Milton Friedman 's The Hong Kong Essay

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“I believe that the only plausible explanation for the different rates of growth is socialism in Britain, free enterprise and free markets in Hong Kong. Has anybody got a better explanation? I’d be grateful for any suggestions.” Milton Friedman asks us this in his 1998 essay: The Hong Kong Experiment. Milton Friedman was part and founder of a school of economic thinkers called the Chicago School. This group believed strongly in the power of Capitalism, and although there are many definitions for this form of economic policy, Friedman and this paper us the following definition: “the organization of the bulk of economic activity through private enterprise operating in a free market”. Friedman in the aforementioned essay attempts to show us the benefits which a capitalist nation has over a socialist one. He uses, specifically, the case studies of the United Kingdom, Hong Kong, and Israel. Through these examples he postulates that it was Hong Kong’s capitalist policies which allowed it to succeed economically. There is no debating that Hong Kong is something of an economic miracle. The island began as small rock covered with a few fishing villages, and ended up being a world economic power. Friedman, however, makes the error of oversimplifying the situation of Hong Kong in the thesis of his essay. Hong Kong, by its very nature, does not exist in isolation. It is greatly affected by world politics, long history, and its own geography. We must understand Hong Kong’s success as a
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