Sherlock Holmes solves the crime in The Hound of the Baskervilles because the dog of the house does not bark. Hernando de Soto has solved the problem of property in the Third World by the dogs that bark. Whether in Peru, Egypt, Indonesia, South Africa, Haiti or Central Asia, millions of people have settled on unclaimed public lands but have no titles since it was never owned except by the claim of the state to everything. Challenged to find the property rights among the settlers around the Third World cities, de Soto proves the property rights by each individual family´s dog knowing the family´s property lines. You know when you have crossed onto another´s property because a different dog barks.
We should recall one of the greatest books, The Ancient City, by the Sorbonne historian, Numa Denis Fustel de Coulanges (Garden City, NY, Doubleday Anchor Books). Fustel de Coulanges describes the origins of property in the classical world rooted in ancestral religion of each family. Each property was sacrosanct as the religion of each family was unique. According to Cicero (Pro Domo, 41) What is there more holy, what is there more carefully fenced around with every description of religious respect, than the house of each individual citizen? Here is his altar, here is his hearth, here are his household gods; here all his sacred rights, all his religious ceremonies, are preserved.
The property boundaries were religiously preserved. If a stranger trespassed over a boundary, it was a sacrilege. Fustel de Coulanges notes: To encroach upon the field of a family, it was necessary to overturn or displace a boundary mark, and this boundary mark was a god. The sacrilege was horrible, and the chastisement severe. According to the old Roman law, the man and the oxen who touched a Terminus were devoted that is to say, the man and oxen were immolated in expiation (p. 69) Such a law explains why Rome lasted much more than one thousand years.
Hernando de Soto´s The Mystery of Capital describes his project to establish the property titles to all the settled lands in the Third World as a road out of persistent world poverty. De Soto notes: Imagine a country where nobody can identify who owns what, addresses cannot be verified and the rules that govern poverty vary from neighborhood to neighborhood, or even from street to street. De Soto estimates that underground businesses and home building by settlers is valued at $9 trillion 20 times direct foreign investment in the Third World in the last decade and more than 46 times what the World Bank has lent over three decades. But, because there are no titles, this wealth cannot be turned into credit to expand business, educate children, etc.
The former governor of Guanajuato, Vincente Fox (and former PAN president of Mexico), called on the advice of de Soto, as has the son of President Hosni Mubarak of Egypt, and President Gloria M. Arroyo of the Philippines to achieve registration of property titles for the poor.
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Hernando de Soto´s work has paralleled the academic contributions of the Nobel Laureate economic historian Douglass North. North has demonstrated historically the fundamental role of institutions in human progress or retardation. North´s approach is parallel to his fellow Nobel Laureate Ronald Coase.
Another way of approaching the problem of poverty has been offered by Lawrence E. Harrison in Underdevelopment Is a State of Mind. Harrison (with Samuel P. Huntington) has co-edited, Culture Matters: How Values Shape Human Progress. Harrison has compared different cultures to identify which have progressed economically and which have not. A question which is raised is: if institutions were different providing different, more profitable incentives, would there be economic progress without reference to the culture?
Similar studies have been presented by Thomas Sowell. Protestant Dutch, Swedes, Germans; Catholic Italians, Poles, Irish; Orthodox Greeks, Armenians, Ukrainians; and Confucian Chinese, Japanese, and Koreans have retained their cultures in America, but have progressed economically high above compatriots in home countries. Douglass North would see American institutions as important in the comparative economic progress.
These will continue to be paths of study to discover the persistence of what it is which causes persistent poverty. The Atlas Economic Research Foundation is proud of its role in the initial institutionalization of the work of Hernando de Soto.
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