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    <title>Bernd Bergmann - Acton Institute PowerBlog</title>
    <link>http://blog.acton.org/</link>
    <description>Power tends to corrupt, and absolute power corrupts absolutely</description>
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    <pubDate>Mon, 12 May 2008 00:04:45 GMT</pubDate>

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        <title>RSS: Bernd Bergmann - Acton Institute PowerBlog - Power tends to corrupt, and absolute power corrupts absolutely</title>
        <link>http://blog.acton.org/</link>
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<item>
    <title>European Commission Attacks its Own Scientists</title>
    <link>http://blog.acton.org/archives/2329-European-Commission-Attacks-its-Own-Scientists.html</link>
            <category>Technology &amp; Regulation</category>
    
    <comments>http://blog.acton.org/archives/2329-European-Commission-Attacks-its-Own-Scientists.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2329</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    On Wednesday the European Commission again delayed a &lt;a href=&quot;http://euobserver.com/9/26098&quot; &gt;decision&lt;/a&gt; on whether European farmers may grow more genetically modified (GM) crops. The commission claimed that more scientific analysis is needed before three new crops can be approved. But curiously, the &lt;a href=&quot;http://www.efsa.europa.eu/EFSA/efsa_locale-1178620753812_home.htm&quot; &gt;European Food Safety Authority&lt;/a&gt; (EFSA) has already twice analyzed the crops and found that they pose no danger to public health. &lt;br /&gt;
&lt;br /&gt;
Divisions seem to have broken out within the commission on how to proceed with GM food. This comes at a time when biotech investors are increasingly exasperated with European procrastination on the &lt;a href=&quot;http://&quot; &gt;issue&lt;/a&gt;. &lt;br /&gt;
&lt;br /&gt;
The intra-Commission conflict on GM food is most bizarrely expressed in the open attempts by Environment Commissioner Stavros Dimas to &lt;a href=&quot;http://www.gmo-safety.eu/en/news/600.docu.html&quot; &gt;discredit&lt;/a&gt; the EFSA, an agency set up by the Commission in 2002 in order to specifically investigate food safety concerns. By undermining the authority of the EFSA, Dimas is colliding with Agriculture Commissioner Mariann Fischer Boel, who has defended the agency. The result is a complete stalemate which may leave the Europe years behind in biotech investment compared to the US and other countries.&lt;br /&gt;
&lt;br /&gt;
Dimas’s hostility to GM food is cheered on by some environmental NGOs, in particular &lt;a href=&quot;http://www.greenpeace.org/international/news/gm-crop-safety-alarm-bells&quot; &gt;Greenpeace&lt;/a&gt; and Friends of the Earth. Greenpeace boasts that it orchestrated a campaign of 130,000 emails in order to obstruct the approval of the crops. &lt;br /&gt;
&lt;br /&gt;
These NGOs have virtually no expertise in the area of consumer health research but join Dimas’s ritual attacks on the risk assessments done by the EFSA. It is particularly striking that they try to bring the EFSA into disrepute by implying that the World Health Organization (WHO) is speaking out against GM crops. But here’s what the &lt;a href=&quot;http://www.who.int/foodsafety/publications/biotech/20questions/en/index.html&quot; &gt;WHO&lt;/a&gt; actually says:&lt;br /&gt;
&lt;br /&gt;
&amp;#8220;GM foods currently available on the international market have passed risk assessments and are not likely to present risks for human health. In addition, no effects on human health have been shown as a result of the consumption of such foods by the general population in the countries where they have been approved.&amp;#8221; &lt;br /&gt;
&lt;br /&gt;
European worries about food safety are to a large extent based on the experience of the 1990s when a number of food scandals, in particular BSE or mad cow disease, caused understandable anxiety among consumers. All of these scandals, however, were entirely unrelated to GM food; it is irresponsible to exploit these fears in the current debate on biotechnology.&lt;br /&gt;
&lt;br /&gt;
It is not difficult to see that at bottom the controversy is not so much about health and science but about politics and whose ox is being gored. In the European Council of Ministers, more agrarian-based countries like Greece (Dimas’s home country), Italy, Austria and Poland tend to vote against GM foods while states where traditional farming is not as dominant like the UK and the Netherlands are more open to biotech.&lt;br /&gt;
&lt;br /&gt;
The politicization of the GMO debate is especially damaging at a time of global food price inflation. Future improvements in agricultural productivity will become increasingly necessary and biotech can play an important role in this area. The Commission must not allow pseudo-scientific excuses to stand in the way of serving the interests of the European, and indeed the global, consumer. 
    </content:encoded>

    <pubDate>Fri, 09 May 2008 10:45:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2329-guid.html</guid>
    <category>biotechnology</category>
<category>european commission</category>
<category>European Food Safety Authority</category>
<category>european union</category>
<category>gmo</category>
<category>Stavros Dimas</category>

</item>
<item>
    <title>The Lost Heritage of Economic Freedom in Italy</title>
    <link>http://blog.acton.org/archives/2325-The-Lost-Heritage-of-Economic-Freedom-in-Italy.html</link>
            <category>Business and Society</category>
    
