Book: The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else
Author: Hernado de Soto
ISBN: 0-552-99923-7
Reviewer: Madibeng Kgwete
What distinguishes Peruvian author and economist Hernado de Soto from the rest is the intensity of his research and the wealth of personal experience he boasts.
De Soto puts these two qualities to good use in his book, “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else”.
The author blames, amongst other things, red tape in the public sector, lack of information and the inability by poor “Third World” countries to bring what he calls “dead capital” into the mainstream economy.
In Egypt, for example, the author says his research has established that: “To build a legal dwelling on former agricultural land would require 6 to 11 years of bureaucratic wrangling, maybe longer”!
This, according to De Soto, “explains why 4.7 million Egyptians have chosen to build their dwellings illegally. If, after building his home, a settler decides he would like to be a law-abiding citizen and purchase the rights to his dwelling, he risks having it demolished, paying a steep fine and serving up to ten years in prison”.
On growing urbanisation and why many developing countries struggle to cope, De Soto says “extralegal ventures [such as illegal occupations of land, unregistered small businesses in the inner cities, etc; reviewer’s own example] have already overtaken government efforts to provide housing for migrants and the poor”.
The book is quite fascinating, more so when one tries to compare the examples the author uses to the situation here in South Africa.
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1 comment:
yes this is idea of property rights and formal titles is quite an interesting approach to question of why, despite globalization and the "spread of capital", capitalism is not benefiting the majority of the world.
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