Hernando de Soto has done what I think is the most significant work in economics in the last decade. He has researched what makes people poor. Travelling many poor countries and looking at many impoverished economies, he believes he has found the answer: poverty of title.
de Soto's book, the Mystery of Capital, is about how the lack of clear and open title to assets is the rock that crushes the poor. Without good title, the poor cannot raise capital. Without good title, the poor have to sit on their assets, and resort to physical security at their own cost. Without good title, there is no possibility of economic and efficient allocation of resources.
It was then with some sadness that I saw this ironic development in some chat room on the net: the poverty of title over the book itself has been exploited. Ironically, someone has OCR'd the book and is now selling the electronic versions.
I would hope that Hernando would shrug his shoulders and carry on, realising that the fundamental title to books and knowledge is as weak already as the title a poor mother holds over her shack in a shanty town. That which we call intellectual property, which some claim to derive from the belief that man has the right to what was created in his own head, has over-extended itself, and technology is now in the process of destroying it.
Title is no such beliefs-based right. It is an economic practicality, we create title as a society to protect that which is naturally protectable. Law follows economics, and economics follows physics.
This sad path may well be the path to its future success, and I can think of no higher accolade for a work than to be sacrificed on its own altar. The Mystery of Capital is needed in any place where the poor have no strong title, and thus they lack the money to buy the book.
-------- Original Message --------
Subject: The Mystery of Capital, eBook
Date: Thu, 14 Oct 2004 09:28:36 00200 (CEST)
From: Nostra
I have recently completed the conversion of the excellent economics
book, The Mystery of Capital, by Hernando de Soto, to Adobe Acrobat
format. http://www.amazon.com/exec/obidos/ASIN/0465016154
The 8.91 MB book is available for download at a cost of 0.1 grams of
e-gold from the File Exchange at
https://www.meshmx.com/fe/download_get.php?file=FE:d7c1ecf8b3e460de8a2f9ce1003595f0c2344cb2
For instructions on funding a File Exchange Pay Token needed for
downloading the book, download the free Acrobat document at:
https://www.meshmx.com/fe/download_get.php?file=FE:ab2e4d29a46088a8c3ed4c21a8baf9041f93d29c
This conversion easily required over 80 hours of intense OCR, Photoshop
and MSWord editing. I ask that anyone downloading not post the eBook
or share with friends (you are, of course, as free to ignore this as I
have been in ignoring Mr. DeSoto's publisher's request that I honor
their copyright.) I intend to offer the author a share of the proceeds
should they become significant.
Discussion in Distributed City regarding this e-publication can be found
at
https://www.distributedcity.com/forums/?action=thread_view&thread_id=f304a9b748efdc04a3e5f949be30b277
Nostra
Posted by iang at October 14, 2004 06:26 AM | TrackBackIan,
It is a good book but it is extraordinarily hard to implement the measures he recommends, not least because of resistance from vested interests in the countries he writes about and advises. BTW, the key summary chapter of the book is Chapter 7, whereas Chapter 1 is available as a free download from his institute's web site:
http://www.ild.org.pe/tmoc/cp1-en.htm
I had arranged to interview him a couple of years back as I was going to be passing through Lima but then he got called away to some UN confernece in Cape Town at the last minute so that was a disappointment.
Other books that should be read with him include _Power and Prosperity_, Mancur Olson; _Development as Freedom_, Amartya Sen (possibly the best); and a new one, _The World's Banker_, Sebastian Mallaby.
Duncan
Posted by: Duncan Goldie-Scott at October 19, 2004 07:08 AMIan,
It was no accident that I chose de Soto's book for this paper->eBook treatment.
On the Distributed City forums I ignited some debate due to my offer for sale of the 'Mystery' eBook. Several people raised some good and classical objections to the violation of copyright. Here are a few choice excerpts from one of the better posts:
[What copyright does is serve notice of the author's creation of the work as a whole and their ability to derive benefit from such production. It is not just the ideas that make a book. A book is a manifest reality which someone or several someones have put a great deal of effort into the production of. All of the people involved in such a production deserve to be rewarded for their efforts. Anything which reduces the sellor's ability to reward people for the work they have done is counterproductive. Spreading an author's ideas does indeed help them to gain in reputation which in turn enhances their future earning potential, but there are many ways to do this without wholesale ripping off their book for one's own personal gain.
....
