Defining Idiotocracy and Solutions to Apathy and Corruption: Hernando de Soto on the Economic Crisis

A term that does not yet exist, but may be a simple and direct explanation of how many institutions, governments and companies currently operate is to call these organisations Idiotocracies. An Idiotocracy can be defined as a structure, group of managers or culture within an institution that actively works to undermine and slowly destroy and corrupt an institution from within. The defining feature of an Idiotocracy is that the group or culture creates a lose-lose situation for themselves and the institution in which they operate. Often such institutions are not fixated on strong ideals or beliefs, as that would create a strong opposition to counterbalance a strong position, but is defined by a lack of position or ideal or ethic. This lack of focus in the institution promotes a culture of apathy, thus promoting apathetic, uninterested and unmotivated actors to dominate the institution. The core group undermining the institution requires the culture of apathy to be able to push through lose-lose policies and fuel a lack of research and debate into their activities.

In the event the core group is challenged they will go beyond all means in quell any dissent, but with no focus or goal for the institution such actions to silence dissent often crosses the line of civil behaviour. An Idiotocracy cannot function if there are individuals claiming challenges through any existing sensible regulations and policies created by the institution itself, and laws created by the community, as it would naturally balance out the organisation to create a win-lose or win-win scenario. Often such apathy and actions to promote the Idiotocracy is sourced in the negative personal attributes in the leadership of such institutions, as they would likely be the only ones with the power and ability to go beyond regulations, policies and laws to establish their own personal imprint on an institution and guarantee the lose-lose scenario in exchange for their own personal gains. Even if there are no concrete wins for the core group of mangers or leaders, the extreme response needed to maintain the Idiotocracy is certainly a career focused lawyer’s dream as the core group tends to not only be personally negligent, but may tie the organisation into a dilemma without considering the overall effect. While many institutions could be labelled as Idiotocracies in the current economic problems in the West, the core elements of democratic economic traditions need to be re-mended towards its source if the economic crisis will ever be resolved.

Hernando de Soto is a consultant who took to examining the relationship between property rights and economics in his native Peru, and has done similar research in Egypt and other developing countries. Mr. de Soto is an expert in creating viable systems of ownership in order to create specific policy frameworks in those countries. He claims to be a true capitalist and works to create healthy economic development through the core values of property ownership. In the interview in the video below, Mr. De Soto discusses how Latin America has spent the last twenty years focusing on tying ownership to assets so that economic progress can be labelled and claimed. When growth can be measured as wealth and ownership of assets, you also tie the economic actors into a system where profits result from intelligent entrepreneurship and losses can be governed by healthy policies. He discusses how the current economic solutions in the West may never produce an end to the economic crisis as there has been very little done to tie the ownership of property and assets to those who bought and sold the assets in the financial system. While Latin America worked hard to clarify their economic systems and reduce corruption and shocks, the West had worked to erase the basic elements of property ownership in their financial systems and the demise of healthy American and European regulations was the end result. Without knowing who is investing in what products and without a label to reward entrepreneurs and guard against the creation of Idiotocracies, it created a lose-lose situation for those banks and national economies. Without the basic elements of ownership in capital markets the right to claim wins and be accountable for losses no longer exists. Without a means to profit from investments and to be accountable to the regulations and laws regarding the loss of assets the end result is either a corrupt system or a pure Idiotocracy as people become worn down and apathetic with the absolute instability with their investments and complete lack of leadership from their elected officials.

Some first basic steps to trying to resolve the current system mired in economic and political difficulties is to acknowledge that in Western countries there is no physical loss of capital value in most assets, but the impression of loss and a bad future as opposed to the physical reality of the current economy. Confidence and facts will affect the markets in a great way. When media focuses on debates that argue the future losses with candidates that are in no position or power or leadership, it places the anarchy of partisan politics above the stability of the true economy. Read and ask questions of political leaders after researching those like Hernando de Soto, and do not just vote but contribute and challenge your community and leaders with arguments that make for better dialogue. If you protest, make sure you protest for something, as past generations fought for this very basic and important right, and it is our obligation to respect our society and system and make it better beyond trying to destroy it, this has to involve some compromise. The Arab Spring is a good example to follow, but one needs to understand that it is a result of a lack of rights, rights that have established a means to challenge and elect our ways out of major crisis in Western countries. They are on the streets, in often dangerous circumstances because a healthy system does not exist for them. To prevent further economic problems, we must not only work to reduce corruption, but also fight against apathy as we are at the verge of becoming a pure Idiotocracy in many of our public and private institutions. The only way to stop it is to acknowledge we are responsible for our own communities and take a serious intelligent challenge to improve our situation. It is each individual’s responsibility to become a part of their community, as the reality is that it is easier in our societies to create a healthier system as the current troubles could be a lot worse.

Please see Michael Coren’s Interview with Hernando de Soto below:

http://www.sunnewsnetwork.ca/video/search/hernando/latin-american-analysis/1275286073001

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