Many years ago, I wrote my senior thesis on the origins of capitalism. I argued that capitalism can be defined as the ability to leverage one’s own assets, coupled with a legal system of equality under the law. This sounds easier than it is. In most of the world, throughout most of history, property has ultimately belonged to a lord, a king, or — most critically — to the future generations. If one is farming a piece of familial land, then the property is not actually owned by the farmer. He is, instead, a steward, connecting the past to the future. He cannot mortgage the property, because he cannot lose it. Capitalism requires the ability to lose one’s investment, and a society where the real estate is held as familial land cannot free up the capital required to achieve the enormous growth in wealth that capitalism enables.

Equality under the law is quite difficult as well. Almost every legal system has different rules for different people, and some kind of immunity for rulers. This kind of law, however, ultimately comes at a steep price for the populace. Only a fool invests in a new venture that the king can seize on a whim, so the most successful nations are the ones that put the law above any man. In order for capitalism to work, the system has to allow, at least theoretically, a poor man to sue the king for a property violation – and win.