Capitalism obscured: the limits of law and rights-based approaches to poverty reduction and development

The Commission on the Legal Empowerment of the Poor (CLEP) was established by the United Nations in 2005 and concluded in 2008. Although inspired by Hernando de Soto's analysis of the role of property rights in economic development, the scope of the Commission was defined as ‘legal empowerment’ in general. This commentary offers a critique of the CLEP report, and argues that its underlying assumptions rest on an idealised version of liberal democratic capitalism in which a dynamic market economy assures ‘win-win’ solutions for all. This implies that there are no tensions between the four ‘pillars’ of legal empowerment identified by CLEP (the rule of law, property rights, labour rights, and business rights). However, in the real world of capitalism, in both democratic and authoritarian versions, there are structural tensions between classes of capital and classes of labour, which result in the economy and its underlying institutional order becoming a key site of contestation. The case of farm labour in rural South Africa is used to illustrate this argument. A focus on legal rights can, however, be ‘empowering’ to a degree, when it helps defend poor people from exploitation and abuse, or is located within broader strategies to eradicate systemic poverty.