For The Record  

FTR #744 The Shape of Things to Come

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Intro­duc­tion: View­ing the future through a glass, darkly, this pro­gram looks at extreme mea­sures being pro­posed (and actu­al­ized) to deal with dire eco­nomic and social dis­lo­ca­tion. Some of these mea­sures are gam­bits sought by the priv­i­leged, in order to gain dis­tance from the chaos that their poli­cies gen­er­ate. Some are pro­posed in order to impose anti-democratic ways and means on those affected by eco­nomic and social deterioration.

Before div­ing into the seasted­ding move­ment and the polit­i­cal phi­los­o­phy (and philoso­phers) under­ly­ing that phe­nom­e­non, the pro­gram high­lights an essen­tial state­ment by Patri Fried­man, grand­son of right-wing eco­nomic the­o­reti­cian Mil­ton Fried­man. In this defin­ing pre­sen­ta­tion, Fried­man dis­tills the fun­da­men­tals of the seasted­ding movement–a “cor­po­rate state”–precisely how Mus­solini defined his fas­cist system.

An Alter­net post sets forth details and sub­stance about the move­ment and, in par­tic­u­lar, the for­mi­da­ble, far-right wing entre­pre­neur Peter Thiel, a dri­ving force behind Sil­i­con Val­ley com­merce and cul­ture. (Thiel, one of the seasted­ding movement’s back­ers is dis­cussed at length in FTR #718.) Epit­o­mized ide­o­log­i­cally by his view that the United States began going down­hill when we allowed women to vote, Thiel has used the pow­er­ful Koch  broth­ers’ polit­i­cal and media appa­ra­tus to pub­li­cize their view that “democ­racy and free­dom are incompatible.”

In addi­tion, the post high­lights the strong area of inter­sec­tion between the Fron­tier Group (a major  backer of the seasted­ding move­ment)  and the Car­lyle Group.

Thiel’s ven­tures are far more than the­o­ret­i­cal. Thiel was instru­men­tal in devel­op­ing the elec­tronic intel­li­gence firm Palan­tir, whose pri­mary appli­ca­tion is counter-terrorism. Aside from pos­i­tive appli­ca­tion of its tech­nol­ogy, how­ever, the firm has appar­ently been engaged in polit­i­cal espi­onage and covert action against polit­i­cal oppo­nents of the U.S. Cham­ber of Commerce.

A ter­ri­fy­ing glimpse of “things to come” has been pro­vided by TV com­men­ta­tor Rachel Mad­dow, who has exposed a plan by the Michi­gan GOP estab­lish­ment to, for all intents and pur­poses, elim­i­nate demo­c­ra­tic process in the Wolver­ine State. Osten­si­bly designed to deal with “finan­cial crises,” the GOP pro­poses gov­ern­ment by exec­u­tive fiat, with delin­quent areas to be turned over to cor­po­ra­tions to be admin­is­tered as–you guessed it–corporate states!

Of par­tic­u­lar sig­nif­i­cance for our pur­poses is the appar­ent con­tem­pla­tion of these mea­sures as nec­es­sary to imple­ment “Shock Doc­trine,” as con­ceived by seasted­ding maven Patri Friedman’s grand­fa­ther Milton.

Antic­i­pat­ing a global apoc­a­lypse, hedge fund man­agers have pur­chas­ing all the arable land they can, in order to cash in on global famine.

Pro­gram High­lights Include: Pro­posal to estab­lish “Char­ter Cities,” which would enable for­eign gov­ern­ments (and per­haps cor­po­ra­tions) to assume gov­er­nance of cities in other coun­tries; Deutsche Telekom’s use of T-Mobile to spy on users of that net­work (Deutsche Telekom–controlled by the Ger­man government–assumed a 5.5 per­cent stake in A, T & T in exchange for that company’s acqui­si­tion of T-Mogile. Will Deutsche Telekom have access to the A, T & T database?)

1. Before div­ing into the seasted­ding move­ment and the polit­i­cal phi­los­o­phy (and philoso­phers) under­ly­ing that phe­nom­e­non, the pro­gram high­lights an essen­tial state­ment by Patri Fried­man, grand­son of right-wing eco­nomic the­o­reti­cian Mil­ton Fried­man. In this defin­ing pre­sen­ta­tion, Fried­man dis­tills the fun­da­men­tals of the seasted­ding movement–a “cor­po­rate state”–precisely how Mus­solini defined his fas­cist system.

. . . Backed almost entirely by ven­ture cap­i­tal­ist Peter Thiel, who co-founded Pay­Pal, the team plans to seast­ead, col­o­nize the sea beyond the reach of exist­ing nations.

Friedman’s mis­sion is to open a polit­i­cal vac­uum into which peo­ple can exper­i­ment with startup gov­ern­ments that are “consumer-oriented, con­stantly com­pet­ing for cit­i­zens,” he says.

“I envi­sion tens of mil­lions of peo­ple in an Apple or a Google coun­try,” where the high-tech giants would gov­ern and res­i­dents would have no vote. “If peo­ple are allowed to opt in or out, you can have a suc­cess­ful dic­ta­tor­ship,” the goa­teed Fried­man says, wig­gling his toes in pink Vibram slip­pers. [Ital­ics are mine–D. E.] . .

“Patri Fried­man Makes Waves with ‘Seasted­ding Plan’ ” by Nel­lie Bowles; San Fran­cisco Chron­i­cle; 6/1/2011.

2. An Alter­net post sets forth details and sub­stance about the move­ment and, in par­tic­u­lar, the for­mi­da­ble, far-right wing entre­pre­neur Peter Thiel, dri­ving force behind Sil­i­con Val­ley com­merce and cul­ture. Epit­o­mized ide­o­log­i­cally by his view that the United States began going down­hill when we allowed women to vote, Thiel has used the pow­er­ful Koch  broth­ers’ polit­i­cal and media appa­ra­tus to pub­li­cize their view that “democ­racy and free­dom are incompatible.”

(In his speech at the Indus­try Club of Dus­sel­dorf, Hitler won the hearts and minds of Germany’s indus­trial elite with a pre­sen­ta­tion that por­trayed democ­racy as inher­ently evil, because it allowed infe­rior peo­ple to struc­ture soci­ety to their ben­e­fit. In Hitler’s view democ­racy led inevitably to com­mu­nism. This speech is dis­cussed in Mis­cel­la­neous Archive Show M11.)

In addi­tion, the post high­lights the strong area of inter­sec­tion between the Fron­tier Group (a major  backer of the seasted­ding move­ment)  and the Car­lyle Group.

. . . . The float­ing cas­tle is a long­time dream of lib­er­tar­ian oli­garchs — a place where they can live their lives in peace free from the teem­ing masses of starv­ing losers and indebted par­a­sites and their tax demands. Since they’ve grown so rich off of Amer­ica, they have enough spare change to fund projects like the Seast­eading Insti­tute, run by Mil­ton Friedman’s grand­son, Patri Fried­man, and financed by the bizarre right-wing Pay­Pal founder, Peter Thiel. . . .

. . . Both Thiel and Mil­ton Friedman’s grand­son see democ­racy as the enemy–last year, Thiel wrote “I no longer believe that free­dom and democ­racy are com­pat­i­ble” at about the same time that Mil­ton Friedman’s grand­son pro­claimed, “Democ­racy is not the answer.” Both pub­lished their anti-democracy procla­ma­tions in the same billionaire-Koch-family-funded out­let, Cato Unbound, one of the old­est billionaire-fed lib­er­tar­ian wel­fare dis­pen­saries. Friedman’s answer for Thiel’s democ­racy prob­lem is to build off­shore lib­er­tar­ian pod-fortresses where the lib­er­tar­ian way rules. It’s prob­a­bly bet­ter for every­one if Mil­ton Friedman’s grand­son and Peter Thiel leave us for­ever for their lib­er­tar­ian ocean lair–Thiel believes that Amer­ica went down the tubes ever since it gave women the right to vote, and he was outed as the spon­sor of accused felon James O’Keefe’s smear videos that brought ACORN to ruin. . . .

. . . While Thiel and Fried­man are busy cook­ing up their lib­er­tar­ian dystopia, the Fron­tier Group invest­ment firm — an off­shoot of the Car­lyle Group — has already entered the real­iza­tion phase with the Utopia float­ing cas­tle. Fron­tier Group, was founded by some of the same big names from the noto­ri­ous Car­lyle Group–the pri­vate equity firm that brought together right-wing oli­garchs like George H. W. Bush and other top Amer­i­can offi­cials with their bil­lion­aire pals in Saudi Ara­bia like the Bin Laden fam­ily, who together raked in enor­mous prof­its thanks to the War on Ter­ror that their kids Dubya and Osama launched.

While nei­ther Bush nor the Bin Ladens are prin­ci­pals in the Fron­tier Group, its found­ing direc­tor, Frank Car­lucci, is a name they know well, and you should too. Car­lucci ran the Car­lyle Group as its chair­man from 1989 through 2005, right around the time that the wars started going unde­ni­ably bad, and float­ing cas­tles started to look like a viable plan. But Carlucci’s past is much weirder and scarier than most of us care to know: whether it’s his strangely timed appear­ances in some of the ugli­est assas­si­na­tions and coups in mod­ern his­tory, or serv­ing as Carter’s num­ber two man in the CIA, and Ronald Reagan’s Sec­re­tary of Defense, if Frank Car­lucci (nick­named “Creepy Car­lucci” and “Spooky Frank”) is the found­ing direc­tor of a firm that’s build­ing float­ing cas­tles, it’s a bad sign for those of us left behind. . . .

. . . Car­lucci may be the scari­est of the Fron­tier Group bunch build­ing the float­ing cas­tles, but he’s among his kind. Other Car­lyle Group direc­tors who joined Car­lucci at Fron­tier include David Robb, who headed up Carlyle’s invest­ments in defense and aero­space; San­ford McDon­nell, the for­mer CEO of McDon­nell Dou­glass and one­time head of the Boy Scouts of Amer­ica; and Nor­man Augus­tine, another ex-president of the Boy Scouts, another Prince­ton alum, and for­mer board direc­tor at the scandal-plagued Riggs bank.

