De Soto, Hernando 1941-

BIBLIOGRAPHY

The Peruvian economist, Hernando de Soto, best known for his work on the informal economy and its negative effect on poverty amelioration, was born in 1941 in Arequipa. After his father left Peru in 1948 following a military coup, de Soto was educated in Switzerland and did not return to Peru until 1979. He founded the Institute for Liberty and Democracy (ILD) in Lima the next year and serves as it president.

De Soto has written two major books expounding his ideas: The Other Path: The Economic Answer to Terrorism (1986) and The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (2000). For both, the subtitles are as significant as the titles. Terrorism is a topic with which de Soto is familiar. He and the ILD have been attacked (physically, not just intellectually) by the Shining Path, a leftist revolutionary Peruvian movement.

De Soto discusses five mysteries of capital in The Mystery of Capital. The three most significant are missing capital, the lessons of U.S. history, and legal failure. The basic argument is that the problems of the poor—whether in Peru, Egypt, Haiti, the Philippines, or elsewhere—are not due to lack of possessions or assets but to lack of legally recognized property rights. His researchers have documented the problems that the poor face in major cities, where it takes too long for them to get a license for a legitimate business and their capital is dead capital, preventing them from benefiting from standardization, legal transferability of property, and the use of property as collateral. De Soto claims that over half the grievances of the poor in Peru concern difficulties of getting legal title to real estate: houses, offices, factories, and agricultural land. He claims that the changes in the developing world since the 1960s rival those of the Industrial Revolution since they have involved a massive migration of four billion people leaving their traditional way of life.

De Soto and the ILD have been involved in designing and implementing programs to empower the poor in many areas of the world: Africa, Asia, Hispanic America, the Middle East, and the former USSR. The Other Path (a title chosen as a deliberate antithesis to the Shining Path) argues that the real enemy of the poor is not capitalism or “feudalism” but mercantilism: the predominant system in Europe in the early modern pre–Adam Smith (1723–1790) era and a continuing socioeconomic system in postcolonial Hispanic America. It was in The Other Path that de Soto first developed the ideas behind the informal economy: “informal” because it is not formally recognized by the law but functions outside it. It includes informal housing, informal trade, and informal transport.

De Soto points out the hidden costs of informality and the significance of the law as a determinant of development, and he critiques the redistributive tradition, which he associates with the early mercantilist system. He contrasts the relatively peaceful resolution of socioeconomic problems in England (and the United States) with the much more violent revolutions in France, Spain, and Russia. The unlearned lesson of U.S. history was its implementation of widespread property rights in the late nineteenth century.

Numerous criticisms have been made of de Soto’s theories and of attempts to implement them to empower the poor. He has been accused of favoring a “single bullet” approach, and the statistical basis of his data has been questioned. Some critics argue that it is difficult to establish who owns what in an informal economy and that some ILD reforms (such as those in Bogotá) have not improved conditions for the poor. Critics also argue that de Soto ignores the importance of culture and that, while he may be correct in his vision of property rights, the sequencing of reforms is just as important as the need to pay attention to local social context.

In response de Soto (as well as a prominent colleague of his, Madeleine Albright, former U.S. secretary of state) have countered that arguments for the importance of legally recognized property rights do not imply “a silver bullet” but a “missing link.” De Soto argues that heads of state want his help in quantifying the informal sector and that ILD is the only organization doing such detailed research. Perhaps the best summary of de Soto’s views would be that he has the correct diagnosis but an as yet imperfect prognosis; nevertheless, he has started the important process of documenting the (legally) unrecognized assets of the poor.

SEE ALSO Capital; Development Economics; Informal Economy; Land Claims; Poverty; Property; Property Rights

BIBLIOGRAPHY

PRIMARY WORKS

De Soto, Hernando. [1986] 2002. The Other Path: The Economic Answer to Terrorism. Trans. June Abbott. New York: Basic Books.

De Soto, Hernando. 2000. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books.

