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The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

3.96  ·  Rating Details ·  2,736 Ratings  ·  210 Reviews
"The hour of capitalism's greatest triumph," writes Hernando de Soto, "is, in the eyes of four-fifths of humanity, its hour of crisis." In The Mystery of Capital, the world-famous Peruvian economist takes up the question that, more than any other, is central to one of the most crucial problems the world faces today: Why do some countries succeed at capitalism while others ...more
Paperback, 288 pages
Published July 9th 2003 by Basic Books (first published January 1st 2000)
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Gordon
Dec 21, 2008 Gordon rated it it was amazing
Written by a Peruvian author, this book is wonderfully enlightening for anyone interested in issues of 3rd World economic development.

De Soto's central thesis is quite simple: you can't solve the problem of stagnant, poverty-stricken economies unless you figure out how to make credit available so that people can start and operate businesses. But you can't get credit if you have no assets to secure it with. And you have no significant assets you can call your own if you can't establish title to
...more
Vicky Sherwood
Aug 17, 2007 Vicky Sherwood rated it really liked it
everything your soc prof fails to consider
Doug
Mar 09, 2010 Doug rated it it was ok
More than most conservatives, Hernando De Soto understands that, even with the death of Cold War socialism, the “advocates for capitalism are intellectually on the retreat” (209). “The hour of capitalism’s greatest triumph is its hour of crisis.” Perhaps this explains the recent rise in panicked defenses of free markets, though most of these defenses simply regurgitate Reagan-era arguments with no realization of how the debate has shifted and deepened. De Soto observes, “for those who have not n ...more
Rachel
Jul 02, 2009 Rachel rated it really liked it
Shelves: economics, nonfiction
This book explains the importance of property rights to the success of capitalist systems. In order for a society to use its assets to their fullest potential, it needs a legal system that transforms wealth into "living capital." "Living capital" can be leveraged to create further wealth: for example, in the U.S. most new enterprises are funded by mortgages on the entrepreneur’s home. But in a society that does not clearly define and protect ownership, such strategies are impossible.
This explain
...more
Seth
Jan 09, 2008 Seth rated it it was amazing
Recommended to Seth by: My brother
Best Economic Development book I ever read. It's thought provoking and it resonates. Third World poverty could dramatically shrink if property owners had a legitimate claim to their real property. I thought micro lending was the answer to most of Latin America's problems (it still is a partial answer), however, De Soto convinces me that most of the Third World already owns enough property to leverage themselves out of poverty if only formal property and legal systems could legitimize their prope ...more
شمس الدين
لم اقرأ كتاب منذ فترة يحمل هذا الكم من التحيزات المعرفية للحضارة التي ينتسب اليها الكاتب .... عندما ابحر فيه سوف اكتب انتقاداتي له تباعا لان التحفظات عليه لا آخر لها
Conrad
Mar 24, 2007 Conrad rated it really liked it
This book puts forward the stunning notion that one of the things that keeps poor countries poor is that they have most of their value locked up in defunct land, which is tended (but not owned) by squatters and people who don't have titles to it. DeSoto's idea is that land reform in these countries would end up allowing the poor to buy, sell, and borrow the things they already have. All it would really take is streamlining title acquisition and land-use laws.

I haven't really read much criticism
...more
ZaRi
در هاییتی فقیرترین کشور آمریکای لاتین، کل داراییهای فقرا بیش از ۱۵۰ برابر ارزش تمامی سرمایهگذاریهای خارجی است اما مردم این منابع را به شکل معیوب نگهداری میکنند و فرایندی ندارند که مالکیت آنها را نشان داده و سرمایه تولید کند.
اگر جهان سوم در حال گذار به یک نظام سرمایهداریِ متکی بر بازار باشد،که به تمایلات و اعتقادات مردم احترام بگذارد، من به اینکه جهان سومی هستم عشق میورزم. هنگامی که سرمایه در همه جا یک داستان موفق باشد، ما میتوانیم فراتر از محدودیتهای جهان فیزیکی حرکت و از افکار خود برای اوجگیری
...more
Hotspur
Nov 04, 2008 Hotspur rated it it was amazing
Recommends it for: anyone
Recommended to Hotspur by: National Public Radio
Shelves: nf-essays
An amazing book that investigates the power of informal economic infrastructures. Latin America had a higher per capita income than North America in 1789. What happened? Why did capitalism take root in North America and why did it fail elsewhere? Now that Capitalism's big rival is for intents vanquished, the capitalist society is the only viable option for economic growth left for the developing countries. DeSoto's brilliant work examines the impediments to economic growth in the developing worl ...more
Miro Nguyen
Jul 14, 2013 Miro Nguyen rated it it was amazing
Shelves: economics
A must read book to understand how western countries are so successful, pointing out a way to help developing countries, not just copying blindly, have to understand the roots. A true manifestation of how brilliant human beings are.
Douglas Wilson
Oct 27, 2009 Douglas Wilson rated it it was amazing  ·  review of another edition
What an eye-opening book this one was! Everyone who has a heart for the globally poor needs to read it. Along with everyone who pretends to have a heart for the poor.
Matthew Raketti
Aug 13, 2014 Matthew Raketti rated it it was amazing
November 20, 2014
My reactions to reading Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else by Hernando de Soto originally written for a Readings in Legal Thought Seminar with Judge D. Ginsburg of the U.S. D.C. Circuit Court of Appeals; Readings in Legal Thought – George Mason University School of Law

