Is Economic Freedom for Everyone?
Heritage Lecture
by Hernando de Soto
Delivered on September 29, 2006 at the Heritage Foundation
Since The Mystery of Capital came out, many things have happened to us. Among other things, we've been called in by 32 heads of state, and we are working directly with some of them and with others through knowledge and training programs to try to bring into their countries the tools of freedom: to bring in markets where there are no markets, to bring people into property rights and into business organizations.
What I'm going to talk to you about is some of the things that we have learned since the publication of The Mystery of Capital, how we go about doing our research and how we go about finding out why, even if there is now no competing model to the market economy-because, since the fall of the Berlin Wall, it's the only game in town-we advocates of markets in the developing world still face difficulties. We're in difficulties in Afghanistan. We're in difficulties in Iraq. We're in difficulties in Mexico, where the election of people who believe in markets was won by a hair's breadth. In Peru, again, we've grown by a very small margin.
There's no Moscow, there's no Beijing centering anti-capitalist activities, and yet the pro-market message is hard to get across. The argument, of course, against the idea of markets is, "Well, if this is what you call freedom, look at the disorder it's producing. Why does it produce disorder? The whole idea was that we were going to get into an orderly society. Now that you've made us drop feudalism, now that you've made us drop Communism, now that you've made us drop central planning, you've now given us freedom, and look what it's doing to our country."
So what we try and do at my organization, the Institute for Liberty and Democracy (the ILD), is find out what's going on, and we have come to the conclusion that the message of how you start off a market economy, how you start off freedom, isn't that clear so far. In other words, the genesis, the beginning point. What happens when you're already in a market economy, when your powers are balanced, how you modify it, this is another matter. But when you're substituting a new order for an old one, you've got to start thinking genesis: how to begin.
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