Positive non-interventionism

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Positive non-interventionism was the economic policy of Hong Kong during British rule. It was first officially implemented in 1971 by John James Cowperthwaite, who observed that the economy was doing well in the absence of government intervention. The policy was continued by subsequent Financial Secretaries, including Sir Philip Haddon-Cave. It is considered a fairly comprehensive implementation of laissez-faire policy.

[edit] First-hand explanation

According to Cowperthwaite:

"In the long run, the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralised decisions of a government, and certainly the harm is likely to be counteracted faster."

According to Haddon-Cave:

"positive non-interventionism involves taking the view that it is normally futile and damaging to the growth rate of an economy, particularly an open economy, for the Government to attempt to plan the allocation of resources available to the private sector and to frustrate the operation of market forces"

Haddon-Cave goes on to say that the "positive" part means the government carefully considers each possible intervention to determine "where the advantage" lies, and although usually it will come to the conclusion that the intervention is harmful, sometimes it will decide to intervene.

This policy means that the government had to respond when industries with social obligations ran into trouble and when an institution needed regulation to prevent inequitable practices.