Famine and Private Property

There’s never been a famine in the United States, and one thing alone is responsible for this: private property rights.

Capitalistic societies are the wealthiest societies in the history of the world, and it is the absence of fully protected property that creates poverty. As the Peruvian economist Hernando de Soto puts it in his instructive book The Mystery of Capital:

Many of the poorest countries in the world possess enormous amounts of capital, but their ownership is insecure because of faulty or nonexistent property law or property rights protection. The value of private savings in the ‘poor’ countries of the world is forty times the amount of foreign aid they have received since 1945. [The citizens of poorer countries] hold these resources in defective forms: houses built on land whose ownership rights are not adequately recorded, unincorporated businesses with undefined liability, industries located where financiers and investors cannot see them. Because the rights to these possessions are not adequately documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles, cannot be used as collateral…

Compare that to property laws in the west “where every parcel of land, every building, every piece of equipment, or store of inventories is represented in a property document that is the visible sign of a vast hidden process that connects all these assets to the rest of the economy.”

Private property is the crux of wealth. And property is nothing more, or less, than an extension of person.

What is capitalism? Capitalism is a social system based upon private ownership of the means of production and the preeminence of the individual over the group.

The hour of capitalism’s greatest triumph is its hour of crisis. The fall of the Berlin Wall ended more than a century of political competition between capitalism and communism. Capitalism stands alone as the only feasible way to rationally organize a modern economy. At this moment in history, no responsible nation has a choice (ibid).

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