Hernando de Soto

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pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

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Airbnb, altcoin, asset-backed security, autonomous vehicles, barriers to entry, bitcoin, blockchain, Bretton Woods, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, cloud computing, cognitive dissonance, corporate governance, corporate social responsibility, Credit Default Swap, crowdsourcing, cryptocurrency, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Erik Brynjolfsson, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Galaxy Zoo, George Gilder, glass ceiling, Google bus, Hernando de Soto, income inequality, informal economy, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer lending, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, quantitative easing, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, social graph, social software, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Uber and Lyft, unbanked and underbanked, underbanked, unorthodox policies, X Prize, Y2K, Zipcar

“Bitcoin Proves the Libertarian Idea of Paradise Would Be Hell on Earth,” Business Insider, www.businessinsider.com/bitcoin-libertarian-paradise-would-be-hell-on-earth-2013-12#ixzz3kQqSap00. 13. Human Rights Watch, “World Report 2015: Events of 2014,” www.hrw.org/sites/default/files/wr2015_web.pdf. 14. Interview with Hernando de Soto, November 27, 2015. 15. Seymour Martin Lipset, Political Man: The Social Bases of Politics, 2nd ed. (London: Heinemann, 1983), 64. 16. Interview with Hernando de Soto, November 27, 2015. 17. Hernando de Soto, “The Capitalist Cure for Terrorism,” The Wall Street Journal, October 10, 2014; www.wsj.com/articles/the-capitalist-cure-for-terrorism-1412973796, accessed November 27, 2015. 18. Interview with Hernando de Soto, November 27, 2015. 19. Interview with Carlos Moreira, September 3, 2015. 20. Melanie Swan, Blockchain: Blueprint for a New Economy (Sebastopol, Calif.: O’Reilly Media, January 2015), 45. 21.

Further, the publisher does not have any control over and does not assume any responsibility for author or third-party Web sites or their content. Version_1 To Ana Lopes and Amy Welsman for enabling this book, and for understanding that “it’s all about the blockchain.” “A masterpiece. Gracefully dissects the potential of blockchain technology to take on today’s most pressing global challenges.” —Hernando De Soto, Economist and President, Institute for Liberty and Democracy, Peru “The blockchain is to trust as the Internet is to information. Like the original Internet, blockchain has potential to transform everything. Read this book and you will understand.” —Joichi Ito, Director, MIT Media Lab “In this extraordinary journey to the frontiers of finance, the Tapscotts shed new light on the blockchain phenomenon and make a compelling case for why we all need to better understand its power and potential.”

Clippinger, CEO, ID3, Research Scientist, MIT Media Lab Bram Cohen, Creator, BitTorrent Amy Cortese, Journalist, Founder, Locavest J-F Courville, Chief Operating Officer, RBC Wealth Management Patrick Deegan, CTO, Personal BlackBox Primavera De Filippi, Permanent Researcher, CNRS and Faculty Associate at the Berkman Center for Internet and Society at Harvard Law School Hernando de Soto, President, Institute for Liberty and Democracy Peronet Despeignes, Special Ops, Augur Jacob Dienelt, Blockchain Architect and CFO, itBit and Factom Joel Dietz, Swarm Corp Helen Disney, (formerly) Bitcoin Foundation Adam Draper, CEO and Founder, Boost VC Timothy Cook Draper, Venture Capitalist; Founder, Draper Fisher Jurvetson Andrew Dudley, Founder and CEO, Earth Observation Joshua Fairfield, Professor of Law, Washington and Lee University Grant Fondo, Partner, Securities Litigation and White Collar Defense Group, Privacy and Data Security Practice, Goodwin Procter LLP Brian Forde, Former Senior Adviser, The White House; Director, Digital Currency, MIT Media Lab Mike Gault, CEO, Guardtime George Gilder, Founder and Partner, Gilder Technology Fund Geoff Gordon, CEO, Vogogo Vinay Gupta, Release Coordinator, Ethereum James Hazard, Founder, Common Accord Imogen Heap, Grammy-Winning Musician and Songwriter Mike Hearn, Former Google Engineer, Vinumeris/Lighthouse Austin Hill, Cofounder and Chief Instigator, Blockstream Toomas Hendrik Ilves, President of Estonia Joichi Ito, Director, MIT Media Lab Eric Jennings, Cofounder and CEO, Filament Izabella Kaminska, Financial Reporter, Financial Times Paul Kemp-Robertson, Cofounder and Editorial Director, Contagious Communications Andrew Keys, Consensus Systems Joyce Kim, Executive Director, Stellar Development Foundation Peter Kirby, CEO and Cofounder, Factom Joey Krug, Core Developer, Augur Haluk Kulin, CEO, Personal BlackBox Chris Larsen, CEO, Ripple Labs Benjamin Lawsky, Former Superintendent of Financial Services for the State of New York; CEO, The Lawsky Group Charlie Lee, Creator, CTO; Former Engineering Manager, Litecoin Matthew Leibowitz, Partner, Plaza Ventures Vinny Lingham, CEO, Gyft Juan Llanos, EVP of Strategic Partnerships and Chief Transparency Officer, Bitreserve.org Joseph Lubin, CEO, Consensus Systems Adam Ludwin, Founder, Chain.com Christian Lundkvist, Balanc3 David McKay, President and Chief Executive Officer, RBC Janna McManus, Global PR Director, BitFury Mickey McManus, Maya Institute Jesse McWaters, Financial Innovation Specialist, World Economic Forum Blythe Masters, CEO, Digital Asset Holdings Alistair Mitchell, Managing Partner, Generation Ventures Carlos Moreira, Founder, Chairman, and CEO, WISeKey Tom Mornini, Founder and Customer Advocate, Subledger Ethan Nadelmann, Executive Director, Drug Policy Alliance Adam Nanjee, Head of Fintech Cluster, MaRS Daniel Neis, CEO and Cofounder, KOINA Kelly Olson, New Business Initiative, Intel Steve Omohundro, President, Self-Aware Systems Jim Orlando, Managing Director, OMERS Ventures Lawrence Orsini, Cofounder and Principal, LO3 Energy Paul Pacifico, CEO, Featured Artists Coalition Jose Pagliery, Staff Reporter, CNNMoney Stephen Pair, Cofounder and CEO, BitPay Inc.

A Voyage Long and Strange: On the Trail of Vikings, Conquistadors, Lost Colonists, and Other Adventurers in Early America by Tony Horwitz

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airport security, Atahualpa, back-to-the-land, Bartolomé de las Casas, Colonization of Mars, Columbian Exchange, dematerialisation, diversified portfolio, Francisco Pizarro, Hernando de Soto, illegal immigration, joint-stock company, out of africa, Ralph Waldo Emerson, trade route, urban renewal

Translations of Biedma, Rangel, Elvas, and Garcilaso, as well as other documents relating to De Soto’s life and expedition, are collected in The De Soto Chronicles: The Expedition of Hernando de Soto to North America in 1539–1543. This indispensable two-volume work includes essays by many of the leading experts on De Soto and Spanish conquest. For a cautionary deconstruction of the sources on De Soto, see The Hernando de Soto Expedition: History, Historiography, and “Discovery” in the Southeast, edited by Patricia Galloway. The best biography of the conquistador is David Ewing Duncan’s Hernando De Soto: A Savage Quest in the Americas. Duncan bridges popular and academic history, writing a biography that is carefully researched, balanced, and also a lively and accessible read. Almost half of the book deals with De Soto’s life before his arrival in La Florida. Charles Hudson’s Knights of Spain, Warriors of the Sun: Hernando de Soto and the South’s Ancient Kingdoms focuses almost exclusively on the La Florida expedition, and is particularly strong on the native societies De Soto encountered.

Castañeda learned all this upon his return to Mexico, where he met members of the Spanish party that had recaptured the woman. The men were survivors of another major expedition, this one led by Hernando de Soto, who had set off from Florida at almost the same time Coronado left Mexico. Several years later, the paths of the conquistadors’ armies—one wandering east, the other straggling west—had almost intersected in the middle of the continent. Of the tattooed woman who witnessed the two greatest expeditions of conquest in North America, and became captive to both, nothing more is known. CHAPTER 8 THE SOUTH DE SOTO DOES DIXIE Knights errant are exempt from all jurisdictional authority . . . their law is their sword, their edicts their courage, their statutes their will. —Miguel de Cervantes, Don Quixote HERNANDO DE SOTO was a self-made conquistador, the first to spend more of his life in the New World than the Old.

New York: Penguin, 1963. Donegan, Kathleen M. “Seasons of Misery: Catastrophe and the Writing of Settlement in Colonial America.” Ph.D. dissertation, Yale University, 2006. Duncan, David Ewing. Hernando de Soto: A Savage Quest in the Americas. Norman: University of Oklahoma Press, 1996. Elliot, J. H. Empires of the Atlantic World: Britain and Spain in America 1492–1830. New Haven: Yale University Press, 2006. ———. Imperial Spain 1469–1716. London: Penguin Books, 1963. Estabrook, Arthur H., and Ivan E. McDougle. Mongrel Virginians: The Win Tribe. Baltimore: The Williams & Wilkins Co., 1926. Ewen, Charles R., and John H. Hann. Hernando de Soto among the Apalachee. Gainesville: University Press of Florida, 1998. Fernández-Armésto, Felipe. Columbus. Oxford: Oxford University Press, 1991. ———. Pathfinders: A Global History of Exploration.


pages: 232

Planet of Slums by Mike Davis

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barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, edge city, European colonialism, failed state, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Internet Archive, jitney, Kibera, labor-force participation, land reform, land tenure, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, New Urbanism, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

In its first iteration, the new World Bank philosophy, which was influenced by the ideas of the English architect John Turner, stressed a "sites-and-services" (provision of basic "wet" infrastructure and civil engineering) approach to help rationalize and upgrade self-help housing. By the late 1980s, however, the World Bank was championing privatization of housing supply across the board and soon became the most powerful institutional megaphone for the schemas of Hernando de Soto, the Peruvian economist who advocates micro-entrepreneurial solutions to urban poverty. The Friends of the Poor The intellectual marriage in the 1970s between World Bank President Robert McNamara and architect John Turner was supremely odd. The former, of course, had been chief planner of the war in Vietnam, while the latter had once been a leading contributor to the English anarchist paper Freedom.

They divert and sublimate political rage, and make sure it does not build to a head."31 Syrupy official assurances about "enablement" and "good governance" sidestep core issues of global inequality and debt, and ultimately they are just language games that cloak the absence of any macro-strategy for alleviating urban poverty. Perhaps this guilty awareness of the gap between promise and need explains some of the fervor with which international lending institutions and NGOs have embraced the ideas of Hernando de Soto, the Peruvian businessman who has become the global guru of neo-liberal populism. A John Turner for the 1990s, de Soto asserts that Third World cities are not so much starved of investment and jobs as suffering an artificial 29 Ibid., pp. 8-15, 33-35. 30 Ibid., pp. 90-91. 31 Arundhati Roy, The Checkbook and the Cruise Missile: Conversations with Arundhati Boston 2004, p. 82. shortage of property rights.

Payne warns that it even risks "the creation of a large underclass that is denied access to any form of affordable or acceptable housing."33 Peter Ward confirms that titling — or rather, "regularization" — in Mexico City has been a mixed blessing for colonos. "It is not simply a means of extending full property titles to the poor, but increasingly a means of incorporating them into the tax base." The benefits of being able to use homes as legal collateral are counterbalanced by a new visibility to tax collectors and municipal utilities. Regularization also undermines solidarity within the colonias by individualizing the struggle 32 Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, New York 2000, pp. 301-31. 33 Geoffrey Payne, unpublished 1989 report, quoted in Alan Gilbert and Ann Varley, landlord and Tenant: Housing the Poor in Urban Mexico, London 1991, p. 4. for housing and by giving tided homeowners interests that differ from those of other slum residents. "Renters, harassed squatters, displaced downtown tenants," argues Ward, "are likely to be more radical and disposed to anti-government demonstrations than are those who have, in effect, been bought-off by the government through successive housing policies."34 This has even been the case in Sao Paulo, where Workers' Party (PT) administrations, starting in 1989, have tried to regularize and upgrade the "huge illegal city" of the poor.


pages: 366 words: 117,875

Arrival City by Doug Saunders

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agricultural Revolution, Ayatollah Khomeini, Berlin Wall, Branko Milanovic, call centre, credit crunch, Deng Xiaoping, desegregation, ghettoisation, Gini coefficient, guest worker program, Hernando de Soto, Honoré de Balzac, illegal immigration, immigration reform, income inequality, informal economy, Jane Jacobs, Kibera, land reform, land tenure, low skilled workers, megacity, microcredit, new economy, pensions crisis, place-making, price mechanism, rent control, Silicon Valley, special economic zone, the built environment, The Chicago School, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban sprawl, white flight, working poor, working-age population

Antwi, “Informality, Illegality and Market Efficiency: A Case for Land Market Deregulation in Accra and Lagos” (London, 2004). 27 R. Home and H. Lim, Demystifying the Mystery of Capital: Land Tenure and Poverty in Africa and the Caribbean (London: Glasshouse Press, 2004); Bishwapriya Sanyal, “Intention and Outcome: Formalization and Its Consequences,” Regional Development Dialogue 17, no. 1 (1996). 28 Staffan Granér, “Hernando de Soto and the Mystification of Capital,” Eurozine, no. 13 (Jan. 19, 2007): 6. 29 Donald A. Krueckenberg, “The Lessons of John Locke or Hernando de Soto: What If Your Dreams Come True?” Housing Policy Debate 15, no. 1 (2004): 3. 10 ARRIVING IN STYLE 1 Gerben Helleman and Frank Wassenber, “The Renewal of What Was Tomorrow’s Idealistic City, Amsterdam’s Bijlmermeer High-Rise,” Cities 21, no. 1 (2004); Ronald Van Kempen et al., eds., Restructuring Large Housing Estates in Europe (Bristol: The Policy Press, 2005). 2 Helleman and Wassenber, “The Renewal of What Was Tomorrow’s Idealistic City, Amsterdam’s Bijlmermeer High-Rise,” 8. 3 Maurice Crul and Liesbeth Heering, eds., The Position of the Turkish and Moroccan Second Generation in Amsterdam and Rotterdam (Amsterdam: Amsterdam University Press, 2008), 63–85, 166. 4 Doug Saunders, “Citizen Jane,” The Globe and Mail, Oct. 11, 1997. 5 William H.

