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The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (平装)
by Hernando de Sato
| Category:
Non-fiction |
| Market price: ¥ 198.00
MSL price:
¥ 168.00
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| Stock:
Pre-order item, lead time 3-7 weeks upon payment [ COD term does not apply to pre-order items ] |
MSL rating:
 Good for Gifts |
| MSL Pointer Review:
Getting back to the roots of capitalism covering markets, property rights, and fighting poverty, this eye-opening book is one of the essential readings on the future of developing countries. |
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AllReviews |
  1 2 Total 2 pages 16 items |
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G. Maynez (MSL quote), USA
<2006-12-25 00:00>
This interesting book begins with a haunting question: Why is it that capitalism succeeds in Western -or Westernized- countries, but fails everywhere else? His main answer is easy to understand but apparently very difficult to implement: because in the rest of the world, laws and institutions are very far from the common people's everyday life, from the way these people actually work and organize themselves. As a result, a few people live "inside" laws and institutions (Braudel's "crystal bell"), while the rest live outside "legality". This situation is the cause that billions of dollars' worth of poor people's assets are unable to become live capital. The poor people's assets only produce what their use-value allows, and sometimes also what their exchange-value permits, but their extra-legal condition means they can not be used for their symbolic value (as collateral for loans, for example), and thus the said assets can not bring about other kind of revenue and benefits. That is, they do not constitute real capital.
At first sight, operating outside the law looks advantageous: you don't pay taxes and you can avoid regulations. But in reality, it is extremely expensive and inconvenient. De Soto takes us to a logical but frequently overlooked conclusion: the success of Capitalism passes through adequately defined and enforced property rights. When everybody in a society has access to property rights, then they come into a world of security, a world of networks that go well beyond the local, a world of physical and legal certainty. People break free from mafias, from perennial uncertainty and from dependence on factual, and often violent, powers.
The solution? Adapt laws to the actual "social contracts" governing people's lives, and not the other way around. Make the crystal bell larger, so that almost everybody has a place inside (sociopaths and incurably lazy people excluded). What needs to be done? Assume the poor's perspective, co-opt elites (making them understand that the end result will be good for everybody), incorporate visionary law-makers. All this demands a fine, strong political leadership. Is all this a Utopia? Hell, no, it is happening in many places, where politicians have understood the message. This is possibly the first economics classic book to have come out of Latin America. At least in Mexico, now that we seem to have a pro-capitalism leader in the next President, let's hope they understand what we need. |
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Lucas Engelhardt (MSL quote), USA
<2006-12-25 00:00>
Being a student of Economics (one looking into doing a dissertation on Capital Theory in a few years, actually), I thought this book looked like a great book in the field. So, I bought it.
When I started reading it, I was a bit shaken. Mostly because it wasn't the book I expected. I expected a book on capital theory (the theory of capital goods, I was hoping). Instead, I got a book about the importance of legal property rights being derived from the existing social norms among the poor in Third World and post-communist countries. So, from a technical standpoint, I question if "capital" is really the term De Soto should have used for the mystery he was uncovering.
But, after the initial shock, De Soto's point really caught on. The lack of legally enforceable property rights make it so that all the savings the poor of the Third World have can't be converted into "live capital". Personally, I think a better way of saying it would be "The lack of legally enforceable property rights prevent the Third World's poor from being able to join the global markets due to the resulting lack of unenforceable contracts." In addition, laws should be based on pre-existent social contracts. Good points, and I agree with De Soto: pouring money into the developing world just won't cut it as far as economic development is concerned. Until strong legal property rights exist, any investment is more or less waste. (With the exception of charity to the very poor, which isn't with the goal of economic development, anyway.)
But, after giving me 6 good chapters of evidence as to how Third World and post-communist governments are failing to provide good property systems, De Soto decided that his final chapter should be a short essay on how great Karl Marx's analysis of certain capitalist phenomena are, and how tempting his philosophy will be to the Third World if it doesn't shape up soon. Thanks, De Soto. But, perhaps you should reread Marx a bit more critically. Fortunately, this chapter did explain why De Soto felt it necessary to continuous use the phrase "produce surplus value" instead of "make a profit" or "increase standards of living". Either way, much of the last chapter felt like useless conjecture about how Marx would feel about the state of the modern world. So, it's not a 5 star book.
If you're looking for a decent book on a very specific issue in development economics, this book provides good evidence for the necessity of relevant property law to economic development. If you're looking for a book that's actually about capital, then look somewhere else. |
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Booklist (MSL quote), USA
<2006-12-25 00:00>
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 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. |
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The Times London (MSL quote), Britain
<2006-12-25 00:00>
Fastidious in its search for the facts but passionate in spirit and language... the blueprint for a new industrial revolution. |
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Time (MSL quote), USA
<2006-12-25 00:00>
A must-read among the globalization jet set. |
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BusinessWeek (MSL quote), USA
<2006-12-25 00:00>
A provocative and elegantly written book. |
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1 2 Total 2 pages 16 items |
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