|
: There is a biennial Milton Friedman prize for advancing liberty. In 2002, the first Friedman prize was awarded to Peter Bauer. Cato Institute has just announced that the second Friedman prize will be awarded to Hernando de Soto on the 6th of May. That’s not the only award Hernando de Soto has received. There is the 2004 Templeton freedom prize for market solutions to poverty. Thailand has decided to award him a royal order, known as member of the most admirable order of the Direkgunabhornon. This is the first time this Thai award is being given to a Latin American who is not a head of state.
By now, Hernando de Soto’s argument on lack of property rights being responsible for poverty in developing countries is familiar to most people. But I am always slightly surprised that in India, de Soto is almost invariably identified with his 2000 book, “Mystery of Capital, Why Capitalism Triumphs in the West and Fails Everywhere Else”. Although the arguments of his first book spill naturally over into this second book and one shouldn’t differentiate between the two, I have always empathised more with his 1986 book, “The Other Path, The Invisible Revolution in the Third World”. For whatever reason, that book isn’t that readily available and isn’t read as much as it should be.
Research money for the first book came from the Center for International Private Enterprise. And in 1980, de Soto set up the Institute for Liberty and Democracy in Peru. Understandably, the Peruvian Marxist organisation, “Shining Path”, tried to assassinate him twice. Shining may not be the best word to use in India now. But several years down the line, it is fairly obvious which path continues to shine.
“The Other Path” was dedicated to “Latin America’s competitive workers and entrepreneurs, formal and informal, who, through their efforts, are tracing the other path”. The hypothesis is simple. Documented for Peru, where there were apparently half a million orders etc in the nature of administrative law, the case studies for business, manufacture, housing and transportation establish that the costs of legality are too high. Hence, entrepreneurs resort to the illegal or other path. Costs of State intervention directly lead to illegality. A market economy is the illegal one, not the State-fostered law-ridden one. The legal path hinders entrepreneurship. The other path nurtures it. De facto owners were thus locked out of the formal and...
More from Edits & Columns
| Single Page Format | 1 - 2 - 3 - Next |
Discuss this story on expressindia forums
|
|
 |
 |
 |
About Us | Contact Us | Advertisers | Site Map | Make us your homepage | Work for Us | RSS | Subscribe | Electronic Edition | Privacy Policy© 2009: The Indian Express Limited. All rights reserved throughout the world
