The Mystery Of Capital Paperback – 1 Nov 2001
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"People with nothing to lose are trapped in the grubby basement of the pre-capitalist world." This is the nub of The Mystery of Capital. Read just that one sentence and you catch a glimpse of the reason why, as the author puts it, four-fifths of humanity lack the ability to turn dead assets into live capital.
A great deal of the power of legal property comes from the accountability it creates, argues Hernando de Soto, from the constraints it imposes, the rules it spawns and the sanctions it can apply. The lack of legal property thus explains why citizens in developed and former communist nations cannot make profitable contracts with strangers, cannot obtain credit, insurance or utilities services. Because they have no property to lose, they are only taken seriously as contracting parties by their immediate family and neighbours. To put it another way, while most western homeowners dream about paying off their mortgage, their counterparts in the less developed countries could transform their existence if they could only access such sums.
It's rare to come across a book about such an arcane subject that is simultaneously interesting and illuminating, entertaining and thought-provoking. The Mystery of Capital is all these and more. De Soto paints a procession of vivid pictures, from Cairo to the Wild West, from the Andes to the Urals. "The cities of the Third World and the former communist countries are teeming with entrepreneurs," he says, dismissing the notion that entrepreneurialism is the exclusive preserve of the west. "You cannot walk through a Middle Eastern market, hike up to a Latin American village or climb into a taxi in Moscow without someone trying to make a deal with you. The inhabitants of these countries possess talent, enthusiasm and an astonishing ability to wring a profit out of practically nothing."
In The Mystery of Capital, de Soto believes he points to a way in which capitalism can be used to help developing nations. In his vision, the poor are not the problem. They are the solution. --Brian Bollen --This text refers to an out of print or unavailable edition of this title.
"'A hugely persuasive and important book, the more so because of the moving simplicity of its central idea'" (Daily Telegraph)
"'A crucial contribution. A new proposal for change that is valid for the whole world'" (Javier Perez de Cuellar, Ex Sect.General of the UN)
"'A very great book...powerful and completely convincing'" (Ronald Coase, Nobel Laureate in Economics)
"'One of the few new and genuinely promising approaches to overcoming poverty to come in a long time'" (Francis Fukuyama, author of The End of History)
"'A revolutionary book...if the criterion is a capacity not only to change permanently the way we look at the world, but also to change the world itself, then there are good grounds for thinking that this book is surely a contender...thrillingly subvesive'" (Donald McIntyre Independent)
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Top Customer Reviews
The central theme of the book is simple - the reason while capitalism has not taken off outside the west is not that people are somehow lazy (quite to the contrary) but that legal and property systems do not allow them to use their property to obtain liquid capital. I don't disagree, but I think this is a one-dimensional view. I'm always dubious about single cause explanations for economic and social phenomena, and this idea is no exception. Yes, lack of legal property is an important part of the problem, but it's not the only one, and a more rounded view of the problems involved is needed to resolve them.
The author of this book, Hernando De Soto, is siding with the second team in this dispute. And for that purpose he extends a very strong argument, which is that 3rd world countries failed to utilize the most basic element of Capitalism. And that would be Capital itself!
De Soto defines what he calls "Dead Capital" as property and real estate that is not fungible and can serve only in its most basic usage. Capital goes dead when the government fails to establish a real estate system that is accessible to the common public and is appropriate to the people and their property. What De Soto found after years of research and study is that in most developing and ex-communist countries the real estate systems are troublesome, drastically complicated, and out of touch with the real world. These systems nurtured a burgeoning extralegal style of living, where capital and businesses are not adherent to the legal systems of those countries. Instead, they work based on laws and regulations the people developed themselves among their social circles.
De Soto extends many shocking statistical information proving that 3rd world countries posses vast amounts of dead capital in their extralegal sectors.Read more ›
Most Recent Customer Reviews
Easily the best book on economics I have ever read. Clarity of ideas and the use of anecdotal and interesting examples make this book easy to follow and the nearest thing to an... Read morePublished 10 months ago by Junglegirl
Please excuse my withering contempt for Hernando de Soto's ideas. First of all, in view of the 2008 crisis and the resultant fallout, it's safe to say that Capitalism has not even... Read morePublished on 13 Jun. 2014 by Otiose Dodge
Having spent 71 years seeking to expand my understanding of life, this book adds a major contribution. Read morePublished on 3 Jan. 2012 by K. Rothwell
Hernando de Soto has a great view on Capitalism, one that people including myself have forgotten. The book is intriguing, well-written, and very informative. Read morePublished on 23 Oct. 2010 by tlmurphy87
We all know that free markets, which deliver the latest Harry Potter novel within three days to any location in the world, only work in the West. Read morePublished on 30 April 2009 by San Patch
It has all been said by the rest of the reviewers - buy, it, read it and reflect.Published on 30 Dec. 2008 by M Nasrudin
Mr. De Soto's book has almost become a classic in the field of development economics. It is also a compelling and excellently written small book, with good argumentation, not... Read morePublished on 15 Oct. 2007 by Erik Cleves Kristensen
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