Two related issues surfaced in the public debates for the post of Chief Executive of the Hong Kong Special Administrative Region. One issue was whether functional constituencies in the legislature should be abolished as incompatible with the democratic principle of equal political rights. The other, larger issue related to the commitment to uphold the core values that Hong Kong people subscribe to.
These core values concern inalienable, fundamental human rights, including freedom and the rule of law. Human rights are conceived as universal (applicable everywhere) and egalitarian (the same for everyone). Freedom embraces economic freedoms, civic freedoms, and political freedoms, and the rule of law is what protects those freedoms against the arbitrary rule of the sovereign.
The historical articulation of human rights originated in Western Europe and its development is the outcome of both necessity and logic. It was necessary to construct a new theory of justice rooted in human rights to contest the divine right of kings. It was logical because the concept of human rights emerged out of the medieval concept of natural rights associated with the natural law tradition. Natural law was a product of the gradual secularization of Judeo-Christian ethics that led to a conception of eternal law (or the mind of God), which could be discovered through human reasoning. Natural rights were a forerunner of the human rights discourse that became prominent during the Enlightenment among English and French philosophers such as John Locke, David Hume, Montesquieu, and Voltaire.
Geographical Constituencies and Policy Divisiveness
In practical terms, the embracement of these universal values in Western Europe and the American Colonies was closely connected to the development of economic, civic and political freedom in these communities. Economic freedom was underpinned by the protection of property rights and the freedom to contract and exchange, which enabled markets to flourish. Productivity increased and standards of living rose over time. These institutional changes preceded the Industrial Revolution and laid the foundations for the modern world. The idea of economic growth became part of mankind’s vocabulary for the first time in history.
Political freedom was enhanced by replacing the old absolute monarchy with a constitutional monarchy in England and a republic in France. The evolution towards representative government was more gradual and less convulsive in England than in France, and in America it took the path of a revolutionary war of independence from British colonial rule. The path leading to equal political rights for all became possible.
Civic freedoms, including, freedom of speech, freedom of religion, freedom of association, freedom of assembly, rule of law, equality before the law, habeas corpus, security against unreasonable search and seizure, and so on were recognized as essential for and complementary to economic and political freedoms.
From an economic perspective the combination of economic, civic and political freedoms holds out the promise of a society governed by predictable and transparent rules. In its ideal form, the civic and economic freedoms of citizens are enshrined in political institutions designed to protect people’s political rights in a transparent and predictable way. Uncertainty is thus reduced for all members of society, and the economy flourishes and human creativity thrives.
These core values and their associated institutions are considered more compatible with the needs of the modern industrial era than the arbitrary sovereigns that lorded over pre-modern agricultural societies. Western Europe was the first region to achieve this. And yet in many places there is a hangover from pre-modern societies in the form of geographic constituencies.
The most important economic activity was agriculture, the crucial form of wealth in pre-modern societies was land, and the dominant social group was that of landlords or feudal lords. For this reason, the early representative governments were founded on geographic constituencies based on clusters of largely self-sufficient farming communities and villages. This birthmark of the pre-modern agricultural economy became the norm for representative governments. In the United States, for example, until the eve of the Civil War in 1860 almost every elected president was from the Democratic Party, which represented the interests of farmers.
Geographic constituencies are a natural institutional arrangement in an agricultural era where economic self sufficiency is the norm. They are less obviously suited to an industrial era which is market-based and where the fortunes of individual industries may rise or fall over time. Nor is it obvious how such a system suits cities with extensive international economics ties. Geographic constituencies inevitably compel citizens to focus on inward looking policies and are therefore sub-optimal for society. Some form of countervailing political force is needed to keep such forces in check for the larger interest. Unfortunately, geographic constituencies, once constituted, have enormous self-preservation powers that prevent further changes.
The great divisiveness and occasional paralysis in policy making that is found in modern industrial democracies is partly the result of geographically constituted elections. Europe, Japan and to a lesser extent the United States all suffer from such an arrangement. Democracy is not the problem in these countries, as some have argued; rather, the ailment lies with the way power is structured. India‘s democracy has been blamed for its poor economic performance, but again it is geographic constituencies that have discouraged worker migration and frozen the nation in its pre-modern condition. Geographically constituted democracies are more appropriate for static rural communities. US President Thomas Jefferson, who was very hostile to the banking industry, expounded such a vision of democracy known as Jeffersonian democracy.