Riggs bank became one of those dark unsolved mys­ter­ies of the Bush-Cheney War on Ter­ror. After the attacks on 9/11, the FBI dis­cov­ered that Saudi gov­ern­ment offi­cials used accounts at Riggs bank to wire funds to at least two known asso­ciates of the Saudi hijack­ers who crashed Flight 77 into the Pen­ta­gon. Riggs was also impli­cated in the Britain-Saudi $3 bil­lion bribery scan­dal, in which British Aero­space bribes were wired through Riggs accounts to Saudi offi­cials in return for lucra­tive con­tracts. One of Riggs bank’s top exec­u­tives was Jonathan Bush, the brother of George H. W. Bush, after Riggs bought out Jonathan Bush’s bank in 1997, and appointed him as a direc­tor. In 2005, with Riggs embroiled in inves­ti­ga­tions and scandals–Riggs pled guilty to money laun­der­ing Augusto Pinochet’s stolen funds, and the funds of var­i­ous Equa­to­r­ial Guinea offi­cials– it was taken over by PNC bank, with the approval of Fed Chair Alan Greenspan. Even after the Wash­ing­ton Post revealed that Riggs’ bil­lion­aire chair­man flew Greenspan’s wife, MSNBC anchor Andrea Mitchell, on the com­pany jet. . . .

But the weird­est of all the Fron­tier Group direc­tors has to be found­ing direc­tor Danny Pang. Last year, the Wall Street Jour­nal reported that Pang embez­zled hun­dreds of mil­lions of dol­lars from his pri­vate equity firm PEM­Group. Pang claimed he was invest­ing money in “Dead Peas­ants Insur­ance” (life insur­ance poli­cies for peo­ple con­sid­ered likely to die), but in secret, Pang con­fided to PEMGroup’s ex-president that he ran it as a Ponzi scheme. That sparked a fresh FBI inves­ti­ga­tion into Danny Pang’s crimes–which led back to the unsolved mur­der of his wife, Janie Louise Pang, a 33-year-old ex-stripper who was shot to death exe­cu­tion style in their Irvine, Cal­i­for­nia home in 1997, the same year Pang was accused of embez­zling three mil­lion dol­lars from another fund he worked at. There was plenty of rea­son to sus­pect Danny Pang of mur­der­ing his wife: he beat her so often (break­ing her nose on one occa­sion) that police were called in on at least four occa­sions before her mur­der. She’d had him tailed by a pri­vate detec­tive who dis­cov­ered Danny hold­ing hands with another woman shortly before she was mur­dered. Danny had known ties to the Tai­wanese Triad mob, he took the fifth and refused to coop­er­ate in the mur­der trial, and report­edly threat­ened Janie’s friends after her mur­der, demand­ing to know what Janie told them about his busi­ness activities.

Here is a descrip­tion of the actual mur­der, from the L.A. Times:

“Accord­ing to the fam­ily maid and two of Pang’s chil­dren, a clean-cut man with a pencil-thin mus­tache arrived at the door ask­ing for her hus­band. The pair talked casu­ally for a cou­ple of min­utes, until the man drew a semi­au­to­matic pis­tol. Pang began run­ning and the maid, ter­ri­fied, spir­ited Pang’s chil­dren out the back door. Within min­utes, the killer caught up with Pang, who tried to hide in her bed­room closet. The killer fired sev­eral .380-caliber rounds and left her to bleed to death as she lay in a fetal position.”

Some­how, the trial ended with a hung jury, and Danny Pang went on to join Frank Car­lucci and the Boy Scouts pres­i­dents to start build­ing the world’s first billion-dollar float­ing cas­tle to spirit away all that stolen money in lux­ury. But Pang was appar­ently too care­less for them. He was out­ted last spring in the Wall Street Jour­nal, and in Sep­tem­ber 2009, Danny Pang was found dead of unknown causes in his New­port Beach home. . . .

“The Really Creepy Peo­ple Behind the Libertarian-Inspired Bil­lion­aire Sea Cas­tles’ by Mark Ames; Alter­net; 6/2/2010.

3a. Thiel’s extrem­ist polit­i­cal views may find expres­sion through his financ­ing of the Palan­tir firm. Note that Palan­tir CEO Alex Karp appar­ently has Frank­furt, Ger­many, roots, like Thiel. (For more on Thiel’s back­ground see FTR #718.)

. . . Palan­tir CEO Mr. Karp says such crit­i­cism doesn’t trou­ble him. He says the com­pany is already expand­ing rapidly.

Palantir’s roots date back to 2000, when Mr. Karp returned to the U.S. after liv­ing for years in Frank­furt, where he earned his doc­tor­ate in Ger­man social phi­los­o­phy and dis­cov­ered a tal­ent for invest­ing. He recon­nected with a buddy from Stan­ford Law School, Peter Thiel, the bil­lion­aire founder of online pay­ment com­pany PayPal.

In 2003, Mr. Thiel pitched an idea to Mr. Karp: Could they build soft­ware that would uncover ter­ror net­works using the approach Pay­Pal had devised to fight Russ­ian cybercriminals?

PayPal’s soft­ware could make con­nec­tions between fraud­u­lent pay­ments that on the sur­face seemed unre­lated. By fol­low­ing such leads, Pay­Pal was able to iden­tify sus­pect cus­tomers and uncover cyber­crime net­works. The com­pany saw a ten­fold decrease in fraud losses after it launched the soft­ware, while many com­peti­tors strug­gled to beat back cheaters.

Mr. Thiel wanted to design soft­ware to tackle ter­ror­ism because at the time, he says, the government’s response to issues like air­port secu­rity was increas­ingly “night­mar­ish.” The two launched Palan­tir in 2004 with three other investors, but they attracted lit­tle inter­est from venture-capital firms. The company’s $30 mil­lion start-up costs were largely bankrolled by Mr. Thiel and his own venture-capital fund.

They mod­eled Palantir’s cul­ture on Google’s, with catered meals of ahi tuna and a free-form 24-hour work­place wired so 16 peo­ple can play the Halo video game. The kitchen is stocked by request with such items as Pepto Bis­mol and glass bot­tles of Mex­i­can Coca Cola sweet­ened with sugar not corn syrup. The com­pany recently hosted its own bat­tle of the bands.

One of the ven­ture firms that rejected Palantir’s over­tures steered the com­pany to In-Q-Tel, a non­profit venture-capital firm estab­lished by the CIA a decade ago to tap inno­va­tion that could be used for intel­li­gence work. As Sil­i­con Valley’s ven­ture fund­ing dries up, In-Q-Tel says it has seen a surge of requests from start-ups in the last year or so, many of which now see the gov­ern­ment as an alter­nate money stream.

In-Q-Tel invested about $2 mil­lion in Palan­tir and pro­vided a crit­i­cal entreé to the CIA and other agen­cies. For his first spy meet­ing in 2005, Mr. Karp shed his track suit for a sports coat. He arrived at an agency — he won’t say which one — and was imme­di­ately “freaked out” by secu­rity offi­cers guard­ing the build­ing with guns. In a win­dow­less, code-locked room, he intro­duced him­self to the first offi­cial he met: “Hi, I’m Alex Karp,” Mr. Karp said, offer­ing his hand. No response. “I didn’t know you really don’t ask their names,” he says now.

Mr. Karp showed the group a pro­to­type. The soft­ware was sim­i­lar to PayPal’s fraud-detection sys­tem. But instead of iden­ti­fy­ing and con­nect­ing cyber crim­i­nals, it focused on two hypo­thet­i­cal ter­ror sus­pects and fol­lowed their activ­i­ties, includ­ing travel and money transfers.

After the demo, he was pep­pered with skep­ti­cal ques­tions: Is any­one at your com­pany cleared to work with clas­si­fied infor­ma­tion? Have you ever worked with intel­li­gence agen­cies? Do you have senior advis­ers who have worked with intel­li­gence agen­cies? Do you have a sales force that is cleared to work with clas­si­fied infor­ma­tion? The answer every time: no.

But the group was suf­fi­ciently intrigued by the demo, and In-Q-Tel arranged for Palan­tir engi­neers to meet directly with intel­li­gence ana­lysts, to help build a com­pre­hen­sive search tool from scratch. . . .

“How Team of Geeks Cracked Spy Trade” by Siob­han Ghor­ban; The Wall Street Jour­nal; 9/4/2009.

3b. Palan­tir is one of sev­eral defense con­trac­tors impli­cated in a case of polit­i­cal spy­ing against oppo­nents of the U.S. Cham­ber of Commerce.

In Feb­ru­ary, ThinkProgress broke a story reveal­ing that attor­neys for the U.S. Cham­ber of Com­merce had com­mu­ni­cated with a set of mil­i­tary con­trac­tors — HBGary Fed­eral, Palan­tir, and Berico Tech­nolo­gies — to develop tac­tics for sab­o­tag­ing and spy­ing on the Chamber’s pro­gres­sive crit­ics. The Cham­ber attor­neys and the secu­rity firms dis­cussed tar­get­ing Cham­ber­Watch, the SEIU, MoveOn, ThinkProgress, and other groups. The pro­pos­als details efforts to steal pri­vate com­puter infor­ma­tion, spy on the fam­i­lies of the Chamber’s crit­ics, and plant false doc­u­ments within orga­ni­za­tions opposed to the Chamber’s agenda.

ThinkProgress has uncov­ered yet another pre­sen­ta­tion from one of the pri­vate secu­rity firms describ­ing plans for the Cham­ber. Because of a tech­ni­cal glitch, a few emails of the 75,000 emails leaked to the pub­lic from one of the defense firms did not process. One of the emails now processed cor­rectly reveals yet another pro­posal, cre­ated by HBGary Fed­eral exec­u­tive Aaron Barr, and for­warded to the other secu­rity firms. Although it appears not to have been com­pleted, the last slide in the pre­sen­ta­tion lists tac­tics — labeled “Dis­credit, Con­fuse, Shame, Com­bat, Infil­trate, Frac­ture” — to “mit­i­gate [sic] effect of adver­sar­ial groups while seek­ing litigation.” . . .

