Is Capitalism Dead?

Extracted From FORA.tv Series: Is Capitalism Dead?

Event Date: 10.20.08

Hernando de Soto - Hernando de Soto is President of the Institute for Liberty and Democracy, headquartered in Lima, Peru

Is Capitalism Dead? Hernando De Soto believes that the Capitalist system has veered off course by ignoring the fundamental basis to capitalism, and that is record keeping and transparent information exchange. A world where TRUST is BUILT and HONOURED.

TRUST - to be given credit where credit is due.

it isn't that we do not have the technology

it isn't that we do not have the resources

it isn't we do not have the financial backing.

it isn't we lack the entrepreneurial spirit.

its that the legal system that creates trust amongst each other has collapsed.

the focus of the media is, the "real" economy is fine, but the "other" economy has collapsed.

What is the "real" economy? One that is supported by TRUST

What is written on paper acually does mean something.

What happened to the semiotic (The theory and study of signs and symbols, especially as elements of language or other systems of communication, and comprising semantics, syntactics, and pragmatics) system that was set up?

Property Rights System - makes things fungible, makes things fixed in time and space, and that make the paper TRUSTABLE

Always has been in the context of "real" assets

Then came securitization and derivatives - where's the "real" part of the assets?

The Property Rights systems worked sliently and allowed for TRUSTED communication amongst all.

The Reality Today? (Naomi Klein)

The same bank that issued that toxic paper and has been bailed out to the tune of hundreds of BILLIONS of dollars, these banks are paying lobbyists those same millions to stop the government from giving any aid directly to the mortgage holders of the mortgage issued by the bailed out bank. These are contracts which cannot be broken, these banks say, while they break their own contracts in the process. So abiding by Property Rights law is fine when it suit the purpose, but not when it doesn't.

The Reality is that the $440B that went to AIG amounted only to 0.8% of the total securitization/derivative market - the total is more like $60 or 600 TRILLION - some enormous amount several multiples of GLOBAL GDP!!!

The crux of the problem is: nobody trusts the paper - that paper brings information either as social property, private property, micro property, tribal property, cooperative property - call it what you will, the "paper" is property of some nature. The property paper no longer reflects what is going on. And what you lack at the moment is information. The recording of the information under the property laws, meant the one could put value on the information, on the paper. We are lacking the information. When asked what the "real" challenge is with the derivatives market - NO ONE CAN TELL YOU>>>>>>BECAUSE THEY DON'T KNOW. How can you put a value on something you know nothing about.

You can put whatever slant you want on it, the financial crisis, the liquidity crisis, the credit crisis, the subprime mortgage crisis, whatever. The reality is, ou don't know who own's what, where, and in what bank, and THAT is a property problem.

The Power AND the Control is with the people that are NOT concerned about Property Rights as a Reflection of Real Wealth!!

If we are to extricate ourselves from this mess, TRUST must again be REBUILT and MAINTAINED.

http://fora.tv/2008/10/20/Naomi_Klein_and_Joseph_Stiglitz_on_Economic_Power#fullprogram