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It's become clear by now the fall of the Berlin Wall and the collapse of communism in most places around the globe hasn't ushered in an unequivocal flowering of capitalism in the developing and postcommunist world. Western thinkers have blamed this on everything from these countries' lack of sellable assets to their inherently non-entrepreneurial "mindset." In this book, the renowned Peruvian economist and adviser to presidents and prime ministers Hernando de Soto proposes and argues another reason: it's not that poor, postcommunist countries don't have the assets to make capitalism flourish. As de Soto points out by way of example, in Egypt, the wealth the poor have accumulated is worth 55 times as much as the sum of all direct foreign investment ever recorded there, including that spent on building the Suez Canal and the Aswan Dam.
No, the real problem is that such countries have yet to establish and normalize the invisible network of laws that turns assets from "dead" into "liquid" capital. In the West, standardized laws allow us to mortgage a house to raise money for a new venture, permit the worth of a company to be broken up into so many publicly tradable stocks, and make it possible to govern and appraise property with agreed-upon rules that hold across neighborhoods, towns, or regions. This invisible infrastructure of "asset management"--so taken for granted in the West, even though it has only fully existed in the United States for the past 100 years--is the missing ingredient to success with capitalism, insists de Soto. But even though that link is primarily a legal one, he argues that the process of making it a normalized component of a society is more a political--or attitude-changing--challenge than anything else.
With a fleet of researchers, de Soto has sought out detailed evidence from struggling economies around the world to back up his claims. The result is a fascinating and solidly supported look at the one component that's holding much of the world back from developing healthy free markets. --Timothy Murphy
The author, president of an influential Peruvian think tank and a prominent Third World economist, sets out to solve the mystery of why some people in the world can create capital and others cannot. Outside the West, in countries as different as Russia and Peru, it is not religion, culture, or race issues that are blocking the spread of capitalism but the lack of a legal process for making property systems work. Implementing major legal change so as to establish a capitalist order involves changing peoples' beliefs, and de Soto contends this is a political rather than a^B legal responsibility. He believes such a change can be achieved if governments seriously focus upon the needs of their poor citizens for a legally integrated property system that can convert their work and savings into capital. Political action is necessary to ensure that government officials seriously accept the real disparity of living conditions among their people, adopt a social contract, and then overhaul their legal system. Mary Whaley
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Came in good time, book is in good condition but there is a lot of writing in it that was not specified when I bought it. Should be clearer next time.
Thanks for the purchase
Cet exposé de réalités et de magouilles économiques m'a ouvert les yeux sur les véritables principes qui condamnent une si grande proportion de... Read morePublished on Feb. 12 2012 by Jean-Marc Leclerc
First of all, the used copy of The Mystery of Capital that I bought was in great shape, although a previous reader had underlined passages. Read morePublished on Sept. 18 2009 by Janet D. Gray
Great topic and interesting to read. But his argument is somewhat one sided. Indeed, according to his concept, there is way to explain the current surge in China and India. Read morePublished on June 9 2006 by Expat-biz-Hong Kong
Many of the other reviewers have given excellent in depth summaries of DeSoto's book, and I will not regurgitate what others have already done a good job of saying. Read morePublished on June 23 2004 by J A W
Hernando de Soto's ideas cannot and should not be ignored. This book will open many eyes to the nature of capital. Read morePublished on June 7 2004 by Rolf Dobelli
Other reviewers have commented on De Soto's originality in relation to prevailing economic tradition. Read morePublished on June 1 2004 by Dieter
Outside the Western borders; capitalism is in crisis not because international globalization is failing but because developing nations have been unable to channel capitalism in... Read morePublished on April 2 2004 by M. A. ZAIDI
You can not read this book without thinking this author just might be on to something big. The central question or "mystery" of the book as the title suggests is why... Read morePublished on Dec 1 2003 by J. head