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Next Monday will be the sixtieth anniversary of Luigi Einaudi’s inauguration as Italian President. &lt;a href=&quot;http://en.wikipedia.org/wiki/Luigi_Einaudi&quot; &gt;Einaudi&lt;/a&gt; (1874-1961) was a distinguished economist and defender of classical liberalism. In the immediate period following World War II, he was governor of the Bank of Italy and finance minister. Many credit his policy of low taxes and dismantling tariffs with having laid the foundation for Italy’s “miracolo economico” of the 1950s and 1960s.&lt;br /&gt;
&lt;br /&gt;
However, while his role as president between 1948-55 is still remembered, his legacy of economic freedom as a key to Italian post-war development has largely been forgotten. In a recent &lt;a href=&quot;http://www.newsletter.ilsole24ore.com/News24/Articoli/2008/2008_05_06/13_B.php?uuid=187029e0-1b73-11dd-87d6-00000e25108c&amp;amp;DocRulesView=Libero&quot; &gt;article&lt;/a&gt;, the Milanese financial newspaper &lt;em&gt;Il Sole 24 Ore&lt;/em&gt; lamented that currently there is no political force in the country which feels inspired by Einaudi’s actions and insights. &lt;br /&gt;
&lt;br /&gt;
The center-right led by Silvio Berlusconi which won the recent general elections in April cannot be considered a catalyst for market reforms. Its new economy minister Giulio Tremonti has expressed &lt;a href=&quot;http://blog.acton.org/archives/2247-Bashing-Globalization-in-the-Name-of-European-Values.html&quot; &gt;hostility&lt;/a&gt; to free trade and blames most of the world’s economic problems on an ideology he calls “marketism”. At the same time, the Northern League, Berlusconi’s junior coalition partner, is impossible to categorize in terms of its economic policy. It demands decentralization and reducing the role of the Italian state but also advocates protectionism.&lt;br /&gt;
&lt;br /&gt;
Neither can Einaudi’s heirs be found on the Italian center-left. The recently founded Democratic Party (PD) has its origins in communism. One can appreciate its transformation towards more moderate positions and a certain openness to economic liberalization. However, the transition is not complete and cannot be compared to the process initiated by Tony Blair in the UK Labour Party in the 1990s.&lt;br /&gt;
&lt;br /&gt;
It is regrettable that nobody wishes to emulate Einaudi’s achievements. These go beyond the technical mastery and application of market economics. Einaudi’s understanding of freedom also led him to insights of more wide-ranging importance for Italian society. He believed that an excess of state power tends to make citizens more lazy in the way they live their lives and think of their responsibility towards others. This attitude leads them to tolerate the social ills around them. They view the poor state of public services as inevitable and accept corruption and rent-seeking as unchangeable phenomena.&lt;br /&gt;
&lt;br /&gt;
Now, that so many people in Italy worry about the &lt;a href=&quot;http://www.bloomberg.com/apps/news?pid=newsarchive&amp;amp;sid=a57VuvGIdl0k&quot; &gt;economic situation of the country &lt;/a&gt; and feel alienated from the political institutions and their lack of accountability, one might think that the time is ripe to return to Einaudi’s lessons. 
    </content:encoded>

    <pubDate>Wed, 07 May 2008 10:31:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2325-guid.html</guid>
    <category>government</category>
<category>italy</category>
<category>Luigi Einaudi</category>
<category>markets</category>
<category>reform</category>

</item>
<item>
    <title>Returning to the Real Economy</title>
    <link>http://blog.acton.org/archives/2311-Returning-to-the-Real-Economy.html</link>
            <category>Business and Society</category>
    
    <comments>http://blog.acton.org/archives/2311-Returning-to-the-Real-Economy.html#comments</comments>
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    In the April 24 edition of the Vatican newspaper &lt;a href=&quot;http://www.vatican.va/news_services/or/or_quo/index.html&quot; &gt;&lt;em&gt;L’Osservatore Romano&lt;/em&gt;&lt;/a&gt;,  Ettore Gotti Tedeschi focuses on the origins and lessons of the global financial crisis. In a &lt;a href=&quot;http://blog.acton.org/archives/2245-Can-Any-Good-Come-from-a-Recession.html&quot; &gt;previous article&lt;/a&gt;, Gotti Tedeschi argued that the downturn is an opportunity for Italy to reform its economy and cut down on unnecessary public spending.&lt;br /&gt;
&lt;br /&gt;
He now examines what the crisis means for the state of international finance and draws some unusual but noteworthy conclusions. In his view, the principal answer for improving global financial architecture cannot be provided by more government regulation. &lt;br /&gt;
&lt;br /&gt;
Instead, Gotti Tedeschi interprets the crisis as a wake-up call to return to “other rules – older rules which restore the priorities of the banking profession.” These rules of sound economics have been partly eroded by an excessive lowering of interest rates by central banks, inducing other actors to take excessive risks in their financial operations. &lt;br /&gt;
&lt;br /&gt;
The over-stimulation of markets led bankers and business leaders to abandon the path of solid long-term growth in favor of short-term gain: “Too often managers with a poor sense of responsibility have created the illusion of realizing miraculous growth and profitability.” They abandoned the search for “concrete results and above all, long-term sustainability.” His advice is to return “to what is real, responsible and durable.”&lt;br /&gt;
&lt;br /&gt;
He suggests that what is needed is a spiritual refreshment to deepen the understanding of how a successful bank or business is run. This would enable people to resist temporary financial fashions and evaluate real risks and possible gains adequately.&lt;br /&gt;
&lt;br /&gt;
Gotti Tedeschi is in a good position to combine the practical insights of the world of banking with a profound theoretical grasp of business ethics. While he is one of the most well-known bankers in Italy, he has also found the time to write &lt;a href=&quot;http://www.catholic.org/featured/headline.php?ID=1771&quot; &gt;books&lt;/a&gt; about the relationship between Christian values and economics.&lt;br /&gt;
&lt;br /&gt;
His advice deserves to be taken seriously. As politicians around the world propose a whole range of new regulation in response to the credit crunch, it must not be forgotten that public authorities provided the markets with cheap money and excessive stimuli. The result was a widely distorted perception of risk and profitability. It would be unfortunate if a period of over-stimulation was followed by a period of over-regulation. 
    </content:encoded>

    <pubDate>Thu, 24 Apr 2008 11:54:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2311-guid.html</guid>
    <category>banking</category>
<category>business ethics</category>
<category>Christianity</category>
<category>economics</category>
<category>Gotti Tedeschi</category>
<category>regulation</category>

