Our regular Asian/Australian correspondent Suzuki Samurai wanted to tell you about three brilliant books about progress and economic development. So, naturally, I said yes. Here’s the first.
The Mystery of Capital – Why Capitalism Triumphs in the West and Fails Everywhere Else
by Hernando De Soto
Review by Suzuki Samurai
Unlike fiction, when reading a non-fiction book I have to create the voice of the narrator myself. I mean really, how many of you had a clear voice in mind when reading Adam Smiths' An Inquiry into the Nature and Causes of the Wealth of Nations? Was its voice that of a Scots Laurence Olivier? Sean Connery perhaps? - “Wherever there is great property, there is great inequality Miss Moneypenny”
It would have much more fun had you read it in the voice of Billy Connolly don't you think? - “Science is the great antidote to the poison of enthusiasm and superstition yee dopey fuckers.”
Did you have Stephen Hawking's Metal Mickey voice in mind when you read A Brief History of Time? I did, and it was awful.
So I recommend you go and have a listen to Hernando on 'youtube' before you start to read this book, as his South American Spanish accent really gave this book lyrical colour.
Okay, everyone back with us?
Now, the book’s title suggests a dry look at capital theory - lots of graphs and droning prose. One of those books that would ordinarily just go on the pile of “have to read someday, maybe never.” But if you’ve watched the video, you know already not to expect that.
And the subtitle is the kind where I can't help but say, “I think I know, but what does this guy reckon?” Well he reckons a lot. He tears open questions I'd never thought to have asked. It turns out what I thought I knew about the importance of property rights and legal institutions was just scraping the surface.
In a tight and sequential manner, Hernando De Soto sets out what is holding back the natural enterprise of millions, billions even, of people around the world. With painstaking research, he and his researchers have spent their lives traipsing about places like Haiti, Peru, Egypt, and the Philippines negotiating their way through, over and around the truly astounding legal hurdles the 'unconnected' have to go through to simply get the required paper work to open a business and/or get a formal title on land, thus enabling these mostly very poor folk to borrow money & release the capital in their property. And how much capital can be possibly be realised from a tin-shed sat on titled land on the outskirts of say, Port au Prince?
Well consider this revelation from Hernando:
In Haiti, untitled rural and urban real estate holdings are together worth some 5.2 billion. To put that sum in context, it is four times the total of all the assets of all the legally operating companies in Haiti, nine times the value of all assets owned by the government, and 158 times the value of all foreign direct investment in Haiti's recorded history to 1995.
Who needs aid with assets like these?
Added to this pearl of insight, and there are many, is a brief but detailed history of pioneering Americans and how they made up their own 'extra' legal arrangements before law courts were a viable option in remote regions – and, how the state & federal governments used a number of these arrangements as models & precedent-setting examples for formal law thereafter.
Oh, and before I forget, Hernando also takes us to Indonesia and talks about how domesticated dogs used to define property boundaries...who knew?
So, if you really want to know why capitalism triumphs in the west and fails everywhere else; and how your pooch can demarcate your section, buy this book.
Note: if you want to be able to actually read the graphs and see the photos, then buy the hardback.