One study estimates that in the developing cities of Asia, Latin America, sub-Saharan Africa, and the Arab states, between 25 and 70 percent of the urban population is living on land with no clear title.19 For a great many politicians and economists during the past 20 years, the major issue surrounding arrival cities has been the question of property ownership. That, they believe, is the beginning and the end of the social-mobility issue. The debate began in the 1980s, when a Peruvian economist began a drive to turn that country’s millions of rural-arrival squatters into property owners. Hernando de Soto established a network of formalization committees, which turned the jumble of arrival-city land titles into proper deeds and allowed people to form small businesses in a few days with a couple of forms, rather than the hundreds of days and scores of forms previously required. It was an exercise in immersing the very poor in a real economy. In 1989, de Soto described this process in a book provocatively titled The Other Path.

Perlman, “The Myth of Marginality Revisited: The Case of Favelas in Rio De Janeiro, 1969–2003” (Washington: The World Bank, 2005), 16, 20. 16 Mead and Schwenninger, The Bridge to a Global Middle Class. 17 Eduardo Zepeda et al., “Changes in Earnings in Brazil, Chile and Mexico: Disentangling the Forces Behind Pro-Poor Change in Labour Markets” (Brasilia: IPC-IG [UNDP], 2009). 18 Amartya Sen, Development as Freedom (Oxford: Oxford University Press, 1999). 19 A. Durand-Lasserve and L. Royston, Holding Their Ground: Secure Land Tenure for the Urban Poor in Developing Countries (London: Earthscan, 2002), 3. 20 Hernando de Soto, The Other Path: The Invisible Revolution in the Third World (New York: Harper & Row, 1989). 21 de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London: Black Swan, 2000), 35. A number of critics have pointed out that this number is unverifiable. 22 L. J. Alston, G. D. Libecap and B. Mueller, Titles, Conflict and Land Use: The Development of Property Rights on the Brazilian Amazon Frontier (Ann Arbor: Michigan University Press, 1999). 23 G.


pages: 25 words: 5,789

Data for the Public Good by Alex Howard

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23andMe, Atul Gawande, Cass Sunstein, cloud computing, crowdsourcing, Hernando de Soto, Internet of things, Network effects, openstreetmap, Silicon Valley, slashdot, social software, social web, web application

Principles for Data in the Public Good As a result of digital technology, our collective public memory can now be shared and expanded upon daily. In a recent lecture on public data for public good at Code for America, Michal Migurski of Stamen Design made the point that part of the global financial crisis came through a crisis in public knowledge, citing “The Destruction of Economic Facts,” by Hernando de Soto. To arrive at virtuous feedback loops that amplify the signals that citizens, regulators, executives and elected leaders inundated with information need to make better decisions, data providers and infomediaries will need to embrace key principles, as Migurski’s lecture outlined. First, “data drives demand,” wrote Tim O’Reilly, who attended the lecture and distilled Migurski’s insights. “When Stamen launched crimespotting.org, it made people aware that the data existed.


pages: 423 words: 149,033

The fortune at the bottom of the pyramid by C. K. Prahalad

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barriers to entry, business process, call centre, cashless society, clean water, collective bargaining, corporate social responsibility, deskilling, disintermediation, farmers can use mobile phones to check market prices, financial intermediation, Hernando de Soto, hiring and firing, income inequality, late fees, Mahatma Gandhi, market fragmentation, microcredit, new economy, profit motive, purchasing power parity, rent-seeking, shareholder value, The Fortune at the Bottom of the Pyramid, time value of money, transaction costs, working poor

The focus of development aid has also shifted from infrastructure, education, and structural adjustments over the decades. 3. Hernando de Soto. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Basic Books, New York. 4. It is important to distinguish the informal, extralegal sector from the private sector even though the informal sector is about entrepreneurship under very hostile conditions. 5. C. K. Prahalad and Allen Hammond. “Serving the World’s Poor, Profitably.” The Harvard Business Review, September 2002. 6. CII-McKinsey Report on Learning from China to Unlock India’s Manufacturing Potential, March, 2002. 7. Hernando De Soto. Presentation at the World Economic Forum, Davos, Switzerland, 2004. 8. Supportive case written by Praveen Suthrum and Jeff Phillips under the supervision of Professor C.

Therefore, aid must be skewed to these sectors. The record of aid and loans from the various donor countries and the World Bank, International Monetary Fund, and other institutions is at best mixed. More recently, the development community is paying attention to the role of the private sector in building markets. There have been few voices of dissent to the dominant logic of the development community. Hernando De Soto, in his path-breaking book, The Mystery of Capital, challenged the assumption that poor countries are poor.3 Poor countries could often be asset-rich but capital-poor. Assets cannot become capital unless the country guarantees a rule of Reducing Corruption: Transaction Governance Capacity 79 law—primarily the law of contracts—whereby the ownership of assets is clear; and because of clear legal title, these assets can be sold, bought, mortgaged, or converted into other assets.

When Cemex organizes women, it not only gives them the tools and the materials required for them to build a kitchen; it also gives them a legal identity. The women are bound to the firm and vice versa. Neither party can break the contract without penalty. That is a proof of legal identity. The importance of legal identity cannot be underestimated. Without it, BOP consumers cannot access the services we take for granted, such as credit. Hernando de Soto documented the problems of a lack of legal identity at the BOP. The status of a “nonperson” in legal terms can confine people to a cycle of poverty. 108 The Fortune at the Bottom of the Pyramid Women Are Critical for Development A well-understood but poorly articulated reality of development is the role of women. Women are central to the entire development process. They are also at the vanguard of social transformation.


pages: 320 words: 87,853

The Black Box Society: The Secret Algorithms That Control Money and Information by Frank Pasquale

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Affordable Care Act / Obamacare, algorithmic trading, Amazon Mechanical Turk, asset-backed security, Atul Gawande, bank run, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, bonus culture, Brian Krebs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chelsea Manning, cloud computing, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, Debian, don't be evil, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, financial innovation, Flash crash, full employment, Goldman Sachs: Vampire Squid, Google Earth, Hernando de Soto, High speed trading, hiring and firing, housing crisis, informal economy, information retrieval, interest rate swap, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, Julian Assange, Kevin Kelly, knowledge worker, Kodak vs Instagram, kremlinology, late fees, London Interbank Offered Rate, London Whale, Mark Zuckerberg, mobile money, moral hazard, new economy, Nicholas Carr, offshore financial centre, PageRank, pattern recognition, precariat, profit maximization, profit motive, quantitative easing, race to the bottom, recommendation engine, regulatory arbitrage, risk-adjusted returns, search engine result page, shareholder value, Silicon Valley, Snapchat, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, the scientific method, too big to fail, transaction costs, two-sided market, universal basic income, Upton Sinclair, value at risk, WikiLeaks

David Golumbia, The Cultural Logic of Computation (Cambridge, MA: Harvard University Press, 2009). 220. Wu, The Master Switch, 83, 312, 314; Robert Lee Hale, Freedom through Law (New York: Columbia University Press, 1952). 221. Lanier, Who Owns the Future? (describing the inequality generated by the new digital economy). 222. Hale, Freedom through Law, 541. 4 Finance’s Algorithms: The Emperor’s New Codes 1. Hernando de Soto, The Other Path (New York: Harper & Row, 1989). 2. Hernando de Soto and Karen Weise, “The Destruction of Economic Facts,” Bloomberg Businessweek, April 28, 2011, http://www.businessweek .com /magazine/content /11_19/b4227060634112.htm. 3. As leading fi rms obsessed over short-term profit opportunities, one economist half-jokingly concluded that fi nance’s core competencies were “fi nding fools for counterparties,” evading regulations, and “disguising gambling as hedging.”

Opaque aspects of fi nance keep the leading Internet firms on their toes as surely as the Internet firms’ mysterious ranking mechanisms keep everyone else alert and worried about any possible loss of standing. It is therefore to this final and most forceful aspect of the new political economy—finance—that we now turn our attention. 4 FINANCE’S ALGORITHMS: THE EMPEROR’S NEW CODES I N 20 04 , the Cato Institute awarded Peruvian economist Hernando de Soto the $500,000 Milton Friedman Prize for Advancing Liberty. Despite two assassination attempts by communists, de Soto had tirelessly proselytized market solutions for Peru’s poor. American leaders loved his message, since he credited U.S. prosperity to rock solid financial markets and private property protections.1 By 2011, de Soto was lambasting the American economic system. He said that the financial crisis revealed a “staggering lack of knowledge” about “who owned and owed” in the United States.

Matt Taibbi called Goldman Sachs a “vampire squid;” an ink-squirting octopus of obfuscation would be fitting, too.171 Theoretical justifications for finance’s power focus on “free markets” generating fundamental knowledge about the economy. Without the great brokerages, and “bank holding companies,” how would we price debt, equity, or the more exotic risks assimilated into derivatives?172 Yet the rise of fi nancialization has created enormous uncertainty about the value of companies, homes, and even (thanks to the pressing need for bailouts) the once rock solid promises of governments themselves. Recall Hernando de Soto’s observation at the beginning of this chapter: when the basics of owing and ownership are in dispute, it’s hard for real markets to operate. Finance thrives in this environment of radical uncertainty, taking commissions in cash as investors (or, more likely, their poorly monitored agents) race to speculate on or hedge against an ever less knowable future. Like the employees scrambling to succeed on faceless companies’ job scoring algorithms, or fi rms desperate for search engine optimization, now companies compete to use fi nance fi rms for just the FINANCE’S ALGORITHMS 139 right mix of bets and hedges.

Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

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Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, labour market flexibility, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus

In particular, there are two key individuals who brought this project to fruition: Daniel J. Chávez Morán, founder of the foundation, and Roberto Russell, its president. I would also like to thank the individual authors and everyone who participated in the November 2005 seminar in Buenos Aires—also titled “Explaining the Development Gap between Latin America and the United States”—for their thoughtful contributions. In addition to the authors, the seminar participants included Hernando De Soto, John W. Diamond, Pablo Guidotti, Celso Lafer, Juan Pablo Nicolini, Andrés Reggiani, Fernando Rocchi, Julio María Sanguinetti, Catalina Smulovitz, Ernesto Zedillo, and George Zodrow. Thanks are also due to Valeria Sobrino, who provided key logistical support, and Charles Roberts, who translated into English all of the chapters originally written in Spanish. Finally, special recognition is due to Guadalupe Paz, associate director of the Latin American Studies Program at SAIS, for her help in editing the English version of this volume and her general support of the project as a whole.

See, for example, Guido Tabellini, “Culture and Institutions: Economic Development in the Regions of Europe,” unpublished manuscript, Bocconi University, Milan, Italy, 2005. 24. Daron Acemoglu, Simon Johnson, and James A. Robinson, “Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91 (2001): 1369–1401. 25. Simeon Djankov, Rafael La Porta, Florencio López-de-Silanes, and Andrei Shleifer, “The Regulation of Entry,” Quarterly Journal of Economics 117 (2001): 1–37. See also Hernando de Soto, The Other Path (New York: Harper & Row, 1989). 26. Acemoglu, Johnson, and Robinson, “Colonial Origins of Comparative Development.” 27. Alfred W. Crosby, Ecological Imperialism (New York: Cambridge University Press, 1986). 28. Acemoglu, Johnson, and Robinson, “Colonial Origins of Comparative Development.” 29. Ibid. 30. Ibid., p. 1387. 31. Engerman and Sokoloff, “Factor Endowments, Institutions, and Differential Growth Paths.” 32.

On the other hand, welldesigned efforts to decentralize power to a state and, even better, a municipal level have been important as a means of making government more responsive and accountable. Perhaps the single most important institutional deficit that runs through virtually all Latin American countries has to do with a weak rule of law. This includes not just property rights, but physical security against crime and access to the legal system more generally, particularly for the poor. Hernando de Soto has documented extensively how exclusion from the formal legal system, and the enormous amounts of red tape, inefficiency, and corruption present in it, drives large numbers 278 Conclusion of Latin Americans into the informal sector.11 There, they make use of social capital to run businesses or to squat on property, but without the protection of the state and its laws. This leads to inequalities in treatment, huge inefficiencies, and weak legitimacy for the politicians and parties that preside over the system.


pages: 225 words: 61,388

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa by Dambisa Moyo

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affirmative action, Asian financial crisis, Bretton Woods, colonial rule, correlation does not imply causation, credit crunch, diversification, diversified portfolio, en.wikipedia.org, European colonialism, failed state, financial innovation, financial intermediation, Hernando de Soto, income inequality, invisible hand, M-Pesa, market fundamentalism, Mexican peso crisis / tequila crisis, microcredit, moral hazard, Ponzi scheme, rent-seeking, Ronald Reagan, sovereign wealth fund, The Chicago School, trade liberalization, transaction costs, trickle-down economics, Washington Consensus, Yom Kippur War

Third, they should continue to press for genuine free trade in agricultural products, which means that the US, the EU and Japan must scrap the various subsidies they pay to their farmers, enabling African countries to increase their earnings from primary product exports. Fourth, they should encourage financial intermediation. Specifically, they need to foster the spread of microfinance institutions of the sort that have flourished in Asia and Latin America. They should also follow the Peruvian economist Hernando de Soto’s advice and grant the inhabitants of shanty towns secure legal title to their homes, so that these can be used as collateral. And they should make it cheaper for emigrants to send remittances back home. In Dead Aid, Dambisa Moyo does not pull her punches. ‘In a perfect world,’ she writes, ‘what poor countries at the lowest rungs of economic development need is not a multi-party democracy, but in fact a decisive benevolent dictator to push through the reforms required to get the economy moving.’

