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short story: The Historian’s Address

07.30.09 | issues, personal, shortStories, tech | Share | Share

As a teenager I was of course a staunch advocate for the importance of personal freedom. As a prolific devourer of science fiction, I love thinking about the potential changes that science and technology will bring. However, back in 1991, when I was in high school, it occurred to me that freedom and technology may be incompatible. To help me think through these troublesome ideas, I wrote the The Historian’s Address. It was difficult writing from so alien a perspective, and the result still leaves me troubled.

THE HISTORIAN’S ADDRESS

by Ranjit Singh Mathoda
created and copyright February 6, 1991

I have seen the moment of my greatness flicker,
And I have seen the eternal Footman hold my coat, and snicker,
And in short, I was afraid.
- T.S. Eliot

Oppression and manipulation are the tools of life. Manipulation is nothing other than one thing affecting another. Oppression is merely badly conducted manipulation.
- Historian’s Address 2154.17C

Sleep assailed the child, but he fought against it, eyes shut yet aware of a glaring light. Time flowed like thick molasses, straining to show sign of its passage. Melancholy music stained the room; stale air carried the seemingly irremovable stench of exercise and exhaustion. Drowsy sensations penetrated the mind to fight strange battles with concentrated thought: there was no desire or struggle, only a sense of conflict. The boy’s mouth was dry, his skin leathery, and his body aching. The child felt impotent, lying upon a bed in a town on a world revolving about a star within a galaxy plummeting deep inside the universe.

An image formed within his mind, a maelstrom of activity, with horrific speed. The youth constructed an empire, a series of nations, worlds barrenly hostile, sandy plains of sanguine hue, pale white moons, the remains of asteroids pierced with ant-like diligence by efficiently designed machines, and countless other wonders. Technological advances were considered (and discarded if unwieldy), until humanity lay encompassed by progress. Fear of death, the rank odor generated from evolution’s favored children, penetrated the future. Immortality and other advances both great and sinister were cast into motion upon the fictional universe. He recognized the newly formed universe as his own propelled through time.

The child’s attitude rapidly became serious and calm, as he pulled and tested the fabric of societies, acquiring a momentum of consequence that would leave his worlds shaken without sign of the slightest trembling. In the dark firmament, between dying suns, space conquering humanity established itself. Amidst the wretched, powerful masses a character was created in a manner designed to elicit interest. Facial characteristics shaped themselves, clothing attained structure, social position was asserted, and a history congealed from the grave enthusiasm of the child. He let it all ring with authenticity …

Upon a planet whose strange syllables formed the word Caeroon, a historian resided, moulding the appearance of her features slightly with facial accents, leaving an impression of ruggedly elegant beauty. With care she lifted a device curved sensuously to complement her hand. A figure, dark and brooding, appeared. It spoke with a levity that contradicted the grim countenance and the archaic seriousness of its garb. “Are you coming? The Address begins soon.”

She signalled affirmation to her colleague, adjusted the device, and viewed herself. Satisfied with superficial appearance, she fingered controls for mood regulators. Legal, within limits. Technology not boasted of on democratic planets, she thought haughtily. The historian placed graceful fingers upon the surface of a wall, examining the texture of the pale blue material. Imbedded in the structure lay multitudes of miniscule scanners, probes, and detectors. She smiled at those who watched, pleased at their presence. With care the historian entered a medical booth for final preparation.

Body intensive scans probed with a hushed murmuring, signalling a prognosis when they had finished. Supple and slippery, a hose shaped synthetic serpent entered her mouth, dispensing a wash of fluid once it had penetrated a sufficient depth. The object slithered out of the orifice and the historian breathed slowly as she scanned the diagnosis. Apparently a colony of potentially harmful nanodroids had become lodged in the stomach; specifically constructed mechanisms terminated the invaders and then decomposed themselves. The problem had been solved efficiently.