In the course of my learning I have, on rare occasion, had the good fortune to read texts that affect something of a paradigm shift in how I think about the world. Whi
...more
Данило Судин
Книжка обіцяє розказати, чому капіталізм не є ефективним в незахідних країнах загалом і пострадянських загалом, але не робить цього. Основне пояснення автора: недосконалість правового регулювання прав власності. Якщо на Заході все є чітко регламентованим, то в інших країнах – ні. Зокрема, основна проблема, що реальні відносини власності не є присутніми в правилах та законах. Отже, капіталізм запрацює, на думку автора, коли юридична сфера легалізує ті практики, що вже існують в суспільстві.

Ось і
...more
Jesse
Feb 16, 2013 Jesse rated it really liked it
Shelves: economics
This book makes only one point: countries need robust, accessible-to-all property systems to succeed at free-market capitalism. This is, of course, the answer to the question in the book's provocative subtitle. But the book's singular focus does not hinder it from being thorough or effective: de Soto draws from both personal experiences working on extralegal property systems in Peru and a wide range of historical and economic sources. Quoted include economists, legal experts, politicians, histor ...more
Sanford Forte
Oct 11, 2014 Sanford Forte rated it it was amazing
This is an important book; perhaps one of the most important books written about economic development and capitalism in the last few decades.

Anyone who studies or has an interest in how Capitalism works (or could work) in developing economies - and, what optimal preconditions are necessary for the success of Capitalism, will profit from reading this book.

Hernando de Soto is a Peruvian economist whose research clearly shows that coordinated, legally-encoded, well-understood-and-agreed on rights
...more
Cambridge Programme for Sustainability Leadership
One of Cambridge Sustainability's Top 50 Books for Sustainability, as voted for by our alumni network of over 3,000 senior leaders from around the world. To find out more, click here.

The Mystery of Capital argues that capital is the engine of a market economy and that property rights - namely, the ability to have secure title over land and housing - provide the mechanism. De Soto notes that, more than a decade after the fall of Marxism, the expected capitalist revolution has not occurred. Capita
...more
Scott Goddard
Dec 17, 2014 Scott Goddard rated it liked it
Property rights, de Soto posits, are the sine qua non to achieve economic development. For this reason, countries that are bereft of such arrangements - namely developing and socialist-leaning nations - have not experienced rapid growth in spite of embracing the free-market. The function or rather, functions, of property rights is/are multifarious; they serve the purpose of improving civil order and mitigating crime, allowing individuals to borrow through credit intermediation, and making the pr ...more
Patrick
Sep 24, 2014 Patrick rated it really liked it
Shelves: economics
A wonderfully argued book on the advantages that we westerners have over much of the rest of the world in firmly established, transferable, and accountable property rights. de Soto slashes away at the cultural arguments that many authors make in celebration of the west (I'm thinking of Niall Ferguson here), and instead focuses on the structures that allow for individuals to build up credit through the acquisition of property. It is this which enables risk taking and, and debt creation allowing f ...more
TC
Oct 02, 2008 TC rated it it was ok
De Soto has a point, namely that the biggest reason for the continued laggardness of people in developing countries to "catch up" with those in the developed world lies in the convoluted local legal structures that favor those with the power, money, influence, and the wherewithal to navigate their way through the system. As in it is cheaper and easier to just stay outside of the legal system altogether and cobble together an implicit, grassroots alternative to it. Hence the overwhelming majority ...more
Michael Connolly
Jul 22, 2012 Michael Connolly rated it liked it
Shelves: reviewed, economics
The author identifies two of the main obstacles to economic development in Latin America: (a) the lack of government records giving poor people official ownership of their home and work buildings, and (b) the large amount of red tape required to start a business. The English-speaking part of the Americas has the advantage of the history of English common law and its extension of the right to own property from the nobility to the commoners. Property in Latin America is owned mainly by the descend ...more
Charles Allan
Jan 15, 2013 Charles Allan rated it it was amazing
Shelves: economics
Here's an argument for individual rights, openness and equality before the law:

Hernando de Soto: The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

De Soto is a Peruvian economist that tackles one of the oldest mysteries: how can societies unlock their human potential? The answer, as he argues, lies in individual rights and a predictable, open legal system. Which the third world poor lack.

But how do you establish such a thing? De Soto's central idea is that the
...more
Leanna Pohevitz
Jan 04, 2016 Leanna Pohevitz rated it really liked it
This book was difficult to get through because of the truth in its denseness. I agree with de Soto's theories, that first worldness is not a mark of the culture but a mark of all that was established in that location prior to the people then living there. Accordingly, I agree that properties inability to be used as capital in the countries marked 'Third World' is indicative of a long history of extralegal property rights that worked and thus were never questioned. I'd like to believe his theorie ...more
Rachel
Mar 31, 2015 Rachel rated it really liked it
I'll admit. I didn't completely finish this book. The first few chapters summarized the overall theory, which I found fascinating, but I got bored with all the detailed economics in the last 3/4 of the book and felt ready to move on.

The general theme of this book is that 3rd world/post-Communist countries are in fact extremely wealthy (they have a lot of things), but because they don't have the legal framework to make property ownership and the representation/transferring of assets possible, it
...more
Brad
Aug 23, 2015 Brad rated it liked it
I'm very sympathetic to his argument, and his clarion call to action in the last section was very important. However, the book was simply too long. Over and over and over again he harps on the fact that poor people don't have any assets. Well, that's obvious. Or, at least, any legal protection for the assets they do have. Again, right-o. His proposed solutions would be a step in the right direction, no doubt. However, I can't help but think that he ignores the critical role that an effective jud ...more
Shane
Mar 29, 2015 Shane rated it really liked it
Shelves: economic-liberty
Hernando DeSoto always offers such an interesting perspective. Yes this book is a bit dated (I chuckled at the comments on mortgage backed securities... oops). Still it is a very interesting look at the value of property. This is not as deep as "the Other Path" but it is still very broad. DeSoto digs to the very roots of Capitalism. There are many things we call capital in this modern age, but when you boil down all the fancy frills capital is property. You can not truly have Capitalism if you d ...more
Lily Borovets
Mar 10, 2015 Lily Borovets rated it really liked it
Гарна думка, що стосується будь-кого, кому здається, що достатньо просто зробити копіпейст бізнесу, що працює десь на Заході.

"Істина в тому, що юристи надмірно поглинені вивченням і адаптацією західних законів. В університетах їм втовкмачили в голову, що місцева правова практика - це не справжній закон, а щось романтичне, вивчення чого краще залишити фольклористам і антропологам. Але якщо юристи хочуть взяти участь у створенні гарних законів, їм слід покинути бібліотеки і познайомитися з життям
...more
Amazing Titicaca
Jul 09, 2014 Amazing Titicaca rated it did not like it
In this book you Mr De Soto talks much about Perus problem of lack of capital, acces to credits and much.

Maybe Peru suffers from this problem more than any other country in the world.
My ancestors and many of current Andean Peruvians believe Pachamama can be privatized.
This perception and others created huge problems with formalization and legalization not just of properties and thing but of college degrees, patents, inventions, products ( Quinoa, Yacon, a Japanese co patented it, cats claw, ter
...more
Aaron
Nov 22, 2008 Aaron rated it it was amazing
Recommends it for: anyone wondering about how land relates to capitalism
Recommended to Aaron by: Stephen Goode
This book is incredible!
I have always suspected that our historical squatting of land in the U.S. is what fueled the U.S economic machine.

This book documents this notion and demonstrates that it was the formation of a formal property system that ultimately created capital that could be used for businesses and innovation.

A must read.

My two cents....

It was land that propelled capitalism in the U.S and it is land that now seems to be dragging our system down. Never did our forefathers imagine th
...more
Richard
Apr 28, 2012 Richard rated it really liked it
Hernando de Soto (just like the explorer) spent his career with the UN. This book does the service of providing a "boots on the ground" survey of the bureaucracy that impedes clear claim's to property rights. In extreme cases, for over decades or never. Every developed economy was preceded by strong property rights. His book makes a fascinating case for the critically important link between very strong property rights and economic development. Hernando de Soto is easy to read.
Usman Chohan
Jan 21, 2014 Usman Chohan rated it it was amazing
Outstanding book for understanding financial inclusion through property rights. Helps to explain the growth of sprawling Bustis with Dead capital that cannot be converted into exchangeable and fungible tools for economic growth.
"To be socially and politically useful, history has to be assembled to illuminate the problem at hand"
"Without the common standards that legal property brings, people lack the necessary language for their assets to talk to each other".
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