De Soto's arguments fail to take into account a number of significant details regarding the implementation of this property entitlement system. One of the most key factors that is mostly completely ignored in his work is the existence of cultural, social, and historic difference between the countries of the third world and the example he uses to frame his system of property evolution – that of 19th century American western expansionists. De Soto does take a system of incentives into account in Capital; however, he fails to recognize that different cultural groups will react differently to the same incentive. Capitalism is rooted in an ideology that breaks down relationships to economic arrangements between individuals, yet – many of these informal economies are based upon the relationships one has with one's family and neighbors. Daniel Etounga-Manguelle, a Cameroon scholar, writes
"African thought rejects any view of the individual as an autonomous and responsible being. The African is vertically rooted in his family, in the vital ancestor, if not in God; horizontally, he is linked to his group, to society." (2)
Simplifying each and every culture as the equivalent of the other and claiming a future of action consistent with each other makes the assumption that human nature is universal and has not been shaped by key social, historical, geographic factors etc., something that contradicts de Soto's sometime Marxian rhetoric. De Soto's plan is likeable by many right-wing economists and leaders because it includes no necessity towards distribution of wealth or debt relief. Additionally, it ignores the important social history of inequality, especially of that fostered by colonialism – something I see as a gross injustice towards the conditions that exist today because of it. Additionally, De Soto sets up his argument in a way that implies that capitalism is a natural evolution to the way the world peaks, something that anthropologist Eric Wolfe quite lengthily disproved back in the 80s. In fact, capitalism is largely history's greatest accident – and the supposed causal relation between an informal economy and poverty historically inaccurate.
Implementing De Soto's "plan", furthermore, would open up a myriad of new points, largely raising the question of whether de Soto's "natural" property rights would indeed be so natural at all. Who would be legitimized? Those who act as landowners over these plots, or those who actually occupy them? De Soto makes no assertion as to how to make this distinction. What may seem simple may in fact be much more complicated, as Staffan Gernier asserts:
"Should we legalize the claims of the workers at the occupied Argentinean factories that went bankrupt during the last crisis or protect the claims of the creditors in the bankrupt's estate, or should we perhaps acknowledge and defend the formal factory owner's right to appeal the bankruptcy?" (3)
In fact, De Soto's property system has largely been effectual in the countries in which it has been attempted – in Peru, few of those newly propertied landowners who applied for loans were granted any, and of those who were, loans were mostly granted from the government on the basis of need, not from the private sector, which de Soto claimed would come running to newly propertied individuals to lend money. To them, the land was still worthless, a waste of money and resources better spent. Additionally, under de Soto's plan, the government (such as in Phnom Penh and Manila) had registered previously untitled slums, causing rich developers to rush to gain legitimate titles to these lands. They offered low prices to slum inhabitants, who, desperate for money, gave up what should have been their crowning capital achievement in exchange for paltry penny change. This ultimately led to the eviction of many of these people from the slums they once lived in. (4) Finally, a system of property allows for a government to tax its people, which, in Planet of Slums, Mike Davis points out would actually birth the existence of a new underclass – those who are propertied, but weighed down by the burden of taxes, a burden that is already heavy due to low wages and unsafe work conditions. (5)
Obviously, De Soto has oversimplified a global problem to the extent that his solution proves incapable of dealing with the cold hard reality of the matter – that dredging the third world out of poverty is more complicated than the assigning of a piece of paper with a seal of approval and hoping it works.