The lady finished last adjustments to her appearance, moving out of her chambers and into a hallway of tepid air. Artistically sculpted walls that seemed to move with a fluid grace were vigorously repaired, cleaned, and examined by near-infinitesimal machines. She noted a recently crafted aviary with approval. Birds of paradise cawed their enigmatic songs, spreading white frocked wings wide within transparent nets. The historian absently recorded and compared the species and genus of each as she walked towards the lecture chamber.

A man met her at the entrance, fulfilling formal greetings peculiar to the planetary culture. The servant had a soft, pampered face, accentuated by vibrant robes. The historian acknowledged his presence coldly. Swiftly the man spoke, humility evident. “Regulators are in place, illumination is as you requested, citizen.”

The lady passed into the chamber beyond the servant, without replying, and was watched by most of civilization. With careful attention she stood in the center of the chamber, wondering if she really was being scanned by thousands of sensors. Seemingly without notes or material, the historian began to speak in a soft, careful voice.

“Citizens, I thank you for your audience. We stand the product of a decision made by our ancestors, wisely I believe. It is in relation to that which I will talk today. Citizens, here is your Historian’s Address.”

She moved slightly, nervous despite her cool demeanor.

“Of late a great variety of discussion has probed the question of what is sentient. It has given question to the possibility of self awareness, probed the essence of the survival impulse, and even given credence to the concept of irrational thought as the basis of the mind. Topics thought to be closed and finished have been opened anew, largely due to questioning of our legal system. What species are society limited to? Is it within the ‘rights’ of society to seek revenge? How then, can it not be an individual’s ‘right’? Five conflicts within the past cycle have addressed these questions.”

“Place a male member of Homo sapiens, c. 2000 A.D., within a sealed room. Wake him. Then plunge a pendulum of sharp, dense material, very slowly and deliberately, through the center of the room towards his body. I promise he will be frightened, and try to move, in most circumstances. The impulse to move in a ‘healthy’ person is direct and there, whether it is contradicted or not by ‘rational’ thought. The impulse for revenge follows.”

“Often we use these terms, ‘rational’ and ‘healthy’ I mean, in a loose manner. Someone is behaving rationally if they are acting in an intelligent way, just as someone is healthy if they are physically and mentally fit. What about a martyr? Are they acting in a rational or healthy manner? It becomes a matter of comparison. If a person places thereself in a position of relative weakness for the benefit of others are they still being rational or just brave? Maybe they are acting without concern for self interest. We might imply self interest even if it weren’t there. The feeling of being altruistic, or good, can conceivably be coveted and wished for. Is it still altruism, if the feeling is being sought actively by the individual to the point of risking self for a sense of gratification? The definition is not establishing what something ‘is’, it is more a comparison.”

“Our society tends to frown on such altruism, with ‘good’ reason. But why is it ‘good’ reason, and not ‘bad’ or ‘evil’? Why should we not welcome martyrs to the cause? Perhaps because we can not distinguish between martyr and hypocrite. Comparisons are made both irrationally and rationally, emphasizing the possibility of the mind being relatively unstructured. We must recognize this before analyzing our own system of government and attempting to decide whether it seeks, or has sought, vengeance. Fellow citizens, the idea of ‘representative democracy’ as ‘good’, and ‘oppressive oligarchy’ as ‘bad’, is one that plagued our ancestors for a great length of time. In our nation we assume that ‘oppression’ is equatable with the word ‘limitation’, and generally recognize its worth along with its weakness. This was not always the case.”

“As a historian I refer to broad, generally recognized trends in society. Because they are broad, or recognized, does not mean they are correct and present. These are things I leave to the individual to decide. In making that supposition, that you can partially decide on the presence of these trends by yourself, I have placed emphasis upon the major factor that unites both representative democracies and our nation’s oppressive oligarchy. The knowledge possessed by the individual is central to the society. They both expect things of the people; our system of oligarchy is merely more honest. Despite this we seem less benign. How can such an illusion be crafted?”

“The word ‘benign’ has often been applied to a government that works in the interests of the people. It was believed for a lengthy period of time that representative democracies result in a greater number of benign reigns, and in more peaceful transfer of authority, than oppressive oligarchies. To understand why this might be so, let us probe the first true representative democracy, the United States of America, as it was for some time.”

