They’ll Want To Use Them For Planning


Earlier I wrote about the limits of social of science and the need for control groups as the most reliable and accurate means to establish causation.  In today’s But If Not I recall a Milton Friedman story where he compares different economies over fifty years as a controlled economic experiment. The Hong Kong Experiment

He describes Hong Kong as the free economy, the United States as the mixed economy and Britain and Israel as socialist economies. 

The British, while maintaining control over Hong Kong after WWII, appointed John Cowperthwaite (a Dickensian character in more than name) as financial secretary.  Over the next 50 years Britain and Israel practiced Fabian socialism and, under Cowperthwaite’s aggressively hands-off policy, Hong Kong practiced laissez-faire capitalism. 

The result was that from 1960 average per capita income in Hong Kong rose from 28% of that in Great Britain to 137% in 1996.  In four decades the tiny overcrowded island nation with no natural resources had a higher level of income than its economic superpower benefactor.

The agent for this growth can be captured in this little recantation from Friedman on his conversation with Cowperthwaite.

I met Cowperthwaite in 1963 on my next visit to Hong Kong. I remember asking him about the paucity of statistics. He answered, “If I let them compute those statistics, they’ll want to use them for planning.’’

About these ads
This entry was posted in Uncategorized. Bookmark the permalink.

One Response to They’ll Want To Use Them For Planning

  1. Pingback: Samizdata quote of the day « Samizdata

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s