THE OTHER PATH:

The economist versus the terrorist: Hernando de Soto believes that capitalism can defeat terrorism (The Economist, Jan 30th 2003)

TO BE the target of a terrorist campaign is not the usual fate of an economist. But Hernando de Soto is no ordinary practitioner of the dismal science. It was his pro-capitalist intellectual crusade against Shining Path terrorists in his native Peru that made him one of their top targets; he survived at least three attempts on his life. Those ideas, set out in his 1987 bestseller, "The Other Path", may even have helped to turn the poor against the Shining Path, ensuring its defeat. What worked in Peru, he says, can work wherever terrorism now thrives.

After the September 11th terrorist attacks, this message gained a new urgency. Mr de Soto was already increasingly influential with international policymakers, thanks to a second book, in 2000, entitled "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else". Now, he is everywhere. So far, over 20 government leaders-from Afghanistan to Mexico to Russia-have sought his counsel. This week alone he was championed by Bill Clinton at the World Economic Forum in Davos; and then he discussed development with Bono, a rock star, and Gordon Brown, Britain's chancellor of the exchequer.

Mr de Soto is charismatic and sells his ideas energetically. But he is no mere talker. Besides Peru and El Salvador, which made reforms some years ago based on his ideas, Mr de Soto and his think-tank, Institute for Liberty and Democracy, have recently been working with the governments of Mexico, Egypt, the Philippines, Honduras and Haiti-which is expected to be the first of these countries to introduce new legislation in April.

Marx and Engels, Mr de Soto's pet dogs, were so named because "they are German, hairy and have no respect for property". It is a carefully chosen joke, for respect for property is at the heart of Mr de Soto's economic creed-and may explain why his earliest foreign supporters, in the 1980s, were right-wingers such as Margaret Thatcher, Richard Nixon and Dan Quayle.

Richard Nixon? He was no right-winger. Posted by Orrin Judd at February 4, 2003 9:26 PM