“A small nation, although relatively powerful and wealthy, the United States existed as a result of a revolution and overthrow by a disgruntled minority of a colonial population. This minority constructed a framework for their society based upon their beliefs, which would then change during a period of rapid expansion in which the nation conducted whatever actions it felt necessary. When the nation ‘outgrew’ its past ‘crimes’, the expansion ceased as rapidly as it had begun, replaced by economic and then technological expansion. The needs of colonization and settlement, however, had already placed an indelible mark on the framework of the relatively young and influential nation. Technological progress became proliferous due to an inwardly competitive economy, relatively vast funding of educational institutions, and a limitation-sparse environment for communication. Exploration of new sciences became of great ‘national’ interest, clearly showing that the young nation violated its own principles in favor of continued survival.”

“Those principles, established at its inception, implied individual freedom without constraint insofar as no other individual was harmed or limited. Mentally, citizens suffered stress from one another, an obvious harm that was not prevented. Nor could the term ‘individual’, at that time loosely observed as members of Homo sapiens, be specifically defined. Mass numbers of less complex and more specialized life forms were exterminated with some regret; little real outcry was targeted against the society itself. However, as exploration progressed in a technological sense, these flaws became readily apparent. Thankfully, the nation was beginning to cope with rapid social change as a result of technology, and became prepared for the vast schism which would divide its members later.”

The historian paused, grasping for words.

“Representative democracy had been the most dangerous of political systems in its implications. In no other system of governance was the truth more perverted by social impulse. Individual wishes for freedom allowed for rapid growth and progress. However, they resulted in mass destruction as well. Corporations began to manipulate one another in a complex manner, and the representative government was soon incapable of coping. Vast quantities of information became a burden to those who limited their ‘rights’ to search, and a boon to those who placed no self impositions. If a society is a conglomeration of its members, then representative democracy leads to direct collapse in any technologically advanced society. The ‘unalienable rights’ as they were called, are a myth. A myth with serious, and often beneficial, repercussion, but a myth regardless.”

“Individuals are flexible, but they are also readily manipulatable through scientific means. Mental probes opened an entirely new arena for humanity. It became possible for benign oligarchy to survive with individual support, through therapy. Oppression of the mind, five men from the past caught in a faceless room might cry forth in their anger and fear. Yet place them in contact and competition, giving each the capability of destroying the rest. Deterrence, the fear of equal reprisal, might prevent destruction. Increase their number to fifty billion seething people, each with individual cares and desires, some seeing that there is no design or direction to life and unwilling to create one, each capable of destroying the rest with their knowledge of technology, and the need for therapy becomes evident. The American societal impulse, and the ‘morality’ it professed, was based upon a desire for vengeance equal to crime and not direct cognitive or emotional understanding of survival.”

“When individual passions can vary, and technology makes it possible to destroy all other individuals, constraints must be placed in society. The folly of many nations was to accept this need too late; it is historical record that some of the slowest were plunged into infernos, whether biological, chemical, mechanical, anarchical, nuclear or a combination of these, resultant of their own false needs. Their ‘inalienable’ rights, the struggle for dignity, and implications of the underlying connection of all humanity failed miserably because a single individual could be stubborn.”

“We live in a society that stands at opposition to such failure. Each of our citizens is more productive, genetically hardier, and spiritually more sure. Our government realizes the limitations it must impress on itself, for its members are veterans of therapy as well. It is incapable of oppression, where such alludes to unequal manipulation of people. If we are watched continuously, lose all privacy, ‘deprived’ of the ‘right’ to speak without limitation, and face other ‘barbarities’ then these are things that apply to our rulers as well. Perhaps these limitations are unjust. Regardless, they are necessary.”

