The Wall Street Favela

Is this reverting in a way to this? Is Wall Street becoming a favela?

The famous Peruvian development economist Hernando de Soto thinks so. He has argued – and shown in practice – that clear and publicly recorded and legally enforced property rights are a key to ending poverty. Now he offers this robust and now mainstream theory to explain the financial crisis of the rich countries (h/t Frank Pasquale):

Over the past 20 years, Americans and Europeans have quietly gone about destroying these [economic] facts. The very systems that could have provided markets and governments with the means to understand the global financial crisis—and to prevent another one—are being eroded. Governments have allowed shadow markets to develop and reach a size beyond comprehension. Mortgages have been granted and recorded with such inattention that homeowners and banks often don’t know and can’t prove who owns their homes. In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.

De Soto is an important and experienced voice, and one that should be difficult for conservatives to ignore.

I think he’s on to something. The fair and traditional price for state enforcement of private contracts is the partial loss of their privacy and idiosyncrasy into a public and structured institutional memory. Absent this, freedom’s just another word for everything to lose.

[Cross-posted at SameFacts.com]