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Why Do the Poor Stay Poor?

Comment

Of the 6 billion people on Earth, 2 billion try to survive on a few dollars a day. They don't build businesses, or if they do, they don't expand them. Unlike people in the United States, Europe and Asian countries like Japan, South Korea, Hong Kong, etc., they don't lift themselves out of poverty. Why not? What's the difference between them and us? Hernando de Soto taught me that the biggest difference may be property rights.

I first met de Soto maybe 15 years ago. It was at one of those lunches where people sit around wondering how to end poverty. I go to these things because it bugs me that much of the world hasn't yet figured out what gave us Americans the power to prosper.

I go, but I'm skeptical. There sits de Soto, president of the Institute for Liberty and Democracy in Peru, and he starts pulling pictures out showing slum dwellings built on top of each other. I wondered what they meant.

As de Soto explained: "These pictures show that roughly 4 billion people in the world actually build their homes and own their businesses outside the legal system. ... Because of the lack of rule of law (and) the definition of who owns what, and because they don't have addresses, they can't get credit (for investment loans)."

They don't have addresses?

"To get an address, somebody's got to recognize that that's where you live. That means ... you've a got mailing address. ... When you make a deal with someone, you can be identified. But until property is defined by law, people can't ... specialize and create wealth. The day they get title (is) the day that the businesses in their homes, the sewing machines, the cotton gins, the car repair shop finally gets recognized. They can start expanding."

That's the road to prosperity. But first they need to be recognized by someone in local authority who says, "This is yours." They need the rule of law. But many places in the developing world barely have law. So enterprising people take a risk. They work a deal with the guy on the first floor, and they build their house on the second floor.

"Probably the guy on the first floor, who had the guts to squat and make a deal with somebody from government who decided to look the other way, has got an invisible property right.

It's not very different from when you Americans started going west, (but) Americans at that time were absolutely conscious of what the rule of law was about," de Soto said.

Americans marked off property, courts recognized that property, and the people got deeds that meant everyone knew their property was theirs. They could then buy and sell and borrow against it as they saw fit.

This idea of a deed protecting property seems simple, but it's powerful. Commerce between total strangers wouldn't happen otherwise. It applies to more than just skyscrapers and factories. It applies to stock markets, which only work because of deed-like paperwork that we trust because we have the rule of law.

Is de Soto saying that if the developing world had the rule of law they could become as rich as we are?

"Oh, yes. Of course. But let me tell you, bringing in the rule of law is no easy thing."

De Soto started his work in Peru, as an economic adviser to the president, trying to establish property rights there. He was successful enough that leaders of 23 countries, including Russia, Libya, Egypt, Honduras and the Philippines, now pay him to teach them about property rights. Those leaders at least get that they're doing something wrong.

"They get it easier than a North American," he said, "because the people who brought the rule of law and property rights to the United States (lived) in the 18th and 19th centuries. They were your great-great-great-great-granddaddies."

De Soto says we've forgotten what made us prosperous. "But (leaders in the developing world) see that they're pot-poor relative to your wealth." They are beginning to grasp the importance of private property.

Let's hope we haven't forgotten what they are beginning to learn.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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Comments

12 Comments | Post Comment
Each individual human being possesses a unique, highly developed, and
sensitive perception of variety. Thus aware, man is endowed with a natural
capability for enacting internal mental and external physical selectivity.
Quantitative and qualitative choice-making thus lends itself as the superior
basis of an active intelligence.
Human is earth's Choicemaker. His title describes his definitive and
typifying characteristic. Recall that his other features are but vehicles of
experience intent on the development of perceptive awareness and the
following acts of decision and choice. Note that the products of man cannot
define him for they are the fruit of the discerning choicemaking process and
include the cognition of self, the utility of experience, the development of
value measuring systems and language, and the acculturation of
civilization.
The arts and the sciences of man, as with his habits, customs, and
traditions, are the creative harvest of his perceptive and selective powers.
Creativity, the creative process, is a choice-making process. His articles,
constructs, and commodities, however marvelous to behold, deserve neither
awe nor idolatry, for man, not his contrivance, is earth's own highest
expression of the creative process.
Human is earth's Choicemaker. The sublime and significant act of choosing
is, itself, the Archimedean fulcrum upon which man levers and redirects the
forces of cause and effect to an elected level of quality and diversity.
Further, it orients him toward a natural environmental opportunity, freedom,
and bestows earth's title, The Choicemaker, on his singular and plural brow.
Comment: #1
Posted by: Jim Baxter
Wed Dec 8, 2010 8:58 AM