</item>
<item>
    <title>Absolute and Relative Poverty: The 'Dogma' of Economic Equality</title>
    <link>http://blog.acton.org/archives/2290-Absolute-and-Relative-Poverty-The-Dogma-of-Economic-Equality.html</link>
            <category>International Trade</category>
    
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    On Friday April 11, the Vatican newspaper, &lt;a href=&quot;http://www.vatican.va/news_services/or/or_quo/index.html&quot; &gt;&lt;em&gt;L’Osservatore Romano&lt;/em&gt;&lt;/a&gt;, featured a front-page article on the progress made in international development since Pope Paul VI wrote the encyclical &lt;a href=&quot;http://www.vatican.va/holy_father/paul_vi/encyclicals/documents/hf_p-vi_enc_26031967_populorum_en.html&quot; &gt;Populorum Progressio &lt;/a&gt;in 1967. The author of the article, Fr. Gian Paolo Salvini, S.J., is director of the journal &lt;a href=&quot;http://www.laciviltacattolica.it/&quot; &gt;&lt;em&gt;La Civiltà Cattolica&lt;/em&gt;&lt;/a&gt;. He has a degree in economics and since he has lived in Brazil for many years, he has first-hand experience of development issues.&lt;br /&gt;
&lt;br /&gt;
Salvini’s article is entitled “Incomplete Development” (“Uno sviluppo incompleto”) but his overall assessment of what has happened over the last 40 years is positive. He cites various statistics showing that “spectacular progress” has been made in terms of reducing absolute poverty. The number of people who have to live on less than one dollar a day has fallen from 29 to 18 per cent between 1990 and 2004. Also the data for longevity, child mortality and literacy show clear improvements.&lt;br /&gt;
&lt;br /&gt;
Salvini identifies international trade as one of the key factors that has contributed to this trend. He is aware that progress has been uneven and that improvements in Asia have been far more marked than in Africa. This highlights that “the greatest success stories are due to the formula industrialize for exports”. &lt;br /&gt;
&lt;br /&gt;
His most striking example to illustrate this point is that of South Korea. The fact that the country’s economic indicators were similar to those of Zaire (today the Democratic Republic of Congo) in the 1960s reflects the central importance of engaging with international trade: Korea’s achievement is largely due to its ability to export its manufacturing products to North America and Europe. This also explains why Dependency Theory, which was fashionable in the sixties and which advised developing countries to disengage with global trade, “is not taught anymore”.&lt;br /&gt;
&lt;br /&gt;
The power of trade to transform poor countries is nowadays beyond doubt and Salvini notes that today it is often “the developing world which is asking for more free trade”, whereas Europe and the United States are obstructing the free flow of goods in agriculture.&lt;br /&gt;
&lt;br /&gt;
But towards the end of the article, Salvini raises a more critical point regarding achievements in international development. He says that in contrast to absolute poverty, relative poverty is increasing: “The distance between those who are doing well and those doing badly, or to put it better, those who are doing well and those who are doing less well is growing.”&lt;br /&gt;
&lt;br /&gt;
Salvini does not provide any data to illustrate this point and his assertion is, in fact, questionable. At the &lt;a href=&quot;http://www.acton.org/events/20080228_populorum_progressio.php&quot; &gt;Populorum Progressio conference&lt;/a&gt; organized by Istituto Acton in Rome in February, Prof. Philip Booth from the &lt;a href=&quot;http://www.iea.org.uk/&quot; &gt;Institute of Economic Affairs in London&lt;/a&gt;, specifically addressed the issue of relative poverty:&lt;br /&gt;
&lt;blockquote&gt;&lt;div&gt;We should recognise that relative poverty has decreased during the process of globalisation .… Most dramatically, the gap between countries that have recently seen rapid growth and those countries that have been relatively well off for many decades has narrowed significantly … Whilst European Union countries, the US, the UK and Japan grow well below the world average (indeed disposable incomes are broadly stagnant across much of the developed world), over half the world’s population now lives in 40 countries that are growing at more than 7% per year. Development is happening and is benefiting huge numbers of previously-poor people.&lt;/div&gt;&lt;/blockquote&gt;&lt;br /&gt;
Salvini may be referring to an increase in income inequality within countries but in that case he is not looking at poverty in terms of human needs and real deprivations, but as compared to an abstract “ideal”. &lt;br /&gt;
&lt;br /&gt;
Reducing income inequality may seem like a noble aspiration, but it is of minor importance. Prioritizing the alleviation of relative poverty would yield the absurd situation where society as a whole is made poorer only to make it more equal. A desire for greater equality should not justify giving up the real and tangible benefits globalization has brought the poor over the last couple of decades. 
    </content:encoded>

    <pubDate>Mon, 14 Apr 2008 09:30:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2290-guid.html</guid>
    <category>globalization</category>
<category>income</category>
<category>inequality</category>
<category>international development</category>
<category>poverty</category>

</item>
<item>
    <title>The Burden of Italian Red Tape</title>
    <link>http://blog.acton.org/archives/2266-The-Burden-of-Italian-Red-Tape.html</link>
            <category>Business and Society</category>
    
