The Mystery of Capital Why Capitalism Triumphs

Introduction

In this book, the renowned Peruvian economist and consultant to leaders and major ministers Hernando De Soto suggests and argues another cause it's not that poor, postcommunist nations don't have the assets to make capitalism flourish.

Summary

The great merit of this book is De Soto's further elaboration of the way fixed, established, secure property rights pave the way for the development of capital proper, that is, property as the means of obtaining credit in order to generate further investment.1 Property thus generates a multiplier effect that produces compound economic growth.

This function of house was identified most methodically by Marx, De Soto contends, and provided the cornerstone for the Marxist critique of capitalism. But, De Soto states, Marx had it precisely rearwards: it is accurately this function, succinctly apprehended in the period capitalism that has verified the salvation of the smaller categories of society. For when they too are able to have their property identified before the regulation, they too can go in into the capitalist formula and benefit from material prosperity. This is a message that was wise in the West during the developed transformation, and a message that should be wise in the Third World today. For the identical kind of revolution is occurring there that appeared in the West a years ago.

In this book So De Soto argues that it was the customary-law orientation of pre-modern European society that lay at the heart of the problem of extralegality, and that overcoming this customary-law approach, as was accomplished in the 19th century in continental Europe through the codification of the private law, is the key to solving the problem of extralegality in the Third World today, and thus unleashing there a capitalist revolution that will sustain economic growth and bring Third World economies into ...