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The hour of capitalism's greatest triumph
is, in the eyes of five-sixths of humanity, its hour of
crisis. Beginning with these words, this book revolutionizes
our understanding of what capital is -- and why, since the
collapse of communism, capitalism has continued to fail
the majority of mankind.
Five years ago, Hernando de Soto and his
research team closed their books and opened their eyes.
They went into the streets of developing and former communist
nations to learn what real people are achieving inside and
outside the underground economy. Their findings are dramatic.
The data they have collected demonstrate that the world's
poor have accumulated all the assets needed for successful
capitalism. The value of their savings is immense: many
times all the foreign aid and investment received since
1945. In Egypt alone the assets of the poor are fifty-five
times greater than all foreign investment ever recorded,
including the funding of the Suez Canal and the Aswan Dam.
Why then are these countries so underdeveloped?
Why can't they turn these assets into liquid capital --
the kind of capital that generates new wealth? For Hernando
de Soto, this is "the mystery of capital." With
elegance and clarity he produces an answer of dazzling originality.
De Soto reminds us that the present global crisis is the
same kind of crisis that the advanced nations suffered during
the Industrial Revolution, when they themselves were Third
World countries teeming with black markets, pervasive mafias,
widespread poverty and flagrant disregard of the law. The
Western nations, he argues, created the key conversion process
150 years ago, and their economies began to soar into wealth
without their ever realizing what they had done. De Soto
explains how this unwitting process, hidden deep in thousands
of pieces of property law throughout the West, came to be,
how it works, and how today it can be deliberately set up
in developing and former communist nations.
Hernando de Soto is President of the
Institute for Liberty and Democracy [ILD], headquartered
in Peru and regarded by The Economist as the second
most important think-tank in the world. He was recently
named one of the five leading Latin American innovators
of the century by Time. As Personal Representative
and Principal Advisor to the President of Peru, he initiated
that country's economic and political reforms. His previous
book, The Other Path, was a bestseller throughout
Latin America as well as in Washington, D.C. More information
on de Soto and the ILD can be found at www.ild.org.pe.
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