“Back then, to the question of social vengeance. Whether the so-termed Massacres were ‘evil’, ‘bad’, or ‘vengeful’, is a faulty attempt at definition. They can be interpreted as such, for comparatively the motives of our government may have been ‘evil’, ‘bad’, or ‘vengeful’. They might not have been; the actions must stand free and clear of an attempt to link purpose, for the purpose is not known. Regardless, the actions of this nation were necessary to the continuation of stability. What we do, we do not lightly. What we are, we must be to continue to exist. The limitations of our society are sorely felt. They must be strenuously followed.”

The historian paused, bowing her head, mouth slightly dry. “I thank you.”

She exited the room, avoiding those who sought further statements, pleased with her analysis. The historian stopped suddenly, muttering an ancient passage to herself. A sensor technician half a planet away relayed and strengthened the signal, until the statement could be given to the records department, disseminated to the nets, for comment and discussion. He smiled as he did so, impressed by the speech; the woman, he thought, was a genius. He turned his attention to the voice pattern which he had just strengthened. It was a poem, he noted. “Shine, perishing republic …”, it began.

… The child stopped his living dream, lying silently upon the bed for a few moments. It all faded from his mind, giving way to the glaring light which penetrated closed lids. He opened his eyes, blinking as he watched the door to his room decay and crumble, victim to forces that were already present. He blinked again, and it stood straight and white, as it had always been. Air smelt of burnt death, deteriorating in its paralysis. He disregarded the false sensations, and smiled. The music had ceased to emanate from his crude alarm clock, the bright green facing showing the time in ugly numerals. He rose slightly in his bed, reached for the light switch, and then the room lay cloaked in blackness pierced only by ghastly green. The child reclined, bed creaking, and slept.

~ The End ~

You can find more of my stories at http://mathoda.com/stories.

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Tagged with: future • high school • historian's address • short story • the historian's address

Oprah triumphs in Saudi Arabia

09.19.08 | issues, political | Share | Share

In a prior post I stated that the American military appears to have deployed relentless see-through-walls flying terminator like unmanned drones.

America’s most powerful tool in shaping the world may be something far different however: Oprah.

As the NY Times reports:

Once a month, Nayla [a young Saudi Arabian homemaker] says, she writes a letter to Oprah Winfrey. … “I feel that Oprah truly understands me,” said Nayla, who, like many of the women interviewed, would not let her full name be used. “She gives me energy and hope for my life. Sometimes I think that she is the only person in the world who knows how I feel.”

…

When “The Oprah Winfrey Show” was first broadcast in Saudi Arabia in November 2004 on a Dubai-based satellite channel, it became an immediate sensation among young Saudi women. Within months, it had become the highest-rated English-language program among women 25 and younger, an age group that makes up about a third of Saudi Arabia’s population.

…

Ms. Winfrey provides many young Saudi women with new ways of thinking about the way local taboos affect their lives — as well as about a variety of issues including childhood sexual abuse and coping with marital strife — without striking them, or Saudi Arabia’s ruling authorities, as subversive.

…

The largest-circulation Saudi women’s magazine, Sayidaty, devotes a regular page to Ms. Winfrey, and dog-eared copies of her official magazine, O, which is not sold in the kingdom, are passed around by women who collect them during trips abroad.

The entire article is well worth reading.

Tagged with: dubai • islam • muslim • oprah • oprah winfrey • saudi • saudi arabia • war • warfare

Philosophers are wrong to state the unexamined life is not worth living

04.27.08 | issues | Share | Share

It seems to me that some ideas succeed not because they are true, but because the audience attracted to the idea will by its composition be inclined to agree. An example is a statement that Plato ascribes to Socrates, that “The unexamined life is not worth living.”

Socrates meant that he must be free to examine the wisdom of his actions, without the restrictions Athenian voters wished to place upon him, or he would not find it worth living (thus the drinking of the hemlock). That’s certainly a point of view that may be widely shared, although different people and cultures would disagree as to what level of restriction on thoughts or speech might make life not worth living.

While Socrates’ decision is defensible, subsequent philosophers tend to take Socrates’ statement a bit further. They conclude from his statement that it is the process of examining life that gives life its value. Of course philosophers find value in examining the wisdom of ideas and lives, and feel their study of the matter gives them special insights. A philosopher who was unwilling to examine life is a bit of a contradiction in terms. That Socrates was willing to die rather than give up his right to examine his own life has made philosophers sing his praises ever after.