Could it actually be that the countless development agents and agencies and innumerable man-hours deployed to send cash to Africa have been for naught – attempting to address a problem that simply does not exist? That, in fact, the core problem with Africa is not an absence of cash, but rather that its financial markets are acutely inefficient – borrowers cannot borrow, and lenders do not lend, despite the billions washing about. In The Mystery of Capital, the Peruvian economist Hernando de Soto suggests that the value of savings among the poor of Asia, the Middle East and Africa is as much as forty times all the foreign aid received throughout the world since 1945. He argues that were the United States to hike its foreign-aid allocations to the 0.7 per cent of national income (as prescribed by the United Nations at Monterrey), it would take the richest country more than 150 years to transfer to the world’s poor resources equal to those that they already have.


pages: 283 words: 81,163

How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present by Thomas J. Dilorenzo

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banking crisis, British Empire, collective bargaining, corporate governance, corporate social responsibility, financial deregulation, Fractional reserve banking, Hernando de Soto, income inequality, invisible hand, Joseph Schumpeter, laissez-faire capitalism, means of production, medical malpractice, Menlo Park, minimum wage unemployment, Plutocrats, plutocrats, price stability, profit maximization, profit motive, Ralph Nader, rent control, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, statistical model, The Wealth of Nations by Adam Smith, transcontinental railway, union organizing, Upton Sinclair, working poor, Works Progress Administration

Coca-Cola, for example, uses considerably less aluminum in its cans than it did several decades ago. Coca-Cola did this not because it became more environmentally sensitive but because it wanted to increase its profits. One of the most striking demonstrations of the importance of property rights is the fact that the absence of property rights protections is a major cause of world poverty. As Hernando de Soto notes in his 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 protections.10 The value of private savings in the “poor” countries of the world, says de Soto, is forty times the amount of foreign aid they have received since 1945. The problem is that 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.

The mass murder and economic destruction that were the inevitable consequences of socialism—and that were predicted by Mises and others in the 1920s—are documented in Stephane Courtois et al., eds., The Black Book of Communism (Cambridge: Harvard University Press, 1999). 7. Ludwig von Mises, The Free and Prosperous Commonwealth (New York: Volcker Fund, 1962), 67. 8. Leonard Read, “I, Pencil,” Foundation for Economic Education (http:11209.217.49.168/vnews.php?nid=316). 9. Friedrich Hayek, “The Pretense of Knowledge: Nobel Lecture,” American Economic Review, May 1975. 10. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2000). 11. Ibid., 6. 12. Ibid. 13. Nathan Rosenberg and L. E. Birdzell Jr., How the West Grew Rich: The Economic Transformation of the Industrial World (New York: Basic Books, 1986), 116–17. 14. Israel Kirzner, Competition and Entrepreneurship (Chicago: University of Chicago Press, 1978), 81. 15.


pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

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Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, Corn Laws, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, interest rate swap, Isaac Newton, iterative process, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour mobility, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Naomi Klein, Nick Leeson, Northern Rock, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, value at risk, Washington Consensus, Yom Kippur War

The question that remains to be answered is whether or not we have any business exporting this high-risk model to the rest of the world. As Safe as Housewives Quilmes, a sprawling slum on the southern outskirts of Buenos Aires, seems a million miles from the elegant boulevards of the Argentine capital’s centre. But are the people who live there really as poor as they look? As Peruvian economist Hernando de Soto sees it, shanty towns like Quilmes, despite their ramshackle appearance, represent literally trillions of dollars of unrealized wealth. De Soto has calculated that the total value of the real estate occupied by the world’s poor amounts to $9.3 trillion. That, he points out, is very nearly the total market capitalization of all the listed companies in the world’s top twenty economies - and roughly ninety times all the foreign aid paid to developing countries over between 1970 and 2000.

In Castlemilk, too, the recipients of loans are local women. In both El Alto and Castlemilk I heard how men were much more likely to spend their wages in the pub or the betting shop than to worry about making interest payments. Women, I was told repeatedly, were better at managing money than their husbands. Of course, it would be a mistake to assume that microfinance is the holy grail solution to the problem of global poverty, any more than is Hernando de Soto’s property rights prescription. Roughly two fifths of the world’s population is effectively outside the financial system, without access to bank accounts, much less credit. But just giving them loans won’t necessarily consign poverty to the museum, in Yunus’s phrase, whether or not you ask for collateral. Nor should we forget that some people in the microfinance business are in it to make money, not to end poverty. 73 It comes as something of a shock to discover that some microfinance firms are charging interest rates as high as 80 or even 125 per cent a year on their loans - rates worthy of loan sharks.

itemID=32032031. 62 Credit Suisse, ‘Foreclosure Trends - A Sobering Reality’, Fixed Income Research (23 April 2008). 63 See Prabha Natarajan, ‘Fannie, Freddie Could Hurt U.S. Credit’, Wall Street Journal, 15 April 2008. 64 Economic Report of the President 2007, tables B-77 and B-76: http:// www.gpoaccess.gov/eop/. 65 George Magnus, ‘Managing Minsky’, UBS research paper, 27 March 2008. 66 Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London, 2001). 67 Idem, ‘Interview: Land and Freedom’, New Scientist, 27 April 2002. 68 Idem, The Other Path (New York, 1989). 69 Rafael Di Tella, Sebastian Galiani and Ernesto Schargrodsky, ‘The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters’, Quarterly Journal of Economics, 122, 1 (February 2007), pp. 209-41. 70 ‘The Mystery of Capital Deepens’, The Economist, 26 August 2006. 71 See John Gravois, ‘The De Soto Delusion’, Slate, 29 January 2005: http://state.msn.com/id/2112792/. 72 The entire profit is transferred to a Rehabilitation Fund created to cope with emergency situations, in return for an exemption from corporate income tax. 73 Connie Black, ‘Millions for Millions’, New Yorker, 30 October 2006, pp. 62-73. 74 Shiller, ‘Recent Trends in House Prices’. 75 Edward L.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

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3D printing, Airbnb, altcoin, bank run, banking crisis, bitcoin, blockchain, Bretton Woods, California gold rush, capital controls, carbon footprint, clean water, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cryptocurrency, David Graeber, disintermediation, Edward Snowden, Elon Musk, ethereum blockchain, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, hacker house, Hernando de Soto, high net worth, informal economy, Internet of things, inventory management, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, money: store of value / unit of account / medium of exchange, Network effects, new economy, new new economy, Nixon shock, offshore financial centre, payday loans, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, profit motive, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Robert Shiller, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen: Great Stagnation, Uber and Lyft, underbanked, WikiLeaks, Y Combinator, Y2K, Zimmermann PGP

one relief group, Concern Worldwide: Dipankar Datta, Anne Ejakait, and Monica Odak, “Mobile Phone–Based Cash Transfers: Lessons from the Kenya Emergency Response,” Humanitarian Exchange Magazine, October 2008, http://www.odihpn.org/humanitarian-exchange-magazine/issue-40/mobile-phone-based-cash-transfers-lessons-from-the-kenya-emergency-response. Perhaps inevitably, then, someone like Duncan: Elizabeth Rossiello, interviewed by Paul Vigna, May 9 and 18, 2014. a hacker house called iHub: http://www.ihub.co.ke/. from what Peruvian economist Hernando de Soto calls: Hernando de Soto, The Mystery of Capital (Basic Books, 2000). Jonathan Mohan, who works at Ethereum: Jonathan Mohan, speaking at the Inside Bitcoins conference, New York, April 7, 2014. 9. The Everything Blockchain Joseph Gleason, better known as Fireduck: Joseph Gleason, “Anyone Want to Run My Bitcoin Casino,” Bitcoin Forum, April 17, 2012, posted under “fireduck,” http://www.reddit.com/r/Bitcoin/comments/segz0/anyone_want_to_run_my_bitcoin_casino; identified as Joseph Gleason via Gleason’s Web site, http://1209k.com/bitcoin/faq.php.

This is why the stories coming out of Silicon Savannah are important—not only for Kenya but for the developing world as a whole. “There’s a much bigger story here,” Rossiello says. “We’re just getting started.” The root causes of financial isolation in poor countries go beyond people’s lack of bank accounts and how much it costs to send money. They start with the underprivileged being typically cut off from what Peruvian economist Hernando de Soto calls the “mystery of capital,” the idea that economic growth and the creation of wealth depend on clearly defined and documented property rights. De Soto has done as much as anyone else to further the idea that economic development should focus on documenting poor people’s assets—the homes that slum dwellers rightfully own but for which they have no title; the unlicensed businesses they operate; the under-the-table jobs for which they are paid.


pages: 340 words: 91,387

Stealth of Nations by Robert Neuwirth

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accounting loophole / creative accounting, big-box store, British Empire, call centre, collective bargaining, corporate governance, full employment, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Jane Jacobs, jitney, joint-stock company, Joseph Schumpeter, megacity, microcredit, New Urbanism, pirate software, profit motive, Shenzhen was a fishing village, Simon Kuznets, special economic zone, The Wealth of Nations by Adam Smith, thinkpad, upwardly mobile

Every single one of the computer dealers in Ciudad del Este is now a legal, registered, taxpaying company (indeed, Alex reported with a kind of perverse pride that Icompy is now the fiftieth-largest taxpayer in Paraguay), and their imports are all open and on the record and on the books. On the surface, this appears to be a major vindication of the idea advanced more than two decades ago by the Peruvian economist, entrepreneur, and think-tank leader Hernando de Soto. De Soto is one of the pioneers in thinking about System D. His book The Other Path, issued in Spanish in the mid-1980s and in English in 1989, was, essentially, the first mainstream volume to acknowledge the vitality, validity, and value of System D. He offered a simple and intuitive response: simplify the workings of regulations and legal codes to make it easier for System D businesses to join the licensed, registered, incorporated world.

These things are part of the DNA of their system—and, like the Ciudad del Este computer dealers, any merchants who do business at the side of the road will need to see some serious and direct incentives if they are going to consider going legit. The idea that formalization offers an automatic avenue to commercial and social success is captivating, but it hasn’t worked. Even when countries have adopted de Soto’s paradigm, growth has remained elusive. As Princeton sociologist Alejandro Portes told me, “The promise of Hernando de Soto’s ‘Other Path,’ that you would open the markets and lift regulations and the economy would take off because of the energy of these small enterprises, has not materialized.” The main issue here is that de Soto and most other economists view System D from the outside. When your world involves incorporation, registration, and licensing, you see the barriers to achieving these things as the key problem.


pages: 313 words: 84,312

We-Think: Mass Innovation, Not Mass Production by Charles Leadbeater

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1960s counterculture, Andrew Keen, barriers to entry, bioinformatics, c2.com, call centre, citizen journalism, clean water, cloud computing, complexity theory, congestion charging, death of newspapers, Debian, digital Maoism, double helix, Edward Lloyd's coffeehouse, frictionless, frictionless market, future of work, game design, Google Earth, Google X / Alphabet X, Hacker Ethic, Hernando de Soto, hive mind, Howard Rheingold, interchangeable parts, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jean Tirole, jimmy wales, John von Neumann, Kevin Kelly, knowledge economy, knowledge worker, lone genius, M-Pesa, Mark Zuckerberg, Marshall McLuhan, Menlo Park, microcredit, new economy, Nicholas Carr, online collectivism, planetary scale, post scarcity, Richard Stallman, Silicon Valley, slashdot, social web, software patent, Steven Levy, Stewart Brand, supply-chain management, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Whole Earth Catalog, Zipcar

Whatever that might be we will not discover it overnight; it will involve a real struggle against powerful vested interest, conventional wisdom and scepticism, both warranted and not; there will be costs as well as benefits. Cherished institutions and familiar ways of working will be threatened along with the privileged role of professional, authoritative sources of knowledge. The idea that sharing might become the economy’s motive force is deeply unsettling to some because it turns conventional wisdom on its head. From Adam Smith’s Wealth of Nations written in 1749 through to Hernando de Soto’s recent The Mystery of Capital, economists have argued that private property provides the basis for capital – the elixir at the heart of capitalism, which propels its constant growth and renewal. Karl Marx called capital ‘the hen that lays the golden eggs’ – that part of a nation’s assets that allows new ventures to be initiated and productivity increased. A house, parcel of land, piece of machinery or factory becomes capital only if it is fixed in a tangible form, as property, so that it can be used as collateral – to be borrowed against or notionally divided so others can invest in it.

A house, parcel of land, piece of machinery or factory becomes capital only if it is fixed in a tangible form, as property, so that it can be used as collateral – to be borrowed against or notionally divided so others can invest in it. The distinction between assets and capital is a tricky one, but assets are a stock of wealth – like reserves of oil – whereas capital is more like a flow of energy the oil creates when it is refined into petrol. The charismatic Peruvian economist Hernando de Soto argues on this basis that much of the world remains poor because although many people have savings, land and houses, these assets have not been fixed as property and so cannot play the role of capital. The considerable assets of poor economies have not been put into a form – private property – that propels the economy into ceaseless motion, which is what happened in the capitalist West. The answer, for de Soto, is for poorer countries to create systems of private property.


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

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affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

In contrast to these holistic approaches encompassing a very long list of reforms, others attempted to come up with a new big fix. The hedgehogs’ big idea this time was not trade; it had to be something else. But the reasoning took a similar form: “Poor countries are poor primarily because they lack X: give them X and we will have solved the problem of world poverty.” For the Peruvian economist and activist Hernando de Soto, X was formal titles to property. Give poor people a piece of paper which gives them legal ownership rights over their house or their land, he thought, and you will turn them into entrepreneurs and successful capitalists.27 For the Bangladeshi economist and banker Muhammad Yunus, X was credit. Give each entrepreneur a small loan (a “microcredit”), he argued, and you will unleash a process of growth and development from below.28 Both of these ideas inspired active movements and found large numbers of practitioners worldwide.

., Stabilization and Reform in Latin America: A Macroeconomic Perspective on the Experience Since the Early 1990s, IMF Occasional Paper, Washington, DC, February 2005, p. xiv. 25 Anne O. Krueger, “Meant Well, Tried Little, Failed Much: Policy Reforms in Emerging Market Economies,” Remarks at the Roundtable Lecture at the Economic Honors Society, New York University, New York, March 23, 2004. 26 Arvind Panagariya, “Think Again—International Trade,” Foreign Policy (November–December 2003). 27 Hernando de Soto, The Mystery of Capital (New York: Basic Books, 2000). 28 Muhammad Yunus, Banker to the Poor: Micro-Lending and the Battle Against World Poverty (New York: Public Affairs, 2003). 29 William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin, 2006). 30 This approach, called “the Growth Diagnostics framework,” was developed by Ricardo Hausmann, Andres Velasco, and myself.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

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Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, global reserve currency, greed is good, Hernando de Soto, illegal immigration, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, Plutocrats, plutocrats, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, trickle-down economics, Washington Consensus, Winter of Discontent

At the World Economic Forum in Davos, he approached Carla Hills, the U.S. trade representative, with the idea of negotiating a free-trade agreement between Mexico and the United States. The resulting North American Free Trade Agreement (NAFTA) was implemented in 1994.5 Latin America did not simply passively receive lessons in free-market economics from the rest of the world. Prominent regional economists like the Peruvian Hernando de Soto became important contributors to the new liberal economics, with De Soto doing much to argue the case for the importance of property rights for the poor.6 Nonetheless, the new economics pursued across the continent came with the approval of the International Monetary Fund and the World Bank. Since both mighty institutions were based in Washington, the free-market prescription became known as the “Washington Consensus”—a phrase dreamed up by John Williamson, an economist at the Institute for International Economics.7 Across Latin America, government pursued the new consensus policies: cutting tariffs and taxes, making life easier for foreign investors, allowing markets to set interest and exchange rates, cutting regulation, privatizing.

