America loves Hong Kong and China

We are currently witnessing what could be the largest revolution in the history of the world in China, with the people of Hong Kong finally standing up against the government of China's illiberal policies. China currently ranks at 181 out of 201 nations and self-governing territories, while Hong Kong ranks at 18, higher than the United STates. But since Hong Kong is part of China and the Chinese authorities are trying to implement one of the worst human rights records in the world in one of the most free areas in the world. This of course is leading to trouble for the Chinese authorities because the people of Hong Kong don't want to be under such a government like all other people in the world.

This however will hopefully not stay isolated to Hong Kong, since the rest of China has a similar situation of not having free, fair, and open elections. I am hoping that in the next week or two we will see the student rebellion expand to other cities in China which will scare the dickens out of the Chinese government. If the military realizes that they have the same interest as the students who will lead the protest then the emperor will have no clothes, and the Communist Party will fall. I hope this will happen so the people in China will see an improvement in their situation in the near future and the Republic of China will return to the mainland (which currently ranks at 43).

This is the latest chapter in the long struggle between the Confucian leaders of China who claim obedience to the government as one of the highest values and the Mohist faction which has survived 1500 years of persecution by the Chinese government and is one of the earliest if not the earliest form of liberalism in the history of the world. It is currently prevalent in Taiwan and hopefully the students across China can make it dominant in the political sphere.

America loves China.

Hong Kong as a model of supply-side economics

Hong Kong has long been regarded as an example of the successes of the economics policies of Milton Friedman. As a review, Milton Friedman's laissez-faire school usually has the following points:

1. Very low taxes, usually as a flat tax.
2. Little to no regulation on businesses and very low taxation.
3. In the most pure forms as are being advocated for by the modern Republican Party in America, Conservative Party in the UK, and CDU in Germany (in their European policies) most things should be privatized.
4. No minimum wage

When I read about Hong Kong however, I find the following:

1. A Progressive Salaries Tax, along with other Keynesian style taxes, with the one notable exception of no capital gains tax.
2. Regulations on their stock market
3. Public health care and public schools
4. A minimum wage

This is looking very Keynesian too me. They have no corporate income tax but most economists would agree this is a good thing (which is unusual for economists). The reason they are ranked as the most liberal economy is not because of the normal things Friedman proposes but the ability to form a business is the second easiest in the world, and wages in Hong Kong are really high compared to the rest of China (except Macau and Shanghai) which means people have expendable income and there is demand for new businesses. They have a lot of trade going through their port which is a major boost to their economy, and having a large free market is admirable (which both Keynesians and neo-liberals can agree on). But to go so far as to claim that Hong Kong is neo-liberal based on their tax code (which is regressive in the way that it lacks a Capital Gains tax) ignores all the other things the government does.

In one way, Hong Kong is actually the most socialist state in the free world because all land is publicly held. This isn't capitalist to any stretch of the imagination. This is why I think labeling Hong Kong as a neo-liberal example demonstrates a lakc of understanding of how Hong Kong actually works.

If anything, Hong Kong is a great example of how Keynesian economics work very well, as well as Australia, the only developed nation to avoid the 2008 recession.

Sources: Dissent and Wikipedia