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Evaluate the following argument on the topic "What can make the difference today between rich and poor nations?": Industrialization poised America to emerge as the world's leading economic power. The United States also increased its role in international affairs. Strong navies conquered distance, and secured sea lanes for trade. However, nations are divided by more than distance. Statists assume that poor people in the Third World are incapable of entrepreneurship. Hernando De Soto, Peruvian economist, rejects that viewpoint as patronizing. He wrote what some consider the influential book on the informal economy, El Otro Sendero, or The Other Path, 1986. DeSoto argues that overregulation in the economy of a developing country forces entrepreneurs to operate in the informal sector, hindering economic development. He is credited with the victory of the Peruvian state against the Shining Path guerrilla movement. He showed the poor of Peru an alternative solution to their poverty and eroded support for terrorism.

One way to evaluate the argument about the difference between rich and poor nations is to question the initial premises. There is statist ideology of this kind, and those who advocate nationalist economic policies do not believe that poor people are incapable of what the author calls entrepreneurship. These are terms most frequently used by right-wing thinkers to promote an imperialist view. Moreover, De Soto's views arguably disguise the and excuse the genocidal actions of the Peruvian comprador regime.

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An evaluation of this argument necessarily centers around a response to De Soto's. What De Soto euphemistically calls an "alternative solution" might more accurately be called a genocide by the rest of the world. The atrocities committed against the indigenous campesinos in the countryside by the Peruvian military certainly fit the United Nations' definition, which states that any attempt to destroy an ethnic or national group in whole or in part is genocide. The massacres committed against entire villages, claimed by the military to be sympathizers of the Shining Path guerrillas, seems to fall under the category of physical destruction of an ethnic group.

The use of the term "statists" suggests the political assumptions of the arguments. The term is typically found in dialogue deployed by far-right think tanks and libertarian interest groups. The fact is that Peru's former president Alberto Fujimori was sentenced to prison for crimes against humanity, so it is omissive to claim that the poor people of Peru were simply shown how to become entrepreneurs and that this was what destroyed the Shining Path. In fact, the civil war continued for so long precisely because the guerilla movement had massive support from the poor peasants in the highlands. State terror by the military broke their morale and solidarity, and the Peruvian special forces decapitated the movement by capturing or killing its leadership. It wasn't the revelation of the righteous path of the free market that converted the communist-minded Peruvian peasants.

State intervention in the economies of recently decolonized countries was the norm until around the 1980s. In fact, it was a necessity. Countries that threw out their colonizers in national bourgeois revolutions had to rebuild from decades of chronic underdevelopment imposed upon them by their former colonial masters. In order for their indigenous bourgeois to properly develop the productive forces and modernize their country through industrial development, protectionist measures were absolutely needed in order to survive against predatory imperialists who strive to monopolize the markets and resources of the third world in their drive to export massive amounts of finance capital. Such weak national bourgeois forces lacked the capital to be able to profit from the massive infrastructural projects necessary to modernize their country. State intervention solved this issue. By nationalizing the most important of the countrys' resources, such as oil, the profits accrued by the state could be reinvested into developing vital infrastructure for the economy, such as the laying of railroads and the construction of canals, endeavors which are unprofitable at the beginning. With the state taking the loss, this infrastructure serves to kickstart the economy and facilitate the growth of the bourgeois, who can now transport their commodities and expand as their profits increase, thus providing the country with a modern cosmopolitan society.

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