This section draws heavily on the work of Michael Reid, a former colleague of mine at the Economist. 2. Ibid., 121. 3. Timothy Garton Ash is eloquent on the importance of roundtable negotiations as part of the peaceful transition to democracy in Central Europe. 4. Reid, Forgotten Continent, 123. 5. Maxwell Cameron and Brian Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca, N.Y.: Cornell University Press, 2000), 2. 6. See Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London: Black Swan, 2001). 7. Williamson’s own account of what he meant can be found in John Williamson, “A Short History of the Washington Consensus,” Fundación CIDOB paper, presented at a conference titled “From the Washington Consensus Towards a New Global Governance,” Barcelona, September 24, 2004.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

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Asian financial crisis, capital controls, clean water, correlation does not imply causation, Deng Xiaoping, Edward Glaeser, Gini coefficient, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, informal economy, Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, manufacturing employment, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, profit motive, race to the bottom, rising living standards, school vouchers, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, union organizing

Property rights provide an incentive for foresight and personal initiative, spurring growth and distributing the fruits of it equally, on average, between rich and poor. Thus the introduction of safeguards for private property in a society has a distributive effect as favorable to the poor as a commitment to universal education. Studies indicate that protecting private ownership is the economic reform most conducive to growth.19 The Peruvian economist Hernando de Soto has done more than anyone else to show how poor people lose out in the absence of property rights. In his revolutionary book The Mystery of Capital, he turns the orthodox view of the world’s poor upside down. The problem is not that they are helpless or even that they lack ‘‘property,’’ in the sense of the physical assets themselves. The problem, rather, is that they have no formal rights of ownership.

Compare David Dollar and Aart Kraay, Property Rights, Political Rights, and the Development of Poor Countries in the Post-Colonial Period (Washington: World Bank, 2000), http://www.worldbank.org/research/growth/pdfiles/dollarkraay2.pdf and Growth Is Good for the Poor. Concerning the importance of property rights for economic development, see Nathan Rosenberg and L. E. Birdzell, How the West Grew Rich: The Economic Transformation of the Industrial World (New York: Basic Books, 1986). 20. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London: Bantam Press, 2000). 21. James Gwartney, Robert Lawson, Chris Edwards, Walter Park, Veronique de Rugy, and Smita Wagh, Economic Freedom of the World 2002 (Vancouver: Fraser Institute, 2002), http://freetheworld.com; Gerald P. O’Driscoll, Edwin J. Feulner, and Mary Anastasia O’Grady, The 2003 Index of Economic Freedom (Washington: Heritage Foundation and Wall Street Journal, 2002), http://www.heritage.org/index/2003. 22.


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

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accounting loophole / creative accounting, Albert Einstein, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

Whereas in affluent countries the vast majority of economic actors are able to call upon the state for support, in poorer countries many cannot. What is the role of the state? The large amount of shadow activity shows that markets can function where the state is not merely absent but even disruptive. Does this mean that the state is irrelevant to markets? Would the market participants supply for themselves all the market-supporting mechanisms they need, if only the state stayed out of things? Hernando de Soto, in his deservedly famous book The Other Path, depicted Peru’s vigorous shadow economy as a democratic system, run by the people themselves quite independently of the state.25 Unlicensed entrepreneurs developed informal passenger transportation, to such an extent that in the 1980s officially licensed operators ran just 10 percent of Lima’s mass-transit vehicles. Innumerable street vendors sold food, cigarettes, and so on without permits and without paying taxes.

Shadow businesses have ad hoc rights to the land they occupy. But these rights are not as secure as they would be under an effective legal system, for there is some risk of expropriation. As a result, entrepreneurs are reluctant to make expensive, immobile investments in plant and equipment, investments that might enable them to grow beyond simple processing into manufacturing advanced goods. Operating outside the law “involves tremendous costs,” Hernando de Soto concluded. “The apparent chaos, waste of resources, invasions, and everyday courage are the informals’ desperate and enterprising attempts to build an alternative system to the one that has denied them its protection.” The shadow economy has its limits. When you examine the shadow economy anywhere, from Lima to New York, what is most striking is its dynamism: its bustling, life-sustaining energy.


pages: 540 words: 168,921

The Relentless Revolution: A History of Capitalism by Joyce Appleby

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1919 Motor Transport Corps convoy, agricultural Revolution, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, collateralized debt obligation, collective bargaining, Columbian Exchange, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gordon Gekko, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, knowledge economy, land reform, Livingstone, I presume, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, moral hazard, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transatlantic slave trade, transcontinental railway, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War

They had never seen reptiles as large as the iguana, and they puzzled that there were not only no horses or cows in the New World but also no four-legged animals larger than a fox on the islands of the Caribbean. The explorers and conquerors missed the familiar trees of Europe, but they marveled at the exquisite flowering plants of the Caribbean, later determined to number more than thirteen thousand. Horses, cattle, and uninvited rats throve in their new habitat. Hernando de Soto led a four-year expedition across the southeast of the North American continent. With many of his provisions on the hoof, he trekked across what is now North Carolina, Tennessee, Alabama, and Arkansas, leaving behind a host of European pigs to propagate in the New World. Conquistadors, given vast tracts of land, began to raise cattle while the horse made its way north, transforming the culture of the Plains Indians.

Change must come from within, he maintains, but domestic reformers will succeed only with assistance from the industrialized world. Nor does he place faith in globalization per se because the entrance of India and China has made it much harder for latecomers to get into the world marketplace. A former official with the World Bank, Collier recognizes the tyranny of the already tried and urges a revitalized debate on the subject.25 The best ideas for tackling poverty have come from people, like Muhammad Yunus, Hernando de Soto, Amartya Sen, Frances Moore Lappé, Walden Bello, Raj Patel, and Peter Barnes, who want to use the strengths of capitalism in new ways to enhance everyone’s life. This of course is what Marx wanted to do: build on the capitalistic base of wealth to provide for the entire society. He failed to foresee the danger of joining a society’s economic and political power through state ownership of property.

Such capabilities could include women’s being free to discuss contraception, which he found increases the possibility of their society’s making it available to them.29 The basic thrust of Sen’s teachings is to see freedom as a positive force rather than discuss it as the absence of restraint. Governments must assume the responsibility, in his view, to make sure that their citizens have developed their potential. His emphasis has changed the way that aid and deprivation are evaluated. Many poor suffer because their governments fail to address their most basic needs, a neglect less likely to occur where freedom is respected, he says. Hernando De Soto is another warrior in the fight against poverty. A Peruvian economist with strong connections to international banking and engineering firms, he now heads Peru’s Institute for Liberty and Democracy. The institute concentrates on a different way to empower the poor: get them legal title to the land they occupy and the outfits they operate. De Soto has drawn attention to the informal economies worldwide where people cultivate land, improve their dwellings, and run businesses without having title to their property.

The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

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air freight, airline deregulation, Albert Einstein, asset-backed security, bank run, Berlin Wall, Bretton Woods, business process, call centre, capital controls, central bank independence, collateralized debt obligation, collective bargaining, conceptual framework, Corn Laws, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Hernando de Soto, income inequality, income per capita, invisible hand, Joseph Schumpeter, labor-force participation, labour market flexibility, laissez-faire capitalism, land reform, Long Term Capital Management, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, new economy, North Sea oil, oil shock, open economy, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, reserve currency, risk tolerance, Ronald Reagan, shareholder value, short selling, Silicon Valley, special economic zone, the payments system, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, working-age population, Y2K

We cannot find exceptions to this rule, no matter where we look." With the media in authoritarian regimes tending toward selfcensorship, market-interventionist policies—the most prevalent cause of disrupted distribution of food—go unreported and uncorrected until too late. The importance of property rights is a larger issue than that of creating incentives to invest by established business or even incentives for inventors tinkering in a garage. Hernando de Soto, the Peruvian economist, came to the Federal Reserve in January 2003 to brief me on a seemingly radical idea to elevate the standard of living of a significant segment of the world's impoverished. One of the aspects of my job was meeting with foreign visitors who passed through my office when they were in town. These opportunities were a valuable source of information for me and the Fed staff members who often sat in on the meetings.

In the endeavor to modernize, many provincial and local Chinese authorities in their version of creative destruction periodically confiscate peasants' land for development. Riots have been widespread. Granting clear legal ownership rights to peasants for the land they till would go a very long way toward putting an end to such discontent.* Though the means to get there may not be altogether clear, Hernando de Soto's goal is a very appealing one. Protection of property has always been a moving target as the law continually tries to keep up with the nature of economic change. Even in the *"Recognition" of property rights by China's National Congress of t h e People in March 2007 shied away from granting unequivocal rights to rural land. 254 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright.

In a land not far removed in time from the collective farm, loosely articulated urban property rights appear to be enforced; otherwise, foreign investment in real estate, factories, and securities would long since have dried up. Investors behave as though they expect to get returns on their investments and return of principal. And they have.* Chinese citizens have been granted the right to own and sell homes, creating a major opportunity to accumulate capital. Hernando de Soto, I assume, is pleased. And in March 2007, the National People's Congress passed a more comprehensive right of ownership that grants the same legal protection of property that is granted to the state. But the right to own property still falls far short of the status of property rights in developed countries. Property rights require not only a statute but an administrative and judicial system that enforces the law.


pages: 401 words: 122,457

Salt by Mark Kurlansky

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British Empire, clean water, Deng Xiaoping, domestication of the camel, haute cuisine, Hernando de Soto, Honoré de Balzac, invention of movable type, Mahatma Gandhi, spice trade, The Wealth of Nations by Adam Smith, trade route

Deep holes, almost caves, were formed by the constant licking. The lick at the end of the road, because it had a salt supply, was a suitable place for a settlement. Villages were built at the licks. A salt lick near Lake Erie had a wide road made by buffalo, and the town started there was named Buffalo, New York. When Europeans arrived, they found a great deal of salt making in North American villages. In 1541, Spanish explorer Hernando de Soto, traveling up the Mississippi, noted: “The salt is made along a river, which, when the water goes down, leaves it upon the sand. As they cannot gather the salt without a large mixture of sand, it is thrown into certain baskets they have made for the purpose, made large at the mouth and small at the bottom. These are set in the air on a ridge pole; and water being thrown on, vessels are placed under them wherein it may fall, then being strained on the fire it is boiled away, leaving salt at the bottom.”

Eighteenth Annual Report of the United States Geological Survey to the Secretary of the Interior, 1896–97, Washington: Government Printing Office, 1897. Halbouty, Michel T. Salt Domes: Gulf Region, United States, and Mexico. Houston: Gulf Publishing, 1967. Osborne, Roger. The Floating Egg: Episodes in the Making of Geology. London: Pimlico, 1998. General History Barber, Elizabeth Wayland. The Mummies of Ürümchi. New York: W. W. Norton, 1999. Bourne, E. G. Narratives of the Career of Hernando De Soto. Vol. I. Ed. E. G. Bourne. New York, 1904. Boutin, Emile. La Baie de Bretagne et sa contrebande. Laval: Siloë, 1993. Chadha, Yogesh. Gandhi: A Life. New York: John Wiley and Sons, 1997. Chalmers, Harvey. The Birth of the Erie Canal. New York: Bookman Associates, 1960. Condor, George E. Stars in the Water: The Story of the Erie Canal. Garden City, N.Y.: Doubleday, 1974. Cunliffe, Barry.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

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23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, Plutocrats, plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, wage slave, working poor, working-age population, Y2K, Yogi Berra

No wonder nearly five million Egyptians have decided to build illegal dwellings instead. Typically, a Cairo house owner will build up to three illegal storeys on top of his house and rent them out to relatives. Good for him. However, entrepreneurs who start businesses in the West usually finance them with mortgages, and you cannot get a mortgage on an illegal dwelling. The Peruvian economist Hernando de Soto estimates that Africans own an astonishing $1 trillion in ‘dead capital’ – savings that cannot be used as collateral because they are invested in ill-documented property. He draws an instructive parallel with the young United States in the early nineteenth century, where the formal codified law was fighting a rearguard action against an increasingly chaotic confusion of informal squatters’ rights to property.

They include: Bruce Ames, Terry Anderson, June Arunga, Ron Bailey, Nick Barton, Roger Bate, Eric Beinhocker, Alex Bentley, Carl Bergstrom, Roger Bingham, Doug Bird, Rebecca Bliege Bird, the late Norman Borlaug, Rob Boyd, Kent Bradford, Stewart Brand, Sarah Brosnan, John Browning, Erwin Bulte, Bruce Charlton, Monika Cheney, Patricia Churchland, Greg Clark, John Clippinger, Daniel Cole, Greg Conko, Jack Crawford, the late Michael Crichton, Helena Cronin, Clive Crook, Tony Curzon Price, Richard Dawkins, Tracey Day, Dan Dennett, Hernando de Soto, Frans de Waal, John Dickhaut, Anna Dreber, Susan Dudley, Emma Duncan, Martin Durkin, David Eagleman, Niall Ferguson, Alvaro Fischer, Tim Fitzgerald, David Fletcher, Rob Foley, Richard Gardner, Katya Georgieva, Gordon Getty, Jeanne Giaccia, Urs Glasser, Indur Goklany, Allen Good, Oliver Goodenough, Johnny Grimond, Monica Guenther, Robin Hanson, Joe Henrich, Dominic Hobson, Jack Horner, Sarah Hrdy, Nick Humphrey, Anya Hurlbert, Anula Jayasuriya, Elliot Justin, Anne Kandler, Ximena Katz, Terence Kealey, Eric Kimbrough, Kari Kohn, Meir Kohn, Steve Kuhn, Marta Lahr, Nigel Lawson, Don Leal, Gary Libecap, Brink Lindsey, Robert Litan, Bjørn Lomborg, Marcus Lovell-Smith, Qing Lu, Barnaby Marsh, Richard Maudslay, Sally McBrearty, Kevin McCabe, Bobby McCormick, Ian McEwan, Al McHughen, Warren Meyer, Henry Miller, Alberto Mingardi, Graeme Mitchison, Julian Morris, Oliver Morton, Richard Moxon, Daniel Nettle, Johann Norberg, Jesse Norman, Haim Ofek, Gerry Ohrstrom, Kendra Okonski, Svante Paabo, Mark Pagel, Richard Peto, Ryan Phelan, Steven Pinker, Kenneth Pomeranz, David Porter, Virginia Postrel, C.S.


pages: 520 words: 129,887

Power Hungry: The Myths of "Green" Energy and the Real Fuels of the Future by Robert Bryce

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Bernie Madoff, carbon footprint, cleantech, collateralized debt obligation, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, decarbonisation, Deng Xiaoping, en.wikipedia.org, energy security, energy transition, flex fuel, greed is good, Hernando de Soto, hydraulic fracturing, hydrogen economy, Indoor air pollution, Isaac Newton, James Watt: steam engine, Menlo Park, new economy, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, purchasing power parity, RAND corporation, Ronald Reagan, Silicon Valley, smart grid, Stewart Brand, Thomas L Friedman, uranium enrichment, Whole Earth Catalog

PAUL GETTY, one of the world’s first billionaires, once declared that “the meek shall inherit the Earth, but not its mineral rights.”1 Getty—who made his first million dollars in the Oklahoma oil fields—was on to something. Although dozens of economists have written about the critical role that private-property rights play in building wealth in developing countries (among the more notable: Peruvian economist Hernando de Soto), few, if any, have considered the importance of private ownership of mineral rights.2 And fewer still have written about America’s anomalous status as the only country on the planet that allows individuals, rather than the state or the crown, to own the minerals beneath their feet. The private ownership of mineral rights in the United States is a key—but perennially overlooked—reason why the nation has become so prosperous, and why the American oil and gas industry continues to lead the world in developing new technologies to extract hydrocarbons.

