After World War II, the average Hong Kong income was one-quarter what it was in Great Britain. In 1961, John Cowpathwaite was appointed Financial Secretary of Hong Kong. F. A. Hayek might as well have written his first budget speech. He said, “In the long run, the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralised decisions of a government, and certainly the harm is likely to be counteracted faster." (Singleton 2006)
F. A. Hayek was discussing and writing about free markets at this time, but “it was Cowperthwaite who provided the textbook example showing economically liberal policies leading to swift economic development. His practical example provided confidence to the Thatcher and Reagan governments, and was a key influence in China’s post-Mao economic liberalization.” Since the index on economic freedom in the world began in 1970, Hong Kong has ranked number one every year, and “No one deserves more credit for this lofty rating than Sir John Cowperthwaite.”
Milton Friedman called Sir John Cowpathwaite serving as Finance Secretary an “accident of officialdom.” He mentioned the paradox that when “Britain was embarking on an extreme socialist policy in the homeland, one of its last remaining colonies, Hong Kong, was embarking on an extreme free-market policy.” (Gwartney 2006, pp. v)
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