CONTEMPORARY COMMENTS
"I should think that if there is one thing that man has learned about
himself it is that he is a creature of choice." Richard M. Weaver

"Man is a being capable of subduing his emotions and impulses; he can
rationalize his behavior. He arranges his wishes into a scale, he chooses;
in short, he acts. What distinguishes man from beasts is precisely that he
adjusts his behavior deliberately." Ludwig von Mises

"To make any sense of the idea of morality, it must be presumed that the
human being is responsible for his actions and responsibility cannot be
understood apart from the presumption of freedom of choice." John
Chamberlain

"The advocate of liberty believes that it is complementary of the orderly
laws of cause and effect, of probability and of chance, of which man is not
completely informed. It is complementary of them because it rests in part
upon the faith that each individual is endowed by his Creator with the power
of individual choice." Wendell J. Brown

"These examples demonstrate a basic truth -- that human dignity is embodied
in the free choice of individuals." Condoleeza Rice

"Our Founding Fathers believed that we live in an ordered universe. They
believed themselves to be a part of the universal order of things. Stated
another way, they believed in God. They believed that every man must find
his own place in a world where a place has been made for him. They sought
independence for their nation but, more importantly, they sought freedom for
individuals to think and act for themselves. They established a republic
dedicated to one purpose above all others - the preservation of individual
liberty..." Ralph W. Husted

"We have the gift of an inner liberty so far-reaching that we can choose
either to accept or reject the God who gave it to us, and it would seem to
follow that the Author of a liberty so radical wills that we should be
equally free in our relationships with other men. Spiritual liberty
logically demands conditions of outer and social freedom for its
completion." Edmund A. Opitz

"Above all I see an ability to choose the better from the worse that has
made possible life's progress." Charles Lindbergh

"Freedom is the Right to Choose, the Right to create for oneself the
alternatives of Choice. Without the possibility of Choice, and the exercise
of Choice, a man is not a man but a member, an instrument, a thing." Thomas
Jefferson
Comment: #2
Posted by: Jim Baxter
Wed Dec 8, 2010 9:03 AM

THE QUESTION AND THE ANSWER
Q: "What is man that You are mindful of him, and the son of man that You
visit him?" Psalm 8:4
A: "I call heaven and earth as witnesses today against you, that I have set
before you life and death, blessing and cursing; therefore choose life, that
both you and your descendants may live." Deuteronomy 30:19

Q: "Lord, what is man, that You take knowledge of him? Or the son of man,
that you are mindful of him?" Psalm 144:3
A: "And if it seems evil to you to serve the Lord, choose for yourselves
this day whom you will serve, whether the gods which your fathers served
that were on the other side of the river, or the gods of the Amorites, in
whose land you dwell. But as for me and my house, we will serve the Lord."
Joshua 24:15

Q: "What is man, that he could be pure? And he who is born of a woman, that
he could be righteous?" Job 15:14
A: "Who is the man that fears the Lord? Him shall He teach in the way he
chooses." Psalm 25:12

Q: "What is man, that You should magnify him, that You should set Your heart
on him?" Job 7:17
A: "Do not envy the oppressor and choose none of his ways." Proverbs 3:31

Q: "What is man that You are mindful of him, or the son of man that You take
care of him?" Hebrews 2:6
A: "I have chosen the way of truth; your judgments I have laid before me."
Psalm 119:30 "Let Your hand become my help, for I have chosen Your
precepts."Psalm 119:173

References:
Genesis 3:3,6 Deuteronomy 11:26-28; 30:19 Job 5:23 Isaiah 7:14-15; 13:12;
61:1 Amos 7:8 Joel 3:14 Ecclesiastes 3:1-8 Psalms 119:1-176
Comment: #3
Posted by: Jim Baxter
Wed Dec 8, 2010 9:05 AM

Consider: The missing element in every human 'solution' is an accurate definition of the creature.