In July 2008, total production was 1.734 trillion cubic feet, or about 57.6 billion cubic feet per day. 25 Energy Information Administration, “Natural Gas Navigator,” http://tonto.eia.doe.gov/dnav/ng/hist/rngcld.htm. 26 Ibid. Chapter 24 1 For more on mineral rights, see Robert Bryce, “The Meek Need Mineral Rights,” Energy Tribune, December 26, 2007, http://www.energytribune.com/articles.cfm?aid=737. 2 For more on de Soto, see Dario Fernandez-Morera, “Hernando de Soto Interview,” Reason.com, November 30, 1999, http://www.reason.com/news/show/32213.html. 3 This is my estimate. In 1992, the Environmental Protection Agency estimated that 1.2 million wells had been abandoned. See Roberto Suro, “Abandoned Oil and Gas Wells Become Pollution Portals,” New York Times, May 3, 1992, http://www.nytimes.com/1992/05/03/us/abandoned-oil-and-gas-wells-become-pollution-portals.html.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

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affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional

Families and entrepreneurs make significant investments in their “properties.” But there is a crucial difference between those assets and their counterparts in the developed world: The owners have no legal title to the property. They cannot legally rent it, subdivide it, sell it, or pass it on to family. Perhaps most important, they cannot use it as collateral to raise capital. Peruvian economist Hernando de Soto has argued convincingly that these kinds of informal property arrangements should not be ignored. He reckons that the total value of property held but not legally owned by poor people in the developing world is worth more than $9 trillion. That is a lot of collateral gone to waste, or “dead capital” as he calls it. To put that number in perspective, it is 93 times the amount of development assistance that the rich countries provided to the developing world over the past three decades.

And since selling soft drinks from a machine constitutes retail trade, there are assorted fire, health, and safety inspections.10 Excessive regulation goes hand in glove with corruption. Government bureaucrats throw up hurdles so that they can extort bribes from those who seek to get over or around them. Installing a vending machine in Moscow becomes much easier if you hire the right “security firm.” What about opening a business elsewhere in the developed world? Again, Peruvian economist Hernando de Soto has done fascinating work. He and fellow team members documented their efforts to open a one-person clothing stall on the outskirts of Lima as a legally registered business. He and his researchers vowed that they would not pay bribes so that their efforts would reflect the full cost of complying with the law. (In the end, they were asked for bribes on ten occasions and paid them twice to prevent the project from stalling completely.)

Guns, germs, and steel: the fates of human societies by Jared M. Diamond

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affirmative action, Atahualpa, British Empire, California gold rush, correlation does not imply causation, cuban missile crisis, discovery of the americas, European colonialism, Francisco Pizarro, Hernando de Soto, invention of movable type, invention of the wheel, invention of writing, James Watt: steam engine, Maui Hawaii, QWERTY keyboard, the scientific method, trade route

"On the next morning a messenger from Atahuallpa arrived, and the Governor said to him, 'Tell your lord to come when and how he pleases, and that, in what way soever he may come I will receive him as a friend and brother. I pray that he may come quickly, for I desire to see him. No harm or insult will befall him.' "The Governor concealed his troops around the square at Cajamarca, dividing the cavalry into two portions of which he gave the command of one to his brother Hernando Pizarro and the command of the other to Hernando de Soto. In like manner he divided the infantry, he himself tak- ing one part and giving the other to his brother Juan Pizarro. At the same time, he ordered Pedro de Candia with two or three infantrymen to go with trumpets to a small fort in the plaza and to station themselves there with a small piece of artillery. When all the Indians, and Atahuallpa with them, had entered the Plaza, the Governor would give a signal to Candia and his men, after which they should start firing the gun, and the trumpets should sound, and at the sound of the trumpets the cavalry should dash out of the large court where they were waiting hidden in readiness.

When we in the United States think of the most populous New World societies existing in 1492, only those of the Aztecs and the Incas tend to come to our minds. We forget that North America also supported popu- lous Indian societies in the most logical place, the Mississippi Valley, which contains some of our best farmland today. In that case, however, conquis tadores contributed nothing directly to the societies' destruction; Eurasian germs, spreading in advance, did everything. When Hernando de Soto became the first European conquistador to march through the southeast- ern United States, in 1540, he came across Indian town sites abandoned two years earlier because the inhabitants had died in epidemics. These epi- demics had been transmitted from coastal Indians infected by Spaniards visiting the coast. The Spaniards' microbes spread to the interior in advance of the Spaniards themselves.

The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly

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airport security, anti-communist, Asian financial crisis, bank run, banking crisis, Bretton Woods, British Empire, call centre, clean water, colonial exploitation, colonial rule, Edward Glaeser, European colonialism, failed state, farmers can use mobile phones to check market prices, George Akerlof, Hernando de Soto, income inequality, income per capita, Indoor air pollution, invisible hand, Kenneth Rogoff, laissez-faire capitalism, land reform, land tenure, microcredit, moral hazard, Naomi Klein, purchasing power parity, randomized controlled trial, Ronald Reagan, Scramble for Africa, structural adjustment programs, The Fortune at the Bottom of the Pyramid, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, War on Poverty, Xiaogang Anhui farmers

This is of course a vast oversimplification. Western social scientists don’t begin to comprehend fully the complex process of state formation and rule of law in the West, so they shouldn’t be too quick to predict how it will work anywhere else. Property Rights Property rights also determine whether markets work. Do I have title to the land, building, and equipment making up my taco stand? Hernando de Soto noted in his great book The Mystery of Capital that the majority of land occupied by the poor urban majorities in the developing world does not have legal title—nobody owns it. Only if I felt secure that I would keep my taco stand would I invest in more sanitary food-processing equipment. I can borrow from a bank to purchase such equipment only if I have title to the property to put down as collateral.

Searchers found solutions that laid the basis for a miracle. Devoid of revenue bases, it declared a 3 percent tax on the value of land on July 8, 1873. What was more revolutionary was that the emperor declared all land, which had been allocated by village custom, to be the private property of those who farmed it. The government issued certificates of ownership.3 Land could be bought and sold, and used as collateral for loans—the famous Hernando de Soto formula for unlocking the “mystery of capital.” Although externally imposed land reforms have often been disasters, a homegrown reform that respected local custom was more successful. However, when the land tax was insufficient to cover state spending, the inexperienced rulers printed money. Inflation resulted. Matsukata Masayoshi, the architect of the land reform, became finance minister in October 1881.

The Great Turning: From Empire to Earth Community by David C. Korten

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Albert Einstein, banks create money, big-box store, Bretton Woods, British Empire, clean water, colonial rule, Community Supported Agriculture, death of newspapers, declining real wages, European colonialism, Francisco Pizarro, full employment, George Gilder, global supply chain, global village, Hernando de Soto, Howard Zinn, informal economy, invisible hand, joint-stock company, land reform, market bubble, market fundamentalism, Monroe Doctrine, Naomi Klein, neoliberal agenda, new economy, peak oil, planetary scale, Plutocrats, plutocrats, Ronald Reagan, Rosa Parks, South Sea Bubble, stem cell, structural adjustment programs, The Chicago School, trade route, Washington Consensus, World Values Survey

Adventurers Most of us know the period of Europe’s drive for colonial expansion primarily by the names of the great adventurers commissioned and financed by their sovereigns to carry out great voyages of discovery, plunder, and slaughter. In search of a westward sea route to the riches of Asia, Christopher Columbus (1451–1506) landed on the island of Hispaniola (present-day Haiti and the Dominican Republic) in the West Indies in 1492 and claimed it for Spain. Hernando De Soto (1496–1542) made his initial mark trading slaves in Central America and later allied with Francisco Pizarro to take control of the Inca Empire based in Peru in 1532, the same year the Portuguese established their first settlement in Brazil. De Soto returned to Spain one of the wealthiest men of his time, although his share in the plunder was only half that of Pizarro.3 By 1521, Hernán Cortés had claimed the Mexican Empire of Montezuma for Spain.

See John Perkins, Confessions of an Economic Hit Man (San Francisco: Berrett-Koehler, 2004), for an insider account of exactly how it worked. 18. For detailed documentation on the real purpose and consequence of contemporary trade agreements, see Korten, When Corporations Rule the World; International Forum on Globalization, ed. John Cavanagh and Jerry Mander, Alternatives to Economic Globalization: A Better World Is Possible (San Francisco: Berrett-Koehler, 2002); Lori Wallach and Patrick Woodall, 3. Ibid., s.v. “Hernando de Soto.” 4. The Reader’s Companion to American History, s.v. “America in the British Empire” (by Richard S. Dunn), Houghton Mifflin College Division, online edition, http:// college.hmco.com/history/ readerscomp/rcah/html/ ah_003000_americainthe.htm (accessed October 22, 2005). 5. Encyclopaedia Britannica 2003, deluxe ed. CD, s.v. “Privateer.” NOTES 368 Whose Trade Organization? Comprehensive Guide to the WTO (New York: New Press, 2003); and Jerry Mander and Edward Goldsmith eds., The Case against the Global Economy and for a Turn to the Local (San Francisco: Sierra Club Books, 1996). 19.


pages: 537 words: 158,544

Second World: Empires and Influence in the New Global Order by Parag Khanna

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Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, crony capitalism, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Edward Glaeser, energy security, European colonialism, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, Gini coefficient, global reserve currency, global supply chain, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, Khyber Pass, knowledge economy, land reform, low skilled workers, means of production, megacity, Monroe Doctrine, oil shale / tar sands, oil shock, open borders, open economy, Pax Mongolica, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, rising living standards, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

The government has simultaneously quadrupled the internal and external debt, while hospitals have crumbled, their managers fired for voting against him in a 2004 referendum. Price controls have made meat scarce. Chávez scored points when the Caracas mayor seized an exclusive golf course to build housing for the poor, but urban squalor persists as ever. Despite over $20 billion in annual oil revenue, per capita GDP is at best half the level of 1954. Venezuela remains what economist Hernando de Soto calls a “society of accomplices.” Chávez went after the state oil company, PDVSA, dismantling its technocracy, which had so skillfully created the nation’s entire system of public utilities a generation ago. His surrogate, military-managed apparatus now produces over one million barrels less than peak capacity. PDVSA also operated independently of the government, while Chávez has created his own treasury ministry (Banco de Tesoros) from which he fattens his European bank accounts.

While traveling in the region, I learned a great deal from Andrew Wilson, Berik Otemurat, Fabrizio Vielmini, Josh Machleder, Alexander Sosnin, Assel Rustemova, Oraz Jandosov, Azamat Ablazimov, Kassymzhomart Tokaev, Murat Auezov, Yerbol Suleimenov, Meiirzhan Mashan, Adil Abishev, Azamat Abdymomunov, Nikolay Kuzmin, Kadyr Toktogulov, Nicolas Ebnother, Rosa Oltambaeva, Edil Baissalov, Shakirat Toktosunova, Elbek Khojayev, Catherine Eldridge, Susan Carnduff, Farkhad Tolipov, Jeff Erlich, Steve Labensky, Jon Purnell, Ulugbek Ishankhodjaev, Abdujabar Abduvakhitov, and Ulugbeck Khasanoff. As a Latin America neophyte, I am very thankful for the assistance of Moises Naim, Carlos Lozada, Javier Corrales, Kai Poetschke, Bill Hinchberger, David de Ferranti, Hernando de Soto, Shahnaz Radjy, Meredith Davenport, Maria Hutcheson, Timothy O’Neil-Dunne, Jan Boyer, Andres Oppenheimer, Jenny Caplan, Jose Yunis, Juan Enriquez, Hillary Batjer-Johnson, Erica Breth, Moises Benamor, Michael Shifter, Lorena Barbaria, Gilberto Dupas, Paulo Roberto de Almeida, Rubens Barbosa, Eiiti Sato, Amado Cervo, Shepard Forman, Adriana Abdenur, David Henschel, Nathalie Cely, Cecelia Zarate, Maria Teresa Petersen, Peter Schechter, Blas Pérez Henríquez, Sylvie Naville, Joerg Schimmel, Pedro Burelli, Michael Penfold, Dante Pesce, Steve Reifenberg, and Katty Kauffman.


pages: 226 words: 52,069

Bacon: A Love Story: A Salty Survey of Everybody's Favorite Meat by Heather Lauer

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British Empire, haute cuisine, Hernando de Soto, if you build it, they will come, index card, Ronald Reagan