I do not accept your assertion that if you don't like the terms of a contract then you have the right to subvert it. Rather you have the option to not engage in the transaction. Life is not fair. No one owe's you anything, least of all that you should profit from another's work because you don't like their terms. Such an arbitrary decision on your behalf is just plain rude and shows a total disregard for others. Such a regard for others is the foundation of a free society. You cannot expect to gain your freedom if you deny others theirs, although imho this seems to have been a popular route to 'freedom' all through man's history.]
Here is an excerpt from my replies:
[... there may be a contract implied in the book's purchase but the contract is of the 'adhesion' type which is being routinely disputed legally for such uses as software. Also, I think its important to note that I did not purchase the book but borrowed it. Even if one accepts that such a contract may be valid for the purchaser, its quite a stretch to assume that a borrower is also so enjoined.
....
As Thomas Jefferson explained, the concept of owning ideas and their expression is unnatural. Its become a slippery slope. Is it morally defensible for patents to be issued on the natural coding and 'application' of genes in our own bodies, restricting development gene identification tests or therepies?
"Law is ... not simply a set of spoken, written or formalized rules that people blindly follow. Rather, law represents the formalization of behavioral rules, about which a high percentage of people agree, that reflect behavioral propensities and that offer potential benefits to those who follow them. (When people do not recognize or believe in these potential benefits, laws are often disregarded or disobeyed.)"*
The enormity of the people trading IP on P2P systems is clear evidence that the time has come to abandon the current copyright system.
* Margaret Gruter, Law and the Mind (London: Sage, 1881), p. 62. As quoted by Hernando de Soto, The Mystery of Capital, p. 175. ]
Nostra
Posted by: Nostra at October 26, 2004 05:04 AMNostra,
One of your critics said:
> [What copyright does is serve notice of the author's creation of the
> work as a whole and their ability to derive benefit from such
> production. ...
This is nonsense. It assumes that their claim is valuable in society, which is something that they failed to dwell on. On the basis of the above, I can therefore serve notice that every reader of this paragraph pay me 1gg, as deserved reward. Indeed, I think my ISP and every router along the way deserve a slice as well, but not of my 1gg.
You also said:
> Here is an excerpt from my replies:
> [... there may be a contract implied in the book's purchase but the
> contract is of the 'adhesion' type which is being routinely disputed
> legally for such uses as software. Also, I think its important to note
> that I did not purchase the book but borrowed it. Even if one accepts
> that such a contract may be valid for the purchaser, its quite a stretch
> to assume that a borrower is also so enjoined.
Ah, this is where the 1st sale doctrine meets the licence contracting doctrine. I wonder who wins? Maybe the lender has no right to lend, so the acquisition of the book by means foul puts you askance. However, the lending of books is a deep and customary thing, so in this you would be sliding between the cracks. I wonder what a real lawyer would say?
> ....
>
> As Thomas Jefferson explained, the concept of owning ideas and their
> expression is unnatural. Its become a slippery slope. Is it morally
> defensible for patents to be issued on the natural coding and
> 'application' of genes in our own bodies, restricting development gene
> identification tests or therepies?
It's an opinion. Or even a belief? Does it have a foundation?
> [What copyright does is serve notice of the >author's creation of the
> work as a whole and their ability to derive >benefit from such
> production. ...
"This is nonsense. It assumes that their claim is valuable in society, which is something that they failed to dwell on. On the basis of the above, I can therefore serve notice that every reader of this paragraph pay me 1gg, as deserved reward. Indeed, I think my ISP and every router along the way deserve a slice as well, but not of my 1gg."
I am the poster of the abovementioned comment. Yes I do assume that the claim of copyright is valuable in society, and manifestly it is or no one would have bothered publishing Mister De Soto's book. It is also valuable in respect to the fact that Mister De Soto could sue Nostra's arse for copying his book. Whether one agrees with copyright or not the fact remains that very many nation states have copyright laws which can be used to protect the value of the property to the owner. However the point I was making in that thread is if Mister De Soto asks that no one copy and distribute his book and if you ask readers of your weblog to pay you 1gg for reading your column then people should respect these expressed desires. Naturally you would be well served to take steps to prevent people from reading your column without paying if it is really your desire to get paid. If you accept that people have property rights then it follows that said people should be able to set the terms for the distribution of their property. This is where my remark about wanting to protect one's own freedom while not respecting the freedom of other's comes in.
I would also like to quote myself and reiterate my reply to Nostra regarding his assertion that it is about owning ideas,
"It is not about owning ideas...
