Hernando De Soto on Dealing With Terrorism (from Jan'03). Yet Mr de Soto is not one of those economists who thinks that the key to capitalism's success is to protect existing, legally established property rights, come what may. On the contrary, he argues that Capital Ism will thrive, and overcome threats such as terrorism, only if legal systems change so that most of the people feel that the law is on their side. Creating this sense of inclusion requires many things, including marketing the idea aggressively to the poor. But one of the best symbols of change is a mass programme of giving full legal protection to the de facto property rights that are observed informally by the (typically poor) people now living beyond the formal law... His then boss, the then-president, [Alberto Fujimori], and the army agreed to recognise the farmers' informal militias, grant them land titles and decriminalise the growing of coca; Mr de Soto even got the elder George H W Bush to support this strategy, in exchange only for a signed pledge from farmers that they would begin a programme of crop conversion away from coca. This certainly undermined support for the [Shining Path].

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