The Other Path: The Economic Answer to Terrorism

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In this, his classic book on the informal economy of Peru and the reasons why poverty can be a breeding ground for terrorists, Hernando De Soto describes the forces that keep people dependent on underground economies: the bureaucratic barriers to legal property ownership and the lack of legal structures that recognize and encourage ownership of assets. It is exactly these forces, de Soto argues, that prevent houses, land, and machines from functioning as capital does in the West--as assets that can be leveraged to create more capital. Under the Fujimori government, de Soto's Institute for Liberty and Democracy wrote dozens of laws to promote property rights and bring people out of the informal economy and into the legitimate one. The result was not only an economic boon for Peru but also the defeat of the Shining Path, the terrorist movement and black-market force that was then threatening to take over the Peruvian government. In a new preface, de Soto relates his work to the present moment, making the connection between the Shining Path in the 1980's and the Taliban today.

Of all the terrorist movements since World War II that had any realistic potential to form a national government, only one was decisively defeated on the battleground of ideas. Sendero Luminoso, the Shining Path, arose in Peru in 1980. It was distinguished by both the radicalism of its Maoist ideology and the viciousness of its tactics. An American diplomat, Bernard Aronson, called the Shining Path "the most murderous guerilla group ever to operate in the Western Hemisphere" and compared them to the Khmer Rouge. At one point this group commanded eighty thousand followers-two-thirds the size of Great Britain's standing army-and was the single largest political organization in the country.

The task of making the Shining Path politically irrelevant was accomplished primarily by ideological means. Hernando de Soto offered an alternative vision of Peru's poor. Rather than see them as the proletariat, he showed that they were in fact budding entrepreneurs whose greatest desire was not to bring down the market economy but to join it.

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Editorial Reviews

The book contains 'graceful essays exploring the geologic consequences of human activity on the planet.'
Buffalo News
The 31 essays...offer often convincing and sometimes fascinating evidence of the ways that earth's structures affect lives.
Mike Davis
[A] dazzling collection of essays.
Sandra Steingraber
Here is a book that gives a voice to geology's secret passion: an abiding love of the Earth.
David Orr
A blend of literary grace and impeccable science. This elegant collection deserves a wide audience.
George Mitchell
[An] engaging and informative read.
Joni Seager
A 'must-read' for everyone who has curiosity about how the earth works.
Tobias Sheila
This is science writing (and teaching at its very best.
Victor John Yannacone
[D]estined to motivate this generation.
Richard S. Fiske
This engaging and important book offers refreshing, sometimes bracing, perspectives on the challenges that lie ahead.
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Product Details

  • ISBN-13: 9780465016105
  • Publisher: Basic Books
  • Publication date: 9/3/2002
  • Edition description: Reprint
  • Pages: 273
  • Sales rank: 627,886
  • Product dimensions: 5.38 (w) x 7.98 (h) x 0.97 (d)

Meet the Author

Hernando de Soto is President of the Institute for Liberty and Democracy (ILD), headquartered in Lima, Peru. He was named one of the five leading Latin American innovators of the century by Time magazine in its May 1999 issue on "Leaders for the New Millennium." De Soto played an integral role in the modernization of Peru's economic and political system as President Alberto Fujimori's Personal Representative and Principal Adviser. His previous book, The Other Path, was a best seller throughout Latin America and the U.S. He and ILD are currently working on the practical implementation of the measures for bringing the poor into the economic mainstream introduced in The Mystery of Capital. He lives in Lima, Peru.
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Table of Contents

1 Introduction 3
2 Informal Housing 17
3 Informal Trade 59
4 Informal Transport 93
5 The Costs and Importance of the Law 131
6 The Redistributive Tradition 189
7 The Parallel with Mercantilism 201
8 Conclusion 231
Epilogue 259
Appendix 262
Index 265
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