I read an article in HBS Working Knowledge titled "How Property Ownership Changes Your World View". It's about an economic study conducted in Argentina that showed how owning property changes your view of the world. They found an area in Argentina where 1,800 landless families occupied an area of land that was owned by someone else (i.e. they were squatters). After the change in government in 1984, the state proposed to pay off the original owners and grant the squatters ownership of the land (subject to litigation by the owners to adjust the price). By 1998, 62 percent of the squatters owned land the other 38 percent did not. They conducted a survey of each group to see if the families would have different views.
The results were pretty telling:
The idea of property ownership (and the pursuit of property) is so embedded in the culture in the West, it's easy to take for granted. Everyone is familiar with the phrase "life, liberty, and the pursuit of happiness" from the Declaration of Independence. But that was actually a derivation from John Locke ("life, liberty, and estate (or property)") and Adam Smith ("life, liberty, and the pursuit of property"). And in fact, the Declaration of Colonial Rights made by the First Continental Congress used the phrase "life, liberty and property".
For those countries where property rights (and the ability for the common man to realistically own property) are weak or non-existent and are not ingrained in the culture as they are in the West (or where decades of Socialism or Communism have made people believe that private property is bad), it's going to be very difficult to make capitalism stick. The interesting thing about this study in Argentina is that if people are granted property and their right to it is protected under law, their view of the world does change.
The results were pretty telling:
Di Tella and his coauthors found that squatters with land titles believed individual achievement is possible by a margin of 31 percent over those who did not hold title to their land; the margin for those with the materialist view that money is important to be happy was 34 percent; and 17 percent more squatters with titles believed that other people could be trusted. The only question that did not show a significant difference related to the meritocratic belief that effort pays off—in this case, the majority of both groups believe that this is true.The author of the study made this point:
There are several implications for the developing world in terms of their willingness to accept capitalism.
If people don't own property, they don't believe that they can build on their success.That seems pretty straightforward, but it seems really difficult for many developing countries to deal with. Particularly the legal aspects of ensuring property rights is a major problem. In the documentary Commanding Heights, they include a sequence on Hernando De Soto, an economist that explored this topic. He wrote a book on it called The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.
The idea of property ownership (and the pursuit of property) is so embedded in the culture in the West, it's easy to take for granted. Everyone is familiar with the phrase "life, liberty, and the pursuit of happiness" from the Declaration of Independence. But that was actually a derivation from John Locke ("life, liberty, and estate (or property)") and Adam Smith ("life, liberty, and the pursuit of property"). And in fact, the Declaration of Colonial Rights made by the First Continental Congress used the phrase "life, liberty and property".
For those countries where property rights (and the ability for the common man to realistically own property) are weak or non-existent and are not ingrained in the culture as they are in the West (or where decades of Socialism or Communism have made people believe that private property is bad), it's going to be very difficult to make capitalism stick. The interesting thing about this study in Argentina is that if people are granted property and their right to it is protected under law, their view of the world does change.
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