Hernando de Soto's subject in The Other Path is what is pejoratively called the underground economy, but what he calls the informal economy--informal in the sense that it is at the margin of that economy, described as formal, which is recognized as legitimate and is regulated by laws, ordinances, and official administrative regulations. The first half of the book examines informal economic activities in Lima, Peru. It is concerned with the occupation and settlement of vacant public land by poor, new immigrants, with street trading and markets established on private initiative and without official permission, and with public transport. Inquiry into these activities and their history over many decades has been conducted by the author and his helpers at the Instituto Libertad y Democracia, of which he is the president, and is presented in a lucid and exemplary manner.
The title of the book is a clue to its intent. In calling it The Other Path, de Soto clearly intends to contrast the activities of these poor, rural migrants--in their daily struggle to establish and better themselves by finding a niche within the interstices of an indifferent and often hostile society--with those of the communist so-called Shining Path, which has chosen the way of armed struggle. Implicit in this contrast is the view that social betterment and prosperity are not to be attained by class struggle culminating in the revolutionary violence and--so its proponents hope--in the establishment of a classless utopia. Instead of entertaining this forlorn hope, the emptiness of which is attested to by the experience of the poor and the downtrodden in what used to be celebrated by its many Western admirers as the socialist sixth of the world, it is in the path offered by the free economic and political institutions of the West that the poor and oppressed should see their deliverance. That de Soto considers such a message to apply not only to Lima and Peru, indeed to have universal validity, is clear from the subtitle of his book, The Invisible Revolution in the Third World.
Against what is such a revolution waged? On pages 140-41 de Soto prints a graph titled "Sequence of Administrative Requirements for Adjudication of Undeveloped, State-Owned Land." The graph, extending across two pages--with its black dots, its arrows, its straight and broken lines, performing an intricate dance on the page--might seem to be an arresting specimen of abstract or minimalist art. What is does, in fact, is to chart the two hundred and seven steps that a hapless applicant has to follow over the years in order to wrest legal recognition of his title to a piece of vacant state land that he has improved and developed. As we follow the desperate progress of the postulant and his papers from office to office, from the Lima Municipality, to the Government Palace, to the Ministry of Justice, to the Land Registry, to the Public Notary and back again, we are reminded of poor K's forlorn odyssey in Kafka's Castle. And as in The Castle, we remain doubtful whether the applicant's affair will in the end be settled and a decision reached and made public. The point that this graph makes is made, so to speak, even more graphic, by some data that de Soto provides. "Since 1947," he writes, "the state has produced nearly twenty-seven thousand laws and administrative decisions annually."
It is against such a state of affairs that this book calls for a revolution. But before we can judge whether such a revolution is feasible or likely to be successful, it is necessary to find out how such a state of affairs came to exist. Peru formed part of, indeed was the center, of
...
Read Full Article
|