De Soto, Hernando. 2003. The Economist versus the Terrorist. Economist, Feb. 1: 62.

De Soto, Hernando. 2003. Listening to the Barking Dogs: Property Law against Poverty in the Non-West. Focaal: European Journal of Anthropology 41: 179–185.

SECONDARY WORKS

Albright, Madeleine. 2007. The World in 2007: It’s Time for Empowerment. Economist, 21st special yearly edition: 65.

Institute for Liberty and Democracy (ILD). http://www.ild.org.pe/home.htm.

The Mystery of Capital Deepens. 2006. Economist, August 24: 58.

Rossini, R. G., and J. J. Thomas. 1990. The Size of the Informal Sector in Peru: A Critical Comment on Hernando de Soto’s El Otro Sendero. World Development 18 (1): 125–135.

Samuelson, Robert. 2001. The Spirit of Capitalism. Foreign Affairs 80 (1): 205–211.

Woodruff, Christopher. 2001. Review of de Soto’s The Mystery of Capitalism. Journal of Economic Literature 39 (4): 1215–1223.

Calvin Hayes

Hernando de Soto

Born: c. 1496
Jerez de los Caballeros, Spain
Died: May 21, 1542
Ferriday (now in Louisiana in the United States)
Spanish explorer

The Spanish explorer Hernando de Soto participated in the conquests of Nicaragua (in Middle America) and Peru (in South America). De Soto explored parts of nine states in the southeastern part of the United States, and he was the first white man to cross the Mississippi River.

Born to explore

Hernando de Soto was born sometime between 1496 and 1501 at Jerez de los Caballeros in the province of Estremadura, Spain. He was born into a family with minor nobility and little money as the second son of Francisco Mendez de Soto and Leonor Arias Tinoco. His education was limited; he was more interested in adventure and exploration. With little more than a sword and shield he sailed to Central America in 1514 with Pedro Arias de Ávila (c. 1440–1531), known as Pedrarias, who was about to become the governor of Panama.

As Pedrarias's lieutenant, de Soto was allowed to explore Central America in search of treasure and land. Among the areas he explored in the 1520s were modern Costa Rica and Honduras. De Soto conquered Nicaragua in 1524, and along with Hernan Ponce de Leon and Francisco Companon, he became a leading citizen of that country. De Soto was ambitious and wanted the chance to rule a country, but Pedrarias blocked his attempts to achieve more power in Nicaragua.

Fame and reward

Sailing from Nicaragua in 1531, de Soto joined Francisco Pizarro (1471–1541) in the conquest of Peru, becoming an important figure in the fight. He was the first Spaniard to meet the Inca leader Atahualpa (c. 1500–1533), who had led the victory of a recent civil war in Peru. Atahualpa had great wealth, and he gave many gifts to de Soto. Pizarro later had Atahualpa killed while de Soto was on a scouting mission. Although de Soto emerged from the conquest with a reputation as a skilled horseman and "one of the four bravest captains who had gone to the West Indies," he was upset that Pizarro had killed Atahualpa. He also felt he would never be given the opportunity to provide leadership to a country.

With fame and a fortune of 100 thousand pesos in gold, de Soto returned to Spain in 1536, where he married Isabella de Bobadilla, one of Pedrarias's daughters. De Soto was very interested in starting up a new expedition. He got his chance when Emperor Charles V of Spain (1500–1558) rewarded him for his efforts in Peru with a title as governor of Cuba and the authority to explore, conquer, and set up colonies (at his own expense) in the entire region that is now the southern part of the United States. De Soto returned to Cuba in 1538, where he assumed the governorship and prepared for his expedition to Florida.