“New Cham­ber­Leaks Pre­sen­ta­tion Emerges, Details More Plans to Sab­o­tage Lib­er­als” by Lee fang; thinkprogress.org; 4/11/2011.

4. Another indi­ca­tion of the shape of things to come may be found in the dra­con­ian mea­sures being imple­mented by the GOP in Michi­gan. TV com­men­ta­tor Rachel Mad­dow set forth some of the delight­ful fea­tures of this program.

Of par­tic­u­lar sig­nif­i­cance for our pur­poses is the appar­ent con­tem­pla­tion of these mea­sures as nec­es­sary to imple­ment “Shock Doc­trine,” as con­ceived by seasted­ding maven Patri Friedman’s grand­fa­ther Milton.

. . . She described the threat to democ­racy in Michi­gan, “Gov. Rick Snyder’s bud­get in Michi­gan is expected to cut aid to cities and towns so much that a lot of cities and towns in Michi­gan are expected to be in dire finan­cial straits. Right now, Gov. Sny­der is push­ing a bill that would give him­self, Gov. Sny­der and his admin­is­tra­tion, the power to declare any town or school dis­trict to be in a finan­cial emer­gency. If a town was declared by the gov­er­nor and his admin­is­tra­tion to be in a finan­cial emer­gency they would get to put some­body in charge of that town, and they want to give that emer­gency man­ager that they just put in charge of the town the power to, “reject, mod­ify, or ter­mi­nate any con­tracts that the town may have entered in to, includ­ing any col­lec­tive bar­gain­ing agreements.”

The bill also has the power to sus­pend or dis­miss elected offi­cials, “This emer­gency per­son also gets the power under the bill to sus­pend or dis­miss elected offi­cials. Think about that for a sec­ond. Doesn’t mat­ter who you voted for in Michi­gan. Doesn’t mat­ter who you elected. Your elected local gov­ern­ment can be dis­missed at will. The emer­gency per­son sent in by the Rick Sny­der admin­is­tra­tion could rec­om­mend that a school dis­trict be absorbed into another school dis­trict. That emer­gency per­son is also granted power specif­i­cally to dis­in­cor­po­rate or dis­solve entire city governments.”

Mad­dow said Michi­gan Repub­li­cans want to abol­ish entire towns, “What year was your town founded? Does it say so like on the town bor­der as you drive into your town? Does it say what year your town was founded? What did your town’s found­ing fathers and found­ing moth­ers have to go through to incor­po­rate your town? Repub­li­cans in Michi­gan want to be able to uni­lat­er­ally abol­ish your town and dis­in­cor­po­rate it. Regard­less of what you as res­i­dent of that town think about it. You don’t even have the right to express an opin­ion about it through your locally elected offi­cials who rep­re­sent you, because the Repub­li­cans in Michi­gan say they reserve the right to dis­miss your measly elected offi­cials and to do what they want instead because they know best.”

What’s worse is that this power to be abol­ish gov­ern­ments could be handed to cor­po­ra­tions, “The ver­sion of this bill that passed the Repub­li­can con­trolled Michi­gan House said it was fine for this emer­gency power to declare a fis­cal emer­gency invok­ing all of these extreme pow­ers, it was fine for that power to be held by a cor­po­ra­tion. So swaths of Michi­gan could at the governor’s dis­posal be handed over to the dis­cre­tion of a com­pany. You still want your town to exist? Take it up with this board of direc­tors of this cor­po­ra­tion that will be over­see­ing your future now, or rather don’t take it up with them. Frankly, they’re not interested.”

Mad­dow talked about the power grab behind the fab­ri­ca­tion of a fis­cal emer­gency, “The power to over­rule and sus­pend elected gov­ern­ment jus­ti­fied by a finan­cial emer­gency. Oh, and how do you know you’re in a finan­cial emer­gency, because the gov­er­nor tells you, you’re in a finan­cial emer­gency, or a com­pany he hires to do so, does that instead. The Sen­ate ver­sion of the bill in Michi­gan says it has to be humans declar­ing your fis­cal emer­gency. The House bill says a firm can do that just as well.”

Rachel Mad­dow con­cluded, “This is about a lot of things. This is not about a bud­get. This is using or fab­ri­cat­ing cri­sis to push for an agenda you’d never be able to sell under nor­mal cir­cum­stances, and so you have to con­vince every­one that these are not nor­mal cir­cum­stances. These are des­per­ate cir­cum­stances and your des­per­ate mea­sures are there for some­how required. What this is has a name. It is called shock doctrine.”

Naomi Klein, author of “The Shock Doc­trine” implies that man made crises are used to push the “free mar­ket prin­ci­ples” of Mil­ton Fried­man et al, which are pushed through while the cit­i­zens are react­ing to dis­as­ters or upheavals. The per­pe­tra­tors of the shock doc­trine require a vio­lent destruc­tion of the exist­ing eco­nomic order in order to achieve their means. In the case of the Michi­gan gov­er­nor, Sny­der posi­tioned him­self in a state already reel­ing from finan­cial cri­sis, vul­ner­a­ble and ripe for a takeover. . . .

“Rachel Mad­dow Exposes Michi­gan Repub­li­cans’ Secret War on Democ­racy” by Sarah Jones; politicususa.com; 3/9/2011.

5. Some­thing that might be seen as an exten­sion of the GOP plan for Michi­gan con­cerns pro­pos­als for cor­po­rate “char­ter cities.”

. . . About a decade ago, he walked away from acad­e­mia, started an online teach­ing com­pany, sold it and then turned to his next big idea: To cre­ate jobs to lift mil­lions out of poverty, take an unin­hab­ited 1,000 square-kilometer tract (386 square miles), about the size of Hong Kong, prefer­ably government-owned. Write a char­ter: the all-important rules. Allow any­one to move in or out. Invite for­eign investors to build infra­struc­ture for profit. And sign a treaty with a well-governed coun­try, say Nor­way or Canada, to serve as “guar­an­tor” to assure investors and res­i­dents that the char­ter will be respected, much as the British once did for Hong Kong, and—with some over­sight from the Hon­duran Congress—govern the city.

. . . “It’s a mix­ture of great cre­ativ­ity and great naivety,” says William East­erly, an NYU devel­op­ment econ­o­mist. He doubts the city, espe­cially if suc­cess­ful, could with­stand pres­sure if the Hon­duran gov­ern­ment turned hos­tile. Adds Harvard’s Ricardo Haus­mann: “It would be great if it hap­pened, so we can take a look at the exper­i­ment.” He, too, has doubts , and recalls Henry Ford’s failed Ford­lan­dia, which was to be an oasis of U.S. cap­i­tal­ism in Brazil.

Back while Mr. Romer was court­ing Africans, a group of Hon­durans was pon­der­ing how to improve their country’s prospects. One idea, a turbo-charged ver­sion of exist­ing free-trade zones, was to lure investors to a super-embassy, an area gov­erned by another country’s laws. . . .

“The Quest for a ‘Char­ter City’ ” by David Wes­sel; The Wall Street Jour­nal; 2/3/2011.

6. Deutsche Telekom’s spy­ing tac­tics actu­al­ized through that company’s T-Mobile sub­sidiary gives us a view as to the use the com­pany might make of its poten­tial access to the A, T & T data­base. Note that the com­pany (Deutsche Telekom) is con­trolled by the Ger­man government.

The espi­onage poten­tial of that com­pany gain­ing access to the A, T & T data­base would be considerable.

FTR #152 sets forth the pro­found links between “cor­po­rate Ger­many” and the Bor­mann cap­i­tal net­work.

A favorite pas­time of Inter­net users is to share their loca­tion: ser­vices like Google Lat­i­tude can inform friends when you are nearby; another, Foursquare, has turned report­ing these updates into a game.

But as a Ger­man Green party politi­cian, Malte Spitz, recently learned, we are already con­tin­u­ally being tracked whether we vol­un­teer to be or not. Cell­phone com­pa­nies do not typ­i­cally divulge how much infor­ma­tion they col­lect, so Mr. Spitz went to court to find out exactly what his cell­phone com­pany, Deutsche Telekom, knew about his whereabouts.

The results were astound­ing. In a six-month period — from Aug 31, 2009, to Feb. 28, 2010, Deutsche Telekom had recorded and saved his lon­gi­tude and lat­i­tude coor­di­nates more than 35,000 times. It traced him from a train on the way to Erlan­gen at the start through to that last night, when he was home in Berlin.

Mr. Spitz has pro­vided a rare glimpse — an unprece­dented one, pri­vacy experts say — of what is being col­lected as we walk around with our phones. Unlike many online ser­vices and Web sites that must send “cook­ies” to a user’s com­puter to try to link its traf­fic to a spe­cific per­son, cell­phone com­pa­nies sim­ply have to sit back and hit “record.”

“We are all walk­ing around with lit­tle tags, and our tag has a phone num­ber asso­ci­ated with it, who we called and what we do with the phone,” said Sarah E. Williams, an expert on graphic infor­ma­tion at Colum­bia University’s archi­tec­ture school. “We don’t even know we are giv­ing up that data.”

Track­ing a customer’s where­abouts is part and par­cel of what phone com­pa­nies do for a liv­ing. Every seven sec­onds or so, the phone com­pany of some­one with a work­ing cell­phone is deter­min­ing the near­est tower, so as to most effi­ciently route calls. And for billing rea­sons, they track where the call is com­ing from and how long it has lasted.

“At any given instant, a cell com­pany has to know where you are; it is con­stantly reg­is­ter­ing with the tower with the strongest sig­nal,” said Matthew Blaze, a pro­fes­sor of com­puter and infor­ma­tion sci­ence at the Uni­ver­sity of Penn­syl­va­nia who has tes­ti­fied before Con­gress on the issue.

Mr. Spitz’s infor­ma­tion, Mr. Blaze pointed out, was not based on those fre­quent updates, but on how often Mr. Spitz checked his e-mail. . . .

“It’s Track­ing Your Every Move and You May Not Even Know” by Noam Cohen; The New York Times; 3/26/2011.

7. Mean­while, hedge fund man­agers have been invest­ing in arable land, seek­ing to cash in on antic­i­pated global famine.

