Startup Cities Institute posted a tribute to John Cowperthwait, the British Financial Secretary of Hong Kong, who championed the city as a free-market haven, and guided it on its trajectory to becoming an economic powerhouse during the 1960s. As much of the land in the city was government owned, Cowperthwait used his power as taxman-regulator-landlord to provide favorable terms and conditions to entrepreneurs and investors, while not failing to attend to the needs of the poor, support for education, and good urban design. Zach.dev writes:
Cowperthwaite made it easy to build a business and a life in the city. As the primary landowner and tax authority, the city of Hong Kong was like a modest equity investor in every business.
If Hong Kong thrived, land rents and tax revenues would rise. If Hong Kong stagnated, they would would fall. Since Hong Kong had a hard budget constraint — there was no national or state government to bail them out — there was a real feedback loop between good management and financial health. Cowperthwaite’s job was to make sure Hong Kongers thrived while providing the core mobility, security, and other services of a city in an economical way.
Zach.dev. “The Outsider CEO of Hong Kong”. StartupCities.com. November 17, 2023.
And Cowperthwait’s management strategy was effective. The receipts:
When he assumed control in 1961, Cowperthwaite inherited a modest 500 million HKD cash reserve. His management of this reserve delivered incredible growth to Hong Kong and to the city’s bottom line. Ten years later, Hong Kong had 2.4 billion HKD in reserve, while also becoming a much more populous and prosperous city.
But Cowperthwaite’s practices really shine in their legacy. By the time China took control of Hong Kong in 1997, the city’s reserves had compounded to 330 billion HKD. One governor called it “the greatest dowry since Cleopatra.”
Zach.dev is Zachery Caceres. He writes about the economics and technology of Startup Cities on his substack.
The Startup Cities article looks at a number of aspects that the management of Hong Kong entailed. Zach.dev says he drew on Neil Monnery’s book, Architect of Prosperity. Amazon Link.
