Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
To get the free app, enter your mobile phone number.
Other Sellers on Amazon
+ $3.99 shipping
+ $3.99 shipping
+ $3.99 shipping
The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else Paperback – July 9, 2003
Frequently bought together
Customers who bought this item also bought
Customers who viewed this item also viewed
"A must read among the globalization jet set." -- Time
"A must-read among the globalization jet set." -- -Time
"A provocative and elegantly written book." -- BusinessWeek
"Fastidious in its search for the facts but passionate in spirit and language...the blueprint for a new industrial revolution." -- -The Times London
"Fastidious in its search for the facts but passionate in spirit and language...the blueprint for a new industrial revolution." -- The Times (London)
"If a nonmathematician can win a Noble Prize in Economics, I nominate de Soto." -- -Lawrence Minard Forbes Global
"Stunningly conceived, compellingly argued, and impressively written." -- Kirkus Reviews (starred review)
"The Mystery of Capital makes a powerful case.... An important book." -- Washington Post
"The blueprint for a new industrial revolution." -- The Times (London)
"The most intelligent book yet written about the current challenge of establishing capitalism in the developing world." -- The Economist
About the Author
Top customer reviews
There was a problem filtering reviews right now. Please try again later.
He documents that between 50 and 90 per cent of the population in a lot of the developing countries are living in extra legality. A lot of the people on the outside of the legal system are poor, but most of them are not. In reality, they own homes and businesses. However, their ownership cannot be capitalized because it is virtually impossible to register it properly, so creditor would accept their property as collateral. And without credit, development and expansion of business is extremely difficult. The documentation of the dimensions of the extralegal sector is one of the books main qualities.
As some reviewers have pointed out, de Soto is in very little doubt that he has an extremely good case, maybe to little doubt. The book is written almost as a recipe for nations with underdeveloped property registration systems. In the recipe however, de Soto is very nuanced, and pays a lot of attention to most of the important aspects. Especially is he stressing that there is no property vacuum, even without no laws. A transition to a legal system would have to take the extralegal system into great consideration.
To what extent the importance of private property is generally acknowledged in the West, is illuminated by the fact that the Haag convention of war of 1899. "International law (..) treats the property rights of individuals as more sacred than the sovereign rights of states, providing that even if governments lose lands, property owners in those same territories shall not lose theirs (p. 166)".
What I find lacking is a more thorough discussion of the interests in the developing countries that prevent the establishment of rules and property registration. I got a feeling that de Soto thinks the main reason is that the politicians and lawyers just dont know how their nations could grow rich. As an economic explanation, this is clearly to easy, and more related to the classic explanations of how countries are poor (exploitation by the evil West), and not in line with the clear logic carrying most of the book.
Despite these difficulties, ownership still occurs. It does so, however, through extra-legal activities. Local cooperatives that enforce and provide dispute resolution are key aspects of this society. Mr. de Soto argues that these local cooperatives and organizations must be made part of the law; otherwise these countries will eternally lag the developed West. To stop here would have been quite a book, and one which would illicit much debate, but here the author shows himself to be a researcher of particular talent, by providing us with several extremely relevant historical examples. These examples, from the early US, show how extra-legal organizations, such as early mining organizations and land cooperatives in the frontier, came together to dictate how deeds were to be approved, provide safety to those who had settled and resolve disputes. The many acts of the US government that would dictate how these items were to be "officially" handled were more often than not several years lagging in their development, and were merely the `officialization' of pre-existing extra-legal institutions.
The author takes us through his argument using wonderful prose, a clear argument and poignant tables. Even those who might disagree with his point would appreciate this book. He does a magnificent job of referencing relevant modern economic works, particularly those of Ronald Coase. This book not only educates the reader about the argument the author puts forward, but also provides the reader with the education necessary to critically evaluate the method and supporting data of that argument. Such books as this are rare, and this is why I highly recommend this book.
Points of Interest:
Metcalfe's Law (also commonly known as the network effect) described in detail according to its official definition. "The value of a network - defined as its utility to a population - is roughly proportional to the number of users squared. An example is the telephone network. One telephone is useless: whom do you call? Two telephones are better, but not much. It is only when most of the population has a telephone that the power of the network reaches its full potential to change society." (Page 72)
The book contains the story of a slump in the Peruvian economy, with one of the indicators being a decrease in construction. Further inspection revealed that sales of bags of cement were actually increasing. The extra-legal economy was booming, but uncounted. (Page 76)
"Mandatory law is not enough. As Andrzeg Rapaczynski has pointed out:... `This is the old Hobbesian problem: when most people obey the law, the government can enforce it effectively and [relatively] cheaply against the few individuals who break it. But when obedience breaks down on a large enough scale, no authority is strong enough to police everyone....'" (Page 170)
"In the absence of legal protection from the state in most developing nations, it is extralegal law that regulates the assets of most citizens." (Page 175)
"One large [extra-legal] squatter settlement I visited recently was initiated by the city council itself to provide homes for some 7,000 families of government employees." (Page 177)
"Using economic data from fifty-two countries from 1960 to 1980, Samar K. Datta and Jefferey B. Nugent have shown that for every percentage point increase in the number of lawyers in the labor force (from say 0.5 to 1.5%), economic growth is reduced by 4.76 to 3.68 percent - thus showing that economic growth is inversely related to the prudence of lawyers." (Page 198)
Most recent customer reviews
Author: Hernando de Soto.
Publisher: Basic Books, New York (2000).Read more