. . . But on a recent after­noon, The Observer had a con­ver­sa­tion of a dif­fer­ent sort about agri­cul­tural pur­suits with a hedge fund man­ager he’d met at one of the many dark-paneled pri­vate clubs in mid­town a few weeks prior. “A friend of mine is actu­ally the largest owner of agri­cul­tural land in Uruguay,” said the hedge fund man­ager. “He’s a year older than I am. We’re some­where [around] the 15th-largest farm­ers in Amer­ica right now.”

“We,” as in, his hedge fund.

It may seem a lit­tle odd that in 2011 anyone’s think­ing of putting money into assets that would have seemed attrac­tive in 1911, but there’s some­thing in the air-namely, fear. The hedge fund man­ager and oth­ers like him envi­sion a dooms­day sce­nario cat­alyzed by a weak dol­lar, higher-than-you-think infla­tion and an uncer­tain polit­i­cal cli­mate here and abroad. . . .

“Hedge Farm! The Dooms­day Food Price Sce­nario Turn­ing Hed­gies  into Sur­vival­ists” by Fos­ter Kramer; New York Observer; 5/17/2011.

Discussion

25 comments for “FTR #744 The Shape of Things to Come”

  1. Looks like you mis­spelled the name for http://www.palantirtech.com/. But a good listen!

    Posted by David M | June 16, 2011, 10:29 pm
  2. @David M: Good catch! Hadn’t noticed it myself. =)

    Posted by Steven | June 18, 2011, 2:38 pm
  3. One thing I missed in my analy­sis of the seasted­ding move­ment is the sim­i­lar­ity with the Ark of Noah. At least, that’s prob­a­bly how they see those ships, as if a great flood is com­ing. It says it all.

    Have a great day.

    Posted by Claude | June 18, 2011, 9:28 pm
  4. @Claude: Frankly, I see things the same way.......when will the Amer­i­can peo­ple wake up?

    Posted by Steven | June 19, 2011, 7:54 am
  5. > when will the Amer­i­can peo­ple wake up?

    The “Amer­i­can peo­ple” are the ones doing all of this mis­chief. The rest of us are either in their way or sup­port­ing and enabling them to grow their empire.

    Posted by bruce k. | July 29, 2011, 8:22 am
  6. It looks like the Michi­gan Plan is just get­ting started.

    http://news.yahoo.com/benefits-shut-off-41–000-michigan-welfare-recipients-220800423.html

    Posted by Sandra | October 1, 2011, 1:54 pm
  7. Here’s an unin­ten­tion­ally com­i­cal peek into the inner worlds of the folks like Thiel guid­ing the shape of things to come:

    ‘Atlas Shrugged’ Pro­duc­ers Replace ‘Embar­rass­ing’ DVD Cov­ers That Say Movie Is About ‘Self-Sacrifice’
    TPMDC

    Jil­lian Ray­field Novem­ber 11, 2011, 5:36 PM

    The pro­duc­ers of the film ver­sion of “Atlas Shrugged: Part One” apol­o­gized for an “embar­rass­ing” error on the DVD cover that described the theme of their adap­ta­tion of Ayn Rand’s novel as one of “self-sacrifice.” As dis­ci­ples of Rand, one of libertarianism’s heroes, are sup­posed to know, Atlas Shrugged is actu­ally all about “ratio­nal self-interest.”

    On Fri­day, the pro­duc­ers announced plans to replace more than 100,000 title sheets on the DVD and Blu-ray ver­sions of the movie because they “were pack­aged with an inac­cu­rate syn­op­sis of ‘Atlas Shrugged.’”

    Whereas, accord­ing to the pro­duc­ers, the book presents “a cogent argu­ment advo­cat­ing a soci­ety dri­ven by ratio­nal self-interest,” the syn­op­sis instead described it as “AYN RAND’s time­less novel of courage and self-sacrifice comes to life.”

    “It’s embar­rass­ing for sure and of course, regard­less of how or why it hap­pened, we’re all feel­ing respon­si­ble right now.” said Scott DeSa­pio, Atlas Pro­duc­tions’ COO and Com­mu­ni­ca­tions Direc­tor, in a state­ment. “You can imag­ine how mor­ti­fied we all were when we saw the DVD but, it was sim­ply too late — the prod­uct was already on shelves all over the coun­try. It was cer­tainly no sur­prise when the incred­u­lous emails ensued. The irony is inescapable.

    ....

    Read­ing the news these days, it’s start­ing to feel like the more a soci­ety falls into the hands of folks like the folks we got run­ning the show nowa­days, the more that last line becomes a cos­mic law.

    Posted by Pterrafractyl | November 12, 2011, 3:54 pm
  8. Here’s a long and very inter­est­ing piece on Thiel’s back­ground, his vision for the seast­eader move­ment, and its under­ly­ing philosophy:

    ...
    “The ulti­mate goal,” Fried­man says, “is to open a fron­tier for exper­i­ment­ing with new ideas for gov­ern­ment.” This trans­lates into the found­ing of ide­o­log­i­cally ori­ented micro-states on the high seas, a kind of float­ing petri dish for imple­ment­ing poli­cies that lib­er­tar­i­ans, stymied by indif­fer­ence at the vot­ing booths, have been unable to advance: no wel­fare, looser build­ing codes, no min­i­mum wage, and few restric­tions on weapons.

    So all these cor­po­rate “cit­i­zens” are going to be leav­ing out in the ocean on aban­doned oil rigs retro­fit­ted with no build­ing codes and few weapons restrictions...making this a quite pos­si­bly the first planned com­mu­nity ever that uses Mos Eisley’s Can­tina as a fun­da­men­tal build­ing block.

    And just FYI to the future inhab­i­tants of these com­mu­ni­ties, you might want to google some­thing called dead peas­ant insur­ance. Some­thing tells me there won’t be many rules against it where your living.

    It’s a vivid, wild-eyed dream—think Burn­ing Man as reimag­ined by Ayn Rand’s John Galt and steered out to sea by Cap­tain Nemo—but Fried­man and Thiel, aware of the long and tragi­comic his­tory of failed lib­er­tar­ian utopias, believe that entre­pre­neur­ial zeal sets this scheme apart. One poten­tial model is some­thing Fried­man calls Apple­topia: A cor­po­ra­tion, such as Apple, “starts a coun­try as a busi­ness. The more desir­able the coun­try, the more valu­able the real estate,” Fried­man says. When I ask if this wouldn’t amount to a share­holder dic­ta­tor­ship, he doesn’t flinch. “The way most dic­ta­tor­ships work now, they’re enforced on peo­ple who aren’t allowed to leave.” Apple­topia, or any seast­eading colony, would entail a more benev­o­lent vari­ety of dic­ta­tor­ship, sim­i­lar to your cell-phone con­tract: You don’t like it, you leave. Cit­i­zen­ship as free agency, you might say. Or as Ken How­ery, one of Thiel’s part­ners at the Founders Fund, puts it, “It’s almost like there’s a car­tel of gov­ern­ments, and this is a way to force gov­ern­ments to com­pete in a free-market way.”

    I’d be curi­ous to see the ratio of dictatorship/non-dictatorship pro­pos­als put out by these folks (and yes, I know, you can’t divide by zero).

    I’ll bet every one of these Seast­eader founds are plan­ning their own per­sonal dictatorship-lite par­adise right now. I won­der what Thiel’s vision would look like?

    ...
    When I ask Thiel what, beyond work, gives him plea­sure, he cringes slightly and says, “You know, it ends up being, um . . . it ends up being a lot of, uh . . . a lot of time, uh . . . it’s mostly, uh, pretty basic, sim­ple social things. Hang­ing out with friends, hav­ing good din­ner con­ver­sa­tion . . . sort of doing outdoor-hike-type stuff. It’s not . . . it tends not to be . . . I don’t really have any crazy hob­bies. It’s noth­ing that, um . . . it’s noth­ing that, uh . . . noth­ing that insane or excit­ing.” This may be true, but gos­sip items about Thiel’s par­ty­ing sug­gest a healthy dose of excite­ment. In June, the New York Daily News reported that fire­fight­ers were called to his apart­ment to res­cue a group of partiers from a stuck ele­va­tor. The “full-on rager,” accord­ing to the paper, fea­tured a “not-so-hot shirt­less bar­tender,” and a source was quoted bemoan­ing the dis­ap­pear­ance of the servers in “ass­less chaps” that had once enlivened Thiel’s par­ties. One of the guests at the party, who prefers to remain anony­mous, con­firmed the major­ity of the account, dis­put­ing only the detail about ass­less chaps. “He used to have servers wear­ing noth­ing but aprons,” the attendee cor­rected, adding, “Peter works hard, but he likes to play hard, too.” (Thiel declined to com­ment on the event.)
    ...

    Got it!

    Of course, this anec­dote begs an impor­tant ques­tion: will the pri­vate Seast­eader fire depart­ment have the right to NOT save the ass­less chap-clad party peo­ple stuck in an ele­va­tor if the fire­fight­ers don’t approve of the ass­less chap lifestyle? Given Thiel’s pol­i­tics, I’m going to guess yes.

    ...
    If the seast­eading move­ment goes for­ward as planned, Thiel won’t be one of its early cit­i­zens. For one thing, he’s not overly fond of boats, although maybe, as Fried­man says, “he just needs to be on a large enough struc­ture.” Thiel char­ac­ter­izes his inter­est as “the­o­ret­i­cal.” But whether Thiel him­self heads off­shore or not, there’s a whole lot of pas­sion under­ly­ing that the­o­ret­i­cal inter­est. Thiel put forth his views on the sub­ject in a 2009 essay for the Cato Insti­tute, in which he flatly declared, “I no longer believe that free­dom and democ­racy are com­pat­i­ble.” He went on: “The great task for lib­er­tar­i­ans is to find an escape from pol­i­tics in all its forms,” with the crit­i­cal ques­tion being “how to escape not via pol­i­tics but beyond it. Because there are no truly free places left in our world, I sus­pect that the mode for escape must involve some sort of new and hith­erto untried process that leads us to some undis­cov­ered country.”

