www.adn.com/opinion/story/3234120p-3264116c.html
The business directory allows you to locate stores and services statewide. He simply wanted to know why capitalism flourished in the West but didn't in poor countries. By studying poverty in his own native country and later in others, he found the answer. Contrary to popular thought, the problem wasn't a cultural bias against entrepreneurship or a country's inability to sell assets in world markets. The primary reasons for intractable poverty -- in spite of the fact that the poor work hard and are amazingly enterprising throughout the Third World and post-communist societies -- are there is so little private property, and legal and institutional systems allow only small population segments to accumulate wealth. During the 18th, 19th and early 20th centuries, when the United States was a Third World economy, it crafted property laws that differed from its predominantly British legal system. The new system allowed people of humble origins (many of them squatters and scoundrels) to gain economic rights that only "nobility and the high bourgeoisie" had before. Our forefathers surely had no idea of the global implications of their revolutionary accomplishment. Capitalism essentially became a tool for poor people to prosper. How did the United States and other developed nations become so prosperous? According to the Peruvian, it was because, ultimately, every parcel of land, every building, every piece of equipment or store of inventories was represented by a property document and protected by the rule of law. The single most important source of funds for new businesses in the United States is a home mortgage. It provides a link to the owner's credit history, an address for providing and collecting payments for taxes and utilities and a foundation for creating securities that can then be sold in secondary markets. The mortgage, the piece of paper, transforms "dead" capital to "live" capital. This representational process is lacking in Third World and post-communist countries. Some 70 percent of the world's 6 billion inhabitants are considered poor, but they have abundant unrecorded assets. In Lima, researchers found 90 percent of all small industrial enterprises, 85 percent of urban transport, 60 percent of the fishing fleet and 60 percent of food stores operated outside the law. Turns out these millions of shantytown dwellers who had migrated to the city could not afford to be law-abiding. It cost too much and took too much time, so they lived by their own rules. There, too, millions of poor people seeking a better life have recently converged upon the cities, illegally occupying government land. Their anonymous presence routinely overwhelms government's ability to provide services and regulate activities. This column merely touches on the economic strategy that empowers citizens, through property rights and the rule of law, and increases their countries' wealth. It is a great compliment to the United States that the model our forefathers designed is today sought for replication throughout the world. What astounds me is that our own economic and environmental policies seem hellbent on going the other direction: destroying property rights, not protecting them. Paula Easley is a public policy consultant and former executive director of the Resource Development Council for Alaska.
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