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Big news on the labor front. Yesterday, port workers in Hong Kong ended a 40-day strike after winning a 9.8% pay increase. This came after an initial demand for a 20% increase, which was negotiated with  Hutchison Whampoa (who operates the ports), owned by richest man in Asia Li Ka-shing.

Talk about a group of workers who know how to negotiate (President Obama should take note) -- they stood up to a multi-billionaire and demanded a huge pay increase that they knew they couldn't get, so that the compromise would be right in line with their reasonable desired results.

The deal the dockworkers got in writing also included a provision that allows for bathroom breaks while on the clock.

While these concessions may seem like a small win for Hong Kong workers (considering their wages had been on a decline for years anyway), it's indicative of a growing trend in Hong Kong that is accepting a more regulated market that respects collective bargaining and the rights of multiple stakeholders, not just capitalist owners.

Back in 2010, Hong Kong workers had a landmark victory against usurious capitalists when they earned passage of legislation mandating a minimum wage, as well as numerous other pro-labor measures. At the time, "business activists" claimed this would cost Hong Kong working class thousands of jobs, but in a lesson that we can very much learn here in the US, reality played out much differently:

As seen above, after the minimum wage was passed and imposed, Hong Kong's unemployment rate has steadily declined and reached full employment (amidst a worldwide financial panic too). All the consultants and officials who claimed  in 2010 that this would destroy the markets were, well, downright wrong (and we have the benefit of hindsight to show us this).

Awareness of the plight of workers is growing in the Chinese territory,and the press as well as the general public are starting to understand the need to create a balance between workers rights/dignity and the fiduciary duty of capitalists to maximize shareholder wealth.

What's most interesting is that Hong Kong is often touted by the right-wing in the United States as a model of the free market. The conservative Heritage Foundation has named Hong Kong the freest economy in the world for the past two decades. Grover Norquist of Americans for Tax Reform held Hong Kong up as a shining example of the free market recently. Former presidential candidate Mitt Romney even held a fundraiser in Hong Kong in the final stretch of his 2012 campaign. Milton Friedman also loved to use Hong Kong as the example of an ideal system.

It's a territory that has abnormally low income taxes (although wealthier individuals do face higher marginal rates), no sales/VAT, no capital gains taxes, and offers a generally friction business-incorporation process.

But the reality is that Hong Kong isn't much of a "free market" in the way many Republicans think the term means. In addition to the pro-labor reforms over the past two decades listed above, the basic characteristics of their economy show it's not some Republican utopia. Hong Kong is run by communist Chinese oligarchs and state-appointed leaders, despite being a Free Economic Zone. It has a hard peg of their currency to the United States dollar. And while there are few (or no) capital controls, they regularly intervene in the market in order to produce the exchange rate conducive to their public policy goals. It also has a robust public education system, with the government even funding limited spaces in its domestic universities and subsidy programs to study abroad (cry more, Rick Perry!).

Additionally, over 50% of Hong Kongers are provided public housing by the government. And finally, Hong Kong has a universal healthcare system (and Republicans thought Obamacare was Marxist!), through a two-tiered provision with a "...'no turn away policy', which ensures that nobody is denied adequate health treatment due to lack of means" (Hong Kong: Health for all). Studies have examined the Hong Kong welfare system and determined that the state is more involved than many appreciate or understand (Linda Wong, City University Hong Kong)

These facts clash greatly with the impression conservatives try to create of Hong Kong as the Valhalla of radical capitalism. But even though the conservative vision of the ideal "free market" in practice may differ greatly from their darling Hong Kong, one aspect which does fit is that it is decidedly un-democratic (in line with Republican worldview where moochers and takers are given little to no sympathy or assistance).

