De Soto's breakthrough book was The Other Path (1989). He wrote it at a time when a Maoist terrorist group, Shining Path, seemed close to taking over Peru. De Soto saw in "property" not the enemy of the poor but their greatest economic hope: The poor needed to gain clear title to their land and homes so they could use that property as collateral for loans that would allow them to become entrepreneurs.
In The Other Path de Soto celebrated peaceful entrepreneurial disobedience. Peruvian powers tried to lock up markets: De Soto praised street vendors who disobeyed regulations and expanded informal trade. Peruvian powers tried to lock up public transportation: De Soto praised drivers in their vans, station wagons, and mini-buses who disobeyed regulations and got people to work. Leftist ideologues favored governmental redistribution. De Soto praised the initiative of those without homes who moved onto uninhabited and unimproved land.
The worldwide evidence is that big government redistributes wealth to bureaucrats and hurts the poor. People get rich not by investing labor or capital in productive enterprises but by gaining political influence. Businesses begin competing not to serve customers but to build ties with bureaucrats. Political efficiency becomes more important than economic efficiency. Liberal ideologues talk about curtailing lobbyists but in actuality increase their reach: As de Soto notes, "In the redistributive state, the enviable capacity to be generous with other people's money is an invitation to corruption."
De Soto's 1989 critique of Peru's rulers applies equally well to Obama-ites who see government as "a mechanism for sharing a fixed stock of wealth among the different interest groups that demand it." The redistributionist ethos does not acknowledge "that wealth and resources can grow . . . and that even the humblest members of the population can generate wealth." We need pro-entrepreneurship policies that redistribute wealth to those who are shaking up society, not to those who are shaking down business leaders.
Regarding healthcare, it doesn't both me if some doctors become rich by saving lives. Our society becomes poorer if those who could be great doctors instead see that self-preservation requires them to become not-so-great politicians and lobbyists.
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