Category: Free Markets

As Freedom Left Hong Kong, So Did Hundreds of Billions of Dollars and 100,000 Citizens

(p. B1) This summer, when Hong Kong’s stock market rout seemed to have no end in sight, the city’s financial chief, Paul Chan, jumped into action, creating a task force to inject confidence into a market that was being pummeled by global investors wary of China.

Hong Kong cut taxes on trading, and Mr. Chan went on a roadshow to Europe and the United States, promising measures to “let investors feel optimistic about the outlook.” Investors were anything but sanguine, however, and the city’s stock exchange is among the world’s worst-performing stock markets this year.

. . .

Hundreds of billions of dollars flowed out this year as money managers and pension funds reduced their holdings in Hong Kong, which has long been a gateway for foreign investors wanting to put money into mainland China. The outflows were largely driven by an economic downturn in China and mounting pressure on American investors to sell their (p. B3) exposure to Chinese companies.

. . .

A former British colony, Hong Kong was handed back to China in 1997 with a pledge that it would maintain a high degree of self-governance under a policy called “one country, two systems.” For two decades, this allowed Hong Kong to define itself as unique and distinct from the rest of China, while offering financial access to the world’s second largest economy.

But after citywide protests in 2019, Beijing imposed the national security law, which has silenced political debate and stifled civic activity.

More than 100,000 residents have left Hong Kong over the last few years, in part because of the security law and tough pandemic restrictions. Many young Hong Kong professionals who are still there have expressed a desire to leave, making it a challenge to recruit the talent that has helped the city function as a financial center.

Once a major hub for Wall Street banks, Hong Kong had a drought of initial public offerings this year. Companies raised the lowest amount of money since 2001, resulting in layoffs at financial institutions citywide.

Many international companies have stopped hiring for new positions in Hong Kong. With less money coming into the exchange and fewer transactions, dozens of brokerages have also closed.

For the full story, see:

Alexandra Stevenson. “Hong Kong Stock Market Ends in Loss For 4th Year.” The New York Times (Saturday, December 30, 2023): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 29, 2023, and has the title “Hong Kong Stocks Plunge to Losses for 4th Straight Year.”)

“People’s Experience with the D.M.V.” Teaches Them “the Government Is Plodding, Slow”

(p. B1) The film “Leave the World Behind” centers on the idea of mistrust and how easy it is for humans to lose empathy for one another when faced with a crisis. It is at once unnerving, misanthropic and bleak, and, perhaps somewhat surprisingly, it’s produced by Barack and Michelle Obama’s production company, Higher Ground.

. . .

(p. B5) While Mr. Obama was no stranger to Hollywood — since his early days of campaigning for the presidency he found a welcoming audience among the show business elite — he has found that working in this business has taken some getting used to.

“It’s ironic that the private sector is made out to be this hyper-efficient thing, and the government is plodding, slow,” he said. “I think part of it is ideological and part of it is people’s experience with the D.M.V.”

For the full story, see:

Nicole Sperling. “Reimagining Storytelling, Obama Style.” The New York Times (Friday, December 8, 2023): B1 & B5.

(Note: ellipsis added.)

(Note: the online version of the story was updated Dec. 7, 2023, and has the title “Obamas’ Vision for Hollywood Company: ‘This Isn’t Like Masterpiece Theatre’.”)

If You Are Pained to Wait Over Two Years for Socialist Surgery in Britain, Seek Timely Free Market Surgery in Lithuania

(p. 4) For David Haselgrove, it was a battle each day to get out of bed, then another struggle to put on his socks. Stairs were often impossible, and the pain made him tetchy and difficult to live with.

But when he sought medical help for his arthritis, Mr. Haselgrove was told the wait for a specialist consultation was more than two years. It might be another two years before surgery.

“If I wasn’t the person I am, I would have been losing the will to live because the pain takes over your life,” said Mr. Haselgrove, 71, who is now fully mobile after a successful hip replacement.

His recovery has nothing to do with Britain’s National Health Service.

Instead, Mr. Haselgrove, who ran several small businesses during his working life, flew to a clinic in Lithuania to have surgery, becoming one of a growing number of Britons who have dipped into their own pockets to pay for procedures to which they are entitled free on the N.H.S.

. . .

Investment in buildings and equipment, including in vital diagnostic tools such as CT and M.R.I. scanners, has significantly lagged medical systems in other advanced economies, according to the King’s Fund, a health-focused think tank.

That contributed to a backlog of 4.6 million procedures even before the pandemic, a number that swelled to six million as planned procedures made way for emergency care during the Covid crisis. The line for treatment has only grown since. It is now about 7.7 million procedures, representing about a 10th of the population. Thousands have waited more than two years, often in pain.