An explorer until the end

Hoping to find another Peru, de Soto and 620 men landed south of modern Tampa Bay, Florida, on May 30, 1539. His party encountered a man named Juan Ortiz, a survivor of an earlier failed expedition to Florida, who had lived among the Indians for twelve years. With Ortiz acting as interpreter, de Soto began his search for treasure and an advanced Indian civilization. Marching up the west coast of Florida, he spent the winter near the present site of Tallahassee. In 1540 de Soto resumed the march through Georgia. At the Savannah River he met an Indian woman who offered him a long string of pearls and told him more could be found in nearby burial grounds. After collecting 350 pounds of pearls, the party continued northward into present-day South and North Carolina, across the Smoky Mountains into Tennessee, and southward into Georgia and Alabama. Their fiercest battle with Indians, which resulted in the loss of many men as well as the pearls, occurred in southeastern Alabama.

De Soto and his followers, anxious to find riches, set out once again to the north-west into northern Mississippi. In May 1541 de Soto sighted the Mississippi River south of current-day Memphis, Tennessee. After crossing the Mississippi he explored Arkansas, and established his winter quarters near the present site of Fort Smith. Having made up his mind to return to the sea, he reached the mouth of the Arkansas River, where he died of fever on May 21, 1542. De Soto's men wrapped his body in cloaks packed with sand and cast it into the river. The 311 survivors of the expedition, under Luis de Moscoso, floated down the Mississippi and coasted along the Gulf shore until they reached Tampico, Mexico, in September 1543.

For More Information

Clayton, Lawrence A., Vernon James Knight Jr., and Edward C. Moore, eds. The De Soto Chronicles. Tuscaloosa: University of Alabama Press, 1993.

Duncan, David Ewing. Hernando de Soto: A Savage Quest in the Americas. New York: Crown Publishers, 1995.

Whitman, Sylvia. Hernando De Soto and the Explorers of the American South. New York: Chelsea House, 1991.

Hernando de Soto

The Spanish conqueror and explorer Hernando de Soto (1500-1542) participated in the conquest of Peru, explored the southeastern part of the United States, and was the first white man to cross the Mississippi River.

Hernando de Soto was born at Jerez de los Caballeros in the province of Estremadura. Although of noble lineage, he was without wealth. "With only a sword and shield" he accompanied Pedrarias when the latter assumed his post as governor of Darien (Caribbean side of the Isthmus of Panama and Colombia). As Pedrarias's lieutenant, De Soto explored the area encompassing modern Costa Rica, Nicaragua, and Honduras in the 1520s.

Sailing from Nicaragua in 1531, De Soto joined Francisco Pizarro in the conquest of Peru, emerging from the conquest with a reputation as a skilled horseman and "one of the four bravest captains who had gone to the West Indies." With a fortune of 100,000 pesos in gold, De Soto returned to Spain in 1536, where Emperor Charles V rewarded his exploits by appointing him governor of Cuba and adelantado of Florida. As adelantado, he was commissioned to conquer and colonize, at his own expense, the entire region which is now the southern part of the United States.

De Soto returned to Cuba in 1538, where he assumed the governorship and prepared for his expedition to Florida. Hoping to find another Peru, De Soto and 620 men landed south of Tampa Bay on May 30, 1539. A reconnaissance party returned with Juan Ortiz, a survivor of the earlier illfated Narváez expedition, who had lived among the Indians for 12 years. With Ortiz acting as interpreter, De Soto began a 3-year journey in search of treasure and an advanced Indian population. Marching up the west coast of Florida, he wintered near the present site of Tallahassee. In the spring of 1540 De Soto resumed the march through Georgia. At the Savannah River he met an Indian chieftainess who offered him a long string of pearls and told him more could be found in nearby burial grounds. After collecting 350 pounds of pearls, the expedition continued northward into what is present-day South and North Carolina, across the Smoky Mountains into Tennessee, and southward into Georgia and Alabama. Their severest battle with Indians, which resulted in heavy casualties and loss of the pearls, occurred in southeastern Alabama at a large town called Mavilla.

De Soto set out once again to the northwest into northern Mississippi. In May 1541 he sighted the Mississippi River south of Memphis. After crossing the Mississippi he explored Arkansas and established his winter quarters near the present site of Fort Smith. Now resolved to return to the sea, he reached the mouth of the Arkansas River, where he died of fever on May 21, 1542.