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    In yesterday’s &lt;a href=&quot;http://online.wsj.com/article/SB120693073672576203.html&quot; &gt;Wall Street Journal Europe&lt;/a&gt;, Alberto Mingardi of Istituto &lt;a href=&quot;http://www.brunoleoni.org/&quot; &gt;Bruno Leoni&lt;/a&gt; (and long-time Acton friend) lists some of the reforms Italy needs to boost economic growth, which is forecast at a measly 0.6 – 0.8 percent for 2008.&lt;br /&gt;
&lt;br /&gt;
Mingardi advocates a number of tax cuts and a more determined privatization of state assets. Some of these issues are being discussed – timidly – in the current election campaign; Mingardi also focuses on de-regulation and de-bureaucratization, issues heretofore neglected by Italian politicians.&lt;br /&gt;
&lt;br /&gt;
Current labor regulations are “so numerous that no one can even give their precise number. No one can comply with rules they don’t even know about.” Mingardi adds that “it’s safe to say at least half the statutes currently in force should be repealed, as their only effect is to create confusion.”&lt;br /&gt;
&lt;br /&gt;
A &lt;a href=&quot;http://www.confartigianato.it/DocumentiUpload/RS_31_MAR08_LA%20REPUBBLICA%20AFFARI%20E%20FINANZA.PDF&quot; &gt;recent study&lt;/a&gt; shows that it takes on average 696 days to dismiss a worker in Italy compared to only 19 in the Netherlands. Critics of de-regulation would argue that Italian workers are therefore better protected.  Wrong.  Unemployment is 5 per cent in Holland compared to 6 per cent in Italy.&lt;br /&gt;
&lt;br /&gt;
This may seem counter-intuitive but makes economic sense.  If I know it will be impossible to fire an unproductive worker, I will be much less likely to take a chance on hiring any worker I don’t personally know. Hence, the Italian model of “family capitalism” and higher levels of unemployment.&lt;br /&gt;
&lt;br /&gt;
Italian bureaucracy also exacts  high costs on business creation. According to the &lt;a href=&quot;http://www.doingbusiness.org/ExploreEconomies/?economyid=96&quot; &gt;World Bank&lt;/a&gt;, the cost of opening a business is 18.7 per cent of per capita income compared to only 0.8 per cent in the United Kingdom and 0.3 per cent in the Republic of Ireland. Moreover, an Italian business spends an average of 360 hours per year filing taxes whereas in neighboring Switzerland 63 hours suffice. (Not surprisingly, &lt;a href=&quot;http://www.american.com/archive/2008/march-april-magazine-contents/cuckoo-for-switzerland&quot; &gt;Switzerland&lt;/a&gt; is the economic envy of Europe.)&lt;br /&gt;
&lt;br /&gt;
Workers also pay for onerous regulations. Everyone in Italy nowadays complains about stagnant wages, these are clearly the result of decreasing productivity caused by bureaucratic disincentives for businesses to invest and grow. &lt;br /&gt;
&lt;br /&gt;
An overwhelming bureaucracy undermines both individual liberty and the public interest. It punishes the creative spirit of the entrepreneur by obstructing investment and innovation, and  harms society by killing the potential for growth and employment.  The irony is that regulation and bureaucracy are often enacted in the name of social values.&lt;br /&gt;
 
    </content:encoded>

    <pubDate>Tue, 01 Apr 2008 09:47:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2266-guid.html</guid>
    <category>bureaucracy</category>
<category>entrepreneurship</category>
<category>italy</category>
<category>labor</category>
<category>taxation</category>

</item>
<item>
    <title>Should Water Have A Price?</title>
    <link>http://blog.acton.org/archives/2261-Should-Water-Have-A-Price.html</link>
            <category>Environmental Stewardship</category>
    
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    In a front-page article of the March 20-21 edition of the Vatican’s newspaper, &lt;a href=&quot;http://www.osservatoreromano.va/&quot; &gt;L&amp;#8217;Osservatore Romano&lt;/a&gt;, entitled &lt;em&gt;“L’aqua bene comune per tutti”&lt;/em&gt; (“Water:  Common Good for All”), an Italian political scientist laments that a basic necessity of life is bought and sold. &lt;br /&gt;
&lt;br /&gt;
Riccardo Petrella of the Catholic University of Louvain in Belgium is rightly concerned that a billion people do not have access to clean drinking water. While he criticizes world leaders for not making this problem a top priority, his main target is actually the economics of treating water as a commodity.&lt;br /&gt;
&lt;br /&gt;
He blames economics for creating a shortage of water: “This approach does not recognize any human and social rights, there are no public goods or services just private economic goods and services based on economic interest. The commodification of water is accompanied by a privatization of the water supply. In this context, shortages are accepted as ‘natural’, inevitable….”&lt;br /&gt;
&lt;br /&gt;
This is a prime example of combining good intentions with bad economics. Petrella mistakenly assumes that economic goods and common goods are mutually exclusive, when in fact prices help regulate the production and distribution of a natural resource.&lt;br /&gt;
&lt;br /&gt;
Only a small part of the global water supply has actually been privatized. Over the last twenty years or so, the process of privatization has been accelerated, and the availability and the quality of water has generally &lt;a href=&quot;http://www.oecd.org/document/47/0,3343,en_2649_34343_36146415_1_1_1_1,00.html#pricing_water&quot; &gt;improved&lt;/a&gt;. This is not only true for Western countries but also in less developed countries.&lt;br /&gt;
&lt;br /&gt;
Take &lt;a href=&quot;http://www.economicinstruments.com/index.php?option=com_content&amp;amp;task=view&amp;amp;id=28&amp;amp;Itemid=51&quot; &gt;Chile&lt;/a&gt; as an example. It aggressively privatized its water industry and has vastly enhanced access to water for the poor. Usage of potable water went up from 63 percent to 99 percent for the urban and from 27 percent to 94 percent for the rural population after the introduction of markets for trading water rights.&lt;br /&gt;
&lt;br /&gt;
In contrast to what Petrella asserts, privatization, rather than being a cause of water shortage, is increasingly seen as a remedy to this problem. In &lt;a href=&quot;http://www.ft.com/cms/s/0/9e60dd7a-e1fd-11db-af9e-000b5df10621,dwp_uuid=fc2aebdc-32a6-11db-87ac-0000779e2340.html&quot; &gt;Saudi Arabia&lt;/a&gt;, for example, privatization was introduced after a shortage of water caused riots in November 2006. The government had exacerbated the problem by subsidizing water to keep prices low. This led to an inefficient and careless usage of water. Riyadh had to change course and is now planning for half the population to be covered by private water companies by 2010.&lt;br /&gt;
&lt;br /&gt;
It is misleading to suggest a contrast between private enterprise and the common good since the market tends to channel resources to where human demand is strongest and can fill gaps in investment and expertise where the public sector fails.  It’s certainly no violation of human rights to promote a competitive market for something as essential as water. &lt;br /&gt;
 