In an effort to diminish the multiple and persistent dangers and abuses
which have characterized the affairs of man in his every Age, and to assist
in the requisite search for human identity, it is essential to perceive and
specify that distinction which naturally and most uniquely defines the human
being.

Because definitions rule in the minds, behaviors, and institutions of men,
we can be confident that delineating and communicating that quality will
assist the process of resolution and the courageous ascension to which man is called. As
Americans of the 21st Century, we are obliged and privileged to join our
forebears and participate in this continuing paradigm proclamation.


"WHAT IS MAN...?" God asks - and answers:
HUMAN DEFINED: EARTH'S CHOICEMAKER
by James Fletcher Baxter (c) 2010 AD

The way we define 'human' determines our view of self, others,
relationships, institutions, life, and future. Many problems in human
experience are the result of false and inaccurate definitions of humankind
premised in man-made religions and humanistic philosophies.

Human knowledge is a fraction of the whole universe. The balance is a vast
void of human ignorance. Human reason cannot fully function in such a void;
thus, the intellect can rise no higher than the criteria by which it
perceives and measures values.

Humanism makes man his own standard of measure. However, as with all
measuring systems, a standard must be greater than the value measured. Based
on preponderant ignorance and an egocentric carnal nature, humanism demotes
reason to the simpleton task of excuse-making in behalf of the rule of
appetites, desires, feelings, emotions, - and glands.

Because man, hobbled in an ego-centric predicament, cannot invent criteria
greater than himself, the humanist lacks a predictive capability. Thus, his
man-made criteria rises no higher than eyebrows - and too often, no higher
than pubic hair! Without instinct or transcendent criteria, humanism cannot
evaluate options with foresight and vision for progression and survival.
Lacking foresight, man is blind to potential consequence and is unwittingly
committed to mediocrity, collectivism, averages, and regression - and worse.
Humanism is an unworthy worship.

The void of human ignorance can easily be filled with a functional faith
while not-so-patiently awaiting the foot-dragging growth of human knowledge
and behavior. Faith, initiated by the Creator and revealed and validated in
His Word, the Bible, brings a transcendent standard to man the choice-maker.
Other philosophies and religions are man-made, humanism, and thereby lack
what only the Bible has:

1.Transcendent Criteria and
2.Fulfilled Prophetic Validation.

The vision of faith in God and His Word is survival equipment for today and
the future. Only the Creator, who made us in His own image, is qualified to
define us accurately.

Human is earth's Choicemaker. Psalm 25:12 He is by nature and nature's God a
creature of Choice - and of Criteria. Psalm 119:30,173 His unique and
definitive characteristic is, and of Right ought to be, the natural
foundation of his environments, institutions, and respectful relations to
his fellow-man. Thus, he is oriented to a Freedom whose roots are in the
Order of the universe. selah
Comment: #4
Posted by: Jim Baxter
Wed Dec 8, 2010 9:12 AM
As long as some choose to abdicate their personal reality and submit to the
delusions of humanism, determinism, and collectivism, just so long will they
be subject and re-acting only, to be tossed by every impulse emanating from
others. Those who abdicate such reality may, in perfect justice, find
themselves weighed in the balances of their
own choosing.

That human institution which is structured on the principle, "...all men are
endowed by their Creator with...Liberty...," is a system with its roots in
the natural Order of the universe. The opponents of such a system are
necessarily engaged in a losing contest with nature and nature's God.
Biblical principles are still today the foundation under Western
Civilization and the American way of life. To the advent of a new season we
commend the present generation and the "multitudes in the valley of
decision."

Let us proclaim it. Behold!
2010 AD: The Season of Generation-Choicemaker Joel 3:14 KJV
Comment: #5
Posted by: Jim Baxter
Wed Dec 8, 2010 9:17 AM
Each individual human being possesses a unique, highly developed, and
sensitive perception of variety. Thus aware, man is endowed with a natural
capability for enacting internal mental and external physical selectivity.
Quantitative and qualitative choice-making thus lends itself as the superior
basis of an active intelligence.