Family Support Against Adversity
Transplanting modern institutions to developing pre-modern agricultural countries has often failed. The most important reason is that new institutions redistribute political power and the economic power that comes with it. The more significant the threat to the initial power arrangements in a poor country, the greater the resistance to change. Therefore, the introduction of modern institutions has come at a huge cost, often with violence, and in many cases has been ultimately unsuccessful. When it is successful society often ends up creating a dictatorship.
In Hong Kong, public discussion of universal values is primarily focused on political freedoms and not economic and civic freedoms. And the debate over political freedoms has been reduced chiefly to whether and how the Chief Executive and the Legislature should be elected through universal suffrage as opposed to a “small circle” approach where voting rights are reserved for the select few.
This is unfortunately a very limited and distorted view of how political freedoms should be constituted in Hong Kong. Where we are today cannot be separated from where we were; history matters.
Under British colonial rule, political freedom was denied. The British governed Hong Kong by allowing a large measure of economic and civic freedoms, but protected their monopoly over political power with great skill. The resulting environment was highly conducive to the development of enterprise and wealth. Even by the 1960s, a large measure of the support provided to the disadvantaged and unfortunate was left to private charity. On the whole the family network was seen as the primary supporter in the face of adversity. Self-reliance and self-responsibility were promoted as cardinal virtues for those who grew up under the Lion Rock.
In key respects, Hong Kong under British colonial rule followed the political wisdom of the early political philosophers who were skeptical of extending universal suffrage to the masses. The advocates of human rights in the 17th and 18th centuries were keen to limit the arbitrary power of the King, but not to enfranchise landless peasants. The human rights principle was used to counter the divine right of kings. The nobility championed these core values to protect their landed property from arbitrary seizure by the King, hence the claim of “no taxation without representation”. They recognized that enfranchising landless peasants would be a threat to their property rights.
Edmund Burke, the British “classical liberal” parliamentarian who supported the American revolutionaries, was appalled by the populist turn of events in the French Revolution when land was redistributed to the peasants in violation of property rights ownership. The conservative movement was born under such circumstances.
Britain reserved ultimate political power for itself in governing Hong Kong by relying on an approach called the “administrative absorption of politics” to maintain political acceptance. Business and professional elites were appointed as advisors to guide its policies and enhance the legitimacy of its rule. By and large, the absorbed elite accepted the “classical liberal” view of political and public affairs and inherited the conservative’s skepticism towards democracy and universal suffrage without necessarily being opposed to it.
Populism Triumphs in Democracies
The Basic Law promised to introduce greater political freedom in Hong Kong after 1997 leading eventually to equal political rights for all. Since political arrangements decide how power is allocated in society, it is natural for different social groups to be divided over how political freedom will be achieved and the pace for achieving it. As the sovereign, the central government in Beijing also has a keen and legitimate interest in this matter.
The creation of functional constituencies in the Legislature to prepare for the transition to post-1997 rule was a logical political response to stabilize the support of the business and professional elite. While the same faces were preserved in positions of influence, the selection mechanism changed from appointment at the Governor’s pleasure to self-election by the elite. This had the effect of weakening the government’s powers and compelling it to lobby and bargain intensely with highly diverse and fractionalized interests for political support.
When effective governance is held hostage to special vested interests the conditions are set for the rise of cronyism, which provokes subsequently opportunistic populist crackdowns that cast aside the rule of law. The “Sing Red, Smash Black” campaign in Chongqing is a vivid reminder of what can transpire.
The flip side to that is that the needs of the masses must not be so disregarded that they feel disconnected from their government and society. Hong Kong was rapidly industrializing in the post-war period and its workforce was expanding with a huge influx of peasants from Guangdong. Gradually the British government realized it had to assume a more active role in providing for the disadvantaged and unfortunate. After the social disturbances in the late 1960s it became clear that Hong Kong had become a modern industrial society and was no longer a market town or an urban village. The San Po Kong incident demonstrated once again the 19th century experience that urban industrial centers everywhere were vulnerable to industrial action and mass organized protests. The worker in an urban market economy has a powerful weapon not possessed by peasants in the pre-modern era – the ability to organize collective action in the workplace and in dense mass communities. And the workers are aware that a market economy is vulnerable to such action precisely because of its interconnectedness.
