CONCEPT
Dead Capital
De Soto's term for assets that are real, functional, and economically inert — valuable in use but locked outside the representational system that converts value into capital.
Dead capital is the analytical center of de Soto's lifework — the concept that reframed poverty from a problem of scarcity into a problem of institutional blindness. De Soto's researchers estimated that the informally held assets of the developing world exceeded nine trillion dollars, a figure larger than the combined stock market capitalization of the twenty wealthiest nations. The assets were real: houses sheltering families, businesses employing workers, land cultivating crops. But they could not serve as collateral, could not be sold on open markets, could not be leveraged across generations. The deadness was not a property of the assets themselves but of the system surrounding them. What the formal economy cannot recognize, it cannot capitalize. The concept now applies with uncanny precision to AI-generated intelligence.
In The You On AI Field Guide
De Soto developed the concept through fieldwork across Peru, Egypt, Haiti, and the Philippines during the 1980s and 1990s, work conducted through his Institute for Liberty and Democracy. His researchers did not begin with theory.