The Poor Are Richer Than We Think: Unlocking Dead Capital (Vincent Galoso, 5/08/25, Daily Economy)
In 2000, when De Soto produced the first estimate of the scale of this “dead” (i.e., inactive) capital, the total amounted to about $9.3 trillion (9,300,000,000,000 dollars). At the time, this amounted to approximately 28 percent of global individual income. Assuming that proportion holds today, mobilizing this stock of dead capital at a 5 percent annual return (a highly conservative estimate) would generate an additional $1.49 trillion in output per year—equivalent to roughly 1.4 percent of current world GDP.
This may not seem like much. But there are three reasons why it matters a lot. First, the gains would accrue primarily to those at the very bottom of the global income distribution. If all the extra income went to people in Latin America, the Middle East (minus Saudi Arabia, Qatar, United Arab Emirates and Israel) and Africa, this would amount to around $580 per head. In these regions, incomes per head fluctuate from between $500 to $17,000. For them, such an income boost would be significant. Second, the resulting income boost would raise the baseline from which these economies grow—meaning that even if growth rates remain unchanged, the absolute gains compound more quickly year after year. Third, if part of this capital is channeled into research and innovation, it could permanently increase the growth rate itself. Taken together, these effects could help close the gap between rich and poor countries almost overnight, while also accelerating the pace at which that gap narrows over time.
Capitalize.