Two Experiments.

• Author: Leef, George

A Tale of Two Economies: Hong Kong, Cuba and the Two Men Who

Shaped Them

By Neil Monnery

249 pp.; Gulielmas

Occamus, 2019

A popular T-shirt depicts Alberto Korda's famed 1960 photo of Marxist revolutionary Che Guevara. Wearers of the shirt probably know almost nothing about Guevara except that he fought for socialism.

There isn't a similar T-shirt for Sir John Cowperthwaite and I doubt there ever will be one. Relatively few people have even heard of him, although he was the key figure in establishing the governance of Hong Kong after World War II. His battle to preserve laissez-faire capitalism in the colony helped make Hong Kong what it is today.

Guevara and Cowperthwaite are at the center of British businessman Neil Monnerjfs book A Tale of Two Economies. It offers a superb comparison of the two men's radically different philosophies, which set the economic destinies of two societies. Monnery writes:

Both were questioning how to create a better civilization on Earth, using the tools that they had. Since they were united in their question but so divergent in their answer, they are arguably the originators of the most significant natural economic experiment of the last century. We can learn much from that experiment.

Dynamism and stasis j In the late 1950s, the per-capita incomes in Cuba and Hong Kong were roughly equal. The former had long been under the rule of corrupt oligarchs and military men who were willing to let capitalism operate so long as they got a cut of the profits. The latter was a minor outpost of the British Empire that was recovering from Japanese control during World War II. A speck of land with little more than a good natural harbor, Hong Kong seemed to have scant opportunity for an economic takeoff.

Over the next 60 years, the economic fortunes of Cuba and Hong Kong diverged dramatically. Today, the people of Cuba are about twice as prosperous as they were then, whereas the people of Hong Kong are 14 times richer. The reason for this divergence is that under Cowperthwaite's direction the Hong Kong government practiced a hands-off approach to the economy that was as close to pure laissez-faire as you'll find anywhere. At the same time, Cuba adopted an extremely tight communist system that Guevara, in his reading and travels, had become convinced was the best way for a nation to progress equitably.

In short, it was a contest between the ideas of Adam Smith and Karl Marx. Cowperthwaite had studied Smith and other...