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Source link: http://archive.mises.org/16877/when-capital-is-nowhere-in-view/

When Capital Is Nowhere in View

May 10, 2011 by

Some say that we should grow our own food, buy locally, keep firms small, eschew modern conveniences like home appliances, go back to using only natural products, expropriate wealthy savers, and harass the capitalistic class. This paradise has a name, and it is Haiti.

FULL ARTICLE by Jeffrey A. Tucker

{ 51 comments }

Joop May 10, 2011 at 8:47 am

Fantastic article! One of your best, Jeff. I wish every person studying international development could read this article.

Joshua May 10, 2011 at 8:56 am

It should be noted that these things “grow our own food, buy locally, keep firms small, eschew modern conveniences like home appliances, go back to using only natural products” can be done without property rights violations whereas these “expropriate wealthy savers, and harass the capitalistic class” would probably involve violations (although harassment could be done in a non property rights violation scenario). The key point is are you trying to force these practices on others or are these choices you make for yourself?

I really like the show No Reservations, because it shows people and culture in a straightforward way that shows that the world is different but very similar. It’s hard to be jingoistic when you see this simple truth.

J. Murray May 11, 2011 at 5:54 am

The locavore movement has a rather large contingent that believes larger operations exist to subsidize the locavore movement.

MLJ May 13, 2011 at 12:59 pm

Yeah. The thing about our government regulating things to death, is that the regulators decide that the “regular” way of eating shall be to eat corporate food like twinkies. They do NOT want you to grow your own food.
And at certain times, the U.S. government DOES loot accumulated wealth. Look at raids on natural food stores’ (or farmers’) dairy products, medical marijuana clinics, liquor establishments, and any individual with a large stack of cash.

Patrick Barron May 10, 2011 at 9:15 am

In “The Mystery of Capital” Peruvian economist Hernando de Soto explains the two main causes of third world poverty–lack of property rights and government regulations that make it almost impossible for the average person to participate in the legal economy. The vast majority of land in third world countries does not have perfected title, so no one will build any substantial structure on it. De Soto calls this land “dead capital”. Shanty towns are built on this land and occupancy is allowed but only on limited, cultural basis (your family has lived in this shanty for years, so you can live in this shanty). De Soto’s economic researchers documented the vast time (years!) and expense (several years’ expected earnings!) required to get a license to operate legally even the simplest shop, such as a seamstress. So, no property rights in land means no capital investment, and impossible licensing requirements mean vast unemployment, underemployment, and criminal activity.

fundamentalist May 10, 2011 at 9:20 am

Nice analysis!

Marxists got the name right, but for the wrong reason. Capitalism is capitalism, not because it protects the accumulated wealth of capitalists, but because it encourages greater use of capital instead of pure labor.

BTW, I heard an engineer talk about building methods in Haiti and he said the problem is corruption. Contractors use smooth river stones instead of crushed rock in their concrete in order to save money, but the smooth river stones don’t let the concrete attach. Also, they allow the rebar to rust before putting it into the concrete. The rust continues inside the concrete and weakens the rebar and the concrete.

Stefano May 10, 2011 at 9:26 am

I would argue it goes beyond the government, to the lack of understanding of the importance of capital in the population.

I have an acquaintance who is a missionary in Haiti. He studied agriculture at Auburn, and then went back to his home to run a farmer training program.

The biggest lesson he has to teach is this: If you acquire a breeding pair of goats, don’t eat them immediately; Breed them, milk them, and eat some of the offspring.

In other words, delay consumption now and you can consume more later. This is, apparently, a foreign concept down there.

Jeffrey Tucker May 10, 2011 at 9:34 am

Yes, it seems clear that there is a problem with high time preference, and Bob mentioned this in his piece. As Guido Hulsmann argues in Ethics of Money Production, a consequence of government plunder in all forms is to raise time preference higher than it would otherwise be. In that case of goats, let’s say a person opened a goat farm. It would be like clockwork: officials would steal it in one season. So yeah, you think mainly of getting by.

fundamentalist May 10, 2011 at 11:34 am

I agree with Jeff that the habit of “eating the seed corn” may come from the insecurity of property. About a decade ago the UN tried to give oxen to Ugandan farmers in order to elevate their productivity to the level of 2000 BC. They had been using hoes. The Ugandan farmers refused to take the oxen because 1) they were convinced their neighbors would steal and eat them and 2) they didn’t want to arouse the envy of neighbors.

