Sunday, September 27, 2009

The Power of the Poor

Hernando de Soto is one of my heroes.  If you haven't read 'The Other Path' then you should stop now and go do that.  I'm still working on my decision of what I would like to do with my life, but working with his Institute for Liberty and Democracy is definitely near the top of the list. 'The Other Path' and 'The Mystery of Capitalism' were two of the formative books that began my work on Democracy 2.0.

De Soto has a new documentary called 'The Power of the Poor' that is going to air soon on PBS.  Here is the trailer:

De Soto's website says that the show is supposed to premiere on October 8 at 10 Eastern.   Here in Austin, our first viewing will be KLRU on October 20 at 10 PM.

De Soto's website has an essay contest going.  The question is:  “What institutions can enable the world’s poor to realize their power and achieve prosperity?” This is my answer (and entry in the essay contest):

“What institutions can enable the world’s poor to realize their power and achieve prosperity?”

There are thousands of poor communities throughout the world. Each has its own culture and causes for it's current situation. There is no one path that every poor community can follow to prosperity. The following guidelines must be custom fit to each situation.

War is the greatest destroyer of prosperity. Prosperity cannot exist in a war zone, or in an area under constant threat of war. Therefore, prosperity can only exist within a political state that is strong and wise enough to keep armed uprisings, ethnic violence, race riots, and foreign invasion at bay.

Within such a state, any group (race, religion, gender, caste, etc.) that is excluded from the possibility of prosperity is a daily threat to everyone else's prosperity. Those who are excluded will always have a vested interest in destroying the current system and building a new system that includes them. Everyone must have equal protection under the law before the poor can rise.

People who are continually victimized will always remain poor. Before a community can begin the climb out of poverty a police and court system must be put into place. The police must act impartially to protect every person, not just a favored ethnic group. The courts must act quickly to redress grievances, and must have the power to both punish wrongdoers as well as to restore innocent victims.

Bribes, business licenses, high fees, other informal taxes, and high income taxes smother prosperity and keep poor people poor. Haggling also benefits the rich at the expense of keeping the poor held down. Each of these must be minimized as much as possible. The same court system that punishes masked thugs must also have the power and autonomy to take on corrupt bureaucrats and other officials who abuse their positions.

Courts that function at this high level can only occur in a society where people have a great deal of freedom of speech, and where there is a vibrant free press. The free press needs to operate as the collected voice of the people and champion of the victims whom the courts attempt to ignore. The press cannot perform this function so long as it is in the control of corrupt people.

Poor people need to be able to buy and own property. There will have to be some centralized authority to record sales and ownership.

Poor people need access to broad markets where they can buy products from the outside world and sell their wares to each other and outsiders. As the local markets mature they will begin to offer services that the poor need as they move into the middle classes. The most important of those services are medical care (including preventative medicines, emergency services, and long term care), banks (for both loans and earning interest on savings), and insurance.

And finally, the poor need education. That education must include the value and workings of all of the above systems.

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