kenny hodgart


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How The Spectator, and Milton Friedman, misconstrue Hong Kong

This article can also be read at Asia Times

It’s my understanding from meeting people who know him that the English journalist James Delingpole is a decent, thoughtful sort of fellow, despite being way further to the right than seems entirely compatible with possession of a full set of marbles. Personally, even when he is being wrong-headed, I rather enjoy his writing – for its honesty, its freewheeling attitude, its soft-pedalled erudition.

It was fairly obvious, though, from reading his September 24 column in Britain’s Spectator magazine, that he must have spent most of his recent visit to Hong Kong in the pub. Starting off with an anecdote about taxis is usually a giveaway sign that you’ve neglected to do any homework whatsoever. His piece descends from there into a Cook’s Tour of free-market phantasmagoria.

Milton Friedman spent his twilight years evangelizing about Hong Kong and how its economic success proved the irreproachability of pure free-market capitalism. Delingpole merely picks up the baton. Hong Kong’s laissez-faire, “red-in-tooth-and-claw” environment and its low taxes lead him to realise “how incorrigibly, nauseatingly socialistic most western nations are.” The only basis he provides for this realisation is that his step-son has a better job in Hong Kong than he could land in London, despite – I’m reading between the lines – not being especially bright.

The main problem with this narrative about Hong Kong’s development is that it was only partially true when Friedman was espousing it and it is even less so now. Sure, Hong Kong has very low marginal tax rates and, at around 18 percent, low state spending relative to GDP. Moreover, it consistently scores high on indexes measuring ease of doing business. These indicators can be misleading, though: Hong Kong, while spending nothing on defense, is far more statist than outsiders generally perceive.

For decades, the Hong Kong government has offered advanced social welfare services along vaguely European lines. It provides an excellent public health care system and funds education and social security. In public transport and utilities, it grants monopoly franchises and holds equity in them. And it imposes strict rent controls for the roughly 30 percent of Hongkongers who live in public housing, thereby indirectly subsiding labor.

There’s plenty of indirect taxation too. Exorbitant real estate prices have caused spiralling inequality but they also keep government revenues high even as income taxes remain flat and low. How this works is that the government owns all the land in the territory (capitalism, James?) and drip feeds it on lease to a small handful of developers, who in turn control the supply of housing to keep the market inflated for buyers and renters.

Without help from their families, households with two above-average earners can just about save for a deposit to buy a home – provided they don’t eat out much or go on holiday for a few years. (If they want to have children, their careers, mercifully, needn’t be interrupted: childcare is provided by an army of imported female workers from the Philippines and Indonesia who earn a pittance and have next to no rights.)

For those a rung below, there’s no chance. In the first quarter of this year, the average wage in Hong Kong decreased to HK$15,500 (US$2,000) a month. At the same time, a survey classified Hong Kong homes as being the “least affordable” anywhere, ever, with average flat prices surging to 19 times gross annual median income.

One might argue that it’s not the government’s job in a laissez-faire system to fix this problem, but the point is that the government’s role skews the market already and it’s not in favour of the vast majority of Hong Kong people, however hard-working and entrepreneurial they might be. Indeed, there is a case to be made that Hong Kong’s mantra of “positive non-interventionism” has never been more than a soundbite anyway.

In the banking sector alone, the history of Hong Kong since the 1950s onwards is one of repeated bailouts, government rescues and regulatory capture by HSBC and Standard Chartered to stop outside banks gaining licences. So much for Friedman’s notion of free and open markets. Interest rates were set by a cartel until 2001.

The reality of Hong Kong is that it has institutionalised cartels and monopolies in almost every sector of life. Those in political office work hand in hand with the same same business elites who make up a large part of the committees who appoint them. There are some 300,000 SMEs in the city and yet its economy is dominated by a handful of conglomerates. According to a Wall Street Journal report in 2013, the six biggest “take in at least 23 cents of every dollar that residents spend, controlling Hong Kong’s biggest mobile-phone network, its electrical system, its bus system, the vast majority of the buildings making up its iconic skyline, plus two-thirds of its private housing market and 90% of its supermarket sales.”

There’s no doubt that the ingenuity of the private sector helped Hong Kong to grow its per-capita income from 28 percent of Britain’s in 1960 to being almost on a level pegging with the United States by that measure today. But so too did government spending on the poor, the fact that Hong Kong is an entrepot economy and the surplus value it has attained from attracting global companies to make it their home.

As for Mr Delingpole, I get it: you need somewhere to hold up as a paragon of the ‘virtue of selfishness‘, because the “socialism” being foisted on Britain by its Conservative government is crap. But if you see it in Hong Kong, you’re mistaken.


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The messiah friend of President Duterte

This article can also be read at Asia Times

Their Sunday service has just ended and I’m trying to talk to some of the worshippers making their way out of the Southorn Stadium in Hong Kong’s Wan Chai district. Sonny, a middle-aged man who calls himself a Preaching Club Member and wants to know my purpose, seems keen on stopping me. As it happens, he has quite a lot to say for himself – both about the church to which he belongs (‘The Kingdom of Jesus Christ, The Name Above All Names’), and about the prospects for my own salvation (basically, unless I become a “Kingdom citizen”, they’re not good, I think).

Sonny has known the sect’s leader, Pastor Apollo Quiboloy, for many years, he says. Pastor Quiboloy claims to be the ‘Appointed Son of God’ and has amassed considerable wealth and power in the Philippines in recent decades. So what kind of man is he, I ask. “He is just an ordinary guy, but there is something special from within,” Sonny insists. “Many, many people love the pastor. He is the one who encouraged our good president (Rodrigo Duterte) now to stand up and make the Philippines better.”

