As we wait for the Budget, I’d like to draw CoffeeHousers’ attention to a talk being given to the RSA tomorrow by one of my heroes, Hernando de Soto. Much rot is spoken about how to help the poor and his books, the Mystery of Capital and The Other Path – make some hugely important and fairly basic points. You need to look at capital: the right to own, and (from that) the ability to borrow. If a country has not enforced property rights, then it will never be properly pulled out of poverty because its people have no means to accumulate capital. Wealth creation depends on this microfinance, not handouts. Grant people these basic, and miracles can happen. But as things stand:-
“The existence of such massive exclusion generates two parallel economies, legal and extra legal. An elite minority enjoys the economic benefits of the law and globalization, while the majority of entrepreneurs are stuck in poverty, where their assets –adding up to more than US$ 10 trillion worldwide– languish as dead capital in the shadows of the law’
More recently, he has spoken about the Arab Spring and how the West is getting it wrong. It was a protest, he says, of traders demanding the basic tools of capitalism.
Recall the catalyst of what became the Arab Spring: the self-immolation in January 2011 of Mohamed Bouazizi, a Tunisian fruit vendor protesting the expropriation of his merchandise…. It wasn’t unique. We found that at least 63 more men and women—in Tunisia and also in Algeria, Egypt, Morocco, Saudi Arabia, Syria and Yemen—followed Bouazizi’s example within 60 days of his death. That was the critical period during which governments were toppled or dramatically shaken. Does the West get it? The opportunity cost of misinterpreting the causes behind the continuing instability is huge.
I’ll be interviewing him on Friday, and I’d gladly put to him any questions from CoffeeHousers. Or you can come along to his talk at the RSA (it’s free) and ask him directly.Tags: Hernando de Soto, Mystery of Capital