    Until a lib­er­tar­ian colony can be estab­lished in outer space—Thiel is bull­ish on that idea, too, though he thinks the tech­nol­ogy needs at least a half-century to develop—seasteading will have to suf­fice. “[It’s] not just pos­si­ble, or desir­able,” he said in an address at the 2009 Seast­eading Insti­tute Con­fer­ence, “but actu­ally nec­es­sary.”.

    ...

    Ok, great, so in 50 years now we have to worry about rogue lib­er­tar­ian space dystopias. Oh well, at least Thiel doesn’t have rock­ets yet. He has to go to his busi­ness part­ner for those:

    Peter Thiel funds Elon Musk’s sput­ter­ing rock­et­ships
    Aug 7, 2008
    By Nicholas Carlson

    Peter Thiel fought viciously with Elon Musk in the early part of this decade; after they merged their com­pa­nies to form with Pay­Pal, they wres­tled for con­trol, with Thiel emerg­ing vic­to­ri­ous as the CEO who led the com­pany through an IPO and a $1.5 bil­lion sale to eBay. At the time, Musk was the richer, hav­ing sold a for­got­ten com­pany to another for­got­ten com­pany for an unfor­get­table $220 mil­lion. The two have long since made up — and a lucky thing for Musk, who now finds him­self a sup­pli­cant to Thiel. Thiel’s ven­ture cap­i­tal firm, the Founders Fund, has agreed to invest $20 mil­lion in Musk’s fal­ter­ing SpaceX, a rocket-ship startup whose lat­est vehi­cle crashed into the Pacific Ocean rather than soar­ing into the beyond.

    ....

    I wouldn’t be too wor­ried about the future of Elon Musk’s “Space-X”. They’re going to be build­ing the next gen­er­a­tion of rock­ets that will replace the space shut­tle for NASA. While it might seem risky to basi­cally hand over monop­oly sta­tus to a pri­vate com­pany for some­thing as crit­i­cal to national secu­rity as pay­load launch capa­bil­i­ties, at least NASA doesn’t need to worry about launch­ing rock­ets any­more. On sec­ond thought...:

    SpaceX: We Need NASA to Change Crew Con­tracts
    Today, lead­ers of pri­vate space com­pa­nies tes­ti­fied before a con­gres­sional com­mit­tee on their rela­tion­ship with NASA, and they weren’t happy: The space execs say the con­tract NASA has writ­ten to cover their crew-carrying space­craft is too vague, too intrud­ing, and too slow—and one of the biggest play­ers threat­ened to drop out altogether.

    By Joe Pap­palardo
    Octo­ber 26, 2011 2:30 PM

    If NASA doesn’t change the terms in the draft ver­sion of its con­tract to build a space­craft that can deliver astro­nauts to orbit, then Space Explo­ration Tech­nolo­gies Corp. (SpaceX) may sim­ply bow out of build­ing one for NASA. “We may not bid on it,” SpaceX founder Elon Musk said. How­ever he is increas­ingly opti­mistic that the agency will change some of the rules that dic­tate the design.

    Musk was in Wash­ing­ton, D.C., today, along with other lead­ers of pri­vate space com­pa­nies, tes­ti­fy­ing before the House Com­mit­tee on Sci­ence and Tech­nol­ogy about the state of the part­ner­ship between NASA and pri­vate space com­pa­nies. Musk made his com­ments to PM out­side the hear­ing room, but the back­story of his frus­tra­tion is the first draft of a con­tract called the CCIDC (Com­mer­cial Crew Inte­grated Design Con­tract), which NASA issued last month to guide the way that pri­vate com­pa­nies build crew-carrying space­craft. As Pop­u­lar Mechan­ics reported last week, this early ver­sion of the con­tract allows NASA to exert more con­trol over the hard­ware design than many in the indus­try are com­fort­able with. It installs NASA staff into the com­pa­nies’ facil­i­ties and leaves open the ques­tion of how many changes the agency can force com­pa­nies to make.

    ...

    The wit­nesses also expressed dis­com­fort with the lack of detail on how much NASA’s demands on the design would drive the cost of devel­op­ment. “NASA should pro­vide over­sight and direc­tion in all cases where they see a need to improve safety of a space­craft being devel­oped for their use,” Sierra Nevada’s flight direc­tor Steven Lind­sey said. “How­ever, that does not mean that every tech­ni­cal change sug­gested by the gov­ern­ment should be accepted. If a change makes the design ‘bet­ter’ but doesn’t impact safety, then the com­mer­cial com­pany must have the lee­way to accept or reject the change based on tech­ni­cal, cost, or sched­ule con­sid­er­a­tions.“
    ...

    Just think, in a mere 50 years we could see humanity’s first ass­less chapped space pirate Can­tina. I won­der what the weapon restric­tions will be like up there?

    Posted by Pterrafractyl | November 21, 2011, 4:31 pm
  9. @Pterrafractyl: If Peter Thiel is behind the seast­eading move­ment, I won­der who’s behind Peter Thiel? =p

    That said, TBH, I always thought float­ing nations on boats or arti­fi­cial islands, or what have you, was a cool concept.....the truth about the seast­eading move­ment kinda ruined that fan­tasy for me, though.
    =(

    Posted by Steven l. | November 21, 2011, 9:57 pm
  10. @Steven L.: I know how you feel. I have noth­ing against ass­less chapped space pirate Can­tina enclaves. But if they’re to be used as wedges to dele­git­imize demo­c­ra­tic soci­eties or cre­ate “safe spaces” for bad actors (think of Liecht­en­stein merged with Pak­istan and launched into orbit), now I’m sud­denly some­what anti-assless chapped space pirate Can­tina enclaves...at least those par­tic­u­lar enclaves.

    And now that I think about it, I’m actu­ally opposed to ass­less chapped space pirate Can­tina enclaves in gen­eral. I mean, the ass­less chaps with the pirate out­fits prob­a­bly work on some level, but space piracy just sounds like a bad idea (except when it’s not!).

    Posted by Pterrafractyl | November 22, 2011, 2:11 pm
  11. Just check­ing in. What you say makes a lot of sense.

    Posted by Rob Coogan | November 23, 2011, 7:10 am
  12. @Pterrafractyl: Yep, yep.
    On the other hand, at least we might be able to find a float­ing Vegas one of these days, LOL(hey, if it’s run by a legit­i­mate busi­ness and not an Under­ground Reich mob outfit.......) !

    Posted by Steven l. | November 23, 2011, 10:54 am
  13. It looks like HBGary might have some com­pe­ti­tion:

    TPM
    Who Is Behind Secret Phone Track­ing Soft­ware ‘Car­rier IQ’?
    share
    Carl Franzen Decem­ber 1, 2011, 12:21 PM

    Your smart­phone is prob­a­bly spy­ing on you, unless you’re a Win­dows Phone customer.

    That’s the unfor­tu­nate con­clu­sion of a num­ber of tech blog­gers and secu­rity researchers over the past two weeks who have stum­bled upon the whop­per of all real-life tech con­spir­a­cies: That a piece of what appears to be remote, real-time track­ing soft­ware called “Car­rier IQ,” made by a com­pany of the same name, is installed on upwards of 140 mil­lion hand­sets world­wide, includ­ing many pop­u­lar Android, iOS, Nokia and Black­Berry devices in the U.S.

    Fur­ther, the soft­ware records a breath­tak­ing amount of user infor­ma­tion, includ­ing key­strokes, SMS mes­sages, Web searches and a user’s loca­tion, all with­out a user’s knowl­edge or expressed consent.

    Still unan­swered: Just who installed the soft­ware on the hand­sets in the first place and who is receiv­ing all of the user infor­ma­tion obtained. Hand­set mak­ers (such as HTC and RIM) are blam­ing wire­less providers (car­ri­ers such as AT&T, Ver­i­zon and Sprint), but many wire­less com­pa­nies have denied installing the software.

    Who­ever is ben­e­fit­ting from the soft­ware, they and Car­rier IQ could be sub­ject to a class-action law­suit for break­ing U.S. wire­tap­ping law, a for­mer Jus­tice Depart­ment pros­e­cu­tor recently told Forbes.

    In the case of the Android, Nokia and Black­Berry devices, the soft­ware may be cap­tur­ing and record­ing nearly all of a user’s activ­i­ties by log­ging their key­strokes, accord­ing to sys­tems admin­is­tra­tor and Android researcher Trevor Eck­hart, who first brought the mat­ter to light in a blog post the week of Novem­ber 14, after he hooked his Android phone up to his com­puter and ran an analy­sis on the Car­rier IQ soft­ware, only to find that it “secretly chron­i­cles a user’s phone expe­ri­ence, from its apps, bat­tery life and texts,” as Wired Threat Level reported.

    Eck­hart later posted a reveal­ing video show­ing just how much infor­ma­tion the soft­ware cap­tures, includ­ing every key­stroke on his Sprint HTC EVO 3D 4G Android device, and all with­out any dis­claimers that it is doing so and with­out any way to stop it.
    ...

    Posted by Pterrafractyl | December 1, 2011, 11:14 am
  14. The prospect of min­ing in space is extremely tempt­ing for a ton of rea­sons, includ­ing the avoid­ance of trash­ing the bios­phere. But I am a bit wary of just who we’re going to allow to become the space rob­ber barons when a sin­gle aster­oid deposit could be worth more than than the GDP of most con­ti­nents. Then again, a sin­gle find of the right rare met­als could oblit­er­ate exist­ing earth-based min­eral car­tels. I’m not look­ing for­ward to the property-rights bat­tles. Maybe there really is a mar­ket of orbital space-pirate cantinas?

    Shoot­ing for the moon — to mine it
    Naveen Jain of Moon Express Inc. describes plans to put robots on the moon as part of the Google Lunar X Prize competition.

    By Eryn Brown, Los Ange­les Times

    Decem­ber 9, 2011, 6:57 p.m.
    Most peo­ple don’t take it lit­er­ally when they’re told to shoot for the moon — but think­ing small isn’t Naveen Jain’s way. The 52-year-old Inter­net entre­pre­neur is a co-founder of Moon Express Inc., one of sev­eral com­pa­nies in the Google Lunar X Prize com­pe­ti­tion, in which pri­vately funded teams will try to put robots on the moon by 2016.

