Livre como Hong Kong

Milton Friedman ficou famoso apresentando uma série de televisão com o título “Free to Choose”, em que ele exortava os benefícios de deixarem as pessoas individualmente tomarem suas decisões, sem o carregar o governo, pesado e mandão, em suas costas.  É interessante como para muita gente as vantagens de deixar cada um cuidar de si para a economia como um todo são evidentes. E é interessante como para outras pessoas essa liberdade traz temor de uma visão de caos, destruição e ruína.  Também é interessante como tantos dos que têm a primeira opinião cuidam de si mesmos, e tantos dos da outra estão no governo, direta ou indiretamente, cuidando e sendo cuidados pelo sistema centrado em Brasília e nas filiais estaduais.  Bom, agora que Friedman faleceu vale a pena lembrar o que ele diria a todos nós aqui, neste país envergado sob o peso de um estado pesado e ineficiente…

If Only the U.S.
Were as Free
As Hong Kong

July 8, 1997

Which country would you guess has the higher gross domestic product per capita? The U.S., with a population of 260 million occupying a land rich in natural resources stretching from sea to shining sea, and a history of more than 200 years of democracy and economic growth, or Hong Kong, with a population of six million people crammed into a tiny area with a population density 225 times that of the U.S., no natural resources other than a great harbor and the skills of its people, and a history of a tenfold multiplication in population since the end of World War II driven by refugees from mainland China?

Your guess is right. The United States. What will surprise you is how small the difference is. In 1950, the U.S. had a GDP per capita nearly six times Hong Kong’s; in 1996, only 7% higher. If growth continues in both countries at present rates, Hong Kong will have a higher GDP per capita than the U.S. in less than five years.

What accounts for the remarkable success of Hong Kong? Clearly not the special qualities of either its Chinese inhabitants or its former British governors–or else mainland China too would be one of the high income areas of the world, and Hong Kong’s per capita GDP would not exceed Britain’s by more than a third.

The answer to the puzzle is simple: the role of government. Direct government spending is less than 15% of national income in Hong Kong, vs. 40% in the United States. Indirect government spending via regulations and mandates on private individuals and businesses is negligible in Hong Kong but accounts for around 10% of national income in the U.S.

We are more productive than Hong Kong. But we have chosen, or been led by the vagaries of politics, to devote roughly half of that capacity to activities to which Hong Kong devotes 15% to 20%. Are we getting our money’s worth for that extra expenditure? I believe not.

Consider the most basic functions of government, the protection of person and property and the maintenance of the rule of law. Most observers would agree that Hong Kong has been performing those functions better than we have. Our government is doing so many things that it has no business doing, that it is doing those things that it should be doing badly–less well than it did in the past when government spending was lower.

Government has an essential role to play in a free and open society. Its average contribution is positive; but I believe that the marginal contribution in going from 15% of the national income to 50% has been negative. I firmly believe that we would be better off if we were free to use that part of our production in accordance with our individual tastes and values rather than turning control of it over to the political authorities. The result would be a GDP per capita 70%, not 7%, higher than Hong Kong’s.

The obvious occasion for these remarks is the turnover of Hong Kong to China. A less obvious but more important reason is the current budget discussion in this country.

Most of the emphasis is on the proposed tax cuts. I have long favored cutting taxes at any time, in any manner, by as much as possible as the only way of bringing effective pressure on Congress to cut spending. Like every teenager, Congress will spend whatever revenue it receives plus as much more as it collectively believes it can get away with. Reducing spending requires cutting its allowance.

The currently proposed tax cut is trivial: $85 billion over five years, or $17 billion a year, one-quarter of 1% of national income. If that cut were being financed by reducing spending, and were to be repeated year after year, it would take more than 60 years to bring the share of national income controlled by government down to the same level as in Hong Kong today.

Unfortunately, the cut in taxes is not being financed by reducing spending. On the contrary, the proposed “balanced budget” agreement calls for higher spending in coming years. The hypothetical balance is to be brought about by higher tax revenue, not by lower spending. The tax cut is being financed by the unlegislated increase in the effective tax rate produced in a growing economy by a graduated income tax combined with incomplete indexation of taxes for inflation. Taxes are going up, not down.

Neither cutting explicit taxes nor balancing the budget is an end in itself. Both are means to the ultimate objective of increasing the freedom of individuals to use their own resources in accordance with their own values–as President Reagan put it, to get the government off our back. A real cut in direct and indirect government spending as a fraction of national income is required to achieve that basic objective.

Mr. Friedman is a senior fellow at the Hoover Institution.

Link para o artigo original.

Link para artigo relacionado, por Friedman em 2006.

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