The faux ideals like the "Hong Kong free market" put forth by conservatives of how societies should be organized are like pipe dreams, merely delusions from reality; a smoke screen to avoid exposing their true underlying desire: for an outright plutocracy and oligarchy. Conservatives aren't shy about expressing how their views clash with democracy (Hayek's affinity for Pinochet as one example). As Margaret Thatcher famously said:

She agreed Chile to be an “economic miracle”, but lamented that Britain’s “democratic institutions and the need for a high degree of consent” made “some of the measures” taken “quite unacceptable”.
In the conservative "free market", funding a government jobs program that is the military is considered true capitalism. The Republican presidential ticket for 2012 ran a campaign that insisted on having military spending (subsidization of an entire industry) be a minimum of 4% of GDP. "Free market" ideas like this are why the single largest employer in the world is the US Defense Department (followed closely by our free-market buddies across the Pacific, the Chinese army).

This view of the free market essentially means freedom for the rich and those who protect the rich, but no democratic values that protect workers' rights to assemble and bargain collectively. Conservatives reject the establishment of democratic institutions owned by the public and operated for the public interest, while showing a willingness to lay out hundreds of billions annually in military subsidies that provide jobs within the public-private hybrid military-industrial complex. Their worldview necessitates that the wealthy property and capital owners are in fact given preferential societal treatment.

The right-wing "free market" meme is based on a false premise and is abused merely as a tool of rhetorical propaganda/newspeak, while nations like Hong Kong and Singapore are falsely held up as models that emulate their conservative economic ideals. Despite Hong Kong's rampant inequality and anti-democratic tendencies (which would actually be a necessary consequence of a continuation of neoliberal economics of the right-wing), in most other aspects it serves as a glorious counter-example that has implemented numerous "anti-free-market" programs that contradict principles within conservative doctrine.

Hong Kong offers an illusion of a free market that Republicans and their ilk like to use as a model, but the reality of the "unAmerican" HK system paints a much different picture. Its people have full universal healthcare, public education, public housing, and don't need to worry about basic necessities. Workers are beginning to demand rights and seek to expand further what was already an established welfare system (oh noes) that touted social equity in Hong Kong for decades (despite the rather undemocratic governance of the territory). Where this trend in the territory will go is something the capitalists and workers in Hong Kong will fight out.

But the real question for us is: when will American workers reclaim their government and un-rig the system to help rebuild the broken middle class? In a true free society that encompasses the modern usage of the term "democracy", collective bargaining through free assembly is in fact a free market phenomenon.

And in a society of laws that respects the interest of public integrity, all parties should negotiate in good faith that ensures a fair and equitable outcome to disputes. When will we finally say enough is enough, and mobilize to stand up and fight for what's right?

Originally posted to AusteritySucks on Tue May 07, 2013 at 01:59 AM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  The link doesn't explain what this means: (2+ / 0-)
    Recommended by:
    FG, caul
    Additionally, over 50% of Hong Kongers are provided public housing by the government.
    in fact, reading between the lines it seems more like that they are provided a subsidy for housing, rather than the housing itself.  
    •  some combination (6+ / 0-)

      i believe:

      http://www.housingauthority.gov.hk/

      Mathematically and practically, it makes little difference if the government owns and operates the scheme (and forces poor tenants to pay whatever they can) or if they subsidize whatever a poor tenant can pay to get involved in some private scheme.

      The non-governmental public support also goes through: http://www.hkhs.com/...

      The provision is vast though. The 50% figure doesn't come from a loose interpretation of a tax deduction or something, if that's what you're wondering.

      Deficits don't matter, jobs do.

      by aguadito on Tue May 07, 2013 at 04:51:12 AM PDT

      [ Parent ]

      •  Thanks for the link (0+ / 0-)

        From the link you provide, there appears to be several assistance mechanisms available, making this statement not entirely accurate:

        Mathematically and practically, it makes little difference if the government owns and operates the scheme (and forces poor tenants to pay whatever they can) or if they subsidize whatever a poor tenant can pay to get involved in some private scheme.
        Practically, if $$s are given directly to a person to help out with renting housing (owed privately) that could be a rather temporary arrangement, whereas if the same amount of $$s was invested in public housing (i.e., construction of physical buildings, etc) that would tend to be a tad more permanent.

        There's also a link for assistance towards "home ownership" - again, this would be transient, since presumably the person receiving the aid would eventually own their home and no longer need the government largess.    

