“The reason capitalism has triumphed in the West and sputtered in the rest of the world is because most of the assets in Western nations have been integrated into one formal representational system . . . By transforming people with real property interests into accountable individuals, formal property created individuals from masses. People no longer needed to rely on neighborhood relationships or make local arrangements to protect their rights to assets. They were thus freed to explore how to generate surplus value from their own assets.”-Hernando de Soto, The Mystery of Capital
In The Mystery of Capital, de Soto raised a fascinating thesis: That the West’s system of record keeping and property recording is why Capitalism took hold here.
In other regions — namely, Asia, Africa and much of South America, the Peruvian born economist argued that the economic system was highly dependent on elders, neighbors, and recollections — rather than recorded deeds — for transferring property. This would, as you might imagine, stifle the willingness to invest in or lend against property.
Tonight, I want to ask you for actual anecdotes about this. What sort of stories or narratives is anyone familiar with that demonstrate the East’s problems with this, and why it may have stifled the spread of capitalism.
This is for a wicked cool project that I cannot talk about yet . . .