Laissez-faire policy has failed Hong Kong in many ways

PUBLISHED : Saturday, 22 August, 2015, 9:30am
UPDATED : Saturday, 22 August, 2015, 9:30am

Nobel laureates in economics such as Joseph Stiglitz have repeatedly spoken out against the laissez-faire ideology, which has evidently failed. Paul Krugman, another Nobel laureate, believes that government intervention is often necessary to keep capitalism functioning.

Yet, right-wing politicians from Thatcher and Reagan to the Republicans in today's America, backed by conservative think tanks such as the Heritage Foundation and Cato Institute, continue to promote the "free market" ideology.

Hong Kong blindly exalts it. To protect their own vested interests, tycoons, officials, local intellectuals and politicians have used the ideology like a religion. They are scaremongers, painting apocalyptic scenarios if we were to ditch it.

Meanwhile, our frustrated young people engage in radical politics as they slave away with low wages amidst rising living expenses, and blame mainland China and Leung Chun-ying.

Let's not forget the mainland's command economy, within three decades, lifted millions of people out of poverty - a remarkable achievement unsurpassed in the history of human civilisation.

Hong Kong favours capital owners, who get richer here. But the working class who only have labour capital have seen their real disposable incomes stagnate. Housing conditions are poor, with the less fortunate living in shelters resembling slums in less developed economies. Our public hospitals are overcrowded, and standards are falling in our public schools.

Social mobility is restricted and our wealth gap is among the highest in the world. In a jurisdiction of low taxation, the lion's share of our gross domestic product gains have gone to the rich.

The government must play a bigger and more hands-on role in the most fundamental livelihood and welfare issues like housing, education and health care. It must spearhead a retirement scheme similar to Singapore's Central Provident Fund.

Today, too little is going into productive investments for the masses. Instead, resources are being poured into giant white elephants like the high-speed train to Guangzhou and the bridge to Zhuhai and Macau.

Under a laissez-faire ideology that advocates a policy of non-intervention, corporations and tycoons further monopolise the economy and collude with one another, enriching themselves at the expense of the majority and further contributing to unequal opportunities.

I applaud our chief executive for his pledge to ditch this failed non-interventionist policy.

Bernard E. S. Lee, Tsuen Wan