        In a way, the interest mortgage deduction in the USA fits into the latter category, making statements like "50% of Americans are provided with public housing" roughly as correct as the headline you linked to . .. .  Yes, I realize that that is stretching things a bit, maybe swinging to the opposite extreme as that headline, but still - it * was * unnecessarily misleading.

        •  I think... (4+ / 0-)
          Recommended by:
          NYFM, MrJayTee, Laconic Lib, caul

          you're casting unfair doubt on a figure/statement that comes from the BBC's Katie Hunt (who is based in Hong Kong) in a story that involves harmonized data from Hong Kong experts they interviewed--if there was any doubt to the validity of such a number, there would have certainly been an objection.

          Here's the comparison of the data in the story:

          It is a far higher proportion than in the UK where less than 10% live in subsidised housing, but is beaten by Singapore, another supposed bastion of economic liberty, where about 85% of people live in public housing.
          So, you're making a lot of assumptions and engage in speculation without any actual deeper knowledge of the comparative data presented.

          The 50% figure even came with more data that shined light on it:

          More than half of the population earn less than HK$11,000 ($1,400; £920) a month and household incomes have barely increased over the past 10 years despite a booming economy.
          So it's not difficult to see that as a viable statistic. It's not in any way misleading, it's right there in the story with a comparison to another country (and my statement was merely a quote from the story, I didn't even re-word it to change the meaning at all).

          Deficits don't matter, jobs do.

          by aguadito on Tue May 07, 2013 at 05:18:50 AM PDT

          [ Parent ]

          •  My "assumptions" are based on the link (0+ / 0-)

            you provided, namely, the Hong Kong public housing website - where there turned out to be all kinds of shades of gray in what is meant by "public housing" - you provide information and then dis me for using it? Strange!!

            Anyways, what else I am supposed to do?  Just blindly accept a black and white scenario as painted in the headline w/o attempting to make sense out of it?

            In any event, that's not a major point because whatever they're doing, they're clearly not doing enough to make much of an impact on income equality.

            In fact from the Wikipedia page giving the GINI index rankings, sorting on the World Bank ratings puts Hong Kong near the bottom of the list of most inequitable societies (getting worse going down):

             
            (many countries omitted)
            Suriname
            Belize  
            Hong Kong
             Zambia  
             Brazil
             Colombia  
             Guatemala  
             Bolivia
             Central African Republic
             Honduras
             Angola  
             Haiti
             Botswana
             South Africa  
             Namibia
             Comoros
             Seychelles

            Really, Brazil is the only other country close to first world status in the neighborhood of where Hong Kong ranks.

            I suspect that this is the type of thing that conservatives value when compiling their "free economy" lists - i.e., the ability for the wealthy to pad their pockets at every else's expense.  

            Hong Kong is still doing very well in that regard, thank you very much.

            •  heh (5+ / 0-)
              Recommended by:
              Roadbed Guy, leema, MrJayTee, Laconic Lib, caul

              I wasn't trying to diss you, sorry if it came off that way :)

              I'm not suggesting you "blindly accept" the BBC-mentioned data, part of citing a reputable source is that it makes it not "blind" (and their story is rather well-cited with Hong Kong sources too).  It's fair to question the number of course though, as you wish.

              The inequality is a major issue there. It seems the rich don't mind to be super rich and fund a large public housing scheme for the working class. Which is actually a somewhat progressive compromise to what right-wingers seem to propose, which is imprison the poor and leave them on the streets helpless and without healthcare :P

              Deficits don't matter, jobs do.

              by aguadito on Tue May 07, 2013 at 06:59:18 AM PDT

              [ Parent ]

              •  In all fairness, that GINI data (1+ / 0-)
                Recommended by:
                aguadito

                doesn't really reflect HK's recent attempts (e.g., the minimum wage thing you document and the more recent increase in dockworker's pay) that you mention.

                I'll be interested to see a couple years down the road when the data comes in if this has had a measurable effect or not.  I'm skeptical but I suppose it is possible.

            •  I'm wondering if some of your (1+ / 0-)
              Recommended by:
              caul

              "shades of gray" about "public housing" stem, not from the data provided, but from culturally specific assumptions about what constitutes "public", based on the very slim and narrow US model?

