The paradox is as clear as it is unsettling: capital, the most essential component of Western economic advance, is the one that has received the least attention. Neglect has shrouded it in mystery ù in fact, in a series of five mysteries.
∆ááááá The Mystery of Missing Information
ááááááá Charitable organizations have so emphasized the miseries and helplessness of the worldÆs poor that no one has properly documented their capacity for accumulating assets. Over the past five years, I and a hundred colleagues from six different nations have closed our books and opened our eyes ù and gone out into the streets and countrysides of four continents to count how much the poorest sectors of society have saved. The quantity is enormous. But most of it is dead capital.
∆ááááá The Mystery of Capital
ááááááá This is the key mystery and the centrepiece of this book. Capital is a subject that has fascinated thinkers for the last three centuries: Marx said that you needed to go beyond physics to touch æthe hen that lays the golden eggsÆ; Adam Smith felt you had to create æa sort of waggon-way through the airÆ to reach that same hen. But no one has told us where the hen hides. What is capital, how is it produced, and how is it related to money?
∆ááááá The Mystery of Political Awareness
ááááááá If there is so much dead capital in the world, and in the hands of so many poor people, why havenÆt governments tried to tap into this potential wealth? Simply because the evidence they needed has only become available in the past forty years as billions of people throughout the world have moved from life organized on a small scale to life on a large scale. This migration to the cities has rapidly divided labour and spawned in poorer countries a huge industrial/commercial revolution ù one that, incredibly, has been virtually ignored.
∆ááááá The Missing Lessons of US History
ááááááá What is going on in the Third World and the ex-communist countries has happened before, in Europe and North America. Unfortunately, we have been so mesmerized by the failure of so many nations to make the transition to capitalism that we have forgotten how the successful capitalist nations did it. For years, I visited technocrats and politicians in advanced nations, from Alaska to Tokyo, but they had no answers. It was a mystery. I finally found the answer in their history books, the most pertinent example being that of US history.
∆ááááá The Mystery of Legal Failure: Why Property Law Does Not Work Outside the West
ááááááá Since the nineteenth century, nations have been copying the laws of the West to give their citizens the institutional framework to produce wealth. They continue to copy such laws today, and, obviously, it doesnÆt work. Most citizens still cannot use the law to convert their savings into capital. Why this is so and what is needed to make the law work remains a mystery.
The solution to each of these mysteries will be the subject of a chapter in this book.
The moment is ripe to solve the problems of why capitalism is triumphant in the West and stalling practically everywhere else. As all plausible alternatives to capitalism have now evaporated, we are finally in a position to study capital dispassionately and carefully.
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