In an effort to keep the unruly hogs at bay, the residents of Manhattan erected a wall along the northern edge of the settlement. And the street that eventually bordered the wall was called Wall Street. Now that this area of New York City is overrun with stockbrokers and hedge fund managers, some might say the swine problem was never really solved. Americans believe that we have Christopher Columbus and Hernando de Soto to thank for all the bacon, ribs, and tenderloins we enjoy, as they had pigs with them on their ships. Back when it took multiple weeks to cross the Atlantic Ocean on a journey to the New World, pigs were a popular travel companion (nowadays, not so much—unfortunately most airlines won’t let you carry a pig on the plane even if it’s small enough to fit underneath the seat in front of you, and U.S.


pages: 225 words: 54,010

A Short History of Progress by Ronald Wright

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Albert Einstein, Atahualpa, Bretton Woods, British Empire, clean water, Columbian Exchange, cuban missile crisis, Francis Fukuyama: the end of history, Haber-Bosch Process, Hernando de Soto, invention of agriculture, James Watt: steam engine, Jane Jacobs, land reform, Mahatma Gandhi, nuclear winter, out of africa, Parkinson's law, Ronald Reagan, Thomas Malthus, urban sprawl

Inca Garcilaso died in 1616, the same year as Shakespeare and Cervantes. 30. For Adair’s quote and more on the Cherokees and Iroquois, see Wright, Stolen Continents, chaps. 4 and 5. A century after Franklin, Friedrich Engels was equally impressed by the Iroquois, noting among other things the balance of power between the sexes (ibid., p. 117). 31. Thirty-metre. 32. Societies of this type were seen by the Spaniards under Hernando de Soto throughout the Southeast, and the French found equally developed hierarchies along the Mississippi. Impressive earthen pyramids can still be seen at Cahokia, near modern St. Louis; at Etowah, near Atlanta; and at several other eastern sites. 33. European nations, including Britain, became more democratic than at any time since their humble beginnings a thousand years before. At home, that is; democracy was not for the empires. 34.


pages: 271 words: 52,814

Blockchain: Blueprint for a New Economy by Melanie Swan

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23andMe, Airbnb, altcoin, Amazon Web Services, asset allocation, banking crisis, bioinformatics, bitcoin, blockchain, capital controls, cellular automata, central bank independence, clean water, cloud computing, collaborative editing, Conway's Game of Life, crowdsourcing, cryptocurrency, disintermediation, Edward Snowden, en.wikipedia.org, ethereum blockchain, fault tolerance, fiat currency, financial innovation, Firefox, friendly AI, Hernando de Soto, Internet Archive, Internet of things, Khan Academy, Kickstarter, litecoin, Lyft, M-Pesa, microbiome, Network effects, new economy, peer-to-peer lending, personalized medicine, post scarcity, prediction markets, ride hailing / ride sharing, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, SETI@home, sharing economy, Skype, smart cities, smart contracts, smart grid, software as a service, technological singularity, Turing complete, unbanked and underbanked, underbanked, web application, WikiLeaks

As is standard with cryptocurrency code, decentralized governance software, too, would be open source and forkable, so that anyone can create his own blockchain nation and government services in this collaborative platform for DIYgovernance. In the area of titling and deeds, as Bitcoin is to remittances, decentralized blockchain government services is to the implementation of a property ownership registry, and could be the execution of the detailed plans set forth by development economists such as Hernando de Soto.113 Decentralized blockchain-based government services such as public documents registries and titling could be a useful tool for scaling the efforts already in place by organizations such as de Sotos’s Institute for Liberty and Democracy, or ILD, which has programs to document, evaluate, and diagnose the extralegal sector and bring it into alignment with the legal system. A universal blockchain-based property registry could bring much-needed ownership documentation, transferability, transactability, value capture, and opportunity and mobilization to emerging markets where these structures do not exist or are nascent (and simultaneously, potential business for its blockchain service cousin, dispute resolution).

State-Building: Governance and World Order in the 21st Century by Francis Fukuyama

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Asian financial crisis, Berlin Wall, Bretton Woods, centre right, corporate governance, demand response, Doha Development Round, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, George Akerlof, Hernando de Soto, Nick Leeson, Potemkin village, price stability, principal–agent problem, rent-seeking, road to serfdom, Ronald Coase, structural adjustment programs, technology bubble, The Market for Lemons, The Nature of the Firm, transaction costs, Washington Consensus

the missing dimensions of stateness 21 negative effects of excessive state scope are in the long-run counterbalanced by the positive effects of greater administrative capacity.3 The New Conventional Wisdom Much of what has been laid out about the importance of state strength is now taken for granted within the development policy community, whose mantra since at least 1997 has been the dictum that “institutions matter” (World Bank 1997, World Bank 2001). The concern over state strength, which goes under a variety of headings including “governance,” “state capacity,” or “institutional quality,” has always been around under different titles in development economics. It was highlighted in Hernando de Soto’s book The Other Path (1989), which reminded the development community of the importance of formal property rights and, more broadly, of the consequences of well-functioning legal institutions for efficiency. De Soto (1989, 134) sent his researchers to find out how long it took to get a small business license in Lima, Peru; 10 months, 11 offices, and $1231 later, they came back with legal authorization to start a business.

The Empathy Exams: Essays by Leslie Jamison

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Atul Gawande, crowdsourcing, Hernando de Soto, In Cold Blood by Truman Capote, land reform, Skype, Slavoj Žižek

Requirements for the Wolf Cub badge include doing a crab walk, an elephant walk, and a frog leap; folding an American flag; learning four ways to stop the spread of colds; starting a collection, any collection; making breakfast and then cleaning up; visiting a historic site in the community. I try to guess what landmark these boys might have visited in West Memphis, a place history seems to have excluded from its archives: maybe Eighth Street, known as “Beale Street West” for its Depression-era Blues scene, or the Hernando DeSoto Bridge, a massive piece of infrastructure that helps trucks keep going somewhere else. Most of the infrastructure in West Memphis does this: helps things get somewhere else. Maybe the boys just sat by the highway and watched big rigs roll by. They’d be twenty-nine this year, a year younger than I am. Melissa and Mark Byers, Chris’s mother and stepfather, are the strangest of the victims’ parents.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

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Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, laissez-faire capitalism, liquidity trap, means of production, microcredit, minimum wage unemployment, open economy, paradox of thrift, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, unorthodox policies

These economists corrected the errors of Marx and the classical economists, and brought about a permanent revolution. As noted earlier, the cost-of-production approach to price theory had put economics in a box, a box containing a bombshell that could annihilate the classical system of natural liberty. It would take a revolutionary breakthrough in economic theory to rejuvenate the dismal science and restore the foundations of Adam Smith's model. That is the subject of chapter 4. 9. Peruvian economist Hernando de Soto has written several popular books on the need for legal and economic reforms in Latin America and developing countries in general. See Soto (2002, 2003). Scottish economist Adam Smith (1723-90) was a professor of moral pi In 1776, Adam Smith published the "crown jewel" of economics, Tt Nations. "It contains the most important substantive proposition in al the pursuit of self-interest under conditions of competition." 1 N Q V I 8 >«•• f M Nature md CkQi WKALfH of A AT I % IIW Miffy J » m * ' — - J u l . 4* w • • ft * .. — J .


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The end of history and the last man by Francis Fukuyama

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affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, Bonfire of the Vanities, centre right, cuban missile crisis, deindustrialization, Deng Xiaoping, European colonialism, F. W. de Klerk, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Hernando de Soto, income inequality, Isaac Newton, Joseph Schumpeter, kremlinology, labour mobility, land reform, Mikhail Gorbachev, nuclear winter, open economy, post-industrial society, postindustrial economy, RAND corporation, Ronald Reagan, Socratic dialogue, strikebreaker, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions

These new, democratically elected lead­ ers started f r o m the premise that u n d e r d e v e l o p m e n t was not due to the i n h e r e n t inequities of capitalism, but rather to the insuffi­ cient degree of capitalism that had been practiced in their coun­ tries in the past. Privatization and free trade have become the new watchwords in place of nationalization and import substitution. T h e Marxist o r t h o d o x y of Latin A m e r i c a n intellectuals has come u n d e r increasing challenge f r o m writers like Hernando de Soto, Mario Vargas Llosa, and Carlos Rangel, who have begun to find a significant audience f o r liberal, market-oriented economic ideas. A s mankind approaches the end of the millennium, the twin crises of authoritarianism and socialist central planning have left only one competitor standing in the ring as an ideology of poten­ tially universal validity: liberal democracy, the doctrine of indi­ vidual f r e e d o m and p o p u l a r sovereignty.

In any case, import substitution was particularly indiscriminate in Latin America, and was continued long after it could be justified for the protection of new in­ dustries. 22. On this point, see Albert O. Hirschman, "The Turn to Authoritarian­ ism in Latin America and the Search for Its Economic Determinants," in David Collier, ed., The New Authoritarianism in Latin America (Princeton, N.J.: Princeton University Press, 1979), p. 85. 23. On the public sector in Brazil, see Baer (1989), pp. 2 3 8 - 2 7 3 . 24. Hernando de Soto, The Other Path: The Invisible Revolution in the Third World (New York: Harper and Row, 1989), p. 134. 25. In the Foreword to ibid., p. xiv. 360 NOTES, PAGES 106-112 26. Quoted in Hirschman (1979), p. 65. 27. See Sylvia Nasar, "Third World Embracing Reforms to Encourage Eco­ nomic Growth," New York Times (July 8, 1990), pp. A l , D3. Chapter 10. In the Land of Education 1. Nietzsche, The Portable Nietzsche (New York: Viking, 1954), p. 231. 2.


pages: 777 words: 186,993

Imagining India by Nandan Nilekani

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affirmative action, BRICs, British Empire, business process, business process outsourcing, call centre, clean water, colonial rule, corporate governance, cuban missile crisis, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, distributed generation, farmers can use mobile phones to check market prices, full employment, ghettoisation, glass ceiling, global supply chain, Hernando de Soto, income inequality, informal economy, joint-stock company, knowledge economy, labour market flexibility, land reform, LNG terminal, load shedding, Mahatma Gandhi, market fragmentation, Mikhail Gorbachev, Network effects, new economy, New Urbanism, open economy, pension reform, Potemkin village, price mechanism, race to the bottom, rent control, rolodex, Ronald Reagan, school vouchers, Silicon Valley, smart grid, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, trickle-down economics, unemployed young men, upwardly mobile, urban planning, urban renewal, women in the workforce, working poor, working-age population

And unlike many countries, India has not recognized the “right to property” as a fundamental one since 1978, which makes it far more difficult for landowners to contest development plans and to ensure that the growth and expansion of markets do not steamroll over their livelihood. Reforms in land titling and property rights, and linking such titles into the national I.D. system, would be a big step for our land markets. And this would provide powerful momentum toward more inclusive markets—the economist Hernando de Soto noted that the right to property and clear land titles are essential for bringing down poverty.5 Land is particularly useful for the poor since it is a source of funds, a starting fuel for economic mobility, and instrumental as collateral for obtaining loans from banks. But bringing IT into India’s land markets presents a classic clash of the old and the new. Much of our land legislation and data come from methods used in British India.

Prahalad, The Fortune at the Bottom of the Period, Wharton School Publishing, 2004. 3 Simon Szreter, “The Right of Registration: Development, Identity Registration, and Social Security, A Historical Perspective,” World Development 35, 2007. 4 Jos Mooij,“Smart Governance? Politics in the Policy Process in Andhra Pradesh, India,” Working Paper 228, Overseas Development Institute, October 2003. 5 Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Basic Books, 2003. CHANGING EPIDEMICS: FROM HUNGER TO HEART DISEASE 1 Katherine Ashenburg, The Dirt on Clean: An Unsanitized History, North Point Press, 2007. 2 Mark Harrison, Public Health in British India, Cambridge University Press, 1994. 3 David Arnold, The Tropics and the Traveling Gaze: India, Landscape, and Science, 1800-1856, University of Washington Press, 2006. 4 Ghanshyam Shah, Public Health and Urban Development:The Plague in Surat, Sage Publications, 1997. 5 Mark Harrison, Public Health in British India, Cambridge University Press, 1994. 6 Ira Klein, “Plague, Policy and Popular Unrest in British India,” Modern Asian Studies, November 1988. 7 Mark Harrison, Public Health in British India, Cambridge University Press, 1994. 8 A.


pages: 311 words: 17,232

Living in a Material World: The Commodity Connection by Kevin Morrison

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barriers to entry, Berlin Wall, carbon footprint, clean water, commodity trading advisor, diversified portfolio, Doha Development Round, Elon Musk, energy security, European colonialism, flex fuel, food miles, Hernando de Soto, Hugh Fearnley-Whittingstall, hydrogen economy, Long Term Capital Management, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, out of africa, peak oil, price mechanism, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, uranium enrichment, young professional

Pollution is part of the metabolism of the economy. Production starts with the depletion of resources and ends with pollution. ‘In order to put an economic value on the environment, it has to become a commodity through government legislation, by creating property rights that entitle the holder to ownership of the underlying asset and permits allowing the right to pollute,’ said Daly. Peruvian economist Hernando De Soto writes in his book The Mystery of Capital that the use of documents to prove ownership is one of the main conditions for the success of capitalism in the West. In developed nations, writes De Soto, every parcel of land, every building, every piece of equipment or store of inventories is represented by a property document. These documents reflect an asset that can then be turned CLIMATE | 137 into collateral for credit and are the foundation for creating securities such as equities or mortgage-backed bonds that can be sold in secondary markets, which in turn generates capital (De Soto, 2000).


pages: 422 words: 113,525

Whole Earth Discipline: An Ecopragmatist Manifesto by Stewart Brand

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agricultural Revolution, back-to-the-land, biofilm, borderless world, Buckminster Fuller, business process, Cass Sunstein, clean water, Community Supported Agriculture, conceptual framework, Danny Hillis, dark matter, decarbonisation, demographic dividend, demographic transition, Elon Musk, Exxon Valdez, failed state, Geoffrey West, Santa Fe Institute, glass ceiling, Google Earth, Hans Rosling, Hernando de Soto, informal economy, interchangeable parts, invention of agriculture, invention of the steam engine, Jane Jacobs, jimmy wales, Kevin Kelly, Kibera, land tenure, M-Pesa, Marshall McLuhan, megacity, microbiome, New Urbanism, out of africa, Paul Graham, peak oil, Richard Florida, Ronald Reagan, Silicon Valley, smart grid, stem cell, Stewart Brand, The Fortune at the Bottom of the Pyramid, Thomas Malthus, University of East Anglia, uranium enrichment, urban renewal, Whole Earth Catalog, Whole Earth Review, working-age population, Y2K

