Summary of The Mystery of Capital

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The Mystery of Capital book summary


9 Overall

7 Applicability

10 Innovation

9 Style


Hernando de Soto’s ideas cannot and should not be ignored. This book will open many eyes to the nature of capital. The author suggests a radically simple yet enormously challenging way of bringing the world’s impoverished billions onto the track of capitalism and development: give them legal property rights to what they “own.” The author’s intriguing case is that a lack of property rights - not a lack of entrepreneurial zeal or competence - stymies development in the former East Bloc and Third World countries. This seemed to be a shockingly original notion when the author first propounded it in his bestseller The Other Path, and it still does. If the book has a flaw, warns, it is that the author’s undisguised missionary ardor sometimes makes one wonder whether he is merely a zealot. Even if he were one, the book would merit reading.

In this summary, you will learn

  • Why people in the old East Bloc and in the Third World are poor even though they have extralegal assets; and
  • What it would take to legalize and document their possessions so they could use them as capital, thus empowering their economic progress.

About the Author

Hernando de Soto is President of the Institute for Liberty and Democracy (ILD) headquartered in Peru. Time recently named him one of the five leading Latin American innovators of the century. He was Personal Representative and Principal Advisor to the President of Peru and initiated economic reforms.



The Importance of Provable Ownership
Ownership and the institutions that support it are the key to the success of the capitalist West. As fundamental as it is, ownership is an artificial construct. When communism fell, millions of people in the countries of the old East Bloc had property...

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    Timothy Harrell 10 months ago
    There's a mistake in the opening paragraph: de Soto's original book was called The Other Path (not The Other Patch).

    It was a deliberate reference to Shining Path in Peru.

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