Arts of Survival

A continuation of Zara’s mentioning of Hernando de Soto

In 1908 a terrorist group known as the shining path began operating in Peru. ‘The bloodiest and most murderous guerrilla group ever to operate in the western hemisphere” wrote Bernard Aronson, the U.S. assistant secretary of state for Latin America, “Latin America has seen violence and terror, but none like Sendero’s (the shining path) … and make no mistake, if Sendero were to take power, you would see this century’s third genocide.’ After Nazi Germany and Pol Pot’s Cambodia.

Sendero, as they are known, became relatively popular with the poor by giving housing wrights, land, and work trafficking drugs. In return the young would sign up to perform acts such as the car bomb attack on the ILD (Institute for Liberty and Democracy) headquarters in 1992.

The attack was a response, in part, to a book Hernando de Soto, who is the president of ILD in Peru, had released a book called ‘The Other Path’, which contained alternatives methods of helping the poor that directly undermined Sendero. The Other Path was so popular it became the number one best seller and created a link between de Soto and the government that brought about great change and reform. De Soto advised the government to listen to the poor and create new legislation that brought them into the legal sector. Organizations were set up to listen to the public, yellow boxes were placed at ILD, government offices and press offices ready to receive complaints from the citizens of Peru, the press were encouraged to comment on any examples of extreme injustice. There was even a fortnightly TV show that allowed the public to watch as legislation was contested and changed in order to remove restrictions on the poor and cut down the time it takes to get through legal applications (literally taking off years!).
My point is that I believe we should help those less fortunate than ourselves, but through them telling us what they need and why it isn’t working for them. The economy of a country is delicate and individual to each country. In much of Europe, we have developed for over 200 years, since the industrial revolution, to achieve our relatively stable and prosperous lifestyles. Simply shipping our present framework onto third world countries doesn’t work.

De Soto writes of the techniques he acquires, for integrating the poor into the legal system allowing them to accumulate wealth, in his book ‘The Mystery Of Capital’.
In it he explains how easily our financial aid to third world countries misses the mark; how the poor are the undercapitalized sector; how much dead capital is contained in this sector’; the lack of capital conversion process in third world countries. These are but a few of the reasons why, he claims, ‘Capitalism triumphs in the west and fails everywhere else.’

The aid money we give, that avoids the hands of corrupt officials, falls through the citizens hands like a sieve. Many of the poor have no rights to the homes or land they live on, and no safe way of investing that money. Shanty town dwellers on the outskirts of large cities, see how their contemporaries live in the city and strive to achieve the same, but, as in the case of Peru, de Soto writes that it takes six years and eleven months to complete an application for housing rights and thirty one times the monthly minimum wage. Its not that the people lack the talent or know how, entrepreneurs working in the extralegal sector amount vast sums of dead capital (dead as it has no standing in the legal sector).
‘The value of extralegally held rural and urban real estate in Peru amounts to some $74 billion. This is five times the valuation of the Lima stock exchange before the slump of 1998.’ (de Soto, Page 31, The Mystery Of Capital)

We must not discriminate against the poor, considering them as an inconvenience rather than an asset. Our laws must benefit them as much as it does us, we must set off to meet them half way.