Decimoputzu, Italia

In Sardinia the representatives of the crop farmers and the sheep farmers are on hunger strike in the Council Chamber of Decimoputzu. They are protesting about the sale by auction of 5,000 farms according to the law 44/88. The banks are asking for 700 million Euro and not a cent less. The Government and the Region are looking on. The farmers say that the law that forced them into debt is considered to be illegal by the European Community. That the banks have applied enormous interest rates on the debt.
Who has an interest in getting their hands on the Sardinian farmers’ land used for sheep and crops? And what do they want to do with it?
Don’t touch the farmers of Sardinia or I will turn into a ferocious beast!

Part of a letter from Decimoputzu.

”The sale by auction of the Sardinian companies because of the illegality of the regional law 44/88 is the most serious Italian emergency since Parmalat. In Sardinia, more than five thousand farming companies concerned with crops and sheep are at the second or third auction. This is a disaster that involves the lives of tens of thousands of people. Crop farmers, sheep farmers, and manual workers are reduced to desperation.
A disaster caused by planning, management and the government of the regional agriculture that is the result of the last few decades.
The credit system asks those who work on the land in Sardinia for about 700 million Euro but we, don’t even have the resources to send our children to school for our domestic family expenses or for getting our fields to be productive. To produce, then , for what? For many years our products have been sold (when we can sell them and we don’t destroy them in the field) below cost. The banks expect the equivalent of almost a whole year’s farming production from all the Sardinian companies.
Who will benefit from the sale by auction of our lands? And what will they do with them? Certainly not the creditors. So who? Is it the speculators who will buy extraordinary agricultural land at ridiculously low prices to speculate at our expense? The relatives or the friends of how many of those who are seated at their desks in some private or public office know the dates of the auctions and will turn up ready to make a last minute offer?
We were led into investing and getting into debt with the banks by a regional law that the European Commission has declared to be illegal. They have asked us to pay back the sums that were guaranteed by that law with all the interest (the amount of interest has risen in an abnormal way and we are convinced that there are many cases of illegitimate calculations) while the banks, according to the same illegal law, are not giving back the interest payments (even public ones) that they have received. Perhaps we are simple people but in the habit of thinking that if something is illegal for us it is also for the banks and for the Region that made the law, and thus that each party must accept their responsibilities.
If it goes on like this, we run the risk that in the general silence, there’ll be the sell off of a whole heritage of work, of know-how, of an economy, of guarantees for the future not just for us but for all Sardinian citizens. This is why we say “enough!” and we are ready, if it could be any help, for the final possible battles: those for the dignity and the right to the future.”
Bruno Cabitza. – Comitato di Lotta degli Esecutati, Riccardo Piras – Altragricoltura Sardegna, Giorgio Matta – Soccorso Contadino Sardegna.

Watch the programme on raiclicktv at 3.07 minutes:

If the banks, Soru or Prodi want to respond to this letter, the blog is available .

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Ps: It’s revolutionary to be happy. Put your songs on YouTube with the tag "V-day song".

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The Secrets of Intangible Wealth
From the New York Times

September 29, 2007; Page A9

A Mexican migrant to the U.S. is five times more productive than one who stays home. Why is that?

The answer is not the obvious one: This country has more machinery or tools or natural resources. Instead, according to some remarkable but largely ignored research -- by the World Bank, of all places -- it is because the average American has access to over $418,000 in intangible wealth, while the stay-at-home Mexican's intangible wealth is just $34,000.

But what is intangible wealth, and how on earth is it measured? And what does it mean for the world's people -- poor and rich? That's where the story gets even more interesting.

Two years ago the World Bank's environmental economics department set out to assess the relative contributions of various kinds of capital to economic development. Its study, "Where is the Wealth of Nations?: Measuring Capital for the 21st Century," began by defining natural capital as the sum of nonrenewable resources (including oil, natural gas, coal and mineral resources), cropland, pasture land, forested areas and protected areas. Produced, or built, capital is what many of us think of when we think of capital: the sum of machinery, equipment, and structures (including infrastructure) and urban land.