Personally, I have found great value in examining the wisdom of many acts in my life, yet there are many types of people in this world, and if some do not ponder the wisdom of their actions much at all, must we (or particularly they) conclude their life is less worth living? It seems awfully condescending. The people who don’t examine their lives much probably aren’t examining Socrates statement. If they did, they might object to the interpretation with which it is adopted by philosophers.

A less strongly phrased statement might be, “Until you examine your life, you are ignorant of whether it is worth living,” but is even that statement true? Perhaps life is always worth living because of something innate, because of the experiences even an unexamined life gives, or because of the effects a life can have. We ascribe a value to the life of a pet regardless of how unaware the pet is of itself or the wisdom of its own actions.

Whether a life is worth living is a subjective judgment imposed by an observer, not an objective fact. Given the many attributes that might make us conclude a life is worth living, to rest all of a judgment on whether the life is “examined” seems rather excessive. That may be what gives Socrates’ statement its power, but it may also be what robs it of some important truth.

In the spirit of Socrates, here’s a bit of parting wisdom (but even without it I bet your life is worth living): Never trust the admiration of an audience who are made more self important by their admiration.

Tagged with: philosophers • philosophy • socrates • unexamined life

Internet truths that are often wrong: Disintermediation, Death of Distance & Open beats Closed

04.10.08 | art, business, humor, issues | Share | Share

Many ideas about how the Internet will effect the world are right only in certain situations, yet they are held to be true about all situations and stated in a manner that leads to overly broad interpretations.

Let’s examine some commonly held ideas about the Internet more closely:

The Idea of Disintermediation: “The Internet allows people to contact each other directly without a middleman, and in so doing eliminates the economic value of the middle man.”

When people interact they do so in an environment that has been paid for by someone and potentially benefits someone. If you meet someone at a club, it is paid for by the club owners, and potentially benefits the club owners. If the environment is a sidewalk or other public location, it is paid for by taxes, and may benefit retail stores or billboard companies nearby that location. If people interact over a phone it is paid for by one or more of the participants and benefits the telecommunications companies that provide the service.

Changes in technology can cause the manner and types of human interaction to change significantly. People now interact on Google, Amazon, Yahoo, Youtube, Ebay, Skype, Flickr, blogs, and countless other places on the Internet. These environments and tools clearly can generate tremendous benefits for those setting up the meeting place.

More powerful digital tools and distribution are becoming available to greater numbers of people, allowing Youtube celebrities, Ebay store owners, and others to prosper. Yet the largest single monetary reward goes to the founders of the companies that create the most useful environments. New companies may unseat old ones in creating the environments and tools that people want to use, but until all the services that all people want done for them can be done best without cost or advertising, the creator of the environment will continue to receive a generous helping of the monetary rewards.

The Idea of the Death of Distance: “Technology allows digital work to be done from anywhere with an Internet connection and is driving down the cost of transporting goods, so technology is eliminating the importance of location.”

This idea is correct only in a certain context. Yes, American tax returns are being created by Indian workers, Russian programmers create some Chinese websites, and the coffee beans you just imbibed travelled a great distance to find you. Capital, workers, information, and goods are being transported and organized in global supply chains more efficiently than ever. You can hire a tutor from abroad to teach you a language through video chat (see edufire.com) or help you gain new skills. These changes are very important economically and socially.

Yet it is also true that even as the market economy gives significant rewards to creative people who can devise new ways of serving other people, such people are flocking to certain physical locations. The maps that Google makes of the search queries it receives across the globe are not distributed equally according to population density, they are focused in certain cities rich in human capital. This is because creative people want to cross pollinate in ways that are difficult to do across just the Internet. They want to get a feel for what tools and ideas others are adopting, and that’s hard to follow purely on the Internet. It’s also sometimes hard to spot a business opportunity if you’re not immersed in the local environment, at least for part of the time.

