Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #763 The Adventures of Eddie The Friendly Spook, Part 9: Citizen Greenwald’s Financial Angel

Dave Emory’s entire life­time of work is avail­able on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books avail­able on this site.)

Listen: MP3

Side 1  Side 2

Note: In an update, we learn that Greenwald’s Financial Angel–Pierre Omidyar–has helped to finance the coup that led to the crisis in the Ukraine.

David Koch

Intro­duc­tion: This pro­gram high­lights the finan­cial angel behind the new media out­let being launched by “Eddie the Friendly Spook” Snowden’s leak­ing jour­nal­ist of choice, that res­olute cham­pion of human lib­erty Glenn “Give me a Nazi and I will defend him pro-bono” Green­wald.

The founder of EBay (which bought Pay­Pal from Peter Thiel), Pierre Omid­yar has been hailed as a ver­i­ta­ble saint by the media. In fact, he is a crea­ture in the mold of the Koch Broth­ers and the Lud­wig von Mises Insti­tute.

In his auto­bi­og­ra­phy and polit­i­cal man­i­festo “Mein Kampf,” Hitler observe that: “Most peo­ple tell lit­tle lies. They would be ashamed to tell big ones. They would never credit oth­ers with such great impu­dence as the com­plete rever­sal of fact. . . .” That is the case with Omid­yar and the Olmid­yar Net­work that he oper­ates as a vehi­cle for using “busi­ness as a vehi­cle for good.”

Behind the facade of Omidyar’s pro­nounce­ments of good intent and the media’s lavish praise of him, one finds the Olmid­yar Network’s fund­ing of laissez-faire eco­nomic poli­cies that have resulted in lethal, bru­tal real­ity in the Third World.

Among the most grotesque of the projects funded by the Omid­yar Net­work are micro-finance pro­grams in Third World coun­tries such as India. Omid­yar Net­work funded Uni­tus, a micro­fi­nance equity fund that sup­ported SKS Microfinance.

SKS insti­tuted preda­tory lend­ing prac­tices that led to mass sui­cides among the pop­u­la­tion of Andhra Pradesh in India while gen­er­at­ing hand­some prof­its for Uni­tus. Other Omid­yar Network-backed micro­fi­nance enti­ties yielded sim­i­lar results.

In addi­tion to micro­fi­nance projects, the Omidyar-Network has invested in edu­ca­tion pri­va­ti­za­tion projects in both the U.S. and the Third World.

Matthew Hale, Glenn Greenwald's pro-bono client, convicted of solicitation of murder.

ON-backed education-privatization projects are asso­ci­ated with Tea Party-backed ele­ments and prop­ganda. ON-backed education-privatization pro­grams in Africa have exac­er­bated the poverty of those they pro­fessed to help.

Exemplifying the nature of the Omidyar Network’s efforts is Hernando de Soto. Dubbed “the Friedrich von Hayek” of Latin America, de Soto has been lauded by the Koch brothers and is a creature of the same stripe as Augusto Pinochet of Chile.

A backer of the Peruvian dictatorship of Alberto Fujimori (now in prison for crimes committed during his tenure as head of state), de Soto implemented many of the programs that brutalized and impoverished the citizenry of the country.

In addition, de Soto’s programs have resulted in catastrophe in countries such as Cambodia.

Concluding with some of Citizen Greenwald’s recent exploits, the program notes his appearance on Ron Paul’s new internet tv project, as well as his keynote address to a Los Angeles meeting of CAIR, a Muslim Brotherhood front organization.

