09 February 2010
Farewell to the man who made Hong Kong
SCOTLAND said farewell on Saturday to Sir John Cowperthwaite, one of the most illustrious graduates of the University of St Andrews. At a modest ceremony at Dundee Crematorium on a crisp winter morning, the small gathering of relatives and friends did not reflect the adventure of his life nor his achievements.
Cowperthwaite lived a modest, almost reclusive career. Yet his astonishing achievement was to have created the miracle city-state of Hong Kong. He arrived in Hong Kong in 1945 and was Financial Secretary of the colony from 1961 to 1971. He was once termed “the finance director of the world’s most successful enterprise – Queen Elizabeth being CEO”. He died, aged 90, on 21 January.
Cowperthwaite was the oddest of bureaucrats. He always sought to minimise his powers and contain his budgets. This is contrary to the behaviour of the administrative class.
Born in Edinburgh, Cowperthwaite studied economics at St Andrews and Cambridge. He was an admiring disciple of Adam Smith and applied the Whig principles of his hero. Consider the remarkable phenomenon that was this pimple of capitalism underneath the belly of communist China. He refused to operate a central bank – alone in all the jurisdictions of the globe. It was he who insisted tariffs were zero, regulation minimal, company and personal taxes kept low and business requests for subsidies declined.
Appointed to the Colonial Service in Hong Kong in 1941, he retired in 1971. During this period, Hong Kong bloomed from a tiny port to a significant presence on the world’s markets.
Hong Kong had nothing, not even its own water. It had no food. What it did have were the able refugees from the convulsions on the mainland. By letting markets work their magic Cowperthwaite saw the colony’s economy dazzle observers. Typically, he declined to compute gross domestic product figures as he thought them costly and futile.
He thought it a fortunate accident of history that the territory did not have to suffer politicians’ yearnings to deliver “free goods” to their voters. When asked why so much of Hong Kong’s housing was squalid in the midst of bubbling prosperity: he said tersely: “It is supplied by the government”.
Cowperthwaite was self-effacing. This natural modesty seemed an adjunct to his good manners. It can be doubted no Scotsman, and no Briton, can expect to have discretionary power over so many bustling millions again – and to choose to do so very little. It was his view that although China won control, it was Hong Kong’s dynamism that converted China to its current rage for capitalism.
Cowperthwaite was said to keep his text book, Smith’s The Wealth Of Nations, by his bedside. It is an engaging idea that Hong Kong was really Smith’s colony. A mind working in Kirkcaldy in the 1770s was the invisible hand behind the most dynamic spot on the planet in the 1970s. The link was John Cowperthwaite.
He leaves his widow Sheila, having been predeceased by their son Hamish.
John Blundell is Director General of the Institute of Economic Affairs.
Institute of Economic Affairs, 2 Lord North Street, Westminster, London, SW1P 3LB | tel: 020 7799 8900 | fax: 020 7799 2137 | email: iea@iea.org.uk
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