The Mystery of Capital - Chapter 1

An extract from Hernando de Soto''s revolutionary new book, The Mystery of Capital: why capitalism works in the West but fails everywhere else.
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Third World and former communist nations do not have this representational process. As a result, most of them are undercapitalized, in the same way that a firm is undercapitalized when it issues fewer securities than its income and assets would justify. The enterprises of the poor are very much like corporations that cannot issue shares or bonds to obtain new investment and finance. Without representations, their assets are dead capital.

The poor inhabitants of these nations ù the overwhelming majorityáù do have...

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