Mystery of Capital is the first book in my summer reading project. This is my first de Soto book.I enjoyed reading it. I took good 5 hours to read and grasp it’s central idea.
According to de Soto the current global socio-economic condition is as
follows,"communism is dead and the (third) world has embraced the only
existing system (Capitalism). They have made all the macroeconomic
changes, balanced the budget, cut subsidies, welcomed foreign
investment, and dropped taffis,
yet, the result has been bitter
disappointment. He ascribes this disappointment to the inability of
these countries (and / or promoters of Capitalism) to produce capital.
De Soto describes capital as "the force that raises productivity of
labor and creates wealth of nations." According to de Soto this is one thing the poor countires are not able to produce.
However in the west, people are very easily able to make capital due to
the strong representational system (property rights) in place. The
property rights system provides more value to owner than mere
ownership- it helps one raise capital. Through meticlouse research in Phillipines,
Peru, Haiti, and Egypt he proves beyond all doubt that poor of this
world has the assets, but lack the system to raise capital from them.
Through out the book he explains the mystery of missing Capital in
these developing nations.
De Soto concludes by saying, although he is not a die hard capitalist
he believes its the only "game in town" to help the world achieve what
he considers as imp freedom,compassion for the poor, respect for social
contract, and equal opportunity.
Recommendation: (*****)
This book is a great read and helps one see the worlds poor as the
possible solution and not the problem (they are made out to be). I
recommend this book to anyone interested in developmental economics.
Filed under: Uncategorized | Tagged: book
