Author

Hernando de Soto

8 key ideas, each explained in our own words.

The Mystery of Capital

IDEA 1
The poor have assets, not capital
De Soto argues that poor people in developing countries own houses, land and businesses worth enormous amounts. But because these assets are not legally recorded, they cannot be used as capital to borrow, invest or grow.
IDEA 2
Unrecorded assets are dead capital
De Soto calls assets without formal titles dead capital. A house that cannot be mortgaged or sold easily cannot help its owner start a business or invest in the future.
IDEA 3
Bureaucracy blocks legal ownership
De Soto's team tried to register a small business in Lima, Peru. It took many months and enormous effort, showing how bureaucracy pushes poor people into the informal economy. Legal paths seemed closed.

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