EAST AND WEST
“The enjoyment of books has always been regarded among the charms of a cultured life….” -Lin Yutang, The Importance of Living (1937)
One of the benefits of a cruise is that you get time to read new books. Most people read novels, but I prefer non-fiction. Two books caught my interest on my recent Australia-New Zealand cruise: East and West: China and the Future of Asia, by Christopher Patten, the last British governor of Hong Kong, and The Noblest Triumph, by Tom Bethell.
Both books have much in common. East and West is a fascinating account of the agonizing, yet inevitable, transfer of a free and prosperous British colony to a totalitarian and brutal communist regime. In his five years as governor (1992-97), Patten changed his views about the Asian economic miracle.
After World War II, Hong Kong was a poverty-stricken rock of only 400 square miles. Six million refugees poured in from mainland China. Over the years, Hong Kong has had no foreign aid, no natural resources, and has even had to import most of its water and food while being thousands of miles from its trading partners.
Hong Kong’s economic miracle can be explained, says Patten, “as an example of the benefactions of free trade and technological advance. It cannot be attributed to some continent-based value system. ‘Asian values’ has been a shorthand for the justification of authoritarianism, bossiness and closed collusion rather than open accountability in economic management.” He goes on to say, “Values are universal. So, too, is the case for market economics, which work everywhere better than any other economic system, and free and open economies perform most effectively in plural societies. Liberal economics and liberal democracy go hand in hand: Freedom, democracy, the rule of law, stability and prosperity…” (p.4)
THE IMPORTANCE OF PROPERTY RIGHTS
How does democratic capitalism achieve prosperity? That’s the subject of the second book, Tom Bethell’s The Noblest Triumph. Bethell says the key to stability and prosperity is the enforcement of property rights.
“When property is privatized, and the rule of law is established in such a way that all including the rulers themselves are subject to the same law, economies will prosper and civilization will blossom,” writes Bethell. Bethell goes on to say property rights include the right to use and transform the property, to buy and sell land, goods and other assets, to pass it along to your heirs, and to enforce contracts through an independent judicial system. Without property rights, all other rights mean little or nothing, as those who have lived under tyranny can testify. Bothell demonstrates that the Arabs, despite their vast oil riches, have remained relatively poor because Arabic governments don’t guarantee property rights against the state. He argues that the Irish starved during the potato famine of the 1840s because the British didn’t allow enough private ownership of Irish property. Are we in danger of losing our prosperity due to asset forfeitures, taxes, and government controls? Let’s hope not.