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  • The 2017 Global Award for Entrepreneurship Research goes to Hernando de Soto

    The 2017 Global Award for Entrepreneurship Research goes to Hernando de Soto

    The Global Award for Entrepreneurship Research is the most prominent international award in entrepreneurship research with a price sum of EUR 100,000. De Soto’s analyses have had tremendous influence on policy throughout the world and were a main source of inspiration for the World Bank’s Doing Business program. Read More
  • 2017 Award Winner

    2017 Award Winner

    Hernando de Soto Peru  Institute for Liberty and Democracy For developing a new understanding of the institutions that underpin the informal economy as well as the role of property rights and entrepreneurship in converting the informal economy into the formal sector.   Read More
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How long will it take the West to remember that democratic capitalism requires strong property rights to set clear boundaries beyond which the state may not go? Like the entropic universe and all open spaces, the global market is a turbulent place with little respect for life. All living systems, whether natural or organised by man, originate and operate only in encapsulated spaces.

Whether we are talking about cells, molecules, body organs, computers, or social groups, each and every one is contained and constrained within a boundary: a membrane, an epidermis, a wall, or a legal right. 

Within the boundaries of our bodies, complex multicellular structures are sustained by the production of molecules that ensure cooperation and the exchange of information among cells – a process known as “signalling.” Impairments in this process can lead to the onset of disorders such as cancer. If detached from other cells or the surrounding matrix, cells usually die within a short time, a process called “anoikis”, Greek for homelessness.

Whoever ends “anoikis” in the greater Middle East will win the war on terror. That is why the West and its allies must help the 80% of the population whose survival depends on the boundaries needed to protect them and their assets (property rights and limited liability). They need the signalling mechanisms to detect danger (records and tracking systems that come from recording assets and firms). They need the adhesion molecules to connect with others and build increasingly complex and valuable combinations (legally enforceable contracts). And they need the ability to use assets to guarantee credit and create capital (shares and stock to divide, extend and collateralise property). Otherwise, the combined military forces of Europe and the US – and now Russia – will win nothing.

Read the rest of the article on the Economia


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