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Wednesday, June 21, 2006

Ask a simple question

Simple Simon meets a pieman and asks, "Why Isn't the Whole World Developed?" Which is, in fact, the title of this piece from The American Spectator. For those of you who think that the answer is a complicated economic package of mathematical complexity, let me reveal the much less complicated answer: Property law.

Or, as set out in the article
De Soto argues that in this way an actual majority of the world's population "has been locked out of the global economy." Poor people "are forced to operate outside the rule of law," and have "no legal identity, no credit, no capital and thus no way to prosper." They would like to participate in a free enterprise system, "but they cannot access the existing property law" and so are forced to operate outside the law. He adds:

Property law is what makes the market economy work. It is property law that provides the framework of rules that organizes the market, the titles and records that identify economic agents, the contractual mechanisms that allow people to exchange goods and services in the expanded market. It is property law that provides the means to enforce rules and contracts.... Therefore, those who are excluded from the legal system, mainly the poor, are also excluded from the legal market economy.
Well said. Read it all. Thank goodness the U.S. government was founded by property owners.

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