    </content:encoded>

    <pubDate>Thu, 27 Mar 2008 14:23:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2261-guid.html</guid>
    <category>bottled water</category>
<category>free market</category>
<category>l’osservatore romano</category>
<category>public sector</category>
<category>water</category>

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<item>
    <title>Bashing Globalization in the Name of European 'Values'</title>
    <link>http://blog.acton.org/archives/2247-Bashing-Globalization-in-the-Name-of-European-Values.html</link>
            <category>International Trade</category>
    
    <comments>http://blog.acton.org/archives/2247-Bashing-Globalization-in-the-Name-of-European-Values.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2247</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Hostility towards globalization is not the exclusive territory of the left in Italy.  Giulio Tremonti, a former minister of the economy in Silvio Berlusconi’s centre-right government, has written a book called &lt;a href=&quot;http://www.giuliotremonti.it/pubblicazioni/visualizza.asp?id=76&quot; &gt;&lt;em&gt;Fear and Hope&lt;/em&gt;&lt;/a&gt; (&lt;em&gt;La Paura e la Speranza&lt;/em&gt;), largely arguing against free trade and the opening of international markets. &lt;br /&gt;
&lt;br /&gt;
&lt;!-- s9ymdb:1090 --&gt;&lt;img width=&quot;110&quot; height=&quot;76&quot; style=&quot;float: left; border: 0px; padding-left: 5px; padding-right: 5px;&quot; src=&quot;http://blog.acton.org/uploads/tremonti_giulio.serendipityThumb.jpg&quot; alt=&quot;&quot;  /&gt;Tremonti blames the recent rise in the prices of consumer goods on globalization and says that this is only the beginning. The global financial crisis, environmental destruction, and geopolitical tensions in the struggle for natural resources are also fruits of globalization, according to Tremonti. He identifies the main problem as a lack of international governance of the process of globalization and calls for a new Bretton Woods-like system to confront the multiple crises caused by what he calls “marketism”.&lt;br /&gt;
&lt;br /&gt;
The “dark side of globalization” can only be countered by a return to European values: tradition, the family, and the nation, adds Tremonti. Europe “needs a philosophy which makes politics and not economics the primary mover [of globalization]. This can only work if we go back to the roots of Europe, these are the roots of Judeo-Christianity”.&lt;br /&gt;
&lt;br /&gt;
This “cure” to the ills of globalization remains vague (as one would imagine in a book of only 112 pages). Still more puzzling is his insistence on a contrast between market principles and traditional European values. The idea that a return to values must be coupled with a stronger politicization of the world economy clashes with experience.  More regulation and state interference not only tend to reduce growth and living standards but also create new opportunities for rent-seeking and corruption, and thereby undermine the traditional virtues that Tremonti supports.&lt;br /&gt;
&lt;br /&gt;
He misses the opportunity to discuss how certain values are enhanced by the market and how international competition has in fact strengthened Europe by highlighting its best qualities, both technologically and culturally, while repressing its worst.&lt;br /&gt;
&lt;br /&gt;
Tremonti’s vision is inward-looking and profoundly pessimistic. Some &lt;a href=&quot;http://www.brunoleoni.it/nextpage.aspx?codice=6387&quot; &gt;market-oriented Italian commentators&lt;/a&gt; have pointed out that his ideas seem dangerously close to old-style protectionism.  It is clear if Europe followed his analysis, it would be led on a path of future irrelevance both as an economic and a cultural model. 
    </content:encoded>

    <pubDate>Tue, 18 Mar 2008 13:35:18 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2247-guid.html</guid>
    <category>economics</category>
<category>economy</category>
<category>europe</category>
<category>globalization</category>
<category>italy</category>

</item>
<item>
    <title>Can Any Good Come from a Recession?  </title>
    <link>http://blog.acton.org/archives/2245-Can-Any-Good-Come-from-a-Recession.html</link>
            <category>Vatican</category>
    
    <comments>http://blog.acton.org/archives/2245-Can-Any-Good-Come-from-a-Recession.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2245</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Following its new-found interest in sound economics, the Vatican’s newspaper, &lt;a href=&quot;http://www.osservatoreromano.va&quot; &gt;&lt;em&gt;L’Osservatore Romano&lt;/em&gt;&lt;/a&gt;, has turned its attention to what now seems to be a global downturn.  &lt;br /&gt;
&lt;br /&gt;
The usual European trope is that the current troubles are the result of American overspending, overconsumption and unsustainable debt burdens, so it is very surprising to see a contrarian view in Sunday’s paper entitled &amp;#8220;The Morality of the Recession.&amp;#8221;&lt;br /&gt;
&lt;br /&gt;
Italian banker Ettore Gotti Tedeschi evaluates the credit crunch affecting the U.S. economy and the Federal Reserve’s reaction to lower interest rates as problematic for the rest of the world, but he also sees an opportunity for renewal and reform.  &lt;br /&gt;
&lt;br /&gt;
The moral lesson for Europe?  Take the chance to reduce wasteful public spending, lower taxes, increase productivity and attract foreign investment.  Citing Pope John Paul II’s 1987 encyclical &lt;a href=&quot;http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-ii_enc_30121987_sollicitudo-rei-socialis_en.html &quot; &gt;&lt;em&gt;Sollicitudo rei socialis&lt;/em&gt;&lt;/a&gt;, Gotti Tedeschi draws the conclusion that now is the time for Italy to adopt more flexible economic mechanisms and rid itself of its welfare-state mentality.&lt;br /&gt;
&lt;br /&gt;
Italian elections are just a month away, so it is extremely unlikely any politician would advocate such a bold program; it is, however, exactly what Italy needs.  Let’s hope that Vatican officials, at least, are paying attention.  Kudos to &lt;em&gt;L’Osservatore Romano&lt;/em&gt; and Gotti Tedeschi for taking another courageous stand.&lt;br /&gt;
 