All that the keepers of the formal economy have to do, Neuwirth says, is meet the squatters halfway—help them secure their tenure and give them time to gradually join the formal world, which will no doubt be reshaped by their joining it. Program by program, nation by nation, the world is learning how to engage the boundless resourcefulness of urban squatters. One idea put forward early was Hernando de Soto’s. In his seminal 1989 book, The Other Path, he was the first to honor the way the informal economy works, based on research in the squatter communities of Lima. His theory was that squatters could break out of poverty if only they could get bankable title to their shacks. The idea has been tried, but it mostly doesn’t work in urban slums: The practice doesn’t help with credit, it encourages building owners to become absentee landlords, and it attracts rich raiders.


pages: 349 words: 114,038

Culture & Empire: Digital Revolution by Pieter Hintjens

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4chan, airport security, anti-communist, anti-pattern, barriers to entry, Bill Duvall, bitcoin, blockchain, business climate, business intelligence, business process, Chelsea Manning, clean water, congestion charging, Corn Laws, correlation does not imply causation, cryptocurrency, Debian, Edward Snowden, failed state, financial independence, Firefox, full text search, German hyperinflation, global village, GnuPG, Google Chrome, greed is good, Hernando de Soto, hiring and firing, informal economy, invisible hand, James Watt: steam engine, Jeff Rulifson, Julian Assange, Kickstarter, M-Pesa, mutually assured destruction, Naomi Klein, national security letter, new economy, New Urbanism, Occupy movement, offshore financial centre, packet switching, patent troll, peak oil, pre–internet, private military company, race to the bottom, rent-seeking, reserve currency, RFC: Request For Comment, Richard Feynman, Richard Feynman, Richard Stallman, Satoshi Nakamoto, security theater, Skype, slashdot, software patent, spectrum auction, Steve Crocker, Steve Jobs, Steven Pinker, Stuxnet, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trade route, transaction costs, union organizing, web application, WikiLeaks, Y2K, zero day, Zipf's Law

A secure system of property rights also reduces uncertainty and encourages investments, creating favorable conditions for an economy to be successful. Empirical evidence suggests that countries with strong property rights systems have economic growth rates almost twice as high as those of countries with weak property rights systems, and that a market system with significant private property rights is an essential condition for democracy. According to Hernando de Soto, much of the poverty in the Third World countries is caused by the lack of Western systems of laws and well-defined and universally recognized property rights. De Soto argues that because of the legal barriers poor people in those countries can not utilize their assets to produce more wealth. It sounds sensible, doesn't it? The theory of strong private property rights, as the basis for democracy and prosperity is attractive.


pages: 342 words: 94,762

Wait: The Art and Science of Delay by Frank Partnoy

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algorithmic trading, Atul Gawande, Bernie Madoff, Black Swan, blood diamonds, Cass Sunstein, Checklist Manifesto, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, Daniel Kahneman / Amos Tversky, delayed gratification, Flash crash, Frederick Winslow Taylor, George Akerlof, Google Earth, Hernando de Soto, High speed trading, impulse control, income inequality, Isaac Newton, Long Term Capital Management, Menlo Park, mental accounting, meta analysis, meta-analysis, Nick Leeson, paper trading, Paul Graham, payday loans, Ralph Nader, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, six sigma, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical model, Steve Jobs, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, upwardly mobile, Walter Mischel

Andrew’s loyalty since 1997 is rivaled only by that of my wife and dog; this is the fourth book the four of us have done together. Thank you, once again, to everyone at Profile Books. Numerous people talked to me about the various topics in this book. I am especially grateful for conversations with Bill Ackman, Julian Alexander, Michael Ashner, Lanny Breuer, Yaron Brook, Jeff Campbell, Dana Carney, Kathy Casey, Walker Clark, Simon Copleston, Jeff Critchfield, Patrick Daniels, Hernando de Soto, Sanford DeVoe, Gurpreet Dhaliwal, Andrew Dittmer, Jesse Eisinger, Anne Erni, Allen Farrell, Jerome Fons, Mary Fricker, Koji Fukumura, Maria Gavrilovic, Gordon Gerson, Jonathan Glater, Francesco Guerrera, Scott Harrison, Margaret Heffernan, Sheena Iyengar, James Jacoby, Rob Jafek, Roy Katzovicz, Adam Kolber, Eric Kolchinsky, Unni Krishnan, Steve Kroft, Stephen Labaton, Irene LaCota, Vice Chancellor Travis Laster, Angel Lau, Donald Lawrence, Joe Lonsdale, Angel Lopez, John Lovi, Jeff Madrick, Peter McLeod, Ralph Nader, Chuck O’Kelley, André Perold, Stephen Porges, Ernesto Reuben, Christine Richard, Darren Robbins, John Rogers, Jennifer Schenker, Todd Simkin, Robert P.


pages: 295 words: 92,670

1494: How a Family Feud in Medieval Spain Divided the World in Half by Stephen R. Bown

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Atahualpa, Bartolomé de las Casas, British Empire, charter city, Eratosthenes, European colonialism, Francisco Pizarro, Hernando de Soto, Peace of Westphalia, spice trade, The Wealth of Nations by Adam Smith, trade route, UNCLOS

Roving bands of privately funded adventurers scoured the Americas from Florida to Peru, searching for another source of easy treasure. The Mayan city-states in the Yucatán Peninsula and Guatemala were subjugated by Pedro de Alvarado in 1523, and Francisco Pizarro led his band of privateers south to Peru in 1531. By 1533, Pizarro had defeated the Inca Empire and conquered the city of Cuzco by treacherously capturing Emperor Atahualpa. In Florida, Hernando de Soto led an expedition in search of the Fountain of Youth and the Seven Cities of Cibola in 1539. In all these endeavours, the native peoples of the Americas—enslaved, starved, displaced and ravaged by disease—suffered horribly. Many were killed outright, others were compelled to labour, chained in work gangs or bent under the lash in silver mines in Peru and Mexico. To still their consciences and justify their actions, conquistadors read aloud the Requerimiento—a document first devised during Ferdinand’s reign to justify the conquest on religious grounds.


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The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

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Andrei Shleifer, business climate, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, financial repression, Gini coefficient, Hernando de Soto, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, large denomination, manufacturing employment, Network effects, New Urbanism, open economy, Productivity paradox, purchasing power parity, rent-seeking, Ronald Reagan, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

They may create a mazeof regulations that kill off private enterprise. A survey of privatebusinessesin sixty-seven countries gives some insight into the regulatory burden. In countries as diverse as Bulgaria, Belarus, Fiji,Mexico,Mozambique, and Tanzania,firms cited ”the regulationsfor starting new businesses/new operations” as a strong obstacle to doingbusiness.28To take a well-knownexample, the Peruvianeconomist Hernando deSoto registered a smallclothing factory in Lima as an experiment and decided in advance not to pay bribes. During the timeit took to get registered, government officials asked for bribes ten times. In two cases, he hadto break his own rule and pay the bribes, or the experiment would have come to a halt. In the end, it took ten months toregister the clothing factory. A similar procedure takes four hoursin New York.29 In judging government services like electric power supply, firms surveyed in Azerbaijan, Cameroon, Chad, Congo, Ecuador, Georgia, Guinea, Guinea-Bissau, India, Kazakhstan,Kenya,Moldova,Mali, Malawi, Nigeria, Senegal, Tanzania, and Uganda report that they experience power outages atleast once every two weeks.


pages: 298 words: 95,668

Milton Friedman: A Biography by Lanny Ebenstein

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affirmative action, banking crisis, Berlin Wall, Bretton Woods, Deng Xiaoping, Fall of the Berlin Wall, fiat currency, floating exchange rates, Francis Fukuyama: the end of history, full employment, Hernando de Soto, hiring and firing, inflation targeting, invisible hand, Joseph Schumpeter, labour market flexibility, Lao Tzu, liquidity trap, means of production, Mont Pelerin Society, Ponzi scheme, price stability, rent control, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, secular stagnation, Simon Kuznets, stem cell, The Chicago School, The Wealth of Nations by Adam Smith, Thorstein Veblen

And in the real economic world, there is a free lunch, an extraordinary free lunch, and that free lunch is free markets and private property.14 The first Milton Friedman Prize for Advancing Liberty was given on May 9, 2002, at the Cato Institute’s twenty-fifth anniversary dinner in Washington. The prize, which includes a $500,000 cash award, is given every other year to an individual who has made a major contribution to advancing liberty. Its first three recipients have been, in 2002, British economist Peter Bauer, who unfortunately died before it was presented; in 2004, Hernando de Soto, the South American advocate of libertarian ideas; and, in 2006, former Estonian prime minister Mart Laar, who implemented free market reforms in his country. Friedman demonstrated his attachment to exact expression in his extemporaneous talk on Bauer at the 2002 dinner: It was a “shame”—no, he corrected himself—“tragedy”15 that Bauer died before the award could be presented to him. While in Washington for the dinner, Milton and Rose had lunch at the White House.


pages: 790 words: 150,875

Civilization: The West and the Rest by Niall Ferguson

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Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, Ayatollah Khomeini, Berlin Wall, BRICs, British Empire, clean water, collective bargaining, colonial rule, conceptual framework, Copley Medal, corporate governance, credit crunch, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, Deng Xiaoping, discovery of the americas, Dissolution of the Soviet Union, European colonialism, Fall of the Berlin Wall, Francisco Pizarro, full employment, Hans Lippershey, haute couture, Hernando de Soto, income inequality, invention of movable type, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Joseph Schumpeter, land reform, land tenure, Louis Pasteur, Mahatma Gandhi, market bubble, Martin Wolf, means of production, megacity, Mikhail Gorbachev, new economy, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, purchasing power parity, quantitative easing, rent-seeking, reserve currency, road to serfdom, Ronald Reagan, savings glut, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, spice trade, spinning jenny, Steve Jobs, Steven Pinker, The Great Moderation, the market place, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, total factor productivity, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, upwardly mobile, uranium enrichment, wage slave, Washington Consensus, women in the workforce, World Values Survey

But they have been left out for a reason. Does the selection reflect the biases of a middle-aged Scotsman, the archetypal beneficiary of Western predominance? Very likely. But I cherish the hope that the selection will not be disapproved of by the most ardent and eloquent defenders of Western values today, whose ethnic origins are very different from mine – from Amartya Sen to Liu Xiaobo, from Hernando de Soto to the dedicatee of this book. A book that aims to cover 600 years of world history is necessarily a collaborative venture and I owe thanks to many people. I am grateful to the staff at the following archives, libraries and institutions: the AGI Archive, the musée départemental Albert Kahn, the Bridgeman Art Library, the British Library, the Charleston Library Society, the Zhongguo guojia tushuguan (National Library of China) in Beijing, Corbis, the Institut Pasteur in Dakar, the Deutsches Historisches Museum in Berlin, the Geheimes Staatsarchiv Preussischer Kulturbesitz at Berlin-Dahlem, Getty Images, the Greenwich Observatory, the Heeresgeschichtliches Museum in Vienna, the Irish National Library, the Library of Congress, the Missouri History Museum, the musée du Chemin des Dames, the Museo de Oro in Lima, the National Archives in London, the National Maritime Museum, the Başbakanlık Osmanlı Arşivleri (Ottoman Archives) in Istanbul, PA Photos, the Peabody Museum of Archaeology and Ethnology at Harvard, the Archives Nationales du Sénégal in Dakar, the South Carolina Historical Society, the School of Oriental and African Studies, the Sülemaniye Manuscript Library and of course Harvard’s incomparable Widener Library.


pages: 369 words: 121,161

Alistair Cooke's America by Alistair Cooke

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Albert Einstein, Alistair Cooke, British Empire, double entry bookkeeping, full employment, Hernando de Soto, imperial preference, interchangeable parts, joint-stock company, Maui Hawaii, Ralph Nader, Ralph Waldo Emerson, Spread Networks laid a new fibre optics cable between New York and Chicago, strikebreaker, The Wealth of Nations by Adam Smith, transcontinental railway, Triangle Shirtwaist Factory, urban sprawl, wage slave, Works Progress Administration

He sailed down and around the Florida Keys and up to the Gulf Coast, but found neither gold nor a fountain. After him, the Spanish made frequent, unauthorized, raids into Florida for slaves to work the West Indies; and they mounted several official expeditions to seek out the rumored piles of gold. They were all defeated by the native Indians, who had learned a lively detestation of the slave raiders, and on one of the last of these fruitless voyages the body of the commander, Hernando de Soto, was buried by his men in the Mississippi River to save it from desecration by the Indians. But these setbacks did not disabuse the Spanish of their belief in a whole literature woven around the mystical legend that declared that somewhere in the New World there was that ‘terrestrial paradise,’ an actual Heaven on earth that would redeem the hard life of the true believer here below. In many Spanish books written by scholars and divines who had never been to sea, the most confident and bizarre accounts were given of the land to the north of New Spain.


pages: 497 words: 153,755

The Power of Gold: The History of an Obsession by Peter L. Bernstein

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Albert Einstein, Atahualpa, Bretton Woods, British Empire, California gold rush, central bank independence, double entry bookkeeping, Edward Glaeser, falling living standards, financial innovation, floating exchange rates, Francisco Pizarro, German hyperinflation, Hernando de Soto, Isaac Newton, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, large denomination, liquidity trap, money: store of value / unit of account / medium of exchange, price stability, profit motive, random walk, rising living standards, Ronald Reagan, seigniorage, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route

The Conquerors, as Prescott calls them, found only empty streets as they entered Caxamalca. After a short distance, they came to an immense open plaza surrounded by low buildings containing capacious halls, presumably barracks for the Inca's soldiers. Pizarro was determined to occupy this area. Pizarro immediately dispatched a small force toward the Indian encampment, commanded by his brother Hernando Pizarro and his senior colleague Hernando de Soto. De Soto would later make his mark exploring in Florida for the Fountain of Youth; he died in 1542 on the shores of the Mississippi, having found neither the Fountain of Youth nor any North American gold, but he would have a Chrysler car model of the 1930s named after him. In addition, there was one Indian member of this detachment, who had been taught enough Spanish to act as interpreter.


pages: 476 words: 148,895

Cooked: A Natural History of Transformation by Michael Pollan

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biofilm, bioinformatics, Columbian Exchange, correlation does not imply causation, dematerialisation, Drosophila, energy security, Gary Taubes, Hernando de Soto, Louis Pasteur, Mason jar, microbiome, peak oil, Ralph Waldo Emerson, Steven Pinker, women in the workforce

