Tuesday, January 21, 2014, 07:50
Policy Address sends out mixed messages
By Lau Nai-keung

There is some intellectual tension underlying the Policy Address. On the one hand, it is one of the most “pro-poor” addresses ever. On the other hand, it still clings to a mindset that has outlived its usefulness. After more than a year in office, Leung Chun-ying’s administration is still unable to decide whether to be populist or elitist.

At first, I was not quite sure how best to articulate this contradiction. Then I came across Paul Krugman’s blog post in which he examined how the US has had a growing contempt for the little people since 1960s.

Policy Address sends out mixed messages“This contempt surely isn’t limited to Republican politicians. Still, it’s striking how unable they are to show any empathy for people who are just doing their best to make a modest living,” Krugman wrote. “The most famous example, of course, is Mitt Romney, who didn’t just disparage 47 percent of the nation; he urged everyone to borrow money from their parents and start a business.”

What a strange coincidence. Who would have thought that Leung and Romney would share the same narrative? But here it is, on the first few paragraphs of the Policy Address’s economy section. There, Leung commended a young Hong Kong entrepreneur who has made it big in Guangxi with interesting details. The young man “refinanced his property, dug into his savings and borrowed money from his relatives to head for Guangxi. After 10 years, he now owns a company that manages a supply chain of imported red wine, coffee and other food items, with an annual turnover of over HK$100 million.”

The media soon explored this young entrepreneur’s background. He completed his undergraduate studies in 1997 and owns a property that he could refinance no later than in 2003. Some said he might have come from a rich family, but that was not fair. We need not discredit this young man’s success to realize how wrong the Policy Address’s message is.

Under neoliberal economics as it is now experienced by people around the world, there is no sense being an employee. Workers are getting an increasingly smaller share of the wealth they help to create. Worse still, work itself is getting more unstable and insecure, or in other words, precarious.

It may be true that in order to “make it big”, you must start a business and be your own boss, but that does not mean this condition is morally justifiable or should be encouraged.

What should be done, and what is expected of Leung in the Policy Address, is to honor honest workers. They are the people who make everyday life possible and predictable.

The truth is, employers can’t exist if everyone is a boss and there is no one to be employed. When workers are not getting an equitable share of the wealth created, should our government use policy instruments to offset this imbalance, or simply ask them to start their own businesses? The Policy Address is sending out mixed messages.

One can argue that what Leung was trying to say is that there are still plenty of opportunities on the mainland, and that Hongkongers should exploit them. That’s both right and wrong. What we must understand is that today’s mainland is not the mainland of 10 or 20 years ago. Growth has slowed. The markets are much more mature. Local firms are sophisticated and competition is fierce.

At the same time, more mainland Chinese have traveled, studied and worked abroad. Westerners are also entering the mainland directly. The heyday of transaction cost economics has gone, and our role as an agent between the East and the West is shrinking.

The world has changed, while we do nothing except parroting our age-old value propositions of the “rule of law” and “free market”. Everyone knows how to win in a transparent market, what adds value is the ability to navigate one that is opaque. In this regard, we are not equipping our youth to grasp the opportunities which exist up north.

Entrepreneurship is risky. If Hong Kong wants to encourage our youth to be more adventurous, it must prepare them for failure, both psychologically and financially. When young couples are struggling with mortgage repayments and childcare expenses on a meager salary, it is irresponsible for a government asking them to take a huge risk without any substantive support, to say the least.

The author is a veteran current affairs commentator.