    </content:encoded>

    <pubDate>Mon, 17 Mar 2008 14:17:00 -0600</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2245-guid.html</guid>
    
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<item>
    <title>Solid Economics at &lt;i&gt;L'Osservatore Romano&lt;/i&gt;</title>
    <link>http://blog.acton.org/archives/2211-Solid-Economics-at-iLOsservatore-Romanoi.html</link>
            <category>Vatican</category>
    
    <comments>http://blog.acton.org/archives/2211-Solid-Economics-at-iLOsservatore-Romanoi.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2211</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Good news is not always so hard to find. Case in point: Free-market economics is making a comeback at the Vatican’s daily newspaper &lt;a href=&quot;http://www.osservatoreromano.va/&quot; &gt;&lt;em&gt;L’Osservatore Romano&lt;/em&gt;&lt;/a&gt;. &lt;br /&gt;
&lt;br /&gt;
Previously known as a dry read, &lt;em&gt;L’Osservatore Romano&lt;/em&gt; (which means &lt;em&gt;The Roman Observer&lt;/em&gt; in English) now contains provocative interviews and real news stories from around the world.  This is attributable to the paper’s new editor, Giovanni Maria Vian, who was appointed to the post by Pope Benedict last October (see &lt;a href=&quot;http://chiesa.espresso.repubblica.it/articolo/179221?eng=y&quot; &gt;here&lt;/a&gt; for the interesting background on the change by the Italian journalist Sandro Magister.)&lt;br /&gt;
&lt;br /&gt;
Ettore Gotti Tedeschi, a well-known Italian economist and banker, has been given prominent space to comment on current economic developments.  He is a strong defender of the link between Christian principles and free markets, having authored a 2004 book titled, &lt;em&gt;&lt;a href=&quot;http://www.libreriauniversitaria.it/denaro-paradiso-leconomia-globale-mondo/libro/9788838484476&quot; &gt;Money and Paradise: The Global Economy and The Catholic World&lt;/a&gt;&lt;/em&gt;.&lt;br /&gt;
&lt;br /&gt;
In a February 13 article titled “The capital we should value most is human,” he warns against the temptation to resolve economic problems by merely increasing public spending. As Italians know only too well, high public spending will at some point translate into higher taxes. He stresses that these, in turn, diminish human liberty and dignity.&lt;br /&gt;
&lt;br /&gt;
He is also critical of the Italian welfare state which only distributes resources without enhancing individual responsibility and future opportunities. His solution to the current economic difficulties is to leave more space for the market to push Italian businesses to a higher level of competitiveness, which then helps to increase investments and create jobs.&lt;br /&gt;
&lt;br /&gt;
Gotti Tedeschi’s latest front-page article deals with an equally important subject -- the high price of oil and economic development. He directly confronts those who argue that we need to reduce economic growth in order to adapt to falling energy supplies. &lt;br /&gt;
&lt;br /&gt;
In his view, this would signal an unwarranted pessimism and distrust in human creativity. Instead, future energy problems should be combated with more research in new technologies and through using existing technologies more efficiently. Getting human anthropology right and showing confidence in human inventiveness are crucial.&lt;br /&gt;
&lt;br /&gt;
Gotti Tedeschi’s ability to combine economic issues with Christian thought greatly enriches &lt;em&gt;L’Osservatore Romano&lt;/em&gt; and all supporters of the free market should be thankful for this turn to sanity.  Three cheers for the Pope’s newspaper! 
    </content:encoded>

    <pubDate>Wed, 27 Feb 2008 17:01:00 -0700</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2211-guid.html</guid>
    <category>economics</category>
<category>l’osservatore romano</category>
<category>pope benedict xvi</category>

</item>
<item>
    <title>Onward, Christian soldiers?</title>
    <link>http://blog.acton.org/archives/2201-Onward,-Christian-soldiers.html</link>
            <category>News and Events</category>
    
    <comments>http://blog.acton.org/archives/2201-Onward,-Christian-soldiers.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2201</wfw:comment>

    <slash:comments>5</slash:comments>
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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    The head of the Church of England and the Archbishop of Canterbury, Dr. Rowan Williams, made international headlines earlier this month when he suggested that the adoption of some aspects of Islamic sharia law into British law was “unavoidable” and discussed the compatibility of sharia law with the established legal system.&lt;br /&gt;
&lt;br /&gt;
&lt;!-- s9ymdb:1054 --&gt;&lt;img width=&quot;120&quot; height=&quot;98&quot; style=&quot;float: left; padding: 2px; border: 1px solid #ccc; margin-right: 1em;&quot; src=&quot;http://blog.acton.org/uploads/ArchbishopofCanterbury.serendipityThumb.jpg&quot; alt=&quot;&quot;  /&gt;Williams’ &lt;a href=&quot;http://www.archbishopofcanterbury.org/1575&quot; &gt;long speech &lt;/a&gt;discusses the pros and cons of ‘plural jurisprudence.’ He does not ignore the repressive aspects of Islamic law,  but his main concern seems to be to avoid offending or alienating Muslims in British society. &lt;br /&gt;
&lt;br /&gt;
It is no secret that the Archbishop’s own church is in decline while the number of Muslims in the UK and the rest of Europe is growing rapidly. A church leader should seek to strengthen his own flock as well as remind us of the principles that have created the foundations for a free society.&lt;br /&gt;
&lt;br /&gt;
Williams is seemingly unaware of the consequences that such a lack of moral leadership may have. Many Europeans feel legitimately threatened by Islamic terrorism and fundamentalist intolerance, but they have no well-formed intellectual or spiritual defense. The danger is that the abandoned will be tempted to lend an ear to demagogues (not for the first time in European history) and thereby set off a spiral of still more intolerance and violence.&lt;br /&gt;
 
