Friday, November 25, 2005

Blueprint for Global Counter-Revolution?

The Other Path: The Invisible Revolution in the Third World
de Soto, Hernando, Abbott, June (Author)

Blueprint for Global Counter-Revolution?

Hernando De Soto's, "The Other Path" should be required reading for any western-educated, pseudo-left wing, liberal, or otherwise middle-class couched idealists who hold any romantic notions about the desirable benefits of maoist or proletarian revolt among third-world or developing nations.It should also be applied to global economics studies. This book is not great just because it is sanctioned by Clinton, Bush, or Kissinger...(touche)

But it is admittedly an earlier treatise than, "The Mystery of Capital". Written from an issues specific and culturally-specific perspective as a counter point to the Shining Path which slaughtered up to 25,000 Peruvians. The turmoil induced by The Shining Path and Guzman is framed within the self-same self-destruction of Cambodia, China, and Russia to name a few nations under misguided and ultimately failed Marxist (but for tactics, say strictly Stalinist or Maoist) principles. No opposition permitted to imposed status quo.

De Soto defeats revolutionary arguments with good analysis. This is probably why he was leading a think-tank called ILD (Institutio Libertad y Democracia). In a nut-shell, some of his arguments:

1. DeSoto said most Peruvians are not blue-collar workers but emerging
entrepreneurs. This could be applied globally. One could say most of the poor are not blue-collar, they are business people sans jobs.

2.The revolutionary class, as evidenced currently in Bolivia, is made up of newly arrived migrants from the countryside.

* Note that Chinese newly arrived migrants number about 200 million annually in China today. Incredible extralegal work sectors thus exist, as in inter-migrant illegals all over south-east Asia (check out for statistics).

* Note the current strife in areas of South Thailand, inter-Malaysia and Indonesia.

Extralegals in the eighties Peru made up nearly 60-80% of the nation's population constructing seven out of ten buildings. So how can current growth rates in Asian economies even be purported to be adequately accurate figures for growth in comparison if similar variables exist there?

De Soto's argument was strong enough to engage the general public in support of government instituted reforms, and proves his argument that most extralegal workers would prefer to work within the law. Similar studies (See Spring 2005 Economic Perspectives Journals and The Far East Asian Review) support that Chinese economic reform is currently following a similar entrepreneur-motivated path. For the same reasons.

De Soto illustrates the point of dead capital more clearly in "The Mystery of Capital" so it is enough to say here that extralegals in Peru in the early eighties held extralegal assets fourteen times the rate of total FDI. He also went on to prove that simliar cases and proportions exist in comparative developing economies worldwide. He says basically that governments must be willing to engage extralegals or at a certain point disappear.

It would be interesting to note that Chalmers Johnson makes a good contribution to the case that many contemporary bloody revolutions have been the result of American backed, right-wing governments (In "Blowback"). Left-wing or right-wing, De Soto says international interference usually does more harm than good.

However people who would support bloody revolutions probably never read writers like De Soto. This book is about providing laws and legal statues that include new entrants to an economic system and distribute the benefits, especially the taxes back into a government structure which grows more responsive to the needs of all of its business people.

However now I would like to read about Fujimori and try to get a sense of where Peru is today. I also believe it took more than De Soto to bring down Guzman. One might credit a certain US organisation for his capture. Overall, the message of this book cannot be withered over fifteen to twenty years of global growth and change. De Soto illustrates great wisdom in attempting to turn the tides of revolution into political and economic evolution.

It reads very simply.

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