    Jain’s plans don’t end at reach­ing the moon’s sur­face. MoonEx, as his com­pany is also known, plans to make bil­lions min­ing the moon for pre­cious resources. It also hopes to let cus­tomers send mes­sages and mate­ri­als to the moon.

    Jain spoke with The Times about the project.

    Why go to the moon?

    Our inter­est in the moon came because we think it’s a great busi­ness, not because it’s a great hobby. My whole think­ing really is, how do we use sci­ence and entre­pre­neur­ship to solve the big problems?

    The MoonEx project came about because we started think­ing: There are a tremen­dous amount of resources that are avail­able on the moon, and the moon has never been explored from the per­spec­tive of an entre­pre­neur. Every six inches of moon has been mapped. But no one has com­bined the data together and real­ized [that] these resources are right here.

    What kinds of resources?

    Rare earth ele­ments. Today, 80% of these come from China, which now has a pol­icy not to export them. That means we’re held hostage. We know we can get these ele­ments on the moon.

    ...

    What will this cost you?

    The idea is to develop a sys­tem and take a lan­der to the moon for under $70 mil­lion. NASA had to spend bil­lions of dol­lars to fig­ure out how to do it. Now we’re able to use exist­ing technologies.

    By pass­ing the torch to com­pa­nies like yours, is NASA giv­ing up?

    NASA isn’t giv­ing up on the moon or outer space. They’re sim­ply pass­ing this on to the pri­vate sec­tor and say­ing, “Look, the sci­ence for this has been devel­oped.” Now it’s up to the pri­vate sec­tor to go out and cre­ate businesses.

    ..

    Who owns the moon?

    Peo­ple do say, “What right do you have to go up there and do this?” But it’s no dif­fer­ent than look­ing at inter­na­tional waters, which nobody owns. You can go out there and fish, and the fish you bring in is yours. You can drill there, and the oil you bring in is yours. You still don’t own the water. How is it going to be dif­fer­ent on the moon?

    ...

    What is your rela­tion­ship with NASA?

    We have an agree­ment with NASA that allows us to use NASA tech­nol­ogy and allows us to hire NASA to do work for us. Also, NASA has matched the Google Lunar prize for $30 mil­lion. We’re one of those three com­pa­nies in the running.

    ...

    Wow, so NASA spends bil­lions devel­op­ing the tech­nol­ogy required for robotic min­ing and then decides to “hand off” the mis­sion of extract­ing those mate­ri­als for prof­its eco­nomic and sci­en­tific trea­sure to the pri­vate sec­tor and even offers to do con­tract work for these con­trac­tors. I hope these com­pa­nies remem­ber that pub­lic sec­tor kind­ness when it comes to tax­ing their trea­sure trove (ROFLMAO!)

    Posted by Pterrafractyl | December 10, 2011, 9:56 pm
  15. Egads, it looks like Newt was call­ing for lunar min­ing colonies back in 1984. It also looks like the the Outer Space Treaty of 1967 sort of allows min­ing, but it’s ambigu­ous, so that will prob­a­bly change soon.

    Posted by Pterrafractyl | December 12, 2011, 10:36 pm
  16. Pay­Pal co-founder Elon Musk’s rocket com­pany, SpaceX, just got an awe­some boost today. Paul Allen wants to build the worlds biggest plane and launch those rock­ets from 30,000 feet:

    Tycoon’s Next Big Bet for Space: A Count­down Six Miles Up in the Air

    By KENNETH CHANG
    Pub­lished: Decem­ber 13, 2011

    One of the rich­est men in the world is going to build the biggest air­plane ever.

    And then he is going to use it to launch rockets.

    Paul G. Allen, the bil­lion­aire co-founder of Microsoft, said Tues­day that he was enter­ing the rocket busi­ness with a con­cept sel­dom used until now: a plane that can take off the con­ven­tional way and then, at 30,000 feet, launch a rocket to orbit, car­ry­ing with it satel­lites, sup­plies and — even­tu­ally — peo­ple. The first rocket launch­ing could be as soon as 2016.

    The air­plane that his new com­pany, Stra­to­launch Sys­tems, plans to build will be larger and heav­ier than the Spruce Goose, Howard Hughes’s record-setting fly­ing boat that flew, just once, in 1947. With wings that will stretch 385 feet — longer than a foot­ball field — it will dwarf the double-decker Air­bus A380, which is the biggest com­mer­cial pas­sen­ger plane flown today. It will take off from a run­way, fly to a nor­mal cruis­ing alti­tude and then drop off a rocket, elim­i­nat­ing the need for costly launch­ing pads.

    With government-funded space­flight dimin­ish­ing, there is a much expanded oppor­tu­nity for pri­vately funded efforts,” Mr. Allen said. He noted that NASA had ended its space shut­tle pro­gram this year, scrapped plans to return to the Moon and begun rely­ing solely on Rus­sia for launch­ing astro­nauts to the Inter­na­tional Space Sta­tion. He said his new effort would help keep “keep Amer­ica at the fore­front of space exploration.”

    Mr. Allen thus joins the ranks of tycoons who are plac­ing big bets on the heav­ens. The most promi­nent is Richard Bran­son, whose Vir­gin Galac­tic sub­sidiary is plan­ning to fly tourists on short jaunts to the edge of space. Other big names are Elon Musk, who used his for­tune as a founder of Pay­pal to estab­lish SpaceX, a rocket maker that is rack­ing up con­tracts with NASA, and Jef­frey P. Bezos, the Amazon.com founder, who has a space com­pany called Blue Origin.

    ...

    Instead of a tiny space plane like Space­ShipOne, Stratolaunch’s car­rier air­plane will cra­dle a full-size rocket, a vari­ant of SpaceX’s Fal­con 9, weigh­ing about half a mil­lion pounds. The plane will take the rocket to 30,000 feet, almost six miles high, and then drop it. The rocket’s engines will then ignite and the tail fins will turn the rocket’s direc­tion upward. The air­plane will return to the air­port and, in a quick turn­around, could be ready to launch another rocket by the next day.
    ...

    I won­der how many they’ll make and what else they can carry. . You have to won­der what else that thing can be used to carry. I guess the clos­est thing to a rocket is a an inter­con­ti­nen­tal bal­lis­tic mis­sile, so that’s one inter­est­ing pos­si­ble appli­ca­tion. And I sup­pose it could carry a really really big anti-missile laser. I some non-missile related stuff too I’m sure.

    Posted by Pterrafractyl | December 14, 2011, 12:00 am
  17. The AT&T/T-mobile merger was just called off. I’m sure Deutsche Telekom is dis­traught:

    T-Mobile’s Par­ent Cel­e­brates AT&T’s ‘Record High Break-Up Fee’

    share
    Carl Franzen Decem­ber 20, 2011, 12:22 PM

    AT&T wasn’t happy to can­cel its bid to pur­chase T-Mobile for $39 bil­lion, as the com­pany can­didly stated when announc­ing the his­toric retreat late Monday.

    But T-Mobile’s Ger­man par­ent com­pany Deutsche Telekom is savor­ing a “record high break-up fee,” of $4 bil­lion that AT&T agreed to pay the com­pany if the merger fell through.

    “This is one of the high­est pay­ments ever agreed between two com­pa­nies for the ter­mi­na­tion of a pur­chase agree­ment,” Deutsche Telekom noted up high in a state­ment pro­vided to TPM. “It includes a cash pay­ment of USD 3 bil­lion to Deutsche Telekom, which is expected to be made by the end of this year. In addi­tion, it con­tains a large pack­age of mobile com­mu­ni­ca­tions spec­trum and a long-term agree­ment on UMTS roam­ing within the U.S. for T-Mobile USA.”

    Indeed, specif­i­cally, T-Mobile will take con­trol of AT&T’s “large pack­age of AWS mobile spec­trum,” in 128 regions across the coun­try, “includ­ing 12 of the top 20 mar­kets (Los Ange­les, Dal­las, Hous­ton, Atlanta, Wash­ing­ton, Boston, San Fran­cisco, Phoenix, San Diego, Den­ver, Bal­ti­more and Seattle).”

    ...

    Posted by Pterrafractyl | December 20, 2011, 10:44 am
  18. More float­ing vil­lagesOceanic data col­lec­tion plat­forms are hit­ting the seas this year:

    Last updated: Jan­u­ary 6, 2012 6:27 pm
    Super-rich buy­ing ever larger yachts

    FT

    By Vic­tor Mal­let in Madrid

    The world’s super-rich, led by Gulf sheikhs and Russ­ian tycoons, are tak­ing deliv­ery of ever larger and more lux­u­ri­ous European-made moto­ry­achts this year, accord­ing to the lat­est supery­acht ranking.

    Finan­cial and eco­nomic cri­sis in the west has crip­pled some Euro­pean yacht­mak­ers. Fer­retti, the debt-laden Ital­ian man­u­fac­turer, is sell­ing itself to China’s Shan­dong Heavy Indus­try Group for a frac­tion of its 2007 value of €1.7bn. But demand from inter­na­tional bil­lion­aires at the very top end of the mar­ket has remained robust despite the eco­nomic crisis.

    Superyachts.com, the lux­ury yacht­ing web por­tal, says 11 new ves­sels, some the size of cruise lin­ers, will join its annual top 100 rank­ing by length this year, com­pared with nine new entries last year.

    This year’s largest entry – a supery­acht is usu­ally defined as a pri­vate ves­sel more than 100ft or 30m in length – is Topaz, a 147m yacht built by Germany’s Lürssen Yachts for an unknown owner, pos­si­bly a mem­ber of the rul­ing Al Nahyan fam­ily of Abu Dhabi.

    Supery­acht projects are often shrouded in secrecy, and research groups vie with each other to pub­lish the first pho­tographs and pro­vide details of the lat­est addi­tions to the fleet. Prices and cus­tomers’ names are fre­quently kept secret to shield own­ers from accu­sa­tions of osten­ta­tious liv­ing. The largest ves­sels cost well over $100m and can cost more than $1m a week to charter.