              Just a thought.

              Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

              by a gilas girl on Tue May 07, 2013 at 08:32:19 AM PDT

              [ Parent ]

    •  It's a full range, running the whole gamut (6+ / 0-)

      Their public housing goes from the old style public housing with shared bathrooms, to nicer self containde units, to I believe 2 classes of below market rate housing which is sold to low income occupants.  It all depends on how needy you are, and how long you've waited in line for the more popular locations and programs.

      •  so it sounds about right to you (1+ / 0-)
        Recommended by:
        divineorder

        that about 50% of the people live in buildings that are out and out owned by the government?  (i.e., the most literal sense of "public housing")

        I suppose it's possible!  I was there about 15 years ago (right after the PRC takeover) and was hosted by a construction guy who showed me around some construction  sites - I actually never thought to ask who he was building them for - but in retrospect since they mostly were rather bland apartment buildings it very well * could * have been for public housing purposes . ..   but in that case, this isn't that new of a phenomenon.

        •  The units which are sold to the occupants (5+ / 0-)

          are owned by the occupants.  
          But you are absolutely right- public housing developments are very visible in Hong Kong. I grew up there and aside from the lowewst tier of public housing, there is not much stigma to living in public housing.  It's completely unlike here in the US where people blanche when they hear that you live in the projects. The upper tier public housing always had a long waiting list because they were pretty desireable.

          •  Or even romanticized on sitcoms & soap operas (1+ / 0-)
            Recommended by:
            divineorder

            Just like village life is on Chinese TV. ATV and TVB know their audience.

            Most of my friends in HK grew up in the estates and some still do. Vertical villages.

            {Not a sigline. You are hallucinating.}

            by koNko on Tue May 07, 2013 at 04:51:32 PM PDT

            [ Parent ]

    •  I can explain, it's simple. (3+ / 0-)
      Recommended by:
      aguadito, caul, Roadbed Guy

      Originally the system provided free or low cost housing depending on qualification.

      About 10 years ago (can't remember exactly) a private ownership scheme was enacted allowing residents to buy their homes and this resulted in a fairly high rate of private purchase since it was affordable and below market rates.

      More recently, the current scheme detailed at the linked site was enacted with the aim to be privatization by providing subsidies and taking the Housing Authority out of the estate development business (originally all were government projects).

      {Not a sigline. You are hallucinating.}

      by koNko on Tue May 07, 2013 at 04:41:27 PM PDT

      [ Parent ]

  •  Hong Kong is Conservatopia. (3+ / 0-)
    Recommended by:
    a gilas girl, caul, divineorder

    It went directly from being Her Britannic Majesty's Crown Colony of Hong Kong, ruled despotically by a governor appointed in London, to being ruled by a similar official appointed in Beijing. The 1997 handover agreement between Britain and the PRC maintained a veneer of democracy, there are some basic democratic rights for the citizenry and a toothless legislature, but nothing most Americans would be comfortable with.

    Fitting that our cons would embrace a system like that, when they are as suspicious of the right to vote as they are.

    Fuck me, it's a leprechaun.

    by MBNYC on Tue May 07, 2013 at 08:05:36 AM PDT

    •  Yes (6+ / 0-)
      Recommended by:
      leema, MBNYC, MrJayTee, No Exit, Laconic Lib, caul

      The ways in with the HK system is appealing are due to:

      1) Low marginal taxes in general. The top income tax rate being 17% (last I checked), (even if it is technically "progressive" because it starts at 2% then 7% in increments so the wealthier are taxed more). They also don't tax capital gains or any sales/VAT (except for sin taxes)

      2) The suppression of democracy that serves the wealthy and offers cheap, marginalized workers to serve their "free market" system.

