Rejoinder to Mathieu

Abstract

De Soto rejects Mr Mathieu's suggestion that they share a ‘consensus’. He argues that Mr Mathieu is mired in a Marxian bias toward property as ‘theft’. De Soto notes that theft exists with or without property. For him, the real issue is whether their houses and businesses are better protected outside or within a legally enforceable property system. When that question is put to the poor, their answer, insists de Soto, is a no-brainer. De Soto further argues that bringing the poor into the legal property system will give them the same property representations to protect their assets and build capital that are available to the elites in their own country and the West. Otherwise, their assets will remain financially and commercially invisible, and they are doomed to poverty. Far from being ‘theft’, legal property is the poor's ticket into the modern economic world. That the rich have taken advantage of the poor is not in dispute. But de Soto insists that the poor would prefer recourse to legal institutions rather than guns. To support his differences with Mr Mathieu, de Soto explains in detail how good property law can benefit the poor in the developing and post-communist world—whether or not they want to become entrepreneurs.

Keywords:

• extralegal land and businesses
• exclusion
• formalisation
• legal property system
• enforceable property rights
• wealth creation
• capital formation