Do note the won­der­ful arti­cle upon which this primarily broad­cast relies. It is avail­able at: https://www.nsfwcorp.com/

Program Highlights Include: Review of Peter Thiel’s bankrolling of Ron Paul’s candidacy; review of the profound links between “the Paulistinian Libertarian Organization” and Snowden; links between the Omidyar Network’s education-privatization projects and the Pearson education giant (which is involved with joint projects with Bertelsmann); review of Friedrich von Hayek’s links to the Ludwig von Mises milieu; the Omidyar Network’s involvement with a program to influence members of India’s parliament in directions favorable to the ON’s projects; Hernando de Soto’s role as Peru’s “druz czar;” de Soto’s efforts on behalf of Fumori’s daughter’s candidacy; de Soto’s apparent role in the Fujimori coup in Peru; the handsome profit earned by ON-backed Unitus fund on the SKS project (which devastated those to whom it lent money); links between the ON-backed de Soto and the milieu of Chilean dictator Augusto Pinochet; Pierre Olmidyar’s lavish praise for Hernando de Soto, tweeted after dining with him.

1.  Most of the program consists of the reading of long excerpts of the NSFW Corp story on Omidyar.

“The Extra­or­di­nary Pierre Omid­yar” by Mark Ames and Yasha Levine; NSFW­Corp; 11/15/2013.

The world knows very lit­tle about the polit­i­cal moti­va­tions of Pierre Omid­yar, the eBay bil­lion­aire who is found­ing (and fund­ing) a quarter-billion-dollar jour­nal­ism ven­ture with Glenn Green­wald, Laura Poitras and Jeremy Scahill. What we do know is this: Pierre Omid­yar is a very spe­cial kind of tech­nol­ogy billionaire.

We know this because America’s sharpest jour­nal­ism crit­ics have told us.

In a piece head­lined “The Extra­or­di­nary Promise of the New Greenwald-Omidyar Ven­ture”, The Colum­bia Jour­nal­ism Review gushed over the announce­ment of Omidyar’s project. And just in case their point wasn’t clear, they added the amaz­ing sub­head, “Adver­sar­ial muck­rak­ers + civic-minded bil­lion­aire = a whole new world.”

Ah yes, the fabled “civic-minded billionaire”—you’ll find him two doors down from the tooth fairy.

But seri­ously folks, CJR really, really wants you to know that Omid­yar is a breed apart: noth­ing like the Ran­dian Sil­i­con Val­ley lib­er­tar­ian we’ve become used to seeing.

“…bil­lion­aires don’t tend to like the kind of authority-questioning jour­nal­ism that upsets the sta­tus quo. Bil­lion­aires tend to have a fin­ger in every pie: pow­er­ful friends they don’t want annoyed and busi­ness inter­ests they don’t want looked at.

“By hir­ing Green­wald & Co., Omid­yar is mak­ing a clear state­ment that he’s the bil­lion­aire exception….It’s like Izzy Stone run­ning into a civic-minded plas­tics bil­lion­aire deter­mined to take I.F. Stone’s Weekly large back in the day.”

Later, the CJR “UPDATED” the piece with this miss­ing bit of “oops”:

“(UPDATE: I should dis­close that the Omid­yar Net­work helps fund CJR, some­thing I didn’t know until shortly after I pub­lished this post.)”

No big­gie. Hon­est mis­take. And any­way, plenty of oth­ers rushed to agree with CJR’s assess­ment. Media critic Jack Shafer at Reuters describedOmidyar’s pol­i­tics and ide­ol­ogy as “close to being a clean slate,” repeat­edly prais­ing the jour­nal­ism venture’s and Omidyar’s “ide­al­ism.” The “NewCo” ven­ture with Green­wald “harkens back to the techno-idealism of the 1980s and 1990s, when the first impulse of com­puter sci­en­tists, pro­gram­mers, and other techies was to change the world, not make more money,” Shafer wrote, end­ing his piece:

“As wel­come as Omidyar’s money is, his com­mit­ment to the inves­tiga­tive form and an open soci­ety is what I’m grate­ful for this after­noon. You can never uphold the cor­rect ver­dict too often.”

What all of these orgas­mic accounts of Omidyar’s “ide­al­ism” have in com­mon is a total absence of skep­ti­cism. America’s smartest media minds sim­ply assume that Omid­yar is an “excep­tional” bil­lion­aire, a “civic-minded bil­lion­aire” dri­ven by “ide­al­ism” rather than by prof­its. The evi­dence for this view is Pierre Omidyar’s mas­sive non­profit ven­ture, Omid­yar Net­work, which has dis­trib­uted hun­dreds of mil­lions of dol­lars to causes all across the world.

