John Stossel:
Hernando de Soto taught me that the biggest difference may be property rights. ....I first met de Soto maybe 15 years ago.
Huh? Stossel met Hernando de Soto? Wow, he must be really really REALLY old.
Posted on 12/08/2010 4:19:34 AM PST by Kaslin
Of the 6 billion people on Earth, 2 billion try to survive on a few dollars a day. They don't build businesses, or if they do, they don't expand them. Unlike people in the United States, Europe and Asian countries like Japan, South Korea, Hong Kong, etc., they don't lift themselves out of poverty. Why not? What's the difference between them and us? Hernando de Soto taught me that the biggest difference may be property rights.
I first met de Soto maybe 15 years ago. It was at one of those lunches where people sit around wondering how to end poverty. I go to these things because it bugs me that much of the world hasn't yet figured out what gave us Americans the power to prosper.
I go, but I'm skeptical. There sits de Soto, president of the Institute for Liberty and Democracy in Peru, and he starts pulling pictures out showing slum dwellings built on top of each other. I wondered what they meant.
As de Soto explained: "These pictures show that roughly 4 billion people in the world actually build their homes and own their businesses outside the legal system. ... Because of the lack of rule of law (and) the definition of who owns what, and because they don't have addresses, they can't get credit (for investment loans)."
They don't have addresses?
"To get an address, somebody's got to recognize that that's where you live. That means ... you've a got mailing address. ... When you make a deal with someone, you can be identified. But until property is defined by law, people can't ... specialize and create wealth. The day they get title (is) the day that the businesses in their homes, the sewing machines, the cotton gins, the car repair shop finally gets recognized. They can start expanding."
That's the road to prosperity. But first they need to be recognized by someone in local authority who says, "This is yours." They need the rule of law. But many places in the developing world barely have law. So enterprising people take a risk. They work a deal with the guy on the first floor, and they build their house on the second floor.
"Probably the guy on the first floor, who had the guts to squat and make a deal with somebody from government who decided to look the other way, has got an invisible property right. It's not very different from when you Americans started going west, (but) Americans at that time were absolutely conscious of what the rule of law was about," de Soto said.
Americans marked off property, courts recognized that property, and the people got deeds that meant everyone knew their property was theirs. They could then buy and sell and borrow against it as they saw fit.
This idea of a deed protecting property seems simple, but it's powerful. Commerce between total strangers wouldn't happen otherwise. It applies to more than just skyscrapers and factories. It applies to stock markets, which only work because of deed-like paperwork that we trust because we have the rule of law.
Is de Soto saying that if the developing world had the rule of law they could become as rich as we are?
"Oh, yes. Of course. But let me tell you, bringing in the rule of law is no easy thing."
De Soto started his work in Peru, as an economic adviser to the president, trying to establish property rights there. He was successful enough that leaders of 23 countries, including Russia, Libya, Egypt, Honduras and the Philippines, now pay him to teach them about property rights. Those leaders at least get that they're doing something wrong.
"They get it easier than a North American," he said, "because the people who brought the rule of law and property rights to the United States (lived) in the 18th and 19th centuries. They were your great-great-great-great-granddaddies."
De Soto says we've forgotten what made us prosperous. "But (leaders in the developing world) see that they're pot-poor relative to your wealth." They are beginning to grasp the importance of private property.
Let's hope we haven't forgotten what they are beginning to learn.
One of the better posts I ever read.
Clear, concise and hits the nail on the head.
You are welcome. The poster in post#16 doesn’t seem to get it
bkmk
I think you and I are on the same wavelength. (See my post #17)
Jesus said the poor will always be with us!!
"This sentence struck me, but I may be applying it incorrectly:Nope you are applying it exactly as it is meant. Obama and the Democrats engineered one of the greatest scams in the history of our nation and right out in the open with both Democrats and Republicans shouting amens and hosannas and cheering him on."It applies to more than just skyscrapers and factories. It applies to stock markets, which only work because of deed-like paperwork that we trust because we have the rule of law."
What came to mind was when Obama took over GM and left the share holders high and dry, and handed the company to the union. He seized property and destroyed the rule of law in one fell swoop."
This act alone is grounds for impeachment but we will never be able to go back now. And it will be so much easier the next time for the looters to do their dastardly deeds!
Yep, that is a good career path. Also, no mandatory retirement date, good job security (hard to outsource those jobs) and the occupation has favorable tax attributes, and every fringe benefit you could imagine.
It does indeed
John Stossel:
Hernando de Soto taught me that the biggest difference may be property rights. ....I first met de Soto maybe 15 years ago.
Huh? Stossel met Hernando de Soto? Wow, he must be really really REALLY old.
Add in the debate between Ferdinand Lassalle and David Ricardo over the Iron Law of Wages in the modern economic context, immigration trends that begin as a follower to perceived economic progress in a region and then smother that potential in an unrealistic human tsunami, and short-term political expediency by ruling classes that benefit from maintaining an economically stagnant underclass to the subject of the article, and you begin to see just the shadow of the huge, malicious elephant in the room...
The problem is that we are slowly letting the rule of law slip in this country. Trends contributing to this include: judicial activism, tolerating illegals, subjectively enforcing laws, or creating laws that are either incomprehensible or unforceable (to name a few). Within another 20 years, I predict we will be a country of men and not laws. The law will be whatever a Judge or Bureaucrat says it is—at that moment.
For a civilization to thrive it must have 4 things ( minimum):
1) Secure borders.
2) Honest courts and police to enforce contracts and to put criminals in prison.
3) Secure and dependable property rights.
4) A morally well-grounded and honest people with the good will to make it work.
By the way,...No one in the U.S. owns property any longer. We are instead renters to the government. If we fail to pay our property taxes, the government will evict us.
And....
A major part of all property taxes is a MASSIVE and bloated collectivist government school system that is dedicated to indoctrinating our nation's youth into worshiping godless government communism.
For a civilization to thrive it must have 4 things ( minimum):
1) Secure borders.
2) Honest courts and police to enforce contracts and to put criminals in prison.
3) Secure and dependable property rights.
4) A morally well-grounded and honest people with the good will to make it work.
By the way,...No one in the U.S. owns property any longer. We are instead renters to the government. If we fail to pay our property taxes, the government will evict us.
And....
A major part of all property taxes is a MASSIVE and bloated collectivist government school system that is dedicated to indoctrinating our nation's youth into worshiping godless government communism.
Hey, I’m a middle-income guy who lived for 25 years in a modest house with a modest wife and modest children. Why do I stay that way?
And here’s the liberal’s strategy: you can’t take the people out of wealth until you take the wealth out of people.
Please read post #34.
You know, I do think the poster does get it, but is also pointing out something important - that even in the U. S., property is only yours for as long as you can keep the taxman at bay. I think most people were fine with paying taxes when it got them something they wanted: fire protection, education for their children, highway/road maintenance or construction, police protection. Now that taxes are used as wealth transference from those who work/own property to those who think they are owed a living, resentment is building. It’s ludicrous that property owners could lose their property because they can’t afford to pay the taxes to support the deadbeats of society.
You stay that way because it is good. In most of the world you cannot GET that way. In our neighbor to the south, quaint and colorful Mexico, no one actually knows who owns anything 100% legally.
Within another 20 years, I predict we will be a country of men and not laws. The law will be whatever a Judge or Bureaucrat says it is—at that moment.
it’s already here.
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