Review of 'The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else' on 'Goodreads'
3 stars
Hernando de Soto's book is refreshing in its succinct and strong language. He touches on complex issues in a direct manner, imbuing the ideas of capital with a force that even a completely non-economically minded person such as myself can appreciate. He has derived some criticism due to the one-sidedness and over-simplicity of his diagnosis of the problem of capitalism not taking off in developing nations, but I think that his critics often miss that De Soto never claims to solve all problems with the simple induction of squatters into a formal property system. He is outlining property systems as a hitherto unconsidered but fundamental aspect of the formation of capital. Without the incorporation of the activity and assets of the extralegal sectors into the wider economy, there is no chance for developing nations to get capitalism to work for everyone.
I liked his explanations of capital, and I appreciated …
Hernando de Soto's book is refreshing in its succinct and strong language. He touches on complex issues in a direct manner, imbuing the ideas of capital with a force that even a completely non-economically minded person such as myself can appreciate. He has derived some criticism due to the one-sidedness and over-simplicity of his diagnosis of the problem of capitalism not taking off in developing nations, but I think that his critics often miss that De Soto never claims to solve all problems with the simple induction of squatters into a formal property system. He is outlining property systems as a hitherto unconsidered but fundamental aspect of the formation of capital. Without the incorporation of the activity and assets of the extralegal sectors into the wider economy, there is no chance for developing nations to get capitalism to work for everyone.
I liked his explanations of capital, and I appreciated his vision of incorporating the poor into the economy by embracing their collaboratively formed social contracts and using those as a basis for the formal legal system. I think that this vision can be tied more deeply into [author:Muhammad Yunus]' vision of microcredit to provide direct capital to the poor, even when the only asset they have is themselves.
De Sotos' work is invaluable in understanding how to best combat poverty. I would recommend reading this book in tandem with [author:Jeffrey Sachs]' [book:The End of Poverty] to gain a fuller global perspective on methods of effective approaches to elimination of poverty.