We live very important parts of our lives in the location we are at, establishing friendships that teach us, pick us up when we stumble, and are rewarding in their own right. Digital tools can supplement those needs, but are unlikely to completely supplant them because many types of experience are linked irrevocably to sharing a location. In some ways, particularly in finding people who will share major life milestones and experiences, location is more important than ever.

The Idea that Open always beats Closed: “Information wants to be free of constraints, walled systems are always defeated by open systems, and open source products will always beat closed source products.”

This idea rose to prominence largely due to the distaste that many had for the media company’s takedown of Napster, for the contempt they had for the design of AOL’s service, and for the hatred they held for the product design and market dominance of Microsoft. It’s easy when there are dominant companies with inconvenient rules or poorly designed products to imagine the benefits of taking products out of their control or creating a product that is free and open.

Even frustration over a single feature in a proprietary product can lead those who want to tinker to demand a more open system. The low and diminishing cost of distributing the best, cheapest solution to everyone suggests all products and services in a digital age should be easy to tinker with and free of cost to the user.

Yet many of the most respected technology companies that provide services today are not completely open, are not open sourced, and are not free. They are adept at leveraging free or commodity services and products in building proprietary products that have closely controlled elements which are hard for their competitors to duplicate.

Apple is perhaps the poster child for the economic value and dominance that can be created using closed designs and systems. Although it uses open source components for significant parts of its software stack, it does not reveal the source code for its operating system or any of its major applications, it requires the coupling of its hardware and software, it is famously secretive about the design of future products, and in the ipod, iphone and iTunes system it has created a very dominant closed system. Apple has allowed media companies some measure of control over their content, telecommunications companies some measure of reward, and provide software developers some ability to innovate, but Apple retains both ultimate control and the primary share of the monetary reward.

Google uses linux, cheap commodity computing hardware, and makes many contributions to open source projects. Yet it also closely protects its brand and it does not release the source code for any of its major products (gmail, Google news, Google Apps, etc.). It is highly secretive about future products, the methods it uses to rank search results, the methods it uses to serve relevant advertising, and the ways in which it has organized itself.

Ebay closely controls the reputation system which gives buyers and sellers historical information about each others trustworthiness. Facebook opened its system to application developers, but keeps close control of the stream of activities your friends are up to. Even Craigslist charges for some listings to reduce spam. None of these companies reveal the source code for their websites. Even the companies that do reveal the source code for their products charge for certain levels of support and installation services, which is in effect charging for certain kinds of proprietary information.

When do companies do well with closed products? Sometimes closed systems have a design purity that creates the right customer environment or solution, sometimes closed systems discourage behavior that would detract from the community that is formed, and sometimes they simply serve people better than open systems. Sometimes they don’t. Firefox is a great web browser, but Apple thought it could create something simpler and faster and more ubiquitous in Safari. To think that one is destined to be better than the other in the marketplace simply because of their open or closed nature is to grossly oversimplify the factors that lead to product distribution and adoption.

In trying to understand a new phenomena, it’s important to form ideas about it, but also understand when those ideas don’t apply. A trail of wrong predictions and sloppy writing can drill into our heads ideas that are sometimes very false. I have learned that if I can’t name a context in which an idea is false, it is a dangerous idea to rely on. As Emile Chartier stated, “Nothing is more dangerous than an idea when it is the only one you have.” (see my favorite quotes)

Tagged with: andrew warner • bubblegeneration • business • business strategy • closed • closed source • context • disintermediation • edufire • ideas • jon bischke • mixergy • open • open source • startups • strategy • umair

Book review: The Mystery of Capital by Hernando de Soto

04.04.08 | book review, business, issues, political, tech | Share | Share

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, by Hernando de Soto.

A criticism of capitalism is that even though it drives technological change and reduces the price of goods, those without capital are deprived of its rewards. The argument that the poor and disenfranchised are not well served by capitalism is usually followed by an explanation of the need for a stronger social safety net. Another potential solution would be to make sure everyone has capital, but how this can be done fairly is an issue of great political controversy.