And yet what no one seems able to spec­ify is exactly what ide­ol­ogy Omid­yar Net­work pro­motes. What does Omidyar’s “ide­al­ism” mean in prac­tice, and is it really so dif­fer­ent from the non-idealism of other, pre­sum­ably bad, bil­lion­aires? It’s almost as if jour­nal­ists can’t answer those ques­tions because they haven’t both­ered ask­ing them.

So let’s go ahead and do that now.

Since its found­ing in 2004, Omid­yar Net­work has com­mit­ted nearly $300 mil­lion to a range of non­profit and for-profit “char­ity” out­fits. An exam­i­na­tion of the ideas behind the Omid­yar Net­work and of the invest­ments it has made sug­gests that its founder is any­thing but a “dif­fer­ent” sort of bil­lion­aire. Instead, what emerges is almost a car­i­ca­ture of neolib­eral ide­ol­ogy, com­plete with the trail of destruc­tion that ensues when that ide­ol­ogy is put into prac­tice. The gen­er­ous sup­port of the Omid­yar Net­work goes toward “fight­ing poverty” through micro-lending, reduc­ing third-world illit­er­acy rates by pri­va­tiz­ing edu­ca­tion and pro­tect­ing human rights by expand­ing prop­erty titles (“pri­vate prop­erty rights”) into slums and vil­lages across the devel­op­ing world.

In short, Omid­yar Network’s phil­an­thropy reveals Omid­yar as a free-market zealot with an almost mys­ti­cal faith in the power of “mar­kets” to trans­form the world, end poverty, and improve lives—one micro-individual at a time.

All the neolib­eral guru cant about solv­ing the world’s poverty prob­lems by unlock­ing the hid­den “micro-entrepreneurial” spirit of every starv­ing Third Worlder is put into prac­tice by Omid­yar Network’s invest­ments. Char­ity with­out profit motive is con­sid­ered sus­pect at best, sub­ject to the laws of unin­tended con­se­quences; good can only come from mar­kets unleashed, and that trans­lates into an ide­ol­ogy inher­ently hos­tile to gov­ern­ment, democ­racy, pub­lic pol­i­tics, redis­tri­b­u­tion of land and wealth, and any­thing smack­ing of social wel­fare or social justice.

In lit­er­a­ture pub­lished by Omid­yar Net­work, the assump­tion is that tech­nol­ogy is an end in itself, that it nat­u­rally cre­ates ben­e­fi­cial progress, and that the world’s prob­lems can be solved most effec­tively with for-profit busi­ness solutions.

The most char­i­ta­ble thing one can say about Omidyar’s non­profit net­work is that it reflects all the worst clichés of con­tem­po­rary neolib­eral faith. In real­ity, it’s much worse than that. In many regions, Omid­yar Net­work invest­ments have helped fund pro­grams that cre­ate wors­en­ing con­di­tions for the world’s under­class, widen­ing inequal­i­ties, enhanc­ing exploita­tion, push­ing mil­lions of peo­ple into crip­pling debt and sup­port­ing anti-poverty pro­grams that, in some cases, resulted in mass-suicide by the rural poor.

*

Pierre Omid­yar was one of the biggest early back­ers of the for-profit micro-lending indus­try. Through Omid­yar Net­work, as well as per­sonal gifts and invest­ments, he has fun­nelled around $200 mil­lion into var­i­ous micro-lending com­pa­nies and projects over the past decade, with the goal of estab­lish­ing an investment-grade micro­fi­nance sec­tor that would be plugged into Wall Street and global finance. The neolib­eral the­ory promised to unleash bil­lions of new micro-entrepreneurs; the stark real­ity is that it sad­dled untold num­bers with crush­ing debt and despair.