    ...

    I don’t know why these bil­lion­aires are so wor­ried about accu­sa­tions of osten­ta­tious liv­ing. It’s not as if ALL super yachts are cov­ered in gold and plat­inum.

    Posted by Pterrafractyl | January 7, 2012, 5:36 pm
  19. Newt has a Big Idea. I think it means he’s sub­stan­tive or some­thing:

    Gin­grich wants U.S. base on the moon
    By Sarah Huisenga National Jour­nal Jan­u­ary 26, 2012

    COCOA, Fla.–Appealing to res­i­dents of the state’s eco­nom­i­cally strug­gling “Space Coast,” Repub­li­can pres­i­den­tial can­di­date Newt Gin­grich promised to have a per­ma­nent U.S. base on the moon by the end of his sec­ond term as president.

    To cheers and applause in an area that has suf­fered major job losses since the can­cel­la­tion of the space shut­tle, Gin­grich said, “By the end of my sec­ond term, we will have the first per­ma­nent base on the moon and it will be American.”

    ...

    He also said that by the end of 2020, the coun­try would have “the first con­tin­u­ous propul­sion sys­tem in space” capa­ble of allow­ing peo­ple travel to Mars. “I am sick of being told we have to be timid, and I am sick of being told we have to be lim­ited in tech­nolo­gies that are 50 years old,” the for­mer House speaker told the crowd at a “space round­table” he hosted at a Hol­i­day Inn.

    Respond­ing to rival Mitt Romney’s crit­i­cism of his pro­posal for a lunar set­tle­ment, Gin­grich said, “When we have 13,000 Amer­i­cans liv­ing on the moon, they can peti­tion to become a state. And here’s the dif­fer­ence between roman­tics and so-called prac­ti­cal peo­ple. I wanted every young Amer­i­can to say to them­selves, ‘I could be one of those 13,000. I could be a pio­neer. I need to study sci­ence and math and engi­neer­ing. I need to learn how to be a tech­ni­cian. I can be a part of build­ing a big­ger, bet­ter future.’
    ...

    Well, on the plus side, at least the Native Mooninite’s prob­a­bly can’t catch smallpox

    Posted by Pterrafractyl | January 26, 2012, 8:28 pm
  20. This looks like an “Uh oh” moment head­ing for Mitten’s cam­paign: it’s being reported that his old firm, Bain Cap­i­tal (which still holds a huge chunk of his for­tune), recently pur­chased a surveillance-camera divi­sion from a Chi­nese com­pany heav­ily involved in the Chi­nese government’s “Safe Cities” (by spy­ing on every­thing) pro­gram. At least Panan­tir will have some com­pe­ti­tion in the “Big Brother Tech” depart­ment and com­pe­ti­tion = “healthy”, right?

    NYTimes
    Firm Rom­ney Founded Is Tied to Chi­nese Surveillance

    By ANDREW JACOBS and PENN BULLOCK
    Pub­lished: March 15, 2012

    BEIJING — As the Chi­nese gov­ern­ment forges ahead on a multibillion-dollar effort to blan­ket the coun­try with sur­veil­lance cam­eras, one Amer­i­can com­pany stands to profit: Bain Cap­i­tal, the pri­vate equity firm founded by Mitt Romney.

    In Decem­ber, a Bain-run fund in which a Rom­ney fam­ily blind trust has hold­ings pur­chased the video sur­veil­lance divi­sion of a Chi­nese com­pany that claims to be the largest sup­plier to the government’s Safe Cities pro­gram, a highly advanced mon­i­tor­ing sys­tem that allows the author­i­ties to watch over uni­ver­sity cam­puses, hos­pi­tals, mosques and movie the­aters from cen­tral­ized com­mand posts.

    ¶ The Bain-owned com­pany, Uni­view Tech­nolo­gies, pro­duces what it calls “infrared antiriot” cam­eras and soft­ware that enable police offi­cials in dif­fer­ent juris­dic­tions to share images in real time through the Inter­net. Pre­vi­ous projects have included an emer­gency com­mand cen­ter in Tibet that “pro­vides a solid foun­da­tion for the main­te­nance of social sta­bil­ity and the pro­tec­tion of people’s peace­ful life,” accord­ing to Uniview’s Web site.

    ¶ Such sur­veil­lance sys­tems are often used to com­bat crime and the man­u­fac­turer has no con­trol over whether they are used for other pur­poses. But human rights advo­cates say in China they are also used to intim­i­date and mon­i­tor polit­i­cal and reli­gious dis­si­dents. “There are video cam­eras all over our monastery, and their only pur­pose is to make us feel fear,” said Lok­sag, a Tibetan Bud­dhist monk in Gansu Province. He said the cam­eras helped the author­i­ties iden­tify and detain nearly 200 monks who par­tic­i­pated in a protest at his monastery in 2008.

    ...

    As with pre­vi­ous deals involv­ing other Amer­i­can com­pa­nies, crit­ics argue that Bain’s acqui­si­tion of Uni­view vio­lates the spirit — if not nec­es­sar­ily the let­ter — of Amer­i­can sanc­tions imposed on Bei­jing after the deadly crack­down on protests in Tianan­men Square. Those rules, writ­ten two decades ago, bar Amer­i­can cor­po­ra­tions from export­ing to China “crime-control” prod­ucts like those that process fin­ger­prints, make photo iden­ti­fi­ca­tion cards or use night vision technology.

    ¶ Most video sur­veil­lance equip­ment is not cov­ered by the sanc­tions, even though a Cana­dian human rights group found in 2001 that Chi­nese secu­rity forces used Western-made video cam­eras to help iden­tify and appre­hend Tianan­men Square protesters.

    ¶ Rep­re­sen­ta­tive Frank R. Wolf, Repub­li­can of Vir­ginia, who fre­quently assails com­pa­nies that do busi­ness with Chi­nese secu­rity agen­cies, said calls by some mem­bers of Con­gress to pass stricter reg­u­la­tions on Amer­i­can busi­nesses have gone nowhere. “These com­pa­nies are busy mak­ing a profit and don’t want to face real­i­ties, but what they’re doing is wrong,” said Mr. Wolf, who is co-chairman of the Tom Lan­tos Human Rights Commission.

    In pub­lic com­ments and in a state­ment posted on his cam­paign Web site, Mr. Rom­ney has accused the Obama admin­is­tra­tion of plac­ing eco­nomic con­cerns above human rights in man­ag­ing rela­tions with China. He has called on the White House to offer more vig­or­ous sup­port of those who crit­i­cize the Chi­nese Com­mu­nist Party.

    ...

    Uni­view is proud of its close asso­ci­a­tion with China’s secu­rity estab­lish­ment and boasts about the scores of sur­veil­lance sys­tems it has cre­ated for local secu­rity agen­cies in the six years since the Safe Cities pro­gram was started.

    Social man­age­ment and soci­ety build­ing pose new demands for sur­veil­lance and con­trol sys­tems,” Uni­view says in its pro­mo­tional mate­ri­als, which include an inter­view with Zhang Peng­guo, the company’s chief exec­u­tive. “A har­mo­nious soci­ety is the essen­tial nature of social­ism with Chi­nese char­ac­ter­is­tics,” Mr. Zhang says.

    Until now, Bain’s takeover of Uni­view has drawn lit­tle atten­tion out­side China. The com­pany was for­merly the sur­veil­lance divi­sion of H3C, a joint ven­ture between 3Com and Huawei, the Chi­nese telecom­mu­ni­ca­tions giant whose expan­sion plans in the United States have faced resis­tance from Con­gress over ques­tions about its ties to the Chi­nese military.

    In 2010, 3Com, along with H3C, became a sub­sidiary of Hewlett-Packard in a $2.7 bil­lion buy­out deal.

    H3C also sells tech­nol­ogy unre­lated to video sur­veil­lance, includ­ing Inter­net fire­wall prod­ucts, but it was the video sur­veil­lance divi­sion alone that drew Bain Capital’s interest.

    ...

    By mar­ry­ing Inter­net, cell­phone and video sur­veil­lance, the gov­ern­ment is seek­ing to cre­ate an omni­scient mon­i­tor­ing sys­tem, said Nicholas Bequelin, a senior researcher at Human Rights Watch in Hong Kong. “When it comes to sur­veil­lance, China is pretty upfront about its total­i­tar­ian ambi­tions,” he said.

    For the legion of Chi­nese intel­lec­tu­als, democ­racy advo­cates and reli­gious fig­ures who have tan­gled with the gov­ern­ment, sur­veil­lance cam­eras have become inescapable.

    ...

    Posted by Pterrafractyl | March 16, 2012, 7:05 am
  21. @Pterrafractyl: Rom­ney is such a f****** hyp­ocrite, claim­ing that he’s against sup­pres­sion in China while giv­ing cold hard cash to a com­pany BASED IN CHINA, that is help­ing their gov­ern­ment with the uni­ver­sal sur­veil­lance pro­gram! Unbe­liev­able. Rom­ney? Hah. Some­body at Demo­c­ra­tic Under­ground, btw, invented a nick­name for him(purely by acci­dent believe it or not!)....and that would be ‘Rmoney’. Makes sense to me....LMAO. xD

    Posted by Steven L. | March 16, 2012, 9:19 am
  22. Appar­ently, as part of an inevitable soci­etal recon­sid­er­a­tion of our rights to pri­vacy, the dish­washer gets to spy on you for the CIA:

    CIA Chief: We’ll Spy on You Through Your Dishwasher

    By Spencer Ackerman

    March 15, 2012 | 5:35 pm

    More and more per­sonal and house­hold devices are con­nect­ing to the inter­net, from your tele­vi­sion to your car nav­i­ga­tion sys­tems to your light switches. CIA Direc­tor David Petraeus can­not wait to spy on you through them.

    Ear­lier this month, Petraeus mused about the emer­gence of an “Inter­net of Things” — that is, wired devices — at a sum­mit for In-Q-Tel, the CIA’s ven­ture cap­i­tal firm. “‘Trans­for­ma­tional’ is an overused word, but I do believe it prop­erly applies to these tech­nolo­gies,” Petraeus enthused, “par­tic­u­larly to their effect on clan­des­tine tradecraft.”