Such an idea is an absurdity. It would indeed be fruitless for authors to try to protect ownership on an idea. But it seems to me that this is not what copyright is protecting. Once an author publishes a book the ideas in it are, if you like, liberated. Once a person reads them and they enter that person's mind the ideas have begun a journey into the general consciousness, which is the place the author manifestly intended them to be by the very act of publishing the book. What copyright does is serve notice of the author's creation of the work as a whole and their ability to derive benefit from such production. It is not just the ideas that make a book. A book is a manifest reality which someone or several someones have put a great deal of effort into the production of. All of the people involved in such a production deserve to be rewarded for their efforts. Anything which reduces the seller's ability to reward people for the work they have done is counterproductive. Spreading an author's ideas does indeed help them to gain in reputation which in turn enhances their future earning potential, but there are many ways to do this without wholesale ripping off their book for one's own personal gain"
Perhaps I could have more accurately said "What copyright does is serve notice of the author's creation of the work as a whole and their desire to derive benefit from such production."
"There is a long and rich tradition of spreading other author's ideas by productive means. Since the dawn of recorded history authors have spread other's ideas by including elements or characters of earlier stories into new works. This continues up to the present day, manifest in such devices as rap. (imho record company executives who try to sue other record company executives because artist A used three seconds of artist B's song in their new rap song are not only money grubbing but stiffling the creative process which they are parasitic of.) The key thing here is that this kind of crossover of material is a creative act in itself. Authors putting other author's characters in their books is likewise a creative act. Offering a book which you have copied wholesale is not a creative act. It is parasitic. If parasites flourish it will not be long before the being they feed off dies."
Fairwitness.
Posted by: Fairwitness at October 27, 2004 12:16 AMHello Fairwitness,
thanks for posting! I posted the original entry because this is a cusp in the history of science, and open and scientific debate, drawing from all disciplines, is needed to deal with the winds of change. In our field, we have a truism, which goes along the lines of technology determines economics, and economics determines law. A whole lot of tech changed fairly recently, and the economics is catching up. The law is way behind.
You said:
> Yes I do assume that the claim of copyright
> is valuable in society, and manifestly it is
> or no one would have bothered publishing
> Mister De Soto's book.
No, that just refers to the current regime as if it were founded. As copyright is a subsidy, there will be those who benefit from it, and those who lose from it, but that is no argument in support or against it.
What I had issue with was your claim that the author can serve notice on their basis in production. The current regime permits authors to deny access and make access available on their terms. It does not however "serve notice of their ability to derive benefit from such production."
Their ability comes from them. There is no law that says that they can arrange things to their own pleasure, and others must pay them money. This distinction is subtle, but key: it means that if de Soto fails to make money, it's not necessarily because his copyright was breached. He may simply be withholding the work from those who would pay. This may be his right, but, what he doesn't have is a right to force others to recognise his productive ability.
Which is to say that this discussion should not be rooted in production or money. It can only be about the strict rights that copyright brings. And whether and why they are valuable to society.
The rest of the paragraph similarly accepts the existence of the current regime as proof that it is "valuable for society" as opposed to being expressed in the law.
> If you accept that people have property
> rights then it follows that said people
> should be able to set the terms for the
> distribution of their property.
Even this makes leaps and bounds ... I accept that people have property rights, as long as I get to state which ones.
Fairwitness, part II of my response
> Perhaps I could have more accurately said
> "What copyright does is serve notice of the
> author's creation of the work as a whole and
> their desire to derive benefit from such
> production."
Ooops, I should have read on! Yes, they may indeed express their desires as they choose, but such is irrelevant to the debate.
BTW, I forgot to mention, economics thought would generally assume that a subsidy is harmful to society. That's mostly because most subsidies have been shown to be generally harmful to society, and because the allocation of such a subsidy creates a cost in both the act and the decision, so it is _a priori_ damaging. Which is to say that the burden is on the proposer to show why a given subsidy gives benefit to society, in excess of the starting costs.
Now, for copyright, all those showings were done with the technological makeup of centuries past. That's changed. A new showing is required, using modern day tech.
> "It is not about owning ideas...
>
> Such an idea is an absurdity. It would indeed
> be fruitless for authors to try to protect
> ownership on an idea.
Unfortunately, I think it is very much about the notion of owning an idea. There are two reasons for this, and while neither argues for or against necessarily, they form important backdrop.
de Soto has come up with an idea. This idea is in his book. Many in the 3rd world have not purchased his book, simply because they haven't the money to spend on such things. Indeed, it's fair to say that many students in the 1st world will also be denied his book because they can't afford to buy every book they want.
