Wyoming Liberty Group
The Mystery of the Jasmine Revolution
On December 17th, Muhammad Bouazizi set himself on fire in the main square of Sidi Bouzid to protest his frustration at Tunisia’s oppressive economic regulation. In doing so, he sparked the Jasmine Revolution. It toppled Zine el-Abidine Ben Ali and has severely shaken Muammar Gadaffi of Lybia. So far Gadaffi’s main accomplishment has been to make Egypt’s Hosni Mubarak look like a statesman for stepping down when he did.
None of the regimes overthrown or shaken in the Jasmine Revolution is noted for its forbearance of protesters — Islamist or secular. Yet well-organized protests spread like wildfire. How? And how did they come to fruition in spite of the repressive regimes?
It’s facile to say they organized on Facebook, Twitter and mobile phones. Of course they did. But if you are planning a protest to overthrow a repressive regime, you don’t invite just anybody — the secret police will be there as well, hence the mystery of the Jasmine Revolution. How did the protesters organize as well as they did while catching both the domestic secret police and the western spy services like the CIA flat footed?
For the answer to that question, we go to Lima, Peru, and the Institute for Liberty and Democracy. The ILD has led the way in documenting the extra-legal, or informal, markets in countries around the world. In The Other Path, published in1989, ILD’s Hernando De Soto documented the informal markets of Lima, showing that Peru’s Byzantine regulatory system inhibits legal business to the point that vast swaths of the Peruvian economy are in the informal market.
In particular, de Soto documented the system for establishing extra-legal housing in Peru, with its vast invasions of previously idle land by informals. These invasions require coordinating the actions of hundreds to thousands of people, all hidden from the official police. They involve informal possession, construction and titling of hundreds of homes.
In The Mystery of Capital, published in 2000, de Soto documented these practices elsewhere. In Egypt, extra-legals hold some $241 billion worth of assets, or 55 times the total foreign direct investment ever made in Egypt. World-wide, extra-legalss have more than $9 trillion in assets. What these books reveal are vast extra-legal societies with sophisticated legal and social systems of their own, almost completely hidden from the formal government, from the favelas of Brazil to the slums of Cairo. With these come vast hidden communications networks, networks that have been around much longer than Facebook, Twitter or mobile phones. Of necessity they are hidden from the secret police. Of necessity they are hidden from the CIA and its western siblings.
The key domestic policy implication of the Jasmine Revolution is the need, not only to de-throne tyrants, but for legal systems that protect property and business contracts. Bring markets and globalization to the poor so that they can make the most of what they now own only in an informal, hidden way. In short, keep de Soto and his colleagues at the ILD very busy assisting with in the establishment of legal property and contract rights.