Human is earth's Choicemaker. His title describes his definitive and
typifying characteristic. Recall that his other features are but vehicles of
experience intent on the development of perceptive awareness and the
following acts of decision and choice. Note that the products of man cannot
define him for they are the fruit of the discerning choicemaking process and
include the cognition of self, the utility of experience, the development of
value measuring systems and language, and the acculturation of
civilization.

The arts and the sciences of man, as with his habits, customs, and
traditions, are the creative harvest of his perceptive and selective powers.
Creativity, the creative process, is a choice-making process. His articles,
constructs, and commodities, however marvelous to behold, deserve neither
awe nor idolatry, for man, not his contrivance, is earth's own highest
expression of the creative process.

Human is earth's Choicemaker. The sublime and significant act of choosing
is, itself, the Archimedean fulcrum upon which man levers and redirects the
forces of cause and effect to an elected level of quality and diversity.
Further, it orients him toward a natural environmental opportunity, freedom,
and bestows earth's title, The Choicemaker, on his singular and plural brow.
Comment: #6
Posted by: Jim Baxter
Wed Dec 8, 2010 9:27 AM
In the words of John Kluge (1914-2010) "The Rich are rich because they guard their assets as if they are poor; the Poor stay poor because they act like they are rich."
Comment: #7
Posted by: Skip Cashwell
Wed Dec 8, 2010 12:21 PM
Good article. I read this originally on foxnews.com. I don't know where Mr. Stossel stands on most issues, but it would appear to me that he is libertarian. That all well and good, but for libertarianism to really work, the people who do the laboring must be endowed with property. Unfortunately, many libertarians today (the anarcho-libertarian variety) would be happy to see the mass of humanity in slave-like conditions, divorced from all income producing property, and being simply "wage slaves", competing with other wage slaves in China.
Also unfortunately, policies enacted by gubment today tend to encourage the working class to go into as much debt as possible, which is often not much more than a renter-landlord relationship; "rent to own". The banker is the landlord. The "owner" is the tenant who gets ownership after paying three to four times what the property is worth; all done on funny money created by the bank on a a promissory note. This expansion of credit makes things more costly.
There needs to be a movement in this country to make property more affordable, not less. The gubment is in the business of propping up prices, when the opposite should happen. Prices should come back down to earth, which would allow the mass of humanity access to more affordable income producing property.
Maybe Mr. Stossel is a closet Distributist? Note, that does not mean "re-distributist" which he clearly is not. A Distributist favors the wide ownership of property; primarly the income-producing variety. This is the only way to get both big gubment and big business out of peoples lives, and allow people to live a life of stability and prosperity. As long as big business is allowed to dominate the economic realms, big gubment will be there in a vain attempt to remedy the problems caused by big business (i.e. outsourcing to China, pollution, etc.).
Comment: #8
Posted by: Billy Bob
Wed Dec 8, 2010 12:37 PM
For more on Distributism see:
http://www.youtube.com/watch?v=X1PtStipIsc
Comment: #9
Posted by: Billy Bob
Wed Dec 8, 2010 12:53 PM
Re: Billy Bob
"policies enacted by gubment today tend to encourage the working class to go into as much debt as possible" ??
Government does not encourage working class to go into debt. We are free to make choices there is no gun to our head. If you decide that you need to have something that you have not saved up for then you are deciding to go into debt.
I am an immigrant and this country has allowed me to get ahead by working hard and SAVING to buy investments but I guess most people today think they "deserve" these things without working or saving.
Comment: #10
Posted by: peter schu
Thu Dec 9, 2010 8:49 AM
Re: Jim Baxter
Good cat, Jim. I have three college degrees, have taken two foreign languages, traveled to three foreign countries, written numbers of articles, press releases and radio programs, and I have no idea of what you're talking about. I recommend William Zinsser's classic, On Writing Well.
jpbrody
Comment: #11
Posted by: jpbrody
Tue Dec 28, 2010 10:52 AM
Yea JPBrody,

You are an excellent example of the line from Isaac Newton: "No one is smarter than their criteria." Luck, Jim B.
Comment: #12
Posted by: Jim Baxter
Fri Jan 7, 2011 7:02 PM
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