One of his first major invest­ments into micro-lending came in 2005, when Pierre Omid­yar and his wife Pam gave Tufts Uni­ver­sity, their alma mater, $100 mil­lion to cre­ate the “Omidyar-Tufts Micro­fi­nance Fund,” a man­aged for-profit fund ded­i­cated to jump-starting the growth of the micro-finance indus­try. At the time, Tufts announced that Omidyar’s gift was the “largest pri­vate allo­ca­tion of cap­i­tal to micro­fi­nance by an indi­vid­ual or family.”

With the Tufts fund, Omid­yar wanted to go beyond mere char­i­ta­ble dona­tions to spe­cific micro-lending orga­ni­za­tions that tar­geted the devel­op­ing world’s poor­est. At the same time, he wanted to cre­ate a whole new envi­ron­ment in which for-profit micro-lending com­pa­nies could be self-sustaining and gen­er­ate big enough prof­its to attract seri­ous global investors.

This idea was at the core of Omidyar’s vision of phil­an­thropy: he believed that micro­fi­nance would erad­i­cate poverty faster and bet­ter if it was run on a for-profit basis, and not like a charity.

“If you want to reach global scale — and we’re talk­ing about hun­dreds of mil­lions of peo­ple who need this — you can’t do it with phil­an­thropy cap­i­tal. There’s not enough char­ity cap­i­tal out there. By con­nect­ing with an insti­tu­tional investor like a uni­ver­sity, we would like to increase the level of pro­fes­sional investor involve­ment in this sec­tor to try to stim­u­late more com­mer­cially viable invest­ment prod­ucts,” Pierre Omid­yar said in an inter­view at the time. “We ought to be look­ing at busi­ness as a force for good.”

The idea behind micro-loans is very sim­ple and seduc­tive. It goes some­thing like this: the only thing that pre­vents the hun­dreds of mil­lions of peo­ple liv­ing in extreme poverty from achiev­ing finan­cial suc­cess is their lack of access to credit. Give them access to micro-loans—referred to in Sil­i­con Val­ley as “seed capital”—and these would-be suc­cess­ful business-peasants and illit­er­ate shan­ty­town entre­pre­neurs would pluck them­selves out of the muck by their own home­made san­dal straps. Just think of it: hun­dreds of mil­lions of peas­ants work­ing as micro-individuals, tak­ing out micro-loans, mak­ing micro-rational invest­ments into their micro-businesses, duti­fully pay­ing their micro-loan pay­ments on time and work­ing in con­cert to har­ness the dereg­u­lated power of the mar­kets to col­lec­tively lift soci­ety out of poverty. It’s a grand neolib­eral vision.

To that end, Omid­yar has directed about a third of the Omid­yar Net­work invest­ment fund—or about $100 million—to sup­port the micro-lending indus­try. The foun­da­tion calls this ini­tia­tive “finan­cial inclusion.”

Shock­ingly, micro-loans aren’t all that they’ve cracked up to be. After years of obser­va­tion and mul­ti­ple stud­ies, it turns out that the peo­ple ben­e­fit­ing most from micro-loans are the big global finan­cial play­ers: hedge funds, banks and the usual Wall Street huck­sters. Mean­while, the major­ity of the world’s micro-debtors are either no bet­ter off or have been sucked into a morass of crip­pling debt and even deeper poverty, which offers no escape but death.

Take SKS Micro­fi­nance, an Omidyar-backed Indian micro-lender whose preda­tory lend­ing prac­tices and aggres­sive col­lec­tion tac­tics have caused a rash of sui­cides across India.

Omid­yar funded SKS through Uni­tus, a micro­fi­nance pri­vate equity fund bankrolled by the Omid­yar Net­work to the tune of at least $11.7 mil­lion. ON boosted SKS in its pro­mo­tional mate­ri­als as a micro-lender that’s “serv­ing the rural poor in India” and that exem­pli­fies a com­pany that’s pro­vid­ing “peo­ple with the means to address their needs and improve their lives.”

