On PBS Tonight: The Power of the Poor
Ξ October 14th, 2009 | → 0 Comments | ∇ Intellectual |
There is a program tonight on PBS titled “The Power of the Poor”, presented by Peruvian Economist Hernando de Soto (yes, just like the explorer). I’ve been a big fan of de Soto ever since college, when I read his book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.
His basic contention is that the fundamental difference between cronically destitute nations and prosperous ones is the ability of the common people to own and leverage property. He did a study, examining several very prosperous area, such as Hong Kong (pre-handover) and the US against places such as Egypt, to determine the number of bureaucratic steps needed to create a legal business. In the US and Hong Kong, it was only a handful of steps – in poor nations it would frequently take over a hundred, some not legal, in order to start a small business. De Soto’s contention is that the chief result of this inability to legally own businesses and property is that these nations have locked up a great deal of wealth that the poor would otherwise be able to leverage – it’s impossible to get a loan to expand or improve your business or property if you can’t get a loan because the bank can’t see evidence that you actually own anything.
De Soto understands how capitalism works at a very low level, and how it benefits the poor, far better than the talking heads you see on nightly news programs. I really look forward to watching the program.
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