But once the value of all these are added up, the economists found something big was still missing: the vast majority of world's wealth! If one simply adds up the current value of a country's natural resources and produced, or built, capital, there's no way that can account for that country's level of income.

The rest is the result of "intangible" factors -- such as the trust among people in a society, an efficient judicial system, clear property rights and effective government. All this intangible capital also boosts the productivity of labor and results in higher total wealth. In fact, the World Bank finds, "Human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries."

Once one takes into account all of the world's natural resources and produced capital, 80% of the wealth of rich countries and 60% of the wealth of poor countries is of this intangible type. The bottom line: "Rich countries are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity."

What the World Bank economists have brilliantly done is quantify the intangible value of education and social institutions. According to their regression analyses, for example, the rule of law explains 57% of countries' intangible capital. Education accounts for 36%.

The rule-of-law index was devised using several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The latter include civil society groups (Freedom House), political and business risk-rating agencies (Economist Intelligence Unit) and think tanks (International Budget Project Open Budget Index).

Switzerland scores 99.5 out of 100 on the rule-of-law index and the U.S. hits 91.8. By contrast, Nigeria's score is a pitiful 5.8; Burundi's 4.3; and Ethiopia's 16.4. The members of the Organization for Economic Cooperation and Development -- 30 wealthy developed countries -- have an average score of 90, while sub-Saharan Africa's is a dismal 28.

The natural wealth in rich countries like the U.S. is a tiny proportion of their overall wealth -- typically 1% to 3% -- yet they derive more value from what they have. Cropland, pastures and forests are more valuable in rich countries because they can be combined with other capital like machinery and strong property rights to produce more value. Machinery, buildings, roads and so forth account for 17% of the rich countries' total wealth.

Overall, the average per capita wealth in the rich Organization for Economic Cooperation Development (OECD) countries is $440,000, consisting of $10,000 in natural capital, $76,000 in produced capital, and a whopping $354,000 in intangible capital. (Switzerland has the highest per capita wealth, at $648,000. The U.S. is fourth at $513,000.)

By comparison, the World Bank study finds that total wealth for the low income countries averages $7,216 per person. That consists of $2,075 in natural capital, $1,150 in produced capital and $3,991 in intangible capital. The countries with the lowest per capita wealth are Ethiopia ($1,965), Nigeria ($2,748), and Burundi ($2,859).

In fact, some countries are so badly run, that they actually have negative intangible capital. Through rampant corruption and failing school systems, Nigeria and the Democratic Republic of the Congo are destroying their intangible capital and ensuring that their people will be poorer in the future.

In the U.S., according to the World Bank study, natural capital is $15,000 per person, produced capital is $80,000 and intangible capital is $418,000. And thus, considering common measure used to compare countries, its annual purchasing power parity GDP per capita is $43,800. By contrast, oil-rich Mexico's total natural capital per person is $8,500 ($6,000 due to oil), produced capital is $19,000 and intangible capita is $34,500 -- a total of $62,000 per person. Yet its GDP per capita is $10,700. When a Mexican, or for that matter, a South Asian or African, walks across our border, they gain immediate access to intangible capital worth $418,000 per person. Who wouldn't walk across the border in such circumstances?

The World Bank study bolsters the deep insights of the late development economist Peter Bauer. In his brilliant 1972 book "Dissent on Development," Bauer wrote: "If all conditions for development other than capital are present, capital will soon be generated locally or will be available . . . from abroad. . . . If, however, the conditions for development are not present, then aid . . . will be necessarily unproductive and therefore ineffective. Thus, if the mainsprings of development are present, material progress will occur even without foreign aid. If they are absent, it will not occur even with aid."

The World Bank's pathbreaking "Where is the Wealth of Nations?" convincingly demonstrates that the "mainsprings of development" are the rule of law and a good school system. The big question that its researchers don't answer is: How can the people of the developing world rid themselves of the kleptocrats who loot their countries and keep them poor?

Mr. Bailey is Reason magazine's science correspondent

Posted by: Claudio Borghesan | October 17, 2007 11:23 PM

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