Un Discovers Property Rights For The Poor

HERE’S A MAN bites dog story. The United Nations is setting up a commission on the property rights of the poor and the hurdles and obstacles the poor face as they try to make a living.

It’s surprising because, for more than a century, the global bien-pensant elites have brushed aside the question of property rights. They have experienced that the way for the poor to advance was by clientage to the political power of the educated elite. Vote for us, the educated elite told the poor, and we will have our experts look after you.

But now, according to Alejandro Chafuen, the UN is taking a look at the narrative developed by Peruvian businessman Hernando De Soto. And guess what. The new “High Level Commission on Legal Empowerment of the Poor” will be led by former US Secretary of State Madeleine Albright—and Hernando De Soto himself.

Founder and director of the Institute for Liberty and Democracy (ILD) in Lima, Peru, and author of the landmark 1986 book on property rights, "The Other Path," Mr. De Soto has demonstrated to policy makers worldwide that an organized "legal property system" is the single most important factor -- the "hidden architecture" or "missing link," he calls it -- that will determine whether individual entrepreneurs and national economies have even a chance of achieving success.
In capitalist economies, Mr. De Soto notes, business transactions are made possible by widely accepted rules governing legally defined property. Such concepts often don’t exist in the developing world, where existing legal systems (or the lack thereof) may not recognize the assets and transactions of some 70 percent of the population.

And if that doesn’t persuade you there is the testimony of William L. Lewis in The Power of Productivity in which he shows that the biggest problem faced by anyone, rich or poor, is the lack of a flat and fair playing field for economic competition. Usually, Third World countries are hobbled by vast structures that favor producers over consumers and distort the economy with a miasma of subsidies.

Of course, all the UN is proposing to do for now is to talk. But still, progress is progress.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.