Earlier, video of a sermon given in Davao City by Pastor Quiboloy (who claims to have dreamt 17 years ago that Duterte, his long-time friend, would one day be president) had been relayed live on two large screens. As he waxed on about how it has pleased God to make him wealthy – when he had nothing in life, he shouldered that burden with equal grace – I couldn’t help but notice that many of the women around me seemed more concerned with browsing Facebook on their smartphones.

Admittedly, it’s an entirely different story when the music gets up. At the Kingdom’s Southorn services, a full choir and half an orchestra, perched in front of a giant print of two golden staircases ascending into the clouds, occupy one end of the basketball hall. The congregation, around 1,000-strong and composed largely of Filipina domestic helpers immaculately attired in pristine white dresses, can’t seem to get enough of the hymns – jaunty gospel numbers laden with endless euphoric key changes.

It would be tempting to describe the effect as Stepford-ish. In truth, there is something rather touching about the sense of personal and collective pride on display. And even if it’s hard to fathom the appeal of their curiously un-spellbinding figurehead, there’s no obvious sense of anyone having been actively coerced into attendance. Annabel Arroyo, a woman in her mid-30s from Mindanao who has been attending for four years but only submitted to being baptized last December, tells me: “The church is our community. I came because I had friends who came and they talked to me about it.”

Pastor Quiboloy’s ministry is, nevertheless, by most definitions, a cult. And like most cults, its unsavory facets – more of which at length – do not lurk far beneath the surface.

In Hong Kong, The Kingdom of Jesus Christ is listed, along with a legion of similar-sounding Christian churches, on the Inland Revenue department’s register of Tax-Exempt Charities, although it does not have a permit from the Social Welfare department to collect money in public. Nor indeed do either of two philanthropic concerns – The Children’s Joy Foundation and the Sonshine Philippines Movement – related to the church. Women claiming to collect for these programs are a common sight on the streets of Hong Kong Island’s busiest nightlife districts, but the church denies any knowledge of their activities and when approached by the Asia Times they were evasive about any links to Quiboloy’s sect. Rumors abound that they are “on the make”.

Quiboloy set up The Children’s Joy Foundation, its website states, in 1998, “to help feed, clothe, and send to school” destitute children. Meanwhile, donations to the Sonshine Philippines Movement are directed towards “the complete restoration of man and his environment” – and there are details online of its reforestation programs and rebuilding work in communities devastated by typhoons. What’s clear is that these endeavors are no mere ruse. “The pastor has helped many poor people,” says Rose, a member of the church for 18 years who says Quiboloy put her through school in Davao. “He paid for everything – because he is a very good person.”

Where his benevolence ends and his personal wealth begins is not so apparent. Suffice to say that, having risen from poverty, being the messiah has made Quiboloy a very rich man – besides occupying a large estate in the foothills of Mount Avo, near Davao City, he was able to lend Duterte his private jet and helicopter during the former Davao mayor’s recent, successful bid for national office.

As Quiboloy tells it, God came to his mother in the form of a cloud after he was born, declaring “That’s my son.” He left the United Pentecostal Church to start preaching his own gospel in 1985 and now claims to command the allegiance of four million tithed followers (meaning they give the church a tenth of their income) in the Philippines and two million more overseas, in addition to reaching 600 million viewers worldwide through his TV station.

In a rare interview with a mainstream media outlet, he told ABC News, in 2010, that every member of his Kingdom shares in his wealth and is welcome to stay at his mansion. In explaining, however, that the Almighty had revealed to him in 1983 that he wanted Quiboloy to own a jet, he also made it clear that each of us ought to accept what is apportioned to us. “If it is not God’s will for me to have these things I have, you can take it away,” he told his interviewer. “It is God’s will that we follow… If he wanted me to live like a rat, if he wanted me to live in wealth or in poverty, it does not matter to me. Put me there and I’ll be happy as long as it’s God’s will.

My own attempts to score an interview with Quiboloy were met with friendly suspicion then ultimately rebuffed after I complied with a request to submit a list of questions to his office. I’d wanted to sit in a room with someone who describes his state of spiritual perfection as being similar to that of Adam before the Fall and who has convinced several million self-identifying Christians that he is justified in putting himself on an even footing with Jesus Christ. I’d wanted to ask him about his conversations with God – and about allegations against him of brainwashing and of holding a young woman against her will.

I’d wanted to ask, too, about stories linking him to intimidation and land grabs against indigenous peoples in Mindanao – including an episode that resulted in the death of the Bagobo K’lata tribal leader Dominador Diarog, who was gunned down in 2008 shortly after refusing to sell Quiboloy two hectares of land near the so-called Garden of Eden Restored on the Pastor’s grounds. At the time, Quiboloy was able to call on Duterte – himself widely suspected of overseeing extrajudicial killings during his tenure in Davao – to dismiss rumors of his involvement.

In the end, I have to make do with watching him preach on a big screen. Quiboloy made one of his semi-regular appearances at the Southorn in June, but on my visit his presence was virtual. He’s fatiguing to listen to – by turns straw man-denouncing demagogue, late-era Elvis impersonator and used-car salesman – and I’m unable to discern the “something special from within” that Sonny alludes to. Maybe it’s simply stamina, or conviction. “No other pastors or preachers have the knowledge that he has,” says Rose. “He teaches us to work hard and make money for the Father’s glory and to pay for the ministry and its work.”

As I look around the hall, I get the sense I’m witnessing a show of strength that thrives on vulnerability. Maybe that’s how all religion works. Maybe not. Maybe I’m just too cynical. I can’t help but suspect, however, that the greater cynic is Pastor Quiboloy himself.