In addition to eating their livestock instead of letting them breed, poor farmers tend to eat the best animals and keep the worst for breeding. Of course that causes the quality of their herds to deteriorate sharply over time. They need to learn to eat the worst animals and keep the best for breeding.

The late Peter Bauer had the best writing on third world development out there. He showed that if the poorest farmers enjoyed property security they would find inexpensive ways to improve their land and increase productivity and wealth.

BTW, check out the Mercatus Center’s (George Mason U) work on Botswana. It confirms Bauer.

Koblog July 19, 2011 at 7:06 pm

I read a very similar account years ago by an author dealing with what he termed “the politics of envy.”

His story involved missionaries giving gasoline powered rototillers to villagers in Africa so they could farm more efficiently.

The story goes that the missionaries came back a year later only to find the rototillers in a shed, unused. The reason given was the same: the neighbors in the next village would become envious and attack them if they used the tillers.

In socialism everyone is equal…equally poor and destitute.

Compare this to an economic system where advancement is lauded and something to be emulated, not destroyed.

Here, the squeaky wheel gets the oil. There, the nail that stands proud is hammered down flush with all the others.

Sam Bostaph May 10, 2011 at 9:44 am

Jeff, that last paragraph is a classic. Not only should the WSJ print it on the editorial page, where the editors put classic quotes, but it could be the core principle of another (I hope) article by you directed specifically at the greenos.

Deefburger May 10, 2011 at 10:07 am

Excellent piece. You are on a roll.

I’ve been experimenting in my back yard in what has been called re-purposing. It is a means of preserving the capital investment in the material and re-using the material but in different ways. In the process, I try to keep in mind the nature of the solutions I come up with by concentrating on what I call “third world solutions”. It’s a way of maintaining a very basic source of material but getting the most out of the current form or the substance itself.

It’s how I re-discovered wood ash and clay as brick. It’s how I found a simple method of charcoal production and soil amendment and so on.

What I also learned is how specialization leads to capital accumulation. I have to divide my available resources and my time into compartmentalized processes. If I was not alone, it would be easier to do.

If I make a fire, I get the benefit of the heat and the ashes.
If I mix the ashes with water and sand and clay (I have Adobe soil), I can make bricks.
If I then use the bricks to make a hearth, I can raise the temperature of my fire, and make stronger brick.
If I raise the temperature of my fire with stronger brick and bellows, I can carbonize a piece of wood.
If I hollow out the now carbonized wood, I can make a crucible.
If I put the right rocks in my crucible, I can refine a metal out of it, Probably tin or copper.

Each of these processes is available to third world people. But each one requires a great deal of time and effort. I can do it. But I don’t have much time for other things, like eating and gathering food. I imagine that in Haiti, people have a problem with protecting the capital from pillage and in organizing trade of services. What they need is sound money and sound organization. The current form of modern government is not conducive to the formation of functioning social institution like sound money and non-aggressive government organization.

If I were to take my experiments to Haiti, I would be spending my time protecting my capitol instead of trading with it. Without social organization there is no protection of property, and so there is no accumulation of capitol. Bricks are capitol. But if I go to the river to get more clay, I run the risk of coming back to no bricks from the last days labor. If I leave the fire to find more food, I may come back to no larder.

The only reason I can do what I do in my yard is because it’s my yard and my neighbors generally respect that fact. So I say in addition to capital, there is also the right to property that is essential in a progressing society.

fundamentalist May 10, 2011 at 12:08 pm

Excellent experiment! The late great Peter Bauer demonstrated that poor people will do exactly as you did, and even more, if they are secure in their property.

Mitch May 10, 2011 at 5:33 pm

Interesting comment to an intriguing article. Thanks.

A recent EconTalk discusses high time preferences, is related to Tucker’s entire article, and with Munger, it’s a great listen: http://www.econtalk.org/archives/2011/04/munger_on_micro.html

coturnix19 May 10, 2011 at 9:42 pm

Would you agree that existence [but not dominance] of common, public property is just as essential?

Daniel May 11, 2011 at 12:56 am

Do you mean commons or do you mean public (government) property?

The former is cool. The latter is a contradiction in terms and can be terribly repressive to poor people trying to scratch by.

