.
Economists of the modern school will no doubt protest that I have said nothing of theuse of budget deficits or surpluses for the control of the economy in general. I doubtif such techniques would ever be appropriate in Hong Kong's exposed economicposition; and I think they are certainly not appropriate at present, when in strictorthodoxy they would suggest the need to plan for a very substantial surplus "to takethe heat out of the economy". Although we have in fact run substantial surpluses inrecent years we have not done so with deflationary effect because we have notremoved them from the economy but have left them inside the Colony's banking
system to continue to work for the economy. $500 million or 55% of reserves are soheld at present.
February 26, 1964, page 47.
Money cannot be converted into houses or trained teachers or hospitals at thetouch of a magic wand.
There are limitations to our physical and intellectualresources.
February 26, 1964, page 51.
 A glimmer of light is better than no illumination at all.
February 26, 1964, page 52.
Revenue has increased in this way is in no small measure, I am convinced, due toour low tax policy which has helped to generate an economic expansion in the faceof unfavourable circumstances
February 26, 1964, page 53.
If one accepts that in general social services should be made available to all on thebasis of ability to pay, one has the choice of two opposite principles of action,although they need not be mutually exclusive
either progressive taxation and freeservices or fees covering costs with remission for those who cannot afford them.The former method is appropriate, in my view, in rich developed countries where theprinciple of progressive taxation can be applied without unduly adverse economic or social results, and the wastes inherent in full and free services can be afforded. Inless advanced or poorer countries, where neither economy nor society is geared toprogressive taxation and waste cannot be tolerated, fees remittable in case of needseem to me clearly more appropriate.
February 26, 1964, page 54.
Many of our services cost more than do similar services in Europe, because,although we have a substantial quantitative deficiency of public services, thedecision-takers and policy-makers, both inside and outside Government as I havesaid 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 therest of the population in terms of standards relative to our real total resources.
February 24, 1966, page 72.
It seems to me that we have three choices; first, public services of high standardand cost but of limited scope, leaving unfilled a substantial part of the present gap,not necessarily benefiting those in real need and benefiting many who are not inneed at all (this has been our historical approach); second, public services to meet

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