The Mystery of Capital, by Hernando de Soto
Trade paperback, 2000, first ed.

January 2004
Berkeley, CA

I realize that there is little point in writing a review of a book that has been praised by Margaret Thatcher, Ronald Coase, and Milton Friedman. Nonetheless, friends, this is required reading. As Anthony says, capitalists often make the mistake of applying basic equations to complex situations, and expecting what no student of physics would: that the system which explains where a ball bearing rolls can give you enough predictive power to send people to the moon. Anti-capitalists make the same mistake, of course, even if they don’t generally have that many equations.

Fortunately every once in a while an economist comes along who can win back my faith in Vico’s rule: what is fully human can be comprehended. Hernando de Soto may not have the mathematical credentials of other economists, and at points even the untrained will probably find themselves wishing for some more rigorous figures. But if the goal of math is to eliminate all extraneous information in favor of the essentials, Mr de Soto has done such a fine job of cutting out the bullshit that I found myself with the same sense of admiration and relief that comes from seeing a well-balanced and tractable analytical solution.

Whatever your feelings on the meaningfulness of wealth (vanity, vanity), you must admit that what matters to any field of study is what is there, not what we, possessed of so many axes to grind, wish to see. We must make allowances for what actual people want; this is real economics, and this is what The Mystery of Capital is about.