De Soto, H. (2000) “The mystery of capital – Why capitalism triumphs in the West and fails everywhere else”

Résumé du document

In 2004, at the meeting of the World Economic Forum, Bill Clinton publicly declared that Hernando De Soto - founder and president of the Institute of Liberty and Democracy (ILD) in Lima and consultant to numerous heads of state - was "probably the world's most important living economist". He and ILD have been for the most part dedicating themselves to a question that already haunted the French economist Fernand Braudel: "Why capitalism triumphs in the West and fails everywhere else?" De Soto claims he has found the answer. His book published in 2000, The Mystery of Capital, is setting out his argument: it is not a matter of wiping capitalism out but, on the opposite, to give Third World and former communist countries a chance to get the necessary conditions to benefit from it.

Extraits

[...] De Soto calls this informally held property “dead capital” because it can not be mortgaged as it lacks a proper title to guarantee it as collateral. Thus, accumulating capital is not only a matter of will but also of institutions. Because poor countries do not have an integrated property system that is referred to as a “vast hidden process that connects all these assets to the rest of the economy” most of their citizens are bolted out of what De Soto calls the “bell of successful capitalism. [...]

[...] However, some think De Soto leaves too much out of his development agenda. Good property systems would be great, but so would liberal democracy and uncorrupted government. Thus, we could blame the author for being trapped in a single idea: he intends to solve a complex issue by pushing one solution individual property titles for all different kind of poor people in different poor places. The fact that the title only refers to the West and seems to forget Japan and, more recently, the successful conversion to capitalism of Asian countries such as Taiwan and South Korea and other countries such as Chile also tends to show that De Soto uses a catchy formula to promote his idea. [...]

[...] (2000), The Mystery of Capital Why capitalism triumphs in the West and fails everywhere else, Black Swan, United Kingdom. Anderson, W. (April 24, 2001), “Capital and property rights”. Available from: http://www.mises.org/STORY/663 Gravois, J. (January 29, 2005), De Soto Desilusion Peruvian economist Hernando De Soto's ideas for helping the poor have made him a global celebrity. Now, if only those ideas worked Available from: http://slate.com/id/2112792/ Latrive, F. & Losson, C. (August 19, 2005), pauvres possèdent un capital Libération. [...]

[...] Furthermore, it is a pity that De Soto dismisses the argument of culture - to explain why poor nations have not succeeded in implementing capitalism yet - too quickly. Even if we concede his point that Mexico City taxi drivers and Filipino rice farmers do not lack the entrepreneurial spirit, one can not argue that all major cultures can deal with individual property rights. You just have to think of African villagers who see themselves as collective guardians of land entrusted to them by their ancestors or of rural dwellers in India who believe that knowledge about ancient herbal medicines belongs to everyone and should not be patented by drug companies. [...]

[...] It is based upon a rigorous analysis which has been spread over several decades and includes almost all the parts of the globe. Furthermore, taking on an attentive examination of Western countries' histories, it provides us with a convincing explanation about the relations linking an integrated property system to economic growth and development. When read in conjunction with an analysis such as the one about China published by The Economist last week to make China even richer Let the peasants own their The Economist, Volume 378 Number 8470, March 25th-31st 2006), The Mystery of Capital has much explanatory power. [...]