Book Recommendation

I've been reading a lot of fiction over the last year and a half or so and I've enjoyed it but I think I started to forget how enjoyable other types of books can be as well. So I grabbed a book off my bookshelf that was recommended to me by my brother in law a few years ago that I just never got to. I'ts called The Mystery of Capital by Hernando De Soto. He's a Peruvian author who works in a think tank that influences economic policy for developing countries. I've only got through the first chapter and a half but what I've read so far has blown my mind. It actually excites me to read about plausible solutions in a world where so much feels like it is out of control and hopeless.

I just want to summarize what I've read so far and maybe I'll write future posts as I read more.

The beginning of the book talks about how much dead wealth the poor in developing countries actually possess. It defines dead wealth or dead capital as usable goods that cannot be readily turned into liquid or capital. The premise is that the poor in developing countries live wherever they can in homes built in shanty towns and outskirts. He says that these homes do not have clear title but they are worth money in the small communities and are regularly traded and sold within the community which has it's own unofficial regulatory system that is enforced by local leaders and basic social norms. The book describes ways that capitalism can be successful in these communities by rewriting land laws to give the poor clear title to possessions that they obviously own and that nobody really has a chance at taking from them. (eg. would a government really go into a shanty town and evict people living there? Answer- Probably no so why not give them clear title to it). With this clear title, even though the equity would be minimal, they could use the possessions as collateral to receive loans and grow the small businesses that they are already operating. And if this was done for everyone in the shanty at the same time they would all have capital to buy each others goods and services and it would basically act as a springboard to get the community legally operating and growing. A lot of this is my interpretation of what would happen but the basic premise is that giving clear title to poor people's living arrangements free's up capital and what happens from there is up to the free market.

Anyway, it's a really interesting read so far and I just wanted to write a little about it and recommend the book to anyone that might stumble upon my blog.