J. Murray May 11, 2011 at 6:39 am

Public property is not conducive to expansion of capital and improvement of the well being of the population. Public property is essentially the same thing as private property in a society where no one respects private property. No one will put any effort improving or maintaining the public property because any efforts that one person puts in can be immediately looted by someone else. Why bother sowing seed, improving soil, or building a structure if when you return the next day, the “public” ate the crop, ruined the soil, and dismantled the structure for the raw materials? Even if some law passed that said no one can dismantle that structure, it means that if you have a better use for the land, you can’t do anything with it by virtue someone else did something different.

Americans and Europeans are used to seeing public land as a positive, like parks. This is mainly because we had a lengthy period of time where public lands were effectively abolished, particularly in America where we didn’t have a long entrenched royal class that made the whole country public land. With such a giant buildup of private land to allow for capital to form and be used, we haven’t felt the negative effects of the government gobbling up the remaining land and labeling it public because we didn’t have any use for it at the time. This is why we have places like Yellowstone or Central Park and any attempts by the Haitian government, even if we transplanted our entire government apparatus there to manage it, would immediately fail.

The reason we have a Central Park here and that Haiti would cut down all the trees and eat all the animals in the zoo is because capitalism is, surprising to most people, environmentally friendly. The entire concept of capitalism is doing more with less. The more you produce, the fewer resources used, the less garbage created and thrown away (I see CO2 going up the stack as lost money, I paid for the materials that are making CO2 and I have better things to do than throw away money, and would love to find a way to capture it and use it for something productive, plenty of businessmen agree with me), the higher the profits go. If all 310 million of us were expected to subsist on the same level of Haiti, we’d take up tremendous amounts more land, deforest large stretches of our wilderness (fun fact, capitalism in the form of tree farming saved the California Redwood), and pollute to such a degree that the native in those old commercials would die of dehydration from all the crying. Haiti is a far more disgusting place than America despite their lack of all the water heaters and dishwashers that are supposedly destroying the environment.

Government property is the worst of both worlds. It’s land that is removed from the private sector that can be used for something productive and is effectively blocked from even the most meager of public land usage. In a country like Haiti, maintainance of government property would require a sufficient capital base to avoid completely driving the populace into steep poverty, which is a contributing factor to the problems in Haiti. As noted in the main article, the Haitian regime (no matter how benevolent and well intending the leaders may be) still needs funding to operate. Remember, government doesn’t do anything of value and requires confiscation to operate. The excess production in Haiti is so poor that government effectively has to take anything above and beyond basic subsistence to exist, which creates the problem noted by Jeffrey as anything that can be expected to be used for capital formation is removed to fund government operations. Even “proper”, “good”, or as socialists like to pretent, “competent” government would run into this problem. Haiti is in such a poor shape that the presence of any government at all ensures the nation will forever be poor. The Haitian people don’t produce enough above and beyond their own survival to be burdened with a large, unproductive expense like government. The only reason the US can even have a government that doesn’t immediately drive the population into poverty is because we effectively didn’t have one for 150 years, one that had any dealings with most of the people and one that, for the most part, never confiscated capital accumulation (ie no income tax) for operation. This allowed us the necessary capital growth to produce in such immense quantities we can hand over 50% of our real production to government (combined local, state, and federal spending is over 50% of our economy) and still have so much left over we can afford luxuries.

Not that government is a good thing even with the resource base to support it, I’d rather not hand over half my annual salary (either directly or through sales taxes) to an entity whose only purpose is to justify someone else not contributing (welfare) or spending that to hire people to tell me what I can’t do with the 50% that’s left (regulation).

John July 19, 2011 at 8:58 pm

Governments at many levels are now leasing and selling off government assets and property to fund themselves; assets that were bought, developed, and paid for in the first place by taxpayers. Same taxpayers who will get to pay again to use the assets fior which they had already paid.

kenny May 10, 2011 at 10:24 am

I had the pleasure of employing many Haitian refugees in the 90′s. Tremendous courage drove many of them in small boats in search the USA’s shores. One employee in particular Deuisel landed illegally, obtained his citizenship, and, after many years of schooling and working 2-3 jobs at once now owns 2 of his own convenience stores. He has went through the process of bringing his wife and children to the USA as well. He speaks 3 languages fluently and has proven this articles point that his ability to save his earnings and not be harassed or looted by a corrupt government has allowed him prosperity.

David Roemer May 10, 2011 at 10:34 am

There is a fuller picture of the situation in Haiti in Hernando De Soto’s book:
The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

De Soto uses Haiti as an example of a country where there is a tremendous amount of wealth in the form of home ownership and the ownership of businesses. The problem is that the owners don’t have a lawful title to their property, as they do in the West. In the West, there is an elaborate system of public deeds, titles, and articles of incorporation, contract law, courts of law, etc. This enables individuals to increase their wealth by saving and investing.

