Wednesday, February 20, 2019

Property's True Value

"Property is not just the house itself but an economic concept about the house, embodied in a legal representation." 

Legal property . . . gave the West the tools to produce surplus value over and above the physical assets. Property representations enabled people to think about assets not only through physical acquaintance but also through the description of their latent economic and social qualities. Whether anyone intended it or not, the legal property systems became the staircase that took these nations from the universe of assets in their natural state to the conceptual universe of capital where assets can be viewed in their full productive potential.

With legal property, the advanced nations of the West had the key to modern development; their citizens now had the means to discover, with great facility and on an on-going basis, the most potentially productive qualities of their resources. As Aristotle discovered 2,500 years ago, what you can do with things increases infinitely when you focus your thinking on their potential. By learning to fix the economic potential of their assets through property records, Westerners created a fast track to explore the most productive aspects of their possessions. Formal property became the staircase to the conceptual realm where the economic meaning of things can be discovered and where capital is born.

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

[Photo by Scott Webb at Unsplash]

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