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The Mystery of Capital: Why Capitalism…
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The Mystery of Capital: Why Capitalism Triumphs in the West and Fails…

by Hernando De Soto

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839710,738 (4.12)4
Recently added bykennc, YhhapBookExchange, Akiyama, sgtbigg, LibraryofMistakes, ahsimuyandi, private library
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    The wealth and poverty of nations : why some are so rich and some so poor by David S. Landes (br77rino)
    br77rino: De Soto does a wonderful job of making plain the problems of Third World capitalism.
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Showing 1-5 of 7 (next | show all)
Hernando de Soto is a Peruvian economist. In this book, he provides an answer to the question of "Why capitalism triumphs in the West and fails everywhere else".

The answer is that in third-world countries, poor people are unable to realise their potential as savers or entrepreneurs because they come up against laws that make it difficult for them to legally own property or run businesses. Of course, poor people in these countries do "own" property (houses in shanty towns, or smallholdings in the countryside) and run businesses, but they do so outside of the official legal system, which creates problems for them.

To get an idea of just how difficult the migrant's life was, my research team and I opened a small garment workshop on the outskirts of Lima, Peru. Our goal was to create a new and perfectly legal business. The team then began filling in the forms, standing in the lines, and making the bus trips into central Lima to get all the certifications required to operate, according to the letter of the law, a small business in Peru. They spent six hours a day at it and finally registered the business - 289 days later. Although the garment workshop was geared to operating with only one worker, the cost of legal registration was $1,231 - thirty-one times the monthly minimum wage.

The argument of the book is that Western economies took off as a result of having created property laws that led to large numbers of people (not just elites) being able to own property and run businesses.

What I take from this book is that governments that don't provide real opportunities and incentives for poor people to save, invest, and run businesses are crippling their economies.

The Mystery of Capital covers a lot of ground, looking at the issue of property rights for the poor from various angles. It's a relatively slim book (275 pages). I'm giving it four stars because I found it a bit boring in places (it is a serious book on economics, after all), but if you are interested in economics and development then I think it is a book you should read. ( )
  Akiyama | Sep 8, 2014 |
For Ed Feulner- With friendship and admiration as always, Hernando September 27, 2000
  efeulner | May 2, 2014 |
Only read half of this ( we get the idea ) although it is very good ( I also kept flashin on ' Thieves World ', the Asprin books ... hm ... ) ( )
  BakuDreamer | Sep 7, 2013 |
This book not only highlights global legal property right deficiencies, but also guides readers to a first step in reducing global poverty. ( )
  sagacious33 | Aug 12, 2010 |
This is a great book on the power of capitalism, and how its use outside the 'first world' is missing a key ingredient, namely, the legal right and acknowledgement of private property. ( )
  br77rino | Apr 18, 2010 |
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To Mariano Cornejo, who showed me how
to stand firmly on the ground, and to
Duncan Macdonald, who taught me how to
navigate the stars.
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Bien étayé sur le plan théorique , Le Mystère du capital s'appuie en outre sur une solide experience d'homme de terrain . Hernando de Soto conseille depuis des années les dirigeants de pays du Tiers monde et s'appuie ici sur une grande quantité de données chiffrées totalement ignorées des statistiques officielles.
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Amazon.com Amazon.com Review (ISBN 0465016154, Paperback)

It's become clear by now the fall of the Berlin Wall and the collapse of communism in most places around the globe hasn't ushered in an unequivocal flowering of capitalism in the developing and postcommunist world. Western thinkers have blamed this on everything from these countries' lack of sellable assets to their inherently non-entrepreneurial "mindset." In this book, the renowned Peruvian economist and adviser to presidents and prime ministers Hernando de Soto proposes and argues another reason: it's not that poor, postcommunist countries don't have the assets to make capitalism flourish. As de Soto points out by way of example, in Egypt, the wealth the poor have accumulated is worth 55 times as much as the sum of all direct foreign investment ever recorded there, including that spent on building the Suez Canal and the Aswan Dam.

No, the real problem is that such countries have yet to establish and normalize the invisible network of laws that turns assets from "dead" into "liquid" capital. In the West, standardized laws allow us to mortgage a house to raise money for a new venture, permit the worth of a company to be broken up into so many publicly tradable stocks, and make it possible to govern and appraise property with agreed-upon rules that hold across neighborhoods, towns, or regions. This invisible infrastructure of "asset management"--so taken for granted in the West, even though it has only fully existed in the United States for the past 100 years--is the missing ingredient to success with capitalism, insists de Soto. But even though that link is primarily a legal one, he argues that the process of making it a normalized component of a society is more a political--or attitude-changing--challenge than anything else.

With a fleet of researchers, de Soto has sought out detailed evidence from struggling economies around the world to back up his claims. The result is a fascinating and solidly supported look at the one component that's holding much of the world back from developing healthy free markets. --Timothy Murphy

(retrieved from Amazon Mon, 30 Sep 2013 13:47:31 -0400)

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