The government drew upon the lessons of industrial and class strife in 19th and 20th century England and implemented a set of social welfare policies for Hong Kong. In so doing it deviated selectively from “classical liberalism” to embrace elements of 20th century “populist liberalism”. In today’s language a “classical liberal” is often known as a “conservative” and a “populist liberal” is simply known as “liberal”.
Conservatives and liberals alike embrace most of the core values emphasizing freedom and the rule of law, however, the fine interpretations on what sort of institutional arrangements will best preserve political freedom are quite different. Modern history has demonstrated that democracies with universal suffrage have usually succumbed to populist liberal pressures. Among industrialized economies, the average share of government expenditure on subsidies and transfers as a percent of GDP was 1.1% in 1870 and rose to 4.5% in 1937 and then 23.2% in 1995.
Conservatives in modern democracies have sought to use constitutional constraints to limit the populist penchant for redistribution, big government and uncontrolled spending, contrary to the “classical liberal” of the past who wanted to limit the arbitrary power of the sovereign king. The old fear was the arbitrary taxing power of the sovereign; the modern fear is the redistributive power of the populist masses. In Hong Kong, this modern fear has focused, among not a few conservatives, on the inward looking and parochial orientation of voters organized in geographic constituencies.
Two Votes in Dual Constituencies
An arrangement that was efficient for constituting representative government inherited from a pre-modern era is not necessarily appropriate for an international business metropolis like Hong Kong. The economic vibrancy of such a city depends critically on its ability to attract and renew its population pool through immigration. New York and London would not be the business metropolises they are without expanding beyond their jurisdictional borders and attracting population inflows. Some 40% of the population in New York City was not born there. For this reason, geographic constituents in New York are more likely to have an outward looking and cosmopolitan orientation. Hong Kong’s restrictive population inflow practices only reinforce inward looking and parochial orientations in the geographic constituencies. Local politics works against the city’s aspirations to be an international business and financial center.
Such a situation has also led many elites to take refuge in functional constituencies and support their co-existence with geographic constituencies; they often also do this for self-serving reasons. We have to realize that functional constituencies as they are organized today are incongruent with the democratic principle of equal political rights for all. This is morally unacceptable in today’s world. What is worse from an economic perspective is that this arrangement serves the interests of the service providers and not the customers. As such our political incentives are structured to defend existing interests rather than promote the welfare of the larger public, including those who may become future residents.
I do not doubt the moral imperative of having universal suffrage in the election of the future Chief Executive and members of the Legislature, but how this can be done for the long term benefit of Hong Kong is not abundantly obvious. The functional constituencies could be of immense value precisely because they address a wide range of economic, social and other public services that is not adequately represented through geographic constituencies. In the pre-modern agricultural era, these interests happened to coincide with geographic constituencies, but this is no longer the case in today’s industrialized nations.
An approach worth exploring is to grant each qualified resident in Hong Kong two votes. One vote would be cast through geographic constituencies and the other through functional constituencies. Voters would choose which functional constituency they wish to belong to for their second vote. Voter registration for functional constituency elections would be done prior to the nomination of candidates and campaigning. Any voter can register to belong to a functional constituency without having to hold a job in one of its categories at the time. This means all voters can vote in the functional categories, including non-working and retired persons.
The nomination of candidates would in principle be made by the service suppliers. This could result in some diversity among service providers, but it is the voters who will be the final arbiters of political competition.
Voters would be allowed to change their previous registered functional constituency at the next election to reflect their changing interests. This would inject an element of gradual dynamism to permit evolutionary change as the economy and society evolved over time. Functional constituencies that had prolonged lack of interest from voters would be candidates for abolishment.
The proposal here is not novel. It has been voiced before in different contexts. I provide a deeper rationale for why this could be a highly sensible, forward looking dual scheme suitable in this modern industrial era.