A Tale of Two Economies: Hong Kong, Cuba and the Two Men who Shaped Them

by Neil Monnery

As the world entered the turbulent 1960s, two men, half a world apart, one a doctor and the other a classicist, both foreigners far from home, were charged with shaping the economic strategy of their adopted countries. They held a common objective. Both were determined to create a better world. More than half a century later, their principles still drive the policies of those economies today. Their proposed solutions could not have been more different. One, Che Guevara, is well known as a revolutionary. He is less well known as the key architect of Cuba’s communist economic system. He was as serious about economics and its effect on society as he was about revolutionary warfare. The other, John Cowperthwaite, is largely unknown today. And yet he was fundamental to establishing Hong Kong’s unique laissez-faire economic policy. These two men are arguably the originators of the most significant natural economic experiment of the last century, pitting the free-market model of Hong Kong against the state interventionism in Cuba. Each suite of policies has been pursued faithfully for over half a century with remarkable results that have lessons for us all.
REVIEWS

The message is startling. Over the last sixty years, Cuba has been a pure socialist economy and Hong Kong a pure capitalist one. Over this period Cuba’s GDP per capita has doubled. That growth may sound okay but over 60 years it is actually pretty pitiful. Strikingly, over the same period Hong Kong’s per capita GDP has risen fourteen-fold. Roger Bootle, Chairman Capital Economics

A Tale of Two Economies, provides a thorough and penetrating analysis of why Hong Kong has thrived for the last sixty years where Cuba has stagnated. It’s a powerful lesson of how state involvement must be targeted carefully and sparingly if human progress is not to be damaged. The story is an enjoyable read, told through the lens of the architects of the two economies – the unsung hero Sir John Cowperthwaite and the misguided icon Che Guevara. It’s a story that all economic policy makers should know, and a story that will enlighten students of economics and human progress. Marian Tupy, HumanProgress.org

This book compares Cowperthwaite with “Che” Guevara. In spite of geography, “each came to represent the beacon of a peculiar political theory in the 1960s and Hong Kong, what Milton Friedman and many others called an experiment in ‘free enterprise and free markets’; and Cuba, the last bastion of socialism after the Soviet Union faltered and China reformed. Monnery’s book is a fun, engaging read. I highly recommend him, if you are searching for a book to persuade a friend of the benefits of free enterprise. Alberto Mingardi, The Library of Economics and Liberty

Monnery wrote the excellent (2017) Architect of Prosperity about Sir John Cowperthwaite’s shaping of colonial Hong Kong. Who he, you might ask? Indeed, that was part of the interest – an unknown who had laid the foundations for modern Hong Kong’s role as a financial and trading centre. This new book is, intriguingly, a compare and contrast of Cowperthwaite and Che Guevara, or rather an assessment of the natural experiment of two polar opposite economic systems, both intended to deliver the same aim of economic development and lasting prosperity. Diane Coyle, Professor of Public Policy, University of Cambridge

Never mind the politicians, every journalist and opinion former should read this book. A brilliant book, characterised by objectivity and rigour. Fabulous. Steve Baker MP, Minister of State for Northern Ireland

A superb comparison of the two men’s radically different philosophies, which set the economic destinies of two societies. We can learn much from that experiment. George C. Leef, James Martin Center

Genres: Economics

256 pages, Paperback

Published November 18, 2019

Reviews

[Barry · Rating 5 out of 5]

In 1960 Cuba and Hong Kong were both countries at a crossroads, deciding on a future economic path. The countries were similar in population and GDP at the time, but one resolved to follow the laissez-faire principles of Adam Smith and the other chose to adhere to the socialist principles of Karl Marx. Rarely does history provide such an ideal economic experiment.

The author explains the rationale behind the decisions made by each country and then follows the consequences over the next 70 years. He takes pains to remain fair and evenhanded, but the lopsided results of this experiment cannot be denied. By almost every objective measure Hong Kong, by doggedly maintaining an “unfettered” capitalist approach (much more so than other western countries, including the US), vastly outperformed Cuba (and also outperformed those other western countries). I’ll resist the temptation to provide a long list of statistics, but here’s one: In 1960 the per capita GDP in both countries was $4500. Today it is $9000 in Cuba and $64,000 in Hong Kong.

This book is carefully dispassionate and perhaps a bit dry, but overall an excellent read.

[Xuanchen Pan · Rating 4 out of 5]

The book has well introduced the differences between the economies of Hong Kong and Cuba in terms of ideologies, methodologies, historical and cultural background and the characteristics of the leaders. Despite the fact that the reality has demonstrated that the effective free market of Hong Kong has exceeded the socialist Cuba by a great margin, the book focused more on the 'failure' of Cuba, which certainly reflects the author's stand of criticising the economic system and ideology.

A point which is made by the text which was only mentioned nearly at the end of the book, is that cultural differences do not affect the economic growth. It is argued to be supported by the success in Taiwan and Singapore. Yet, it is here to be considered that the historical and cultural background do have an effect on the decisions made by the participants in the economy. The migration into Hong Kong has well indicated that it was motivated by belief which was likely to be formed due to its culture.

Cowperthwaite's system of free market with light government intervention is appreciated. Yet, the size of the economy and the cultural background should be taken into account.

[Drmkk · Rating 4 out of 5]

How economics should be studied and taught! Many could learn from this natural experiment and Monnery’s clear writing on the subject.

[Charlie Key · Rating 5 out of 5]

V good, and acc fairly charitable to Guevara round the edges