The Mystery of Capital explores how capitalism evolved historically, how capital has been obtained in the past, and then lays out policy prescriptions for reducing the barriers that prevent the poor from developing wealth today.

A Review of the Past

Part of the book is a fascinating examination of the historical evolution of the modern market economy. In aristocratic societies only those of noble blood and the powerful guilds were allowed to undertake certain trades. Those with political power could bar competition with their monopolies. Drawn by economic opportunity, slums of workers formed around cities. Workers in the slums tried to organize their own economic activity. Out of the slums came goods of far lower price, and often equal or better quality. Aristocrats and guilds detested the slum dwellers, and would decry and criminalize such competition. The politically powerful would obtain rights of monopoly from the throne, burn down parts of the slums, and put large groups of people to death. These struggles over the right to compete could result in uprisings. For example, Mr. De Soto describes a killing of thousands of seamstresses (motivated by a desire to preserve aristocratic and guild monopolies in the cloth trade) as one of the causes of the French Revolution.

The historical review is particularly fascinating because of some counterintuitive insights. Mr. De Soto points out that in the early United States illegal squatters would adversely possess land owned by someone else. Unlike in Europe, where such action was dealt with harshly, in America if enough squatters occupied a region they could elect representatives who would change the laws to legalize their squatting. Although such an action could be seen as a violation of the absent landowner’s property right, in practice recognizing the work done by squatters on land allowed people who would diligently improve land to create capital and encouraged landlord’s to put their property to better economic use.

A Prescription for the Future

The Mystery of Capital proposes a number of powerful policy ideas. It argues capitalism is at its best when everyone is allowed to compete and it points out that to compete all segments of society need to be able to adequately describe and protect their assets. This allows those assets (1) to be traded to whomever might have the best use for those assets, (2) to be used to borrow against for other productive enterprises, and (3) to be purchased using debt financing as opposed to lump sum payments.

The book demonstrates how most of the non developed world, including those places where capitalism has been perceived to have failed and the modern Western nations before they became developed, fails to adequately describe and protect assets. Mr. De Soto explains that it takes hundreds of steps and significant resources to legally start a business or own a home in different parts of the modern world. The records of who owns what are often murky and difficult to resolve. He explains how government policies are poorly adapted to the lives of those who live on the outskirts of cities. In desiring not to encourage the growth of slums, governments prevent those who dwell in them from recognizing their assets and improving their lives. Mr. De Soto explains that the poor often are in control of assets that they can not monetize or use to obtain funding because their assets are outside of the legally recognized system.

In the absence of legal mechanisms to recognize and enforce rights, slum dwellers often turn to organizations in their own communities such as unions and worker collectives, in effect creating their own extra-legal system. Yet this extra-legal system is only recognized in their own communities, making economic trading difficult, and making it difficult for the poor to fully realize the benefits of their work. Mr. De Soto points out that although their amount of assets are small, given the number of people involved, if the land and homes of the poor were legally recognized these stealth assets would add tremendously to national capital and help encourage development of that capital. People are better served by being brought into the market system, yet laws often exclude them or their resources from it.

One criticism that has been made of de Soto’s argument is that the amount in unrecognized assets, divided among the number of people involved, results in an average of $2000 to $3000 of assets per capita, which is not sufficient to solve the problem of world poverty. The fallacy with this counter argument is that (a) that much in assets greatly exceeds the current wealth per person of the people at question, (b) while modern Western businesses are generally hard to capitalize on this small amount of money (counterpoint: Dell Computer was started on this much) a great many businesses in developing nations could be started by borrowing on this much in assets, and (c) making these assets liquid would encourage companies to serve these unserved peoples because they would form a gigantic market and it would allow for these assets to be traded to whomever would most productively use them. Mr. De Soto argues persuasively that legally recognizing the assets will cause them to grow in market value.

The Mystery of Capital is well worth reading and its ideas deserve to be widely disseminated. If you find them interesting, you can find out more about Hernando de Soto and his ideas at his wikipedia page, at google news, at the website of his organization The Institute for Liberty and Democracy, and at his blog.