The Lion Rock Spirit as an Expression of Market Forces
Hong Kong’s historical formula for wealth creation lies in its ability to establish a system that unleashes the power of the free market. At the heart of this strength is the capacity to bring together people from all walks of life and from all the places, uniting their efforts to overcome challenges and build a shared future. This collective dynamism has ignited a sustaining virtuous cycle of positive momentum and compounding growth.
Author: GUDORDI | 2026-02-11
⋯⋯我哋大家在獅子山下相遇上
總算是歡笑多於唏噓人生不免崎嶇 難以絕無掛慮
既是同舟 在獅子山下且共濟
拋棄區分求共對放開彼此心中矛盾 理想一起去追
同舟人 誓相隨 無畏更無懼同處海角天邊 攜手踏平崎嶇
我哋大家 用艱辛努力寫下那
不朽香江名句⋯⋯── 《獅子山下》歌詞
Lyrics of the Cantonese Song, “Under the Lion Rock”
In the previous article, the author has noted that the free-market commercial framework rooted in the ideas of Adam Smith has guided Hong Kong through numerous challenges over the years, repeatedly producing results that seemed almost miraculous—almost as if there were a providential force safeguarding the city. From this perspective, understanding the origins and underlying logic of this force may well be one of the key factors in assessing the future of Hong Kong.
The Nature and Underlying Logic of the Market
In retrospect, one may say that economics as a discipline may have been over-obssessed with proving the theoretical perfection of the free market. Considerable effort has been devoted to using mathematical models and equations to demonstrate that markets are perfect—or nearly perfect—under ideal conditions. By contrast, the more intriguing question may be this: what is the true source of the market’s seemingly magical power in the real world—the kind often described as the “invisible hand”? This question, arguably more important, has received relatively less attention. As a result, the essence of market forces and their underlying logic can appear somewhat mysterious, even carrying a subtle aura of myth.
In traditional economics textbooks, one of the primary virtues attributed to the market mechanism is its superior efficiency. Yet in the real world, how do we actually measure and compare efficiency? What does efficiency truly mean? If we produce something meaningless with great efficiency, can that genuinely be considered wealth creation?
The Three Levels of Happiness
It is worth noting that Adam Smith once described economics as “a science of wealth.” He drew a distinction between “nominal wealth” and “real wealth,” and suggested that happiness can be understood on three levels. The first is material provision—the satisfaction of basic physical needs. The second is social engagement—the sense of belonging and recognition within a community. The third is the tranquillity and inner peace that arise from acting virtuously. From this perspective, the founding figure of modern economics had a far deeper and more nuanced understanding of wealth and happiness than what is typically conveyed in standard textbooks.
It is equally noteworthy that the full title of The Wealth of Nations is An Inquiry into the Nature and Causes of the Wealth of Nations. The word “inquiry” reflects a spirit of exploration. In this work, Smith outlined the essential components of an economic system, including division of labor, wealth, prices, production, exchange, trade, taxation, and money, and he analyzed each of these in considerable detail. Yet how these elements must interact to give rise to the seemingly magical force of the “invisible hand” is something Smith has not articulated really that explicitly and systematically despite the fact that he actually appears to have considerable insights on the subject matter.
More Than Half a Century of Difficulty
On the positive side, Adam Smith has left considerable intellectual space for later generations to expand upon and further explore his ideas. On the negative side, however, his immense authority may have had unintended consequences. Many later economists perhaps felt there was no need to revisit the fundamental power of the market itself, choosing instead to focus on using mathematics to demonstrate how theoretically perfect markets could be. Such a development was likely not what Smith had hoped to see, and in some ways it may have underutilized the solid intellectual foundation and vast developmental space he had laid down for economics.
The development of mainstream economics over the past century has therefore carried a note of regret. In fact, for more than half a century beginning in the 1930s, many believed that emphasizing markets and individual freedom was outdated, while government intervention and economic management represented the inevitable direction of progress. Looking back today, one might wonder: if Smith had been less modest—if he had boldly titled The Wealth of Nations as “The Code of Wealth Creation,” and if he had articulated more explicitly and deeply how markets and governments should complement one another—might the free market have been spared more than half a century of marginalization and difficulty?
The Roots of Market Power
Taking into account the global political and economic climate between the 1930s and the 1980s, it was quite remarkable that Hong Kong was able, in the late 1960s, to pursue a political economy experiment grounded in the ideas of Adam Smith. At the time, such an approach ran somewhat counter to prevailing global trends. Yet in retrospect, Hong Kong’s achievements in wealth creation over the decades following the 1970s were not only impressive but far ahead of almost every other place in the world. Clearly, Hong Kong must have done something right—whether consciously or otherwise. What exactly was it? And can this driving force be sustained?
In the opinion of the author, Hong Kong’s past “code” for wealth creation may well lay in establishing a system capable of unleashing the power of the free market. And the source of that power rested in the city’s ability to bring together strengths from all corners of the world—uniting diverse talents to confront challenges together, to stand in the same boat and navigate rough waters side by side, to build a shared future. It was this convergence of energies that ignited a sustaining virtuous cycle of positive momentum and compounding growth.
Upon deeper reflection, is this not essentially the same spirit referred to at the lyrics from the Cantonese song “Under the Lion Rock” as quoted at the beginning of this article—hence the “Lion Rock spirit”? Undoubtedly, Hong Kong’s free-market dynamism has weakened in recent years. However, to conclude that this force has entirely disappeared or entered irreversible decline would seem premature—perhaps even overly definitive. The author will continue this discussion in the next article.
