Peruvian economist and writer Hernando de Soto has spent decades researching the economics of the developing and post-Soviet world. In Lima, Peru, he founded and became the head of the Institute of Freedom and Democracy (ILD). In the video The Power of The Poor, he gives examples that refute the main advantages of communism.
The main advantage of communism in theory is social equality, as well as public ownership of the means of production. The economist cites many situations of specific people, showing that this social system is not entirely well-off. He tells the stories of poor migrants from farms to cities in search of a wider market and a better choice for earnings, which contribute to bridging the social gap. However, most often social equality turns out to be a utopia due to the reasons given in the video. Most of the villagers in the city live and work outside the law, deprived of legal and cultural tools with which to improve their lives. Consequently, they will remain cut off from the global economic mainstream and will have much less access to the benefits of social production. For example, Dona Herreria Luna is engaged in entrepreneurship without a license, which is necessary to establish social equality and is impossible due to its absence (“The Power of The Poor “). In addition, the villagers are deprived of basic public goods: for example, Joel, Lucy and Ilena do not have access to drinking water, sewerage or electricity. Without property rights, utilities cannot measure their consumption, bill the family for services or charge fees.
Hernando de Soto saw what can happen when the power of the poor is released, when ordinary people have individuality and property. Thus, the examples given by de Soto demonstrate that systemic reforms alone, which are the essence of communism, are not enough. Positive changes will require many programs to work together.
“The Power of The Poor – Full Video.” YouTube, uploaded by Free to Choose Network, 2015, Web.