      But my point was more to show that there are countless aspects of the HK system which would not quite make it on the conservative Republican party platform :)

      FFS, the right-wingers call the ACA private insurance mandate "marxist" -- who knows what kind words they have for Hong Kong's actual universal healthcare system (not single payer, but two tier -- like New Zealand..)

      and Milton Friedman used to call the minimum wage "a racist policy" and all sorts of over things (Paul Ryan hates the minimum wage too as an apostle of Ayn Rand)

      Their delusion of the "free market" ideals seems to come mostly from HK's low taxation. But there are significant public expenditures and an oft-ignored safety net that would make the GOP vomit.

      Deficits don't matter, jobs do.

      by aguadito on Tue May 07, 2013 at 08:33:57 AM PDT

      [ Parent ]

  •  all successful countries have health care for all (3+ / 0-)
    Recommended by:
    koNko, No Exit, Laconic Lib

    sigh

    double sigh

  •  Thank you so much for this article... (0+ / 0-)

    I will send a link to someone who recently  cited Hongkong as a "free Market" successful example when i asked for a model.    

    “... there is no shame in not knowing. The problem arises when irrational thought and attendant behavior fill the vacuum left by ignorance.” ― Neil deGrasse Tyson, The Sky Is Not the Limit: Adventures of an Urban Astrophysicist

    by leema on Tue May 07, 2013 at 09:34:06 AM PDT

  •  The dock workers win (1+ / 0-)
    Recommended by:
    jm214

    a strike in a communist-run city state.  Meanwhile, in Portland, Oregon, the Port bosses hire professional strikebreakers, and lock out the ILWU at two grain docks.

    Orly, it isn't evidence just because you downloaded it from the internet.

    by 6412093 on Tue May 07, 2013 at 10:07:52 AM PDT

    •  The most important words in the diary: "When will (1+ / 0-)
      Recommended by:
      aguadito

      we finally say enough is enough, and mobilize to stand up and fight for what's right?"

      Without that, Roadbed Guys will continue to pave over the  rest of us, whispering stuff that causes us to doubt, and be a little afraid of offending, and to put lots of effort into showing up the little distortions and disaffections...

      "Is that all there is?" Peggy Lee.

      by jm214 on Wed May 08, 2013 at 04:54:24 AM PDT

      [ Parent ]

    •  the free market at work (0+ / 0-)
      Meanwhile, in Portland, Oregon, the Port bosses hire professional strikebreakers, and lock out the ILWU at two grain docks.
      We're slowly losing all the gains of redefining American capitalism in the early 20th century as meaning "FAIR and EQUITABLE markets" not just "FREE RADICAL MARKET CAPITALISM"

      Deficits don't matter, jobs do.

      by aguadito on Wed May 08, 2013 at 10:53:37 AM PDT

      [ Parent ]

  •  They also have a stock transaction tax (4+ / 0-)
    Recommended by:
    aguadito, MrJayTee, No Exit, Laconic Lib

    The very same tax that is sometimes proposed here in the US, but always shot down as being too socialist. The naysayers would say that the transaction tax would drive investors away and slow down transactions, etc, etc. But Hong Kong is a perfect example of the transaction tax in action- and it hasn't slowed down investors at all. The Hong Kong stock and financial market is the largest and most important one in SE Asia.

    Also- another very important point is that there is no private landownership in Hong Kong!!!!! Land is not owned, but leased from the government for 99 years. Sometimes the government will let you have a continuation of the lease (you got to pay money obviously), and sometimes the government will take back the land for redevelopment. This is why the HK government makes tons of money through redevelopment. This is a very important revenue stream for the government.

    •  great points (0+ / 0-)

      I wasn't aware of the stock transaction tax :)

      The land lease part I had known about, but the way an old colleague had explained it to me was "basically private ownership".

      But i always thought it was just because it was such a small land mass that it was a practical way to avoid cornering of the market.

      Deficits don't matter, jobs do.

      by aguadito on Tue May 07, 2013 at 11:05:17 AM PDT

      [ Parent ]

  •  Ah Milton Friedman was so hilariously wrong (0+ / 0-)

    about Hong Kong that it's always good to watch old videos of him listing off how wrong he was.  

    "Hatred is never appeased by hatred in this world. By non-hatred alone is hatred appeased. This is a law eternal."

    by sujigu on Tue May 07, 2013 at 03:27:07 PM PDT

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