Little wonder, then, that many Britons who can afford to pay to cut the line are doing so, while some of more limited means are dipping into savings or taking on debt. Yet that trend, some critics say, could undermine a health care system that has been a bedrock of British life for three-quarters of a century.

Private medical insurance is costly in Britain, and taxable when offered as a benefit by employers, so the shift is most visible when people pay for operations and other medical help out of pocket.

According to the Private Healthcare Information Network, which publishes data on the sector, there were about 50,000 “self-pay” medical admissions in a typical quarter before the pandemic. That figure is now steadily substantially higher; in the first quarter of this year, it was 71,000, close to a record.

That does not include patients who go overseas, like Mr. Haselgrove. At 7,000 euros, about $7,500, a hip replacement at the Nord Clinic in Lithuania was significantly cheaper than it would have been in a private hospital in Britain.

. . .

Britain is chronically short of health workers, with over 100,000 N.H.S. positions vacant.

. . .

. . . the deepest risk of the rise in self-pay patients, according to Chris Thomas, principal health fellow at the Institute for Public Policy Research, a progressive think tank, is not to the health service’s operations, but to its political underpinnings.

The British health system, he said, is built around the idea of “universalizing the best” — creating a system “as good for a rich person” as for a poor one, Mr. Thomas said.

If wealthier people increasingly opt out, Mr. Thomas said, the N.H.S. will become a second-class system for those who cannot afford to do so, resulting in “a slow erosion of support.”

For the full story, see:

Stephen Castle. “Long Wait Lists Threaten U.K. Promise of Free Care.” The New York Times, First Section (Sunday, December 10, 2023): 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 9, 2023, and has the title “Britons Love the N.H.S. Some Will Also Pay to Avoid It.”)

“I Do What I Want; You Don’t Like It, Don’t Buy It”

(p. 27) Terry Castro, a New York-based jewelry designer whose knack for blending the fantastical with the elegant propelled him from selling on the sidewalks of New York to adorning celebrities like Rihanna and Steven Tyler, died on July 18 [2022] at his home in Istanbul.

. . .

Mr. Castro, who worked under the single name Castro, considered himself a “creator of dreams.”

. . .

Passionate and at times confrontational, Mr. Castro considered himself a rebel within the industry.

“I do what I want; you don’t like it, don’t buy it,” he said in a 2012 interview with The Black Nouveau, a style blog. Recounting his scattered efforts to “go commercial,” he concluded that the income was not worth the creative price paid.

For the full obituary, see:

Alex Williams. “Terry Castro, 50, Rebel Who Created Exquisite Jewelry.” The New York Times, First Section (Sunday, August 7, 2022): 27.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date Aug. 4, 2022, and has the title “Terry Castro, a Proud Outsider in the Jewelry World, Dies at 50.”)

Communists Renege on “Implicit Bargain” to Give Chinese “Stability and Comfort” in Exchange for Lost Freedom

(p. 1) After violently crushing pro-democracy demonstrations at Tiananmen Square in 1989, Beijing struck an implicit bargain: In exchange for limitations on political freedoms, the (p. 9) people would get stability and comfort.

But now the stability and comfort have dwindled, even as the limitations have grown.

. . .

Atop a hill in Shenzhen’s Lianhuashan Park stands a 20-foot bronze statue of Deng Xiaoping. Mr. Deng, the leader who pioneered China’s embrace of market forces after Mao’s death, watches over the city that is a living reminder of the country’s ability to change direction. Mr. Deng is shown in midstride, to honor his credo that opening should only accelerate.

Chen Chengzhi, 80, a retired government cadre who hikes to that statue every day for exercise, credits Mr. Deng with changing his life. Mr. Chen moved to Shenzhen in the 1980s, soon after Mr. Deng allowed economic experimentation here. The city then had just a few hundred thousand people, but Mr. Chen, who had endured famine and the Cultural Revolution, believed in Mr. Deng’s vision.

“At the end of the day, all good things in China are related to Shenzhen,” Mr. Chen said on one of his daily walks, adding that he cheered when China’s premier, Li Keqiang, visited the statue in August and pledged that China would continue opening to the world.

If it doesn’t do so, Mr. Chen said, “China will hit a dead end.”

But Mr. Li is retiring, even as the Xi Jinping era of rising state control stretches on.

For now, Mr. Chen continues climbing the hill — looking over the city that he helped build, that he believes in still.

