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The Mystery Of Capital By Hernando Desoto Essay

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INTRODUCTION
“Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned” (Ayn Rand). The utilization of capitalism alongside of various other economic principles allows society as a whole to create prosperity. “Economically, when such freedom is applied to the sphere of production its result is the free-market” (Capitalism.org). It should make sense that societies who have capitalist values automatically experience the prosperity and freedom that Milton Friedman describes; however, this is not always the case. Oppressive governments while do hold capitalist systems limits the rights of their individuals. In eliminating specialization and comparative advantage governments are hurt. Hernando De Soto argues that there are multiple factors that contribute to wealth creation and McGregor exemplifies this point with descriptions of communist Chinese governments which show the aspects of their governments which are not capitalist.
Section 1
In The Mystery of Capital by Hernando Desoto argues that for a capitalist economy to produce to wealth they need something else. The something else is capital. According to Desoto capital is a “part of a country’s assets that initiates surplus produces and increases productivity” (41). Desoto continues to give accounts of famous economists and their view on capital. For example, Adam smith argued that capital was in charge of the exchange of products in the
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