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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