NCPA - National Center for Policy Analysis

JUST HOW FREE IS THE WORLD'S FREEST ECONOMY?

April 17, 2009

Hong Kong has the freest economy in the whole world, according to both the Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal, and the Economic Freedom of the World report published by the Fraser Institute and the Cato Institute. 

But just how free is Hong Kong, asks John C. Goodman, President and CEO of the National Center for Policy Analysis (NCPA)?

  • One out of every two residents of Hong Kong lives in government housing.
  • Under Hong Kong's system of socialized medicine, everyone is entitled to (nearly) free health care (there are only nominal charges, and even those are waived if your income is low).
  • One out of every seven Hong Kong residents is receiving cash payments from the government, and more than 40 percent of these people are neither old nor disabled.
  • There is no private property in Hong Kong -- at least not real property; all land is owned by the government.

In a sense, Hong Kong is even more socialistic than the Chinese mainland, says Goodman:

  • There is a waiting list for public housing.
  • The average wait to see a medical specialist is more than seven months; that is why almost one out of every two health care dollars is spent privately -- with people paying market prices to obtain promptly what they are supposed to be getting gratis.
  • There is a basic cash benefit, then there is a whole slew of child-related cash allowances, covering such items as day care, pre-school, kindergarten, textbooks, and school lunches; add to that a transportation allowance, a utilities allowance, and even a burial allowance.
  • Property owners are actually leaseholders who have merely acquired the right to use the property they have.

So what does the future hold, asks Goodman?  When the British turned Hong Kong over to China in 1997, the great fear was that China would try to turn it into a Communist state.  As part of an effort to forestall that outcome, the British left the country with institutions that would move in the direction of true democracy with universal suffrage.

In retrospect, the fear was completely misplaced.  Capitalism in Hong Kong is in far greater danger from its own citizens than it is from anyone in Beijing, says Goodman.

Source: John C. Goodman, "Just How Free Is the World's Freest Economy? Democracy may pose the greatest danger to Hong Kong's free-market economy," National Review Online, April 13, 2009.

 

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