If a sandwich can be said to have terroir, that quality of place that the French believe finds its way into the best wines and cheeses, this sandwich had it, a sense of place and history you could taste. Since the Europeans first set foot on these shores, the pig has been the principal meat animal in this part of the country. Indeed, the words “meat” and “pork” have been synonymous for most of Southern history. The Spanish conquistador Hernando de Soto brought the first pigs to the American South in the sixteenth century. For centuries, the descendants of those hogs ranged freely in the Carolinas, feeding themselves on the abundant mast produced by the oak-and-hickory forest. This means that, at least before pigs were confined to farms, the flavors of the Eastern hardwood forest could find their way into their meat by two routes: first as acorn and hickory nuts and then as wood smoke.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

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1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, complexity theory, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, megacity, Mercator projection, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Peace of Westphalia, peak oil, Peter Thiel, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

As the world’s urban masses become the overwhelming majority of the global population, the so-called youth bulge is not an impending challenge but an actual one. If it is not put to work today, then it will not earn enough income to stabilize socially and settle professionally. An estimated 30–40 percent of the world population works in the informal economy, a supply-demand universe if ever there was one. Hernando de Soto, the pioneering advocate of property rights for the poor, has pointed out that most of the self-immolating Arabs during early 2011 were extralegal entrepreneurs cut off from the capital they needed to start businesses capable of surviving food price shocks and petty local corruption. They represent the industrious yet dispossessed youth I’ve seen loitering around Morocco, Libya, Egypt, Jordan, Pakistan, and elsewhere—those who would choose jobs over jihad if the former were offered but take the path that provides them shelter and respect.


pages: 391 words: 117,984

The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World by Jacqueline Novogratz

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access to a mobile phone, Ayatollah Khomeini, Berlin Wall, business process, business process outsourcing, clean water, failed state, Fall of the Berlin Wall, half of the world's population has never made a phone call, Hernando de Soto, Kibera, Lao Tzu, market design, microcredit, out of africa, Ronald Reagan, sensible shoes, side project, Silicon Valley, Skype, The Fortune at the Bottom of the Pyramid, transaction costs

Lovins (Earthscan Publications) Development as Freedom by Amartya Sen (Anchor) The End of Poverty: Economic Possibilities for Our Time by Jeffrey D. Sachs (Penguin Press) The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits by C.K. Prahalad (Wharton School Publishing) Making Globalization Work by Joseph E. Stiglitz (W.W. Norton) The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else by Hernando de Soto (Basic Books) Pathologies of Power: Health, Human Rights, and the New War on the Poor by Paul Farmer (University of California Press) Philanthrocapitalism: How the Rich Can Save the World by Matthew Bishop and Michael Green (Bloomsbury Press) Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble by Lester R. Brown (W.W. Norton) Portfolios of the Poor: How the World’s Poor Live on $2 a Day by Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven (Princeton University Press) The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly (Penguin Books) Wikinomics: How Mass Collaboration Changes Everything by Don Tap-scott and Anthony D.

Poisoned Wells: The Dirty Politics of African Oil by Nicholas Shaxson

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Asian financial crisis, Berlin Wall, blood diamonds, business climate, central bank independence, clean water, colonial rule, energy security, Exxon Valdez, failed state, Fall of the Berlin Wall, Hernando de Soto, income per capita, inflation targeting, Martin Wolf, mobile money, offshore financial centre, Ronald Reagan, Scramble for Africa, Yom Kippur War

As far as they were concerned, it was all there already. They had only to take. They believed that, by being what they were, they had earned the right to take; and the higher the officer, the greater the crookedness— if that word had any meaning. . . . I was nervous of getting involved, because a government that breaks its own laws can easily break you. 53 P o i s o n e d We l l s The Peruvian economist Hernando de Soto, in his best-selling book The Mystery of Capital, argues that property rights are the bedrock upon which the edifice of capitalism is built. In Angola after independence, property was nationalized, chaotically. This ministry was given responsibility for that building, but nobody told them that another ministry had allocated it to someone else. Property rights became an ephemeral concept, a set of dull and shadowy ideas without real substance.


pages: 501 words: 145,097

The Men Who United the States: America's Explorers, Inventors, Eccentrics and Mavericks, and the Creation of One Nation, Indivisible by Simon Winchester

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British Empire, clean water, colonial rule, discovery of the americas, distributed generation, Donner party, estate planning, Etonian, full employment, Hernando de Soto, hive mind, invention of radio, invention of the telegraph, James Watt: steam engine, Khyber Pass, Menlo Park, Plutocrats, plutocrats, transcontinental railway, Works Progress Administration

Instead the Europeans first discovered the three rivers that did drain directly into the ocean—the Colorado,* the Columbia, and the Mississippi. The Mississippi was the first of the three to be seen. A sinuous line approximating its position had already been marked on Spanish maps made as early as 1513; it was most probably first properly viewed six years later, in 1519. There was the certain and definitive encounter with the river twenty years later still, when Hernando de Soto, plundering and destroying his way across the southeastern quadrant of the country, stood on a limestone bluff just south of where Memphis lies today and, astonished, saw the great brown river unwinding slowly hundreds of feet below. These men, the first Europeans definitely to see America’s defining river, assembled crude log barges and managed to cross the stream, which at this point was “almost halfe a league broad,” and as an English translation of one the conquistadores’ diaries had it, . . . if a man stood still on the other side, it could not be discerned whether he were a man or no.


pages: 331 words: 60,536

The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State by James Dale Davidson, Rees Mogg

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affirmative action, agricultural Revolution, bank run, barriers to entry, Berlin Wall, borderless world, British Empire, California gold rush, clean water, colonial rule, Columbine, compound rate of return, Danny Hillis, debt deflation, ending welfare as we know it, epigenetics, Fall of the Berlin Wall, falling living standards, feminist movement, financial independence, Francis Fukuyama: the end of history, full employment, George Gilder, Hernando de Soto, illegal immigration, income inequality, informal economy, information retrieval, Isaac Newton, Kevin Kelly, market clearing, Martin Wolf, Menlo Park, money: store of value / unit of account / medium of exchange, new economy, New Urbanism, offshore financial centre, Parkinson's law, pattern recognition, phenotype, price mechanism, profit maximization, rent-seeking, reserve currency, road to serfdom, Ronald Coase, school vouchers, seigniorage, Silicon Valley, spice trade, statistical model, telepresence, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade route, transaction costs, Turing machine, union organizing, very high income

., p.115. 15. See Mancur Olson, The Logic of Collective Action (Cambridge: Harvard University Press, 1965). 16. Josep R. Liobera, The God of Modernitv.. The Development of Nationalism in Western Europe (Oxford: Berg Publishers, 1994), pp. ix-x. 17. Ibid., p. xiii. 18. See William McNeill, Polyethnicitv and National Unity in World History (Toronto: University of Toronto Press, 1986). 19. Ibid., p.7. 20. Hernando de Soto, The Other Path (New York: Harper & Row, 1989). 21. Ibid. 22. Ibid., p.6. Chapter 6. The Megapolitics of the Information Age: The Triumph of Efficiency over Power 1. Neil Munro, "The Pentagon's New Nightmare: An Electronic Pearl Harbor," Washington Post, July 16, 1995, p. C3. 2. Thomas Hobbes, Leviathan, chap. 13 of "The Natural Condition of Man as Concerning Their Felicity and Misery." 3.


pages: 603 words: 182,781

Aerotropolis by John D. Kasarda, Greg Lindsay

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3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Asian financial crisis, back-to-the-land, barriers to entry, Berlin Wall, big-box store, blood diamonds, borderless world, British Empire, call centre, carbon footprint, Clayton Christensen, cleantech, cognitive dissonance, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, edge city, Edward Glaeser, failed state, food miles, Ford paid five dollars a day, Frank Gehry, fudge factor, full employment, future of work, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Haber-Bosch Process, Hernando de Soto, hive mind, if you build it, they will come, illegal immigration, inflight wifi, interchangeable parts, intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Kangaroo Route, knowledge worker, kremlinology, labour mobility, Marshall McLuhan, Masdar, McMansion, megacity, Menlo Park, microcredit, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, peak oil, Peter Thiel, pets.com, pink-collar, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, savings glut, Seaside, Florida, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, stem cell, Steve Jobs, supply-chain management, sustainable-tourism, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, walkable city, white flight, Yogi Berra

In Memphis: “When Firestone and International Harvester left, taking with them good blue-collar, union jobs, there was a question in the air: ‘Well, now what are we going to be?’ ” The one asking that question is Dexter Muller, whose office at the Greater Memphis Chamber of Commerce is only a few doors down from the Cotton Exchange on Front Street. The view from his window is a snapshot of the city’s transportation history: Cotton Row below, the muddy Mississippi beyond, and, in the distance, the long span of the Hernando de Soto Bridge bearing six lanes of truck traffic to and from points west. His unrepentant drawl and modest pompadour mark him as a native who grew up in the Age of Elvis. He is a third-generation Memphian; his grandfather was a cotton trader, and mother a local belle, while his father moved here from New York in 1937 to build a paper plant for Kimberly-Clark, only to see it promptly swept away in a flood.


pages: 686 words: 201,972

Drink: A Cultural History of Alcohol by Iain Gately

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barriers to entry, British Empire, California gold rush, delayed gratification, Deng Xiaoping, Edward Lloyd's coffeehouse, Fellow of the Royal Society, Gordon Gekko, greed is good, Haight Ashbury, Hernando de Soto, imperial preference, invisible hand, joint-stock company, Louis Pasteur, megacity, music of the spheres, Peace of Westphalia, refrigerator car, Ronald Reagan, South Sea Bubble, spice trade, strikebreaker, the scientific method, Tim Cook: Apple, trade route, traveling salesman, Upton Sinclair, V2 rocket, working poor

While the Spanish were careful, as usual, to write down the diets of the people they came across on the Terra Firma, alcohol only appears on their own provision lists, or in expressions of grief over its absence. For instance, the destruction of communion wine by belligerent Indians near Mobile was ranked an equal loss to that of gunpowder, bullets, and valiant comrades by Rodrigo Rangel, a participant in Hernando de Soto’s crazed 1539 drive from Cape Canaveral to the Mississippi River. Although they found no evidence of indigenous tippling, both the Spaniards and the French had commented on the potential of the land for making wine. Every tree seemed draped with vines; indeed, the original name for the Island of Orleans opposite Quebec was Bacchus Island. It is a matter of dispute as to whether it was the French or Spanish who were the first to make an American vintage.


pages: 740 words: 217,139

The Origins of Political Order: From Prehuman Times to the French Revolution by Francis Fukuyama

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Admiral Zheng, agricultural Revolution, Andrei Shleifer, Asian financial crisis, Ayatollah Khomeini, barriers to entry, Berlin Wall, blood diamonds, California gold rush, cognitive dissonance, colonial rule, conceptual framework, correlation does not imply causation, currency manipulation / currency intervention, demographic transition, Deng Xiaoping, double entry bookkeeping, equal pay for equal work, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, hiring and firing, invention of agriculture, invention of the printing press, Khyber Pass, labour market flexibility, land reform, land tenure, means of production, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, RAND corporation, rent-seeking, Scramble for Africa, spice trade, Stephen Hawking, Steven Pinker, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade route, transaction costs, Washington Consensus

See Francis Fukuyama and Sanjay Marwah, “Comparing East Asia and Latin America: Dimensions of Development,” Journal of Democracy 11, no. 4 (2000): 80–94. 4 On the decline in inequality in the 2000s in Latin America, see Luis Felipe Lopez-Calva and Nora Lustig, eds., Declining Inequality in Latin America: A Decade of Progress? (Washington, D.C.: Brookings Institution Press, 2010). 5 On the general problem of informality, see Hernando De Soto, The Other Path: The Invisible Revolution in the Third World (New York: Harper, 1989); and Santiago Levy, Good Intentions, Bad Outcomes: Social Policy, Informality, and Economic Growth in Mexico (Washington, D.C.: Brookings Institution Press, 2008). 6 See, for example, the chapter on Chile in Hirschman, Journeys Toward Progress, pp. 161–223. 7 An “electoral authoritarian” regime validates itself through elections, but in a highly manipulated process that does not permit a true level playing field for democratic contestation.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

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Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, invisible hand, Jean Tirole, joint-stock company, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, payday loans, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, War on Poverty, Washington Consensus, We are the 99%, working poor

6 The Red Guide to the Neoliberal Playbook For someone who has just spent a few hundred pages arguing that the economics profession has been proven hopelessly corrupt by virtue of its behavior during the crisis, and that the Neoliberal Thought Collective has managed to weather the crisis by expanding to fill the entire space of political discourse left void by the dereliction of the economists, I am now going to do something a little counterintuitive: I am going to start by agreeing (in a limited way) with one famous Mont Pèlerin member, Hernando de Soto. In a retrospective on the crisis, he insisted, “the recession wasn’t about bubbles but about the organization of knowledge.”1 Of course, this was not entirely unexpected, coming from a member of the NTC: it has persistently been an outlier in the history of reactionary movements, a political formation built upon a realization that their own core foundational commitments were epistemological, rather than simply “conservative” or capitalist or traditionalist;2 but I think it is more revealing than perhaps he himself would concede.


pages: 828 words: 232,188

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

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Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, invention of the printing press, iterative process, knowledge worker, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, Post-materialism, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, women in the workforce, World Values Survey

For Friedrich Hayek’s arguments against rationalist planning and in favor of spontaneous order, see Law, Legislation and Liberty (Chicago: University of Chicago Press, 1976), and The Constitution of Liberty (Chicago: University of Chicago Press, 2011). 2. See Robert H. Frank, The Darwin Economy: Liberty, Competition, and the Common Good (Princeton: Princeton University Press, 2011). 3. On the limitations of the contemporary microfinance movement, see David Roodman, Due Diligence: An Impertinent Inquiry into Microfinance (Washington, D.C.: Center for Global Development, 2012). On extending property rights to the poor, see Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (London: Bantam Press, 2000). 4. Amartya Sen, Development as Freedom (New York: Knopf, 1999), p. 27. 5. For a much longer discussion of the role of recognition and dignity in politics, see Fukuyama, The End of History and the Last Man, pp. 162–208. 6. On China’s challenges in moving from middle- to high-income status, see the World Bank, China 2030: Building a Modern, Harmonious, and Creative Society (Washington, D.C.: World Bank, 2013). 7.