Arnando de Sota’s book: “The Mystery of Capitalism, Why the Free Market Succeeds in the West and Fails Elsewhere” (Oatmeal Series, Sela Meir Publishing, 2022) is a book crammed with recurring information, and I was unable to make it all through.
This crowded book has some recurring principles in writing and tables. One of them is: “I intend to prove in this book that the biggest obstacle preventing other parts of the world from benefiting from capitalism is their inability to generate capital” (p. 12).
I have not succeeded in this whole copious book, one of the principles of which is: “I intend to prove in this book that the greatest obstacle which prevents the rest of the world from enjoying capitalism is their inability to generate capital.”
When it comes to holding resources, according to him:
“They hold these resources in poor ways: houses built on lands whose ownership rights are not properly registered, small businesses with undefined legal responsibilities, factories sitting in places hidden from the eyes of capitalists and investors” (p. 14).
And here is the main principle of the book:
“The poor inhabitants of these countries, who make up five-sixths of all mankind, do own things, but they lack the process of representing their property and creating capital. They have houses but no proof of ownership; crop, but not bills of sale; business, but no records. Companies “(p. 15).
The author further clarifies that “this book is a renewed attempt to trace the source of capital to explain how the economic failures of poor countries can be remedied” (p. 17).
Cover of the book “Secrets of Capitalism”
Regarding the process of moving from the village to the city and the difficulty involved, the author gives many examples. One of them deals with a sewing shop, which the research team and the author set up on the outskirts of Lima to create a new and legal business. In order to obtain the approvals, the staff worked six hours a day, for 289 days (!) Just to register the business.
After a few pages the listing appears in charts, in small letters and in a vague way.
There is a significant gap between active capital and dead capital: “According to our calculations, the total value of real estate held by the poor in the Third World and in former communist countries, without legal registration of ownership, is at least $ 9.3 trillion” (p. 41).
This dead capital is due to the fact that the existence of assets requires lists and ownership deeds provided by the official property systems. “It is extremely difficult to mobile in a property market, whose economic and social aspects are not fixed in an official property system” (p. 52). This is the repetitive sentence in the book.
“The poor inhabitants of these countries, who make up five-sixths of all mankind, do own things, but they lack the process of representing their property and creating capital.”
The following detail, as follows, is repeated in the book:
“Capital is born through written representation in a promissory note, a security, a contract and other records of this kind of the most beneficial economic features in relation to an asset, as opposed to the more visually impressive aspects of the asset. […] Property is not the house itself but an economic concept in relation to the house, which is embedded within a legal representation. This means that an official representation of the property is separate from the property it represents “(p. 55).
In other words: “By turning stakeholders in relation to property into guarantors, official property created private individuals out of the crowd (p. 59). This and more:” By making assets liquid, by linking owners to assets, between assets and addresses and between ownership and enforcement, Information on the history of the properties and owners, Official property systems have made Westerners a network of business players who can be identified and held personally accountable ”(p. 63).
Against these data stands the Third World economy, and in Ukraine for example half of the black economy is 50% of GDP.
De Sota repeatedly details the information that reflects his brief economic summaries, but does so extensively, over and over again. for example:
“I have traveled many times to advanced countries to find out how property rights experts in these countries propose to combine illegal property in a particular state into one system of legal property. Now that I am 13 years and thousands of miles behind, and with a little more gray hair, I can say Dealing with property rights – from my friends at the UK Land Registry and the Alaska Land Registry to their equivalent in Japan. None of them had an answer “(p. 109).
This sentence is repeated in the book: “Property is not the house itself but an economic concept in relation to the house, which is embedded within a legal representation. This means that an official representation of the property – separate from the property it represents”
The author devotes a chapter to the United States in relation to illegal property and devotes considerable amount to it, but it is doubtful whether it will interest the reader, the one who does not deal with the legal aspects of the property.
The same is true of the two charts about the capitalization process: “The movement from dead capital to living capital”, which are written like the other charts in small letters and give difficult information for readers to read. On page 185 I broke down and did not continue. Perhaps the book is intended for professional secretaries but not for the general public, which is also intelligent.