    All those new online devices are a trea­sure trove of data if you’re a “per­son of inter­est” to the spy com­mu­nity. Once upon a time, spies had to place a bug in your chan­de­lier to hear your con­ver­sa­tion. With the rise of the “smart home,” you’d be send­ing tagged, geolo­cated data that a spy agency can inter­cept in real time when you use the light­ing app on your phone to adjust your liv­ing room’s ambiance.

    “Items of inter­est will be located, iden­ti­fied, mon­i­tored, and remotely con­trolled through tech­nolo­gies such as radio-frequency iden­ti­fi­ca­tion, sen­sor net­works, tiny embed­ded servers, and energy har­vesters — all con­nected to the next-generation inter­net using abun­dant, low-cost, and high-power com­put­ing,” Petraeus said, “the lat­ter now going to cloud com­put­ing, in many areas greater and greater super­com­put­ing, and, ulti­mately, head­ing to quan­tum computing.”

    Petraeus allowed that these house­hold spy devices “change our notions of secrecy” and prompt a rethink of “our notions of iden­tity and secrecy.” All of which is true — if con­ve­nient for a CIA director.

    The CIA has a lot of legal restric­tions against spy­ing on Amer­i­can cit­i­zens. But col­lect­ing ambi­ent geolo­ca­tion data from devices is a grayer area, espe­cially after the 2008 carve-outs to the For­eign Intel­li­gence Sur­veil­lance Act. Hard­ware man­u­fac­tur­ers, it turns out, store a trove of geolo­ca­tion data; and some leg­is­la­tors have grown alarmed at how easy it is for the gov­ern­ment to track you through your phone or PlayStation.

    That’s not the only data exploit intrigu­ing Petraeus. He’s inter­ested in cre­at­ing new online iden­ti­ties for his under­cover spies — and sweep­ing away the “dig­i­tal foot­prints” of agents who sud­denly need to vanish.

    “Proud par­ents doc­u­ment the arrival and growth of their future CIA offi­cer in all forms of social media that the world can access for decades to come,” Petraeus observed. “More­over, we have to fig­ure out how to cre­ate the dig­i­tal foot­print for new iden­ti­ties for some officers.”

    It’s hard to argue with that. Online cache is not a spy’s friend. But Petraeus has an inad­ver­tent pal in Facebook.

    Why? With the arrival of Time­line, Face­book made it super-easy to back­date your online his­tory. Barack Obama, for instance, hasn’t been on Face­book since his birth in 1961. Cre­at­ing new iden­ti­ties for CIA non-official cover oper­a­tives has arguably never been eas­ier. Thank Zuck, spies. Thank Zuck.

    So in addi­tion to turn­ing our appli­ances into the stasi, the CIA also wants to develop tech­nol­ogy that will be able to wipe the inter­net of all info related to a tar­get indi­vid­ual. Noth­ing creepy about that.

    Posted by Pterrafractyl | March 18, 2012, 7:38 pm
  23. So are calls for sov­er­eign lib­er­tar­ian space colonies going to become a per­ma­nent fix­ture in our polit­i­cal dis­course or is this just a phase?

    Posted by Pterrafractyl | April 10, 2012, 1:24 pm
  24. I’ve some­times won­dered if one of the long term strate­gic objec­tives of destroy­ing the envi­ron­ment while simul­ta­ne­ously push­ing over­pop­u­la­tion of the planet was to even­tu­ally force human­ity into a sit­u­a­tion where all soci­eties have to make the deci­sion “who lives and who dies? We have no choice, there’s just no enough left to go around” (the eugenicist’s dream). But as this arti­cle sug­gests, we might be ask­ing “Who lives? Who Dies? And who gets mod­i­fied?” (the high-tech eugenicist’s dream).

    The authors of the pub­lished paper appear to be taken aback by the con­tro­versy that erupted over their pro­posal to have human­ity embrace a slew of genetic mod­i­fi­ca­tion to adapt to a rapidly change envi­ron­ment. As they point out, their pro­pos­als include the pre­cau­tion that all indi­vid­u­als would be free to choice which mod­i­fi­ca­tions they want. The arti­cle doesn’t indi­cate if their pro­posal also involves mak­ing the mod­i­fi­ca­tions them­selves free. Aside from all the other eth­i­cal con­cerns about this pro­posal, a “free-market of genetic mod­i­fi­ca­tions” doesn’t seem like the best solu­tion for a degraded ecol­ogy. I bet Peter Thiel just loves these guys.

    Posted by Pterrafractyl | April 18, 2012, 7:52 pm
  25. It’s worth recall­ing that yesterday’s Face­book IPO had some folks near the Kremin smil­ing too:

    NYTimes
    A Russ­ian Magnate’s Face­book Bet Pays Off Big
    By ANDREW E. KRAMER
    Pub­lished: May 15, 2012

    MOSCOW — With his droopy eye­glasses and boxy suits, Alisher B. Usmanov is at no risk of being mis­taken for a Sil­i­con Val­ley ven­ture cap­i­tal­ist. But the Russ­ian steel tycoon is poised to make bil­lions of dol­lars from the ini­tial pub­lic stock offer­ing of Face­book this week — in the same league as many of that social net­work­ing company’s early back­ers.

    Mr. Usmanov, an indus­trial and media mag­nate who has demon­strated a keen abil­ity to take advan­tage of the oppor­tu­ni­ties that appear in a finan­cial dis­as­ter, is reap­ing the rewards of an ambi­tious bet on Face­book made amid the global eco­nomic reces­sion in 2009.

    ...

    Mr. Usmanov, 58, who got his start in the plas­tic bag busi­ness and was reared in a remote part of the Soviet Union, said he learned the ben­e­fits of act­ing boldly dur­ing the ruble cri­sis of 1998.

    I have a the­ory of cri­sis that you must employ cri­sis to cre­ate addi­tional mar­gin,” he said this week in a tele­phone inter­view. “You need to under­stand when the moment of growth is com­ing, and invest just before that.”

    Mr. Zucker­berg turned to the Russ­ian investors in 2009 at a meet­ing qui­etly bro­kered by Gold­man Sachs. Other sources of financ­ing had slowed because of the cri­sis. And, because of the pop­u­lar­ity of online social games in Rus­sia, investors here had a keen sense of the value of social net­work­ing sites and were will­ing to pay more than oth­ers for a stake in Facebook.

    The Rus­sians were also will­ing to accept another con­di­tion impor­tant to Mr. Zucker­berg. Despite own­ing 10 per­cent of Face­book, they would get no vot­ing rights or seat on the board. They would also have no say in the site’s poli­cies on pri­vacy or polit­i­cal orga­niz­ing — pre­serv­ing inde­pen­dence that has become espe­cially impor­tant as Face­book has played a major role in domes­tic pol­i­tics in Rus­sia.

    Mr. Usmanov, who is close to the Krem­lin, has not hes­i­tated to use his media prop­er­ties to sup­port the gov­ern­ment. Last Decem­ber, he fired the pub­lisher and edi­tor at one of Russia’s most respected news­magazines, Kom­m­er­sant Vlast, after it pub­lished detailed accounts of bald fal­si­fi­ca­tion in national elec­tions. Mr. Usmanov said he fired the exec­u­tive not for the polit­i­cal cov­er­age per se, but for print­ing a pic­ture of a bal­lot defaced with an obscen­ity insult­ing Vladimir V. Putin, then prime min­is­ter of Rus­sia and now president.

    ...

    The pre­cise details of the Russ­ian own­er­ship in Face­book are dif­fi­cult to assess. The invest­ments were made over two years though the Russ­ian Inter­net com­pany Mail.ru and the invest­ment fund Dig­i­tal Sky Tech­nolo­gies, also known as D.S.T., which is run by the ven­ture cap­i­tal­ist Yuri Mil­ner. Although Mr. Usmanov was the lead­ing backer, other investors were involved.

    Mr. Mil­ner met with Zucker­berg in 2009 before the first invest­ment, though Mr. Usmanov has never met him.

    ...

    Mr. Mil­ner said that this led to an under­stand­ing that social net­work­ing busi­ness mod­els involv­ing tiny pay­ments from large num­bers of users had vast poten­tial in emerg­ing mar­kets.

    ...

    Mr. Usmanov said that, after the series of invest­ments from 2009 until 2011, he and Mr. Mil­ner owned about 9 per­cent of Face­book at one point, but now own about 6 per­cent and will hold about 4.5 per­cent after the ini­tial pub­lic offer­ing. The other shares they orig­i­nally con­trolled have gone to other investors, clients of D.S.T. and cor­po­rate entities.

    Mr. Usmanov earned his bil­lions in the post-Soviet busi­ness world, man­ag­ing steel mill sub­sidiaries for Gazprom before they were spun off as his own busi­nesses, Gazmetal, later renamed Met­al­loin­vest. Mr. Usmanov has said he took on debt in this trans­ac­tion and oth­ers acquir­ing iron ore mines in Russia.

    He said he would use money from investors who buy his shares in the Face­book I.P.O. to invest and pay down debt at his other Russ­ian businesses.

    This year, Russia’s second-largest cell­phone com­pany, Mega­Fon, which Mr. Usmanov partly owns, is expected to issue shares in Lon­don in its own I.P.O.

    From his work with Gazprom, Mr. Usmanov is said to be close to Russia’s for­mer pres­i­dent and cur­rent prime min­is­ter, Dmitri A. Medvedev, a for­mer chair­man of the Gazprom board. His ties to the Krem­lin and Face­book have stirred con­cerns that he might influ­ence the company’s poli­cies in sub­tle ways to appease gov­ern­ments in mar­kets where Face­book is also an impor­tant tool of polit­i­cal dis­sent, such as Russia.

    ...

    So a fig­ure close to the Kremin owns a siz­able share of Face­book, and Face­book hap­pens to be one of the main out­lets used by the anti-Putin pro­test­ers. I’m sure there’s noth­ing for the pro­test­ers to worry about.

    Posted by Pterrafractyl | May 19, 2012, 8:18 pm

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