Importance of Private Property

When you don’t have strong protection of private property, as in many less developed countries, you have poverty.

John Stossel makes this case very clearly in his recent post: Why Do the Poor Stay Poor?

He quotes Hernando de Soto, president of the Institute for Liberty and Democracy in Peru, who said in part that

roughly 4 billion people in the world actually build their homes and own their businesses outside the legal system. … Because of the lack of rule of law (and) the definition of who owns what, and because they don’t have addresses, they can’t get credit (for investment loans).

Because they don’t have an “address” they cannot get loans to start a business.

Good reading, and a very interesting insight into the absolute necessity of private property protections to allow the poor to raise themselves out of poverty.

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