De Soto's men wrapped his body in mantles packed with sand and cast it into the river. The 311 survivors, under Luis de Moscoso, built seven brigantines, floated down the Mississippi, and coasted along the Gulf shore until they reached Tampico, Mexico, on Sept. 10, 1543.

Further Reading

The most recent sources on De Soto are Garcilaso de la Vega, The Florida of the Inca, edited by John G. and Jeannette J. Varner (trans. 1951), and James A. Robertson, ed., True Relation of the Hardships Suffered by Governor Fernando de Soto and Certain Portuguese Gentlemen during the Discovery of the Province of Florida (trans., 2 vols., 1932-1933). Accounts of De Soto's career can be found in Woodbury Lowery, The Spanish Settlements within the Present Limits of the United States, 1513-1561 (1901); Edward G. Bourne, Spain in America, 1450-1580 (1904); and Herbert E. Bolton, The Spanish Borderlands: A Chronicle of Old Florida and the Southwest (1921). □

Hernando De Soto , c.1500–1542, Spanish explorer. After serving under Pedro Arias de Ávila in Central America and under Francisco Pizarro in Peru, the dashing young conquistador was made governor of Cuba by Emperor Charles V, with the right to conquer Florida (meaning the North American mainland). He led an expedition that left Spain in 1538 and landed on the Florida coast, probably near Tampa Bay, in 1539. That was the start of an adventure that took him and his band nearly halfway across the continent in search of gold, silver, and jewels, which they never found.

After wintering near Tallahassee they went N through Georgia and the Carolinas into Tennessee, then turned S into Alabama, where De Soto was wounded in a battle with Native Americans. He was so determined to continue his treasure hunt that he refused to inform his men that Spanish vessels were off the coast. In the spring of 1541 they again set forth and were probably the first Europeans to see and cross the Mississippi. A journey up the Arkansas River and into Oklahoma disclosed no treasures, and, discouraged, they turned back to the banks of the Mississippi. There De Soto died; he was buried in the river, so that the Native Americans, whom he had intimidated and ill-used, would not learn of his death.

His men went west again across the Red River into N Texas, then returned to the Mississippi and followed it to the sea. A remnant of the expedition made its way down the coast to arrive at Veracruz in 1543. The chief chronicle of the expedition is by a Portuguese called the Gentleman of Elvas.

Bibliography: See biographies by R. B. C. Graham (1924), T. Maynard (1930, repr. 1969), B. Shipp (1831, repr. 1971), and M. Albornoz (1986); studies by R. F. Schell (1966) and P. Lily (1983).

De Soto, Hernando (c.1500–42) Spanish conquistador and explorer. De Soto took part in the conquest of Central America, before joining Francisco Pizzaro's expedition in Peru; he returned to Spain when the Inca King Atahualpa, whom he had befriended, was executed by Pizarro. De Soto was then made governor of Cuba by Emperor Charles V, with the right to conquer the mainland of America. He landed on the Florida coast in 1539 and reached North Carolina before crossing the Appalachian Mountains and returning through Tennessee and Alabama. In 1541 he led another expedition, crossing the Mississippi (which he was probably the first White man to see) and going up the Arkansas River into Oklahoma. They were seeking gold, silver, and other treasure, but returned disappointed. De Soto died on reaching the banks of the Mississippi.

De Soto, Hernando (1500–42) Spanish explorer. After taking part in the conquest of the Incas under Francisco Pizarro, he was appointed governor of Cuba (1537) with permission to conquer North America. His expedition landed in Florida (1539), and advanced as far n as the Carolinas and as w as the Mississippi. The search for treasure and the extreme brutality towards the native inhabitants led to a costly battle at Maubilia (1540). They returned to the Mississippi, where De Soto died.

Hernando de Soto see De Soto, Hernando .

Soto, Hernando de See De Soto