Uneasy Partners: The Conflict Between Public Interest and Private Profit in Hong Kong

VI. Government and Business - A Rewarding Alliance

VI Government and Business A Rewarding Alliance The foundations of British rule were built firmly and unashamedly on an alliance between colonialism and capitalism until almost the very end of the colonial era. The underlying British aim was "that political participation should be contained and controlled".1 In place of democratic elections, the colonial administration selected the community's representatives almost exclusively from among the business and professional classes. As the previous chapter showed, the participation of the elite in the power structure did little to enhance the quality of administration. Its record was dismal even in overseeing the economy, an area in which business and professional expertise should have made an overwhelming contribution to good government. But this poor performance mattered less to the British than obtaining public endorsement of colonial rule through the personal participation ofsociety's richest and most successful groups. This chapter will review the rewards offered to the business and professional classes by their partnership with British colonialism, and will analyze their efforts to obtain significant financial and commercial advantages in addition to the prestige and personal privileges conferred by their official appointments. It will also discuss the importance of Hong Kong's traditional laissez faire principles in frustrating attempts by the elite to change key economic policies and take control of economic management. Nevertheless, as the analysis will explain, the commitment to laissez faire was dictated by political expediency and was based on pragmatism rather than principles.2 Thus, on some issues and in some branches of government, officials were prepared to abandon laissez faire either out of administrative convenience or political necessity. Finally, the chapter explores the survival oflaissez faire after the British departure and the public's continuing mistrust of government initiatives designed to protect private sector interests in the post-colonial era. 118 Uneasy Partners Public vs Private Interests Throughout the British Empire as a whole, the strategy of co-opting local elites into colonial power structures became a serious political liability. It led colonial populations to see the British rulers as close allies of vested interests, as collaborators with privileged minorities and as hostile to the educated, reformminded groups that emerged with economic modernization.3 Thus, in Hong Kong, as long as the business elite dominated the undemocratic political system, a fundamental challenge for its British rulers was to convince the community that a proper distinction would be maintained between public and private interests. The survival of British rule until the end of the twentieth century was only possible through imposing limits on the elite's right to profit from the political alliance with colonialism. The colonial administration could not afford to let the public believe that the partnership between colonialism and capitalism would permit the business and professional classes to pillage the public sector and exploit the community unhindered.4 In the second half of the twentieth century, the colonial administration showed considerable ingenuity in managing conflicts between business interests and the community's well being. In particular, the British rulers transformed the traditional doctrines of laissez faire into a powerful ideological weapon that was used to establish quasi-ethical boundaries for the management of public resources. Officials tried to shake off the "do-nothing" overtones of laissez faire by repackaging it as "positive interventionism" in the 1970s and as "maximum support, minimum intervention" in the 1990s. Despite these new labels, there was no retreat from the traditional insistence that business firms, not the bureaucracy, must be left to decide investment priorities for themselves and that free competition, not state assistance, would ensure the growth and efficiency of the economy. As a result, the elite was unable to reap the maximum commercial profits from its privileged political position. Principles in Practice Laissez faire survived through a deliberate choice by the colonial administration. By World War II, this traditional feature of British imperial rule seemed destined to disappear from the Hong Kong political landscape as it had already done throughout much of the British Empire. In 1935, Hong Kong had discarded any ideological commitment to laissez faire, and an official commission had rejected non-interventionism as a sensible principle of government economic management.5 In addition, non-interventionism in social affairs was being abandoned. Chapter II, "Colonial Rule and Its Political Constraints", noted how the Governor, Sir Geoffry Northcote, and his senior officials insisted on the expansion of the social services even if Hong Kong Government and Business...