I believe the reason law and order developed in the West, and not in the “rest,” is the fall of the Roman Empire in the West. When Rome fell, the Roman Catholic Church’s influence increased. The Roman Catholic Church gave us the first modern governments, the first parliaments (in the form of ecumenical councils), and the first courts of law.

Jeffrey Tucker May 10, 2011 at 10:39 am

ok but remember that title is just a piece of paper, and this can be privately supplied as it has been historically. What’s important is the property right itself: own, defend, protect, trade, manage, keep proceeds, etc. A piece of paper alone confers nothing.

noah May 10, 2011 at 11:55 am

But a piece of paper can be helpful when trying to borrow money to grow your business. I think De Soto’s point is that formalizing the property right more easily allows the property to be used as collateral, and hence put the “dead capital” to active use. Using your house as an ATM can be a good thing, assuming you invest the proceeds to create wealth instead of squandering them.

Drigan May 10, 2011 at 2:04 pm

*sighs* Why do I have to keep correcting this? You even used the term in a positive light, but it’s still wrong!!!!

Roman Catholic = a rite or ‘ritual’ within the Catholic Church.
Roman is one of 23ish forms of worship within the Catholic Church.
The term “Roman Catholic” was invented as a pejorative to attack the Catholic Church.
A Roman Catholic church is a building that is part of the Catholic Church, and happens to be from the Roman Rite.

I know, we all know what you mean, but for Pete’s sake can’t we start using the correct terms?

J. Murray May 11, 2011 at 6:44 am

I don’t see it as a negative. The Vatican is in Rome, so it’s Roman Catholic by virtue of having the head of the organization physically located in Rome.

MLJ May 13, 2011 at 1:06 pm

While we’re at it, I forgot to say that “peddling” a bicycle should be “pedaling” a bicycle.

John B May 10, 2011 at 11:05 am

Yes. A terrific exposé of a thriving economy being more than making things go around and around.
It has occurred to me that one of the defining aspects of civilisation, besides the willingness to exercise restraint, is in fact linked to that, and it is the willingness to defer consumption in order to build.
And that is severely discouraged by the Keyenesian economic mentality that now prevails of low interest rates and high ‘inflation’.

keithsan May 10, 2011 at 11:08 am

That was a great line! Its called “Haiti”. Interesting article but that was too funny.

Martin OB May 10, 2011 at 11:41 am

Nice article, Mr Tucker, especially the last paragraph.One thing, I think you are too light on the responsibility of Haitians themselves. Are we to believe Haiti is full of Rothbardians who despise government because of its predatory nature, or is it that they want those predations to be shared with the public in a more equitable way? I’d bet for the second case. Also, I can’t believe all the voters are trying hard to find, say, a classical liberal candidate, but somehow no one dares step forward. I remember Robert Murphy’s account was much less complimentary, and it rang more true. It looks like Haitians have a chronic mistrust of everyone who is not so poverty-struck as themselves, so they mistrust government officials, they mistrust rich people and they mistrust foreigners who come to help, as Mr Murphy experienced, also illustrated by how they blamed the UN for cholera.

Proposals? First, of course, more education on sound economics. Find some locals who are receptive to the message, and let them spread the word.

A higher-level approach would be for a foreign country, like America, to buy or rent a small patch of land on Haiti, where American-style civil legislation would apply. Something like Hong Kong (or like Guantanamo, but for a less controversial purpose); a playground to test the alleged mutual benefits of immigration into America, without the demographic risks. The problem is, of course, it would require the cooperation of the Haiti government.

Ned Netterville May 10, 2011 at 11:43 am

What a compelling metaphor! You are indeed on a roll. I’ll be sharing this with some locavors I know. Thanks.

Stefano May 10, 2011 at 1:06 pm

Ned,

There is an important difference between locavorism and Haiti.

Choosing to buy local produce, for example, is different than choosing to destroy the mechanism whereby others can make their own choices. I grow some of my own produce, and buy a great deal from a local farm. There are benefits to this, both monetary and otherwise.(I can’t resist inserting a plug for my essay, “Capitalism at the Farm Stand”)

The issue arises when someone makes this decision for you, as in Haiti.

