Tuesday, July 6, 2010

Property means wealth creation

Once again we have the grand Walk The Talk Show with Peruvian economist Hernando de Soto:

Some excerpts:

Shekhar Gupta: So the classical capitalists have got their discourse wrong.

de Soto: I don’t think most of our Western friends realise how their wealth coincided with the industrial revolution, and the industrial revolution came about because there was a breakdown of the feudal system, and because essentially every guy got the property and the business right and a uniform rule of law was applicable to everybody.

Shekhar Gupta: How would this apply to, say, tribal India, where we see the rise of Maoism now?

De Soto: So, having a property title doesn’t only mean that you own something, it means that it’s that with which you raise capital. So the question you must ask yourself, which I would do if I were Indian, is: How many of the people that are in these areas where you have natural resources actually have a piece of paper that you can take to Wall Street? And if they don’t, they are in a situation of inferiority.

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