De Soto Capitalism Essay

A Capitalist Economy is the way of the future. As most of the world is making the change to a capitalist economy, Third World and former communist nations are not finding the same success that the United States and some European nations have. First off, Capital is wealth in the form of money or assets owned by an individual or organization. The reason why capitalism works so well in the west is because of the property systems, even in communist China their is property systems to a certain extent but they are much more restricted then the property systems of the United States. The something else that de Soto argues that is needed to produce wealth is, the formal property systems of the west. The reason why the United States has been so successful …show more content…
What this means is taking what is know as dead capital and turning it into active capital. So it would be like turning your house from warmth and shelter into a variety of functions that will secure the interests of other parties. By turning your house into active capital it means that you are able to secure the interests of other parties.What this basically means is your are creating a way to use your personal capital to gain the interests of other parties to say get a loan or to be identified for judicial or civic purposes. de Soto argues …show more content…
Formal property became the staircase to the conceptual realm where the economic meaning of things can be discovered and where capital is born.” de Soto, 51.
This ties back into the something else that de Soto is taking about, which is that legal property systems create the active capital needed to create the wealth that the United States is flourishing from. The reason that China is still having success as a communist nation is because they understand that land and the surplus labor that they have mass countries of are large enough capital pits that they can still succeed from not having the same freedom as the United