(Copyright on books struck a balance on this by saying that a book was the point of control: and once sold, it could be lent, sold second hand, and even placed in a library for all to read. So there was an escape valve for the idea to leak out .)
Which brings us to reason 2: the intellectual property wars. de Soto's ideas may not be owned, but you don't know that. The idea of Mickey Mouse *is* owned, and it is well protected. So much so that they passed an Act of Congress in the US to protect it for another 20 years.
And the rest of IP has gone the same way. The little flashing cursor on your screen is owned, or was, at one point. Business processes are now patentable, and it is not beyond the realms of possibility to imagine that the prescription in de Soto's book is also patentable. After all, it's about business, and it's a process.
All of which leads us to the conclusion that somehow, ideas are ownable now, in law, and it's been a while since anyone made a decent effort at showing that there was benefit to society in the recent IP changes.
Posted by: Iang at October 27, 2004 07:14 AM>No, that just refers to the current regime as if it were founded. As copyright is a subsidy, there will be those who benefit from it, and those who lose from it, but that is no argument in support or against it.
>The rest of the paragraph similarly accepts the existence of the current regime as proof that it is "valuable for society" as opposed to being expressed in the law.
It was not my intention to argue in support of the current situation. I was commenting on a current situation and it seemed fitting to do so in light of what is the current situation. Copyright does have a value to a present day author.
>Yes, they may indeed express their desires as they choose, but such is irrelevant to the debate.
No, No, No! It is key to the debate...
What I am trying to say is this, the quality of a society is dependant on the quality of the individuals in that society. You can legislate, decree, subvert, reorient, reinvent, liberate to your heart's content, but if the individuals of which the society is comprised are shit, then verily I say unto you, the society will be shit. If the individulas in the society are not capable of respecting each other's desires it is probably time to split. If Mister De Soto wants me to not copy his book why should I not respect his wishes? In fact I must, because I fully expect to have my wishes given the same accord by others.
>Indeed, it's fair to say that many students in the 1st world will also be denied his book because they can't afford to buy every book they want.
You don't need to own a book to get its ideas. You can borrow it from the library. There are ways to access the info in the book that the author had consented to. Just because you can pirate a thing doesn't make it right to pirate it. This is not to say that once the technology to pirate a book easilly has arrived if you, as an author, don't grok this and develop strategies for getting paid for your work, other than depending on a thing that you can no longer depend on (copyright), you are trying to will the tide not to come in and you will have as much sucess as King Canute.
>And the rest of IP has gone the same way. The little flashing cursor on your screen is owned, or was, at one point. Business processes are now patentable, and it is not beyond the realms of possibility to imagine that the prescription in de Soto's book is also patentable. After all, it's about business, and it's a process.
I agree with you completely that IP law and patent law has gone all decline and fall of the roman empire. The plebs can no longer be forced to regard the emperor with anything kinder than distain. The plebians are pushing the emperor by subverting his rule with technology. This probably explains why previous emperors preferred to keep their plebians even poorer and stupider than those of the present day...
>The idea of Mickey Mouse *is* owned, and it is well protected. So much so that they passed an Act of Congress in the US to protect it for another 20 years.
This is not a bad thing. It is this kind of act that may make people realise how absolutely greedy the corporations have become. Actually I think that it will take many, many, many more instances of this kind of thing before the people in the que to buy Mickey Mouse 100% approved genuine licensed stuff look up from their stupidity driven purchasing frenzy to even begin to realise that they are being milked. Then again they are whole orders of magnitude more likely to borrow heavily at exorbitant rates of interest in order to finance their aquisition of a full set of Mickey Mouse 'collectibles' and never ever even think about it at all. As a believer in personal freedom I have to say it is not my job to deny such souls whatever pleasure it is they get from this. I will personally choose to not become a participant in that game...
There will be a change to copyright law. Why? Because those making the laws and those trying to enforce them will continue to become a laughing stock if they continue on their current course. Ghandi is a good demonstration of this phenomenon. He made the British realise they couldn't, amoung other things, stop several million Indians from making their own salt and not paying the tax on it. The British were smart enought to realise that if you allow yourself to become irrelevant then your career as a law making group is over and its time to shut up your empire and go home.
Those supporting the current IP law paradigm will abandon it, or suffer the inevitable end of such fools. They will just be ignored... because the world is full of individuals who are prepared to ignore a request by another individual as regards providing him recompense for his work.
Fairwitness.