Re: Demarchy's promise

From: Brian D Williams (talon57@well.com)
Date: Mon Aug 12 2002 - 08:30:04 MDT


>From: Charlie Stross <charlie@antipope.org>

>What "property rights"?

>The majority of the world's population today live OUTSIDE the
>organised and quantified system of property to which we assign
>rights. Consider illiterate peasant farmers living on the land and
>scratching a living. Their involvement in the formal economy may
>be zero, but they're still eating even though they don't 'own' the
>land they work -- insofar as they don't have pieces of paper to
>say they're entitled to it, or receive any money for what they
>grow, or spend any money for the extras they acquire.

They need to get those pieces of paper, I previously posted this to
the list, you might wish to consider it.

After Technotranscendence published the following article the other
day I ordered the book:

                     The Mystery of Capital
"Why capitalism triumphs in the west and fails everywhere else."
                        Hernando De Soto
                       ISBN 0-465-01614-6
                           U.S. $27.50

This is a fascinating book and I would highly recommend it to
anyone interested in either free markets or seriously interested in
helping out disadvantaged countries/peoples.

I'm going to bend the rules by reposting the excellent article.

PERUVIAN EXCELS IN ANALYZING ECONOMIES WORLDWIDE
by Georgie Anne Geyer

http://www.uexpress.com/georgieannegeyer/viewgg.cfm

WASHINGTON -- It may seem unlikely that a highly intellectual and
unusual Peruvian economist would have some of the long-term answers
to terrorism in the world. But Hernando de Soto, who has enlivened
economic thinking and challenged the misery of the developing world
for several decades now, truly has some original ideas.

During his most recent visit to Washington, he and I had our third
talk in the past few months. Only this time, building on his years
of contacts with leaders and thinkers of the poorest countries of
the globe, de Soto had just come from three and a half hours with
the head of a faded superpower, Russian President Vladimir Putin.

"I told him that all capitalism is a legal framework," he said. "If
you get it right, everything will fit together. But in fact, all
countries start out the same way. All countries start out with a
black market -- until property rights are established.

"So the first thing we do when we go into a country is 'measure it'
and tell the government where the problem is. It might be the
mafias, because then someone else is making the rules. We show them
how to go from a black market to a legal system."

Was President Putin, the ex-KGB agent who has never been noted for
his economic prowess, willing or able to accept de Soto's formula?
"Putin was terrific," de Soto said. "He understands perfectly.

"I told him, 'I don't know Russia, but let me tell you throughout
history what Switzerland and Germany did to create a market
economy. They did a very sophisticated job of creating the proper
kinds of laws and on agreeing on who owns what.'

"When you talk with Putin and tell him that this is what the
Germans did decades ago, it begins to register. So Putin begins to
realize that you're saying the black market is not the result of
the Russian soul, but it's like smallpox: Everybody has had it."

Hernando de Soto works out of his Institute for Liberty and
Democracy in his hometown of Lima, Peru, an institute that has been
the bete noir of terrorists for years (the brutal Maoist Sendero
Luminoso bombed the offices in 1998, knowing full well where their
enemy lay).

But in the last six years, he and his staff have moved further
afield, across the underdeveloped world, into poverty-stricken
countries or into moderately developing countries that are falling
behind because of overpopulation. One of those, on both accounts,
is Egypt.

But, true to his insights into the economic life of societies, de
Soto found new facts to analyze in that teeming and increasingly
troubled society. Since Sept. 11, the government has been terrified
by the "Arab street" from taking a position on terrorism.

"In Egypt," he wrote in his new book, "The Mystery of Capital,"
http://www.amazon.com/exec/obidos/ASIN/0465016146/thefriedrhayeksc
"the wealth that the poor have accumulated is worth 55 times as
much as the sum of all direct foreign investment ever recorded
there, including the Suez Canal and the Aswan Dam." In fact, he was
already, at the time of the bombings, four and a half years into a
five-year in-depth analysis of the Egyptian economy, sponsored by
President Hosni Mubarak.

Going beyond Egypt, "by our calculations, the total value of the
real estate held but not legally owned by the poor of the Third
World and former communist nations is at least $9.3 trillion,"
which is "about twice as much as the total circulating U.S. money
supply," and "very nearly as much as the total value of all the
companies listed on the main stock exchanges of the world's 20 most
developed countries."

The trouble is that the "mystery of capital," with its unique
capacity to regenerate societies by creating liberating wealth,
never has the chance to operate.

As de Soto points out, this is because, whether in Egypt or
Indonesia or for that matter in George Washington's era in U.S.
history, "They have houses but not titles, crops but not deeds,
businesses but not statutes of incorporation. And this is why many
countries seem to be modern, but aren't."

They have adopted superficial products of capitalist society, but
not the "representational forms" underlying capitalist societies
and freeing capital in a "vast hidden process that connects all the
assets to the rest of the economy" and gives them a "parallel life
in the creation of new assets."

Painfully little of this complex but creative -- and comfortably
quantifiable -- process is present today in the Arab and Islamic
world (whose banks spurn interest, for example). Only 4 percent of
the investment moneys of the world go into the Middle East,
including Israel. No wonder, then, that teams of violent youth
haunt the mountains of Afghanistan and the streets of Cairo and
Djakarta.

Not much can be done, of course, in terms of the economic
reconstruction of developing countries while this "war on
terrorism" is at its height. But in the long run, if the countries
of the world are to stabilize, the original and practical ideas of
this remarkable thinker are surely the place to begin.

COPYRIGHT 2001 UNIVERSAL PRESS SYNDICATE
Originally Published on October-12-2001

Also see: www.ild.org.pe

Brian

Member:
Extropy Institute, www.extropy.org
National Rifle Association, www.nra.org, 1.800.672.3888
SBC/Ameritech Data Center Chicago, IL, Local 134 I.B.E.W



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