“By our calculations, the total value of the real estate held but not legally owned by the poor of the Third World and former communist nations is at least $9.3 trillion (1997).”
- The Mystery of Capital
Beginning in 1862, Homestead laws in the US offered free property to qualifiers who promised to work the land for five years. Once that obligation was met, ownership was theirs. During this time, over 10 percent of the total area of the US was transferred to over 1.6 million homesteaders. In developing nations, GPS and satellite maps were used to identify land rights for a multitude of the poor, who had no previous deeds or titles assigned to their assets. But this may all be moot by the year 2030. If the World Economic Forum (WEF) has its way, private property as we know it will be a thing of the past.
The WEF is an international non-governmental organization founded in 1971 by German millionaire Klaus Schwab and funded by member organizations. Mostly known for their annual Davos meeting in Switzerland, this highbrow shindig is attended by the world’s wealthiest businessmen, politicians, and celebrities. Their goal? The abolition of the current political structure to be replaced with governance by multinational organizations. Schwab, who just happens to reside in the U.S.’s wealthiest zip code in California, has duplicitously declared, “You will own nothing, and you’ll be happy about it”.
While the WEF threatens to take property away, billions of the world’s poorest are struggling to obtain it. It has been taken for granted, that if you joined your sweat with a piece of land, that land was yours. And yet by those standards, the West flourished, while the rest withered. For example, today in Africa, only 25 percent of all land receives any kind of legal protection, while nearly 80 percent is community-held.
In America, secure private property rights are essential for success in the marketplace. In 2018, 77 percent of small business startups were launched from personal funds, many using home equity loans as collateral. Established legal institutions and formal property designations allowed these entrepreneurs the physical assets needed to open their businesses.
In Hernando de Soto’s 2000 book, “The Mystery of Capital” DeSoto looks to solve the mystery of why capitalism flourishes in the West, but not in the rest. What he soon discovers is that the mystery isn’t a mystery after all. What has constrained developing countries is their inability to create capital. While their assets are significant, they are dead, without legal titles, deeds, or incorporation. DeSoto reveals the stunning fact that the value of savings among the poor is 40 times all the foreign aid received since 1945. The poor have assets in the form of houses, businesses, and crops, but without a process to legally fix their assets, their informally held property is unavailable for credit. The potential for wealth is there, it exists, but it is not recognized. Without it, individuals are denied loans, mortgages, and even bank accounts, making it impossible to sell, rent, lease, or leverage their assets to create and grow their wealth. Add to that the excessive amount of red tape needed to start a business, forcing willing entrepreneurs into less productive and non-legal arrangements.
In fact, a 2018 International Labor Organization (ILO) report found that more than 60 percent of people employed around the world work outside legal economies. The majority are found in developing countries that operate in underground or black markets. In Robert Neuwirth’s book, “Stealth of Nations”, Neuwirth notes: “In 2009, the Organization for Economic Cooperation and Development (OECD), a think tank sponsored by the governments of 30 of the most powerful capitalist countries and dedicated to promoting free-market institutions, concluded that half the workers of the world – close to 1.8 billion people – were working in System D; off the books, in jobs that were neither registered nor regulated, getting paid cash and, most often, avoiding income taxes.”
For our ancestors, the land was necessary for survival. Before laws were written, early settlers set up social contracts and arrangements defining the ownership of assets and rules that governed their use and exchange. These informal arrangements served as a foundation for the formal structure that followed. Using legislation, statutes, regulations, and institutions, property became legally recognized assets through titles and deeds. Once in place, private property recognition provided the opportunity for citizens to grow their wealth. If developing countries can imitate what the West has already done, they too can begin to produce wealth on a massive scale.
Presently, there are nearly 40 billion acres of inhabitable land in the world. Royalty, billionaire businessmen, corporations, and other well-connected individuals own significant portions of that land. In the US, the federal government owns a third of all land, including nearly 85 percent in Nevada alone. Property is the great equalizer, a source of wealth, and a means of autonomy. World organizations, like the WEF, calling for an end to private property, threaten the prosperity and future success of all of us.
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