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Wednesday, December 8, 2010

The poor you will always have with you..




The poor you will always have with you, but you will not always have me. Matthew 26:11

John Stossel examines one of the main reasons why poverty is so persistent in certain areas of the world...

"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."..


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...


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."



I hope that the leaders of the aforementioned countries take what de Soto is saying to heart. Meanwhile, we here in the developed West seem to be oblivious to such UN initiatives as Agenda 21 and the concept of "Sustainable Development" as the creep towards the elimination of private property slowly and steadily advances.

2 comments:

Jquip said...

I get an uneasy feeling from De Soto's notions. All I'm seeing is that he says that one cannot gain credit without a postal address. And while that's certainly true it's not because industrious people can't build the houses they've already built or start the businesses they've already started.

It's because without Debtor's Prison you need a state approved mailbox to set a lien against. But that isn't the model we've forgotten, it's the one we're seeing go up in fraud and smoke before our eyes as we speak.

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