In 2010, SKS made head­lines and stirred up bit­ter con­tro­versy about the role that prof­its should play in anti-poverty ini­tia­tives when the com­pany went pub­lic with an IPO that gen­er­ated about $358 mil­lion, giv­ing SKS a mar­ket val­u­a­tion of more than $1.6 bil­lion. The IPO made mil­lions for its wealthy investors, includ­ing the Omidyar-backed Uni­tus fund, which earned a cool $5 mil­lion profit from the SKS IPO, accord­ing to the Puget Sound Busi­ness Jour­nal.

Some were both­ered, but oth­ers saw it as proof that the power of the mar­kets could be har­nessed to suc­ceed where tra­di­tional char­ity pro­grams sup­pos­edly hadn’t. The New York Times reported:

“An Indian com­pany with rich Amer­i­can back­ers is about to raise up to $350 mil­lion in a stock offer­ing closely watched by phil­an­thropists around the world, show­ing that big prof­its can be made from small helping-hand loans to poor cowherds and bas­ket weavers.”

Con­tro­versy or not, SKS embod­ied Omidyar’s vision of phil­an­thropy: it was a for-profit cor­po­ra­tion that fought poverty while gen­er­at­ing lucra­tive returns for its investors. Here would be proof-positive that the profit motive makes every­one a winner.

And then real­ity set in.

In 2012, it emerged that while the SKS IPO was mak­ing mil­lions for its wealthy investors, hun­dreds of heav­ily indebted res­i­dents of India’s Andhra Pradesh state were dri­ven to despair and sui­cide by the company’s cruel and aggres­sive debt-collection prac­tices. The rash of sui­cides soared right at the peak of a large micro-lending bub­ble in Andhra Pradesh, in which many of the poor were tak­ing out mul­ti­ple micro-loans to cover pre­vi­ous loans that they could no longer pay. It was sub­prime lend­ing fraud taken to the poor­est regions of the world, strip­ping them of what lit­tle they had to live on. It got to the point where the Chief Min­is­ter of Andrah Pradesh pub­licly appealed to the state’s youth and young women not to com­mit sui­cide, telling them, “Your lives are valuable.”

The AP con­ducted a stun­ning in-depth inves­ti­ga­tion of the SKS sui­cides, and their report­ing needs to be quoted at length to under­stand just how evil this pro­gram is. The arti­cle begins:

“First they were stripped of their uten­sils, fur­ni­ture, mobile phones, tele­vi­sions, ration cards and heir­loom gold jew­elry. Then, some of them drank pes­ti­cide. One woman threw her­self in a pond. Another jumped into a well with her chil­dren. 

“Some­times, the debt col­lec­tors watched nearby.”

What prompted the AP inves­ti­ga­tion was the gulf between the reported rash of sui­cides linked to SKS debt col­lec­tors, and SKS’s pub­lic state­ments deny­ing it had knowl­edge of or any role in the preda­tory lend­ing abuses. How­ever, the AP got a hold of inter­nal SKS doc­u­ments that con­tra­dicted their pub­lic denials:

“More than 200 poor, debt-ridden res­i­dents of Andhra Pradesh killed them­selves in late 2010, accord­ing to media reports com­piled by the gov­ern­ment of the south Indian state. The state blamed micro­fi­nance com­pa­nies — which give small loans intended to lift up the very poor — for fuel­ing a frenzy of overindebt­ed­ness and then pres­sur­ing bor­row­ers so relent­lessly that some took their own lives. 

“The com­pa­nies, includ­ing mar­ket leader SKS Micro­fi­nance, denied it.

“How­ever, inter­nal doc­u­ments obtained by The Asso­ci­ated Press, as well as inter­views with more than a dozen cur­rent and for­mer employ­ees, inde­pen­dent researchers and video­taped tes­ti­mony from the fam­i­lies of the dead, show top SKS offi­cials had infor­ma­tion impli­cat­ing com­pany employ­ees in some of the suicides.”

The AP inves­ti­ga­tion and inter­nal reports showed just how bru­tal the SKS micro­fi­nanc­ing pro­gram was, how women were par­tic­u­larly tar­geted because of their height­ened sense of shame and com­mu­nity responsibility—here is the bru­tal real­ity of finan­cial cