Hernando de Soto Defeats Marx: Property Rights, Authoritarian Governments & The Unity of Human Capital and Work

It was John Paul II who grasped more fully than most, the intrinsic value that electric technology had on what was sundered by both the Reformation and the Industrial Revolution, namely the total separation of labor and capital.

Now united through digital technology, the long lost unity of nomadic man tied to the achievements of his whole self has returned.  Will it be harnessed to the utopian madness of a Rousseau?  Or can the achievements of the west embodied in the rule of law, civil society and limited yet true autonomy pry loose the desire to ameliorate differences?  That drive has always underwrote the appeal to authority, centralized or not.  My guess is that the return to ethics, if united to a view of Christian humanism, one that acknowledges the sanctity of conscience, the indissoluble unity that is the human person, the autonomy of reason and the gift of realism that is our material world, can ignite and drive a Civilization to acknowledge the limits of the political.

The secret to defeating authoritarian governments cannot rest on liberty alone.  The desire for capital, equity formation in light of personal independence will give the efficient means to conquer the satanic drive that animates all centralization, Caliphate or Commitern.

The Institute for Liberty & Democracy was founded by Hernando de Soto.  Located in Lima, Peru, he is known for defeating Maoist terrorists that terrorized most of Peru for decades.

His secret?  Political reform whose insight is private property!

Haven’t all utopian revolutionaries hated middle class sentiments?  The value of private property is the single most significant bulwark against utopian desires.  It underwrote the ethics of the American Revolution.  It still burns the fires of hatred that animate Socialist envy.

Hernando de Soto was never alone in his convictions.  There are two individuals who helped him secure his victory over Shinning Path Maoist terrorists, they are Enrique Ghersi Silva and Mario Ghibellini Harten.  They deserve mention, for too often de Soto is given credit alone in a coalition victory.

The Arab Spring is an expression of political, cultural revolt against authoritarian tyranny.  It is rooted in a desire to have a market based economy, the only system that benefits individual achievement!  Following the self-immolation of Tunisia’s Mohamed Bouazizi in January 2011, Hernando de Soto discovered the self immolation of 63 more men and women all engaged in extra-legal market based economies.  This distinction is missed by the media throughout the west.

The desire for self improvement through commerce; the political impact of this illicit desire should be quarried.

Why the self-immolation?  Because they dared try to make a buck and get ahead.  The authorities saw this illicit activity and ‘expropriated’ or ‘sequestered’, seized their property.  The rest is history.

De Soto’s Institute studied most nation states throughout the northern Mediterranean and found that land holdings and businesses were not protected by the rule of law.  These extralegal assets had no standing, no relative impact to credit allocation and the procurement of a better life.  They remain cut off from beginning a market based political economy.

English Common Law; the creation, standing, defense and value of ‘several property‘ all made a market based economy.  These are inseparable from a Protestant ethos that elevated rugged individualism.

What De Soto discovered is that if you add up the value of every extra-legal business and property throughout the Arab Spring, you’ll find its value far exceeding both the stock market valuation of each nation, its official GDP along with the value of direct foreign investment combined!!

His studies on Egypt are staggering.  Using the same equation, Egypt’s value of its ‘several properties’, its extra legal business’ and official property make it 6 times ($350 Billion) more valuable than all direct foreign investment and GDP.

In sum:  no amount of foreign investment, transfer payments, no amount of quantitative easing can come close to wealth creation that underwrites the entrepreneurial aspirations of the people who comprise the Arab Spring.

We here in the West have a deep spiritual problem, we denigrate how our Civilization has begotten such stability.  We owe it to others to have access to our system of government that codifies and protects civil society, provides standards and rules of conduct from which we can anticipate an uncertain future and grow.

The guarantees we enjoy are underwritten by a theology exposed through engagement with the fraud that has become post-modernity.

About William Holland

Systematic Theologian/International Relations
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