    </content:encoded>

    <pubDate>Thu, 21 Feb 2008 10:06:00 -0700</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2201-guid.html</guid>
    <category>christianity</category>
<category>church of england</category>
<category>demographics</category>
<category>islam</category>
<category>liberty</category>
<category>religious freedom</category>
<category>rowan williams</category>

</item>
<item>
    <title>More Freedom = Less Corruption in Italy</title>
    <link>http://blog.acton.org/archives/2185-More-Freedom-Less-Corruption-in-Italy.html</link>
            <category>Business and Society</category>
    
    <comments>http://blog.acton.org/archives/2185-More-Freedom-Less-Corruption-in-Italy.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2185</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Last week, Istituto Acton’s close Italian ally in defense of liberty, &lt;a href=&quot;http://www.brunoleoni.it/&quot; &gt;Istituto Bruno Leoni&lt;/a&gt; (IBL), presented the &lt;a href=&quot;http://www.heritage.org/research/features/index/&quot; &gt;2008 Index of Economic Freedom&lt;/a&gt; in Rome. The IBL invited speakers to discuss the decline of economic freedom in Italy over the last 12 months. &lt;em&gt;Il bel paese&lt;/em&gt; ranks as the 64th freest economy in the world, with Hong Kong at number one and the U.S. at five.&lt;br /&gt;
&lt;br /&gt;
Italy’s economic problems were blamed on &lt;a href=&quot;http://www.transparency.org/policy_research/surveys_indices/cpi/2007&quot; &gt;corruption&lt;/a&gt; and weak law enforcement. While corruption to some extent reflects individual moral failings and certainly does affect economic growth, the reverse is also true: corruption tends to flourish in environments already hostile to markets and free competition.&lt;br /&gt;
&lt;br /&gt;
Bad and excessive regulation tends to create opportunities for the arbitrary use of power when dealing with citizens and companies. This, in turn, distorts market incentives and deters investment but it also creates mistrust among people and alienates them from the governing institutions. Better and less regulation, on the other hand, not only boosts economic growth but could tackle a more deeply-rooted crisis of political and social ethics.&lt;br /&gt;
&lt;br /&gt;
Not surprisingly, a labor union representative at the IBL event argued for stronger government to fight corruption at the expense of additional economic reforms. He unfortunately missed the point: The lack of economic freedom simply leads to more opportunities for the moral evils that already plague Italy. 
    </content:encoded>

    <pubDate>Tue, 12 Feb 2008 16:07:00 -0700</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2185-guid.html</guid>
    <category>corruption</category>
<category>free market</category>
<category>government regulation</category>
<category>italy</category>
<category>morality</category>

</item>
<item>
    <title>'Casino Capitalism' or Personal Failure?</title>
    <link>http://blog.acton.org/archives/2171-Casino-Capitalism-or-Personal-Failure.html</link>
            <category>Business and Society</category>
    
    <comments>http://blog.acton.org/archives/2171-Casino-Capitalism-or-Personal-Failure.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2171</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    Two weeks ago, French bank Société Générale announced that off-balance sheet speculation by a single “rogue trader” had cost the company 4.9 billion Euros ($7.2 billion). The scandal had enormous repercussions in international markets leading some commentators to decry the rotten nature of global “casino” capitalism and to call for the reversal of financial liberalization. However, the actual circumstances of the case do not justify more government intervention in financial markets but illustrate individual moral failings and poor internal governance on behalf of the bank.&lt;br /&gt;
&lt;br /&gt;
A new report also suggests that a lack of internal controls and weak enforcement of existing rules may be the real source of the problem at one of the oldest banks in France.&lt;br /&gt;
&lt;br /&gt;
On January 24th, Société Générale said that it had discovered a “massive fraud” through &amp;#8220;a scheme of elaborate fictitious transactions.&amp;#8221; The event caused a great stir not only for the magnitude of the bank’s losses but also because it is partly blamed for the worst European stock market collapse since September 11, 2001. &lt;br /&gt;
&lt;br /&gt;
Jerome Kerviel, who worked as a junior trader in the arbitrage department at Société Générale, was responsible for betting on markets&amp;#8217; future performances. The bank claims that he had made unauthorized and concealed bets of around 50 billion Euros on European markets. According to the &lt;a href=&quot;http://www.nytimes.com/2008/01/29/business/worldbusiness/29trader.html?scp=2&amp;amp;sq=kerviel+1.4&amp;amp;st=nyt&quot; &gt;New York Times&lt;/a&gt;, Mr. Kerviel told prosecutors that his bets would have resulted in a profit of 1.4 billion Euros for the bank if they had been cashed out by the end of December. However, at the start of this year, stock markets experienced a sharp downturn turning the projected profits into losses.&lt;br /&gt;
&lt;br /&gt;
The French bank discovered the bets in mid-January when auditors in the risk management office noticed a series of fictitious trades on its books. Société Générale then conducted a dramatic market sell-off operation in order to neutralize Kerviel’s deals. Traders estimate that the bank unwound contracts in the range of 20 billion to 70 billion Euros from January 21st to 22nd. &lt;br /&gt;
&lt;br /&gt;
Many suspect that selling all these positions into an already volatile European market contributed to the shocking stock market performance in Europe around that time. This in turn, provoked an unexpected and controversial interest rate cut by the Federal Reserve of 0.75 per cent in order to protect the New York Stock Exchange which had been closed on the day when European markets dived. The curious series of events was summed up by a hedge fund manager who told Reuters that: “The real story here is basically, this guy, paid 100,000 Euros a year, sitting in some office at SocGen, forces the Fed to cut interest rates by 75 basis points, which is basically what happened”.&lt;br /&gt;
&lt;br /&gt;
The huge and wide-ranging market repercussions have given ammunition to the critics of financial liberalization. An &lt;a href=&quot;http://www.liberation.fr/actualite/evenement/evenement2/306731.FR.php&quot; &gt;editorial&lt;/a&gt; of the French newspaper Libération sarcastically entitled “Casino” laments that no one controls the huge sums of money moving around in financial markets and demands tighter regulation of financial markets. It also claims that the scandal embarrasses President Sarkozy’s alleged embrace of laissez-faire capitalism. &lt;br /&gt;&lt;a href=&quot;http://blog.acton.org/archives/2171-Casino-Capitalism-or-Personal-Failure.html#extended&quot;&gt;Continue reading &quot;&#039;Casino Capitalism&#039; or Personal Failure?&quot;&lt;/a&gt;
    </content:encoded>

