Richard Musgrave

Sir John Cowperthwaite ran Hong Kong's finances from 1961 to 1971 and treated regulation like a tax on discovery. Nobody in government can know which business will work, so he refused to pick, plan, or protect. Whitehall sent officials to Hong Kong to push for economic statistics, and he sent them home. When Milton Friedman asked in 1963 why he collected so little data, Cowperthwaite answered: "If I let them compute those statistics, they'll want to use them for planning." Numbers give planners a reason to act, and every plan arrives as a rule that tells entrepreneurs what they may not try. Asked what poor countries should do to grow, he said they should abolish the office of national statistics. He rebuffed tariffs, opposed corporate subsidies, and refused London's push to raise taxes. When a legislator proposed that the government back promising industries, he asked how the government could possibly know which ones those were. The results arrived without a plan. During his decade as Financial Secretary, real wages rose 50% and the share of residents in acute poverty fell from 50% to 15%. When he took the job, the average Hong Kong resident earned about a quarter of what a Briton earned. By the early 1990s, Hong Kongers out-earned Britons. Britain, the birthplace of the Industrial Revolution, planned its economy with ministries full of statisticians and fell behind a rock with no resources except a harbor. Every regulation assumes a regulator who knows which experiments to allow. That regulator does not exist, so each gate he builds blocks the ideas nobody in the room could have predicted. Hong Kong's most valuable policy was the absence of a gatekeeper. As far as civil servants go, this guy is the GOAT.