21 March 2009

Poverty and the Right Update

Following up on my previous post, here is another example of a right-of-center author who is genuinely concerned with the poor: Hernando de Soto. His The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else argues that the reason capitalism has failed in third-world countries is not because the poor are not entrpreneurial, have low IQs, or have anti-capitalistic cultures (as others have alleged). Rather, it is because the substantial and underestimated assets they have is in the form of "dead capital," unable to be used or built upon because it is untitled, buried under layers of bureaucracy, and not protected within a framework of property that allows it to be transparent, traded, divided, used as collateral, etc.

De Soto ends his book with these words: "I am not a die-hard capitalist. I do not view capitalism as a cred. Much more important to me are freedom, compassion for the poor, respect for the social contract, and equal opportunity. But for the moment, to achieve those goals, capitalism is the only game in town. It is the only system we know that provides us with the tools required to create massive surplus value" (p. 228).

I would also add that de Soto makes more sense out of the spirit of the Marxian critique of capitalism than many Marxists do.

1 comment:

Victor V Claar said...

I agree. I read the Mystery of Capital about three or four years ago, and found deSoto's thesis both intriguing and compelling. The book is a bit repetitive once it has made its major points, but it is certainly worth spending a day with. I also had a chance to hear deSoto speak in Dearborn about a year ago. What struck me was his clarity, as well as his reasoned hope for the poorest among us. An ideologue he is not.