    <pubDate>Tue, 05 Feb 2008 12:01:00 -0700</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2171-guid.html</guid>
    <category>banking</category>
<category>france</category>
<category>free markets</category>
<category>global economy</category>
<category>societe generale</category>

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    <title>The Pope and Intellectual Freedom</title>
    <link>http://blog.acton.org/archives/2148-The-Pope-and-Intellectual-Freedom.html</link>
            <category>Vatican</category>
    
    <comments>http://blog.acton.org/archives/2148-The-Pope-and-Intellectual-Freedom.html#comments</comments>
    <wfw:comment>http://blog.acton.org/wfwcomment.php?cid=2148</wfw:comment>

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    <author>blog@acton.org (Bernd Bergmann)</author>
    <content:encoded>
    &lt;div class=&quot;serendipity_imageComment_right&quot; style=&quot;width: 280px&quot;&gt;&lt;div class=&quot;serendipity_imageComment_img&quot;&gt;&lt;!-- s9ymdb:1003 --&gt;&lt;img width=&quot;280&quot; height=&quot;187&quot; src=&quot;http://blog.acton.org/uploads/fuori186401.jpg&quot; alt=&quot;&quot;  /&gt;&lt;/div&gt;&lt;div class=&quot;serendipity_imageComment_txt&quot;&gt;canceled&lt;/div&gt;&lt;/div&gt;&lt;em&gt; Update: Ecumenical News International is reporting that the rector of Rome&amp;#8217;s La Sapienza University has said he plans to re-invite Pope Benedict XVI to address his institution. The English text of the Pope&amp;#8217;s speech is available &lt;a href=&quot;http://chiesa.espresso.repubblica.it/articolo/186421?eng=y&quot; &gt;here&lt;/a&gt;.&lt;/em&gt;&lt;br /&gt;
&lt;br /&gt;
This week Benedict XVI canceled a visit to La Sapienza University in Rome, an institution founded by Pope Boniface VIII in 1303. The decision was made after a number of professors and students had announced protests claiming that the pontiff’s presence would undermine the autonomy and free scientific inquiry of the university. After canceling the visit which was planned for the opening of the academic year on January 17th, the Vatican released the speech which Benedict XVI would have delivered. In the speech he defends the intellectual freedom and autonomy of universities. His emphatic pledge for the unimpeded and autonomous search for truth is an embarrassment for his opponents who are now themselves being accused of intolerance by large parts of the Italian public.&lt;br /&gt;
&lt;br /&gt;
The controversy began when in November 2007 an emeritus professor of physics, Marcello Cini, wrote an open letter to the rector of La Sapienza, Renato Guarini, published by the communist newspaper Il Manifesto. In this letter Cini launched a ferocious attack on the rector for having invited the pope. He lamented that the pope’s right to speak at the ceremony would mark an “incredible violation of the traditional autonomy of the university”. He argued that there is no place for any teaching of theology at modern universities, or at least public universities like La Sapienza. This categorical ban would include the pope’s ceremonial speech planned for the opening of the academic year.  Cini claimed that Pope Benedict’s right to speak would signal a leap backwards of at least 300 years. In addition to these “formal” concerns, Cini attempted to discredit the pope’s conviction that reason and faith are compatible as explained in his Regensburg lecture in 2006. Cini maintained that this idea is merely the continuation of the battle against science which was fought by the inquisition in previous centuries and would serve no other purpose than to impose religious dogma and pseudo-scientific methods.&lt;br /&gt;
&lt;br /&gt;
At the time when it was published Cini’s letter did not cause a great stir in the mainstream media but it chimed in with the anti-clerical attitudes of the readership of Il Manifesto. It was taken up by 67 professors and lecturers of La Sapienza who signed a petition against the visit of the pope which was sent to Guarini a few days before the opening of the academic year.  &lt;br /&gt;&lt;a href=&quot;http://blog.acton.org/archives/2148-The-Pope-and-Intellectual-Freedom.html#extended&quot;&gt;Continue reading &quot;The Pope and Intellectual Freedom&quot;&lt;/a&gt;
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    <pubDate>Sat, 19 Jan 2008 10:49:00 -0700</pubDate>
    <guid isPermaLink="false">http://blog.acton.org/archives/2148-guid.html</guid>
    <category>academic freedom</category>
<category>benedict xvi</category>
<category>roman catholic church</category>
<category>secularization</category>

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