For the full story, see:

Vivian Wang. “Covid Crackdowns Shake Chinese People’s Faith in Progress.” The New York Times, First Section (Sunday, December 4, 2022): 1 & 9.

(Note: ellipsis added.)

(Note: the online version of the story also has the date December 4, 2022, and has the title “The Chinese Dream, Denied.” The online version says that the title of the print version was “Beijing’s Bargain With Its People Is Shaken” but my National Edition of the print version had the title “Covid Crackdowns Shake Chinese People’s Faith in Progress.”)

Xi’s Communist Assertion of Control of Private Firms Dulls the Entrepreneurial Innovation and “Unbridled Energy That Powered China’s Explosive Growth”

(p. A3) Just a few weeks later, Mr. Xi personally intervened to block the $34 billion initial public offering of one of China’s biggest private firms, Ant Group, partly out of concerns it was too focused on its own profits rather than the state’s goal of controlling financial risk.

The message isn’t lost on entrepreneurs, who are reorienting their businesses to appease the state or giving up on private enterprise altogether.

“For us small businesses, we have no choice but to follow the party,” says Li Jun, a 50-year-old owner of a fish-farming business in the eastern Jiangsu province. “Even so, we’re not benefiting at all from government policies.”

Mr. Li recently closed down a seafood-processing plant because it couldn’t get bank loans—a persistent problem for private firms, despite Beijing’s repeated pledges to make credit more available for them.

The risk for China is that Mr. Xi’s vigorous assertion of statist prerogatives will dull the kind of innovation, competitive spirit and unbridled energy that powered China’s explosive growth in recent decades. The economic policies that helped nurture e-commerce giant Alibaba Group Holding Ltd., tech conglomerate Tencent Holdings Ltd. and other global success stories seem to be at an end, say economists inside and outside China. As a result, they say, Chinese companies are becoming less like American ones, which are driven by market forces and depend on private innovation and consumption.

. . .

In one of the clearest signs of China’s direction, more state firms are gobbling up private companies, redefining a government initiative called “mixed-ownership reform.” The original idea, dating back to the late 1990s, was to encourage private capital to invest in state firms, bringing more private-sector acumen to China’s often-bloated state-owned enterprises.

Now, under Mr. Xi, the process often works the other way around, with big state companies absorbing smaller ones to keep them going, and reconfiguring the smaller firms’ strategies to serve the state.

For the full story, see:

Lingling Wei. “Xi Ramps Up Control of China’s Private Sector.” The Wall Street Journal (Friday, Dec. 11, 2020): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 10, 2020, and has the same title as the print version.)

Milton Friedman Made the Case for Freedom to 15 Million Viewers

New York Times reviewer Szalai says that watching Milton Friedman’s “Free to Choose” documentary today is a surreal experience. To the contrary, I say that watching Milton Friedman’s documentary today is an exhilarating experience and watching the the evening news today is a surreal experience. (As a graduate student at the University of Chicago, I was in the audience for a couple of the episodes of Milton Friedman’s “Free to Choose” documentary.)

(p. C1) The documentary series “Free to Choose,” which aired on public television in 1980 and was hosted by the libertarian economist Milton Friedman, makes for surreal watching nowadays. Even if Ronald Reagan would go on to win the presidential election later that year, it was still a time when capitalism’s most enthusiastic supporters evidently felt the need to win the public over to a vision of free markets and minimal government.  . . .

They had an enormous audience: The 15 million viewers who watched the first episode saw an avuncular Friedman (diminutive and smiling), leaning casually against a chair in a Chinatown sweatshop (noisy and crowded), surrounded by women pushing fabric through clattering sewing machines. “They are like my mother,” Friedman said, gesturing at the Asian women in the room. She had worked in a factory too, after immigrating as a 14-year-old from Austria-Hungary in the late 19th century. Friedman explained that these low-wage garment workers weren’t being exploited; they were gaining a foothold in the American land of plenty. The camera then cut to a tray of juicy steaks.

For the full review, see:

Jennifer Szalai. “Sounding an Alarm Over America’s Values.” The New York Times (Saturday, February 18, 2023): C1 & C4.

(Note: ellipsis added.)

(Note: the online version of the review was updated Feb. 17, 2023, and has the title “Is the Marriage Between Democracy and Capitalism on the Rocks?”)

The book based on Milton Friedman’s documentary is:

Friedman, Milton, and Rose D. Friedman. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich, Inc., 1980.

Betting on Elections Is a Form of Free Speech

(p. A17) The Commodity Futures Trading Commission has moved to shut down PredictIt, an online marketplace for futures contracts on the outcomes of political events, effective Feb. 15, 2023. This is a blow to investors in these contracts, such as those on the presidential election of 2024, who are left uncertain as to how their positions will be unwound. And it’s a blow to the public at large, because political futures have proven to have better predictive power than polls.

. . .

. . . in early 2020, . . . PredictIt listed a contract on whether the World Health Organization would declare Covid-19 a pandemic. According to John Phillips, chief executive of Aristotle, the firm that operates PredictIt, the CFTC telephoned to complain about that contract, saying it was in poor taste. The contract had already expired.

. . .

If investors can express their opinions on the future prices of corn and pork bellies, surely the First Amendment also protects their ability to do the same on elections and other political matters. It’s a matter of free speech that you can put your money where your mouth is.

For the full commentary, see:

Donald Luskin. “The Feds Don’t Want You Betting on Elections.” The Wall Street Journal (Wednesday, Nov. 2, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 1, 2022, and has the same title as the print version.)

Long Waits for Italian Cabs Due to Regulations Limiting More Cabs and Ride-Sharing

(p. A4) Returning to Rome from Naples one Monday afternoon in June [2023], a train trip that takes just over an hour, Daniele Renzoni said that he and his wife waited for more than an hour and a half at Termini station for a cab under a blazing sun.

“Just image a long line of grumbling, frustrated people, complaining, cursing. Hot day, angry tourists, there’s not much else to say,” said Mr. Renzoni, who is retired. “Taxi drivers will tell you there’s too much traffic, too many requests, too much everything, but the fact is, the customer pays.”

The situation is “a disgrace to Italy,” said Furio Truzzi, president of the consumer rights group Assoutenti, one of several associations that protested the shortage.

. . .

Thanks to the taxi lobby, ride-sharing services are almost nonexistent in Italy, where Uber is the only platform in use, with many restrictions.

The government lost an opportunity for real change, said Andrea Giuricin, a transportation economist at a research center at the University of Milan Bicocca. He said the best way to meet consumer needs would be to increase the number of licenses for Italy’s chauffeur services, known as N.C.C., which work with Uber.

“It’s very difficult in Italy” because “there isn’t a culture of liberalization in general,” creating little opportunity for competition, said Professor Giuricin. Taxis “are a small but powerful lobby” that easily influences politics, “which is very weak” in Italy, he said.

Angela Stefania Bergantino, a professor of transportation economics at the University of Bari, pointed out that previous governments had tried to open up the taxi market. But they failed.

“The problem is that taxis are regulated by municipal governments, which can find themselves captive in the sense that it is difficult for City Hall to implement policies that the cab lobby doesn’t like,” she said. “These are lobbies that have effective strike tools,” like wildcat strikes or traffic blockages that can paralyze entire cities, she said.

. . .

Above all, though licenses are issued by the city, they can then be sold by the drivers, for sums that can reach 250,000 euros, or about $276,000, depending on the city — a retirement nest egg for many. With an influx of new licenses, the value of an existing license would depreciate.

City administrators fear cabbies could revolt and strike if the status quo changes. “If I decide to issue new licenses,” said Eugenio Patanè, Rome’s city councilor in charge of transportation, “I’m going to find 1,000 taxis blocking traffic in Piazza Venezia,” the downtown Rome square that taxi drivers habitually clog while protesting.

For the full story, see:

Elisabetta Povoledo. “Getting a Cab in Italy Is Hard. But Remedying That Isn’t Easy.” The New York Times (Friday, August 11, 2023): A4.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Aug. 10, 2023, and has the title “Getting a Taxi in Italy Is Too Hard. Fixing That Is Not Easy.”)

Socialist Alexandria Ocasio-Cortez (AOC) Buys Foreign Sunscreens Not Approved by U.S. Government F.D.A.

(p. 2) After months of prompting, I have finally managed to help my husband form a daily sunscreen habit. Whenever I see traces of paper white cream in his dark beard, I think, We’re halfway there.

Hoping to avoid the white cast, heaviness and greasiness common in many sunscreen products available in U.S. drugstores, some Americans, including Representative Alexandria Ocasio-Cortez of New York, have taken matters into their own hands, opting for sunscreens manufactured abroad. In a recent interview, the congresswoman said she toggled between Bioré in the summer and Beauty of Joseon in the winter — two Asian brands that employ active ingredients not approved for use in the United States.

“The technology is very sophisticated,” Ms. Ocasio-Cortez said. “You don’t feel like you have a layer of sunscreen on, and it kind of just feels like you’re putting on a moisturizer in that sense, which makes it easier to use.”

While sunscreen is regulated as a cosmetic in major skin-care hubs like South Korea, Japan and the European Union, in the United States, it falls under the purview of the Food and Drug Administration. Any drug product marketed to American consumers must be approved by the F.D.A., and because sunscreen “makes a drug claim” — namely, that it can prevent sunburn, decrease the risk of skin cancer and mitigate early skin aging — the agency regulates it as an over-the-counter drug.

The last time the Food and Drug Administration approved new active ingredients for use in sunscreens was more than two decades ago, and at times it can feel as if the rest of the world has surpassed the United States in the development of new sunscreen formulations and protocols. Skin-care influencers on TikTok and Instagram are in a near-constant state of frenzy over exciting new products and innovations that are nowhere to be found on American shelves. Currently there are 14 sunscreen filters approved for use by the F.D.A. The European Union employs more than 30.

Frustrated by what seems to be a wealth of more exciting options for sun protection overseas, skin-care-conscious Americans have been quick to point the finger at the F.D.A. for the delay in approving new active ingredients.

For the full story, see:

Sandra E. Garcia. “U.S. Sunscreen Is Stuck in the ’90s.” The New York Times, SundayStyles Section (Sunday, August 13, 2023): 2.

(Note: the online version of the story has the date Aug. 12, 2023, and has the title “U.S. Sunscreen Is Stuck in the ’90s. Is This a Job for Congress?”)

60-Year-Old Retired Musician Says She Will “Fetch a Gun” to Defend Taiwan’s Freedom

(p. A1) TAIPEI, Taiwan—People in Taiwan have been following every twist of the war in Ukraine. But, while their sympathy for the Ukrainian cause is near-universal, the conclusions for the island’s own future widely diverge.

To some, the takeaway is that even a seemingly invincible foe can be defeated if a society stands firm, an inspiration for Taiwan’s own effort to resist a feared invasion by China. Others draw the opposite lesson from the images of smoldering Ukrainian cities. Anything is better than war, they say, and Taiwan should do all it can to avoid provoking Beijing’s wrath, even if that means painful compromises.

. . .

(p. A8) “The young people are the ones who don’t want unification with China,” said ret. Lt. Gen. Chang Yan-ting, a former deputy commander of Taiwan’s air force. “But if you want independence, you need to fight, and they also don’t want to fight. Therein is the conflict.”

Yi-hao, a student in Taiwan’s National Defense University, was an exception. “Before the war in Ukraine, we were taught that Russia’s military power is stronger than China’s, and Taiwan’s military was stronger than Ukraine’s,” he said. “If they were able to resist this long, Taiwan will definitely be able to hold out.” He didn’t want his surname used because he wasn’t authorized by the military to speak.

Lai Yi-chi, who became a lieutenant after graduating from the Naval Academy in June [2023], said that she had been inspired by the bravery and resilience of Ukrainian soldiers, something often discussed in her classes. “We should also embody such spirit and determination,” she said.

Bypassing the official armed forces, some volunteer groups have decided to act on their own, preparing fellow citizens for a possible war. One such group is Kuma Academy, which received a $100 million donation from Robert Tsao, the founder of the United Microelectronics, one of the world’s biggest semiconductor companies.

“We don’t intend to build up a private army,” Tsao said. “But I think their effort will probably increase the resilience of Taiwan’s society. If we know how to hide, how to help each other, how to retain communication, we can pretty much reduce the damage in wartime.” Some of the students also like to learn more martial skills, such as shooting, Tsao said, but Taiwan’s strict gun laws make it difficult. Some 25,000 Taiwanese have been trained at Kuma.

Nico Li, a 60-year-old retired musician attending a Kuma class, said she was unnerved by growing risks coming from China, and wanted to arm herself to avoid being a burden to her children. “Taiwan is an island of treasure. I don’t want to hand it over to others without a fight,” Li said, referring to what she sees as the Taiwanese values of freedom and democracy. “If I have the ability, I would even go and fetch a gun if necessary.”

At another training session, run by the Forward Alliance, dozens of Taiwanese practiced how to stop arterial bleeding with tourniquets and stabilize major wounds. “There is a sense of impending doom, of feeling very hopeless,” said one of the students, Eric Lin. “So, instead of sitting at home and browsing the negative news, I wanted to come here—so that I would be able to do something.”

For the full story, see:

Yaroslav Trofimov and Joyu Wang. “Taiwan’s Impossible Choice: Be Ukraine or Hong Kong.” The Wall Street Journal (Thursday, July 6, 2023): A1 & A8.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story has the date July 5, 2023, and has the same title as the print version.)