One other point, though; in America, government action does not favor the small farmer or the locavore; it favors the large conglomerates through subsidies and regulatory action. (Try to buy raw milk, for example) It is the essence of crony capitalism. Buying from local farmers, to me, is a blow against the State, not the corporation.

Michael Orlowski May 10, 2011 at 11:57 am

“Many people (I’ve been among them) rail against the term capitalism because it implies that freedom is all about privileging the owners of capital.

But there is a sense in which capitalism is the perfect term for a developed economy: the development, accumulation, and sophistication of the capital-goods sector is the characteristic feature that makes it different from an undeveloped economy.”

That’s exactly what I was thinking this past year when the whole “capitalism” controversy was at its peak. Someone should tell Sheldon Richman this( no offense to him, just a disagreement). But either way, who cares if a many thinkers some decades and centuries ago thought of capitalism as mercantilism ? They didn’t get their terms right.

HL May 10, 2011 at 12:17 pm

Call me crazy, but I bet if every single UN, World Bank, US, European, etc, aid agency left Haiti and not a dime more of foreign aid funds flowed that way, Haiti would be a relatively peaceful and prosperous place within ten years. Even the undermenschen have their home grown Hank Reardon’s just waiting to be freed.

Stefano May 10, 2011 at 1:10 pm

Haiti vs. Dominican Republic. On the same rock, but the Dominican Republic’s GDP is 8 times that of Haiti, and they’re not exactly a bastion of economic liberty, either.

The Anti-Gnostic May 10, 2011 at 5:12 pm

The Dominican Republic seems to have a good plan for avoiding the fate of Haiti: keep Haitians the hell out.

newson May 10, 2011 at 9:56 pm

hoppe makes some political incorrect corrections to mises’ views (pertinent to haiti). kurtagic is blunter, but along the same lines.
http://mises.org/media/4691/Necessary-and-Sufficient-Causes-of-the-Industrial-Revolution-Some-Critical-Remarks-on-Mises-and-His-Explanation
http://alexkurtagicofficial.blogspot.com/search/label/Haiti

LugNut May 10, 2011 at 1:07 pm

I know this might seem odd to bring up religion; but to me , one of the fundamental problems with Haiti is voodoo. It is the most pervasive evil force down there. It teaches people not only not to trust anyone, but encourages revenge and living for the moment. Hard to breed good capitalist behavior with such a backward faith system.

61north May 10, 2011 at 7:33 pm

I think you are onto something. Two of the basic tenets of the Christian faith are to “love your neighbor” and “Thou shalt not steal.” As a result, “Christian” societies generally assume cooperation between individuals and respect for private property instead of the antagonistic attitude among people found in some other cultures. Christian societies are not without their problems, but the difference in attitude and basic assumptions is noticeable. This difference tends to support individual property rights and allows the productive use of capital.

newson May 10, 2011 at 10:09 pm

to lugnut:
why? perhaps it’s unrealistic to expect that haitians adopt a western legal system, and voodoo is the system that best suits the indigenous people. each to his own.
http://blog.vdare.com/archives/2010/01/20/haiti-anarchism-one-cheer-for-voodoo/

Antonio May 10, 2011 at 1:37 pm

Haiti at it’s present state, should not be filmed for pure entertainment only. It’s insensitive to sample the local food while most of the locals are going hungry.
I like A.B., but this is the wrong country to go to unless to raise money for charity.

HL May 10, 2011 at 9:57 pm

Nonsense. And Haiti has been in its present state, more or less, since the French left.

newson May 12, 2011 at 3:21 am

out comes the pin from the grenade.
http://is.gd/pB0Lrn

Anthony May 10, 2011 at 11:50 pm

What if you pay for the local food and that allows the local restaurant to buy a fridge? Buying things from Haiti provides a benefit to Haitians… your sensitivity does no one any good.

coturnix19 May 10, 2011 at 10:00 pm

Wow! This repeats, almost word-in-word an old joke from soviet union, albeit with a bit different punchline.
=====
On a street, a salesman sells beer from a motorized barrel. An old man comes by, and asks
‘How much for a beer?’, – ’0.1 rubl’ -’here, take 200 rubl, I purchase the whole barrel. Then, the old man proclaims out loud ‘Free beer, get you free beer’. A crowd starts to gather, as everyone tries to get free beer, eventually tension arises and people start to fight. Soon, police arrives and tries to pacify the crowd. Policeman asks the old man ‘What’s going on here?’ – ‘I was giving beer for free’ – ‘Why would you do that?’ – ‘You see, I am an old man, retired, i figured I will not live long enough to experience communism, so i decided to see what it would be like’
============

Deefburger May 12, 2011 at 3:46 pm

@coturnix19

Excellent joke! Very true too. I am a philosopher of sorts and I have found that a really good joke points out the ugly truth in anything it touches. You summed up the whole blog in one paragraph!

Keith May 14, 2011 at 8:11 am

Brilliant piece, very thought provoking.

The third world does provide an eye opener. Corruption is so much less camouflaged with sophistry, for example, to set up a business in Angola, requires an Angolan as a 51% “share holder” – in the name of socialism of course.

If the business is anything interesting, then that “shareholder” will need to be either a general or one of the President’s family, who will say; “Give me… and I want a car, and expenses account and a salary of…”

a piece about patents
Jeffery,
you will probably find this piece from the guys who do Opera web browser interesting. Apparently an “Update Button” is patented, US patent 7222078 ! One more stupid mercantilist block on innovation.
http://my.opera.com/portalnews/blog/2011/05/13/software-patent-insanity-strikes-down-small-time-developers

P.M.Lawrence May 23, 2011 at 9:32 pm

Now, to be sure, there are plenty of Americans who are firmly convinced that we would all be better off if we grew our own food, bought only locally, kept firms small, eschewed modern conveniences like home appliances, went back to using only natural products, expropriated wealthy savers, harassed the capitalistic class until it felt itself unwelcome and vanished. This paradise has a name, and it is Haiti.

No. Apart from “expropriated wealthy savers, harassed the capitalistic class until it felt itself unwelcome and vanished”, that’s precisely what Haiti used to be – until the government, in support of U.S. interests, destroyed the capital base by such things as wiping out the avenues of capital accumulation (like the local “Creole pig”) and stopped the agricultural sector from supplying local food in favour of cash crops for export that gave the kleptocracy more to tap into. And things really were better when it was like that.

Koblog July 19, 2011 at 7:15 pm

Property rights are extremely important, no doubt, but our system also has something called “honoring contracts.” You know, “a man’s handshake means something.”

The Haitian government, like all socialist systems, does not honor contracts. Who in his right mind would bring in enough capital if the government would immediately renig on the contract.

The story’s told of a foreign guy opening a car battery plant in the post-USSR Russia. He got it up and running, only to have the Russian government come in and “nationalize” it because it was deemed critical to military production.

How many times will that happen before capital simply flees?

Check out Hugo Chavez’s Venezuela for a current version of such theft.

K Carpenter July 19, 2011 at 7:24 pm

Funny you mention Chavez, who is undergoing Chemo, I understand. They estimate his oil seizures and other nationalizations have his empire now valued at 70 billion. Here is the saddest part. He is taking the revenue from the oil production and using it to feed social programs, buy votes and congress, control generals and press. Instead of reinvesting oil profit into further exploration and drilling, he is losing the very advantage that provided him power. Who knows how much he is giving to Bolivia, Ecuador and Cuba? Venezuela actually had to import some gasoline or oil recently I heard.

It seems a large government will plant the seed for collapse and a dictator who, in turn squanders the capital during tenure. It is a mad race to the bottom for those societies.

John July 19, 2011 at 8:50 pm

Great article, but I would appreciate some examples of what the Haiti government does to steal or consume any / all accumulated wealth (capital). Is it done by politicians to enrich themselves or merely used to support people through government benefits. Is there a fairly large government that needs supporting? I know little about Haiti. Thank you.

miguel July 19, 2011 at 9:29 pm

The way I tend to think about this problem is one that has to do with property rights. In Haiti, what you are saying in effect is that there are no property rights and no rule of law. Haiti is a jungle, where the strong (i.e., those with guns and the will to use them) can take anything and everything they want. In that situation, the true potential of Haiti’s “human capital” will never develop. Why would anyone work to create something of added value– a chair, a prize cow, a farming technique, a tool– when it will just be stolen from you?

Susan Lee July 21, 2011 at 5:23 pm

Oh my Goodness. I have learned SO much, coming here from American Digest, today. I have wondered for a long while why Haiti is the mess that it is, and could not get any further than thinking they must not have the raw materials… (North America is so blessed in her RM’s.)
Y’all have given me a whole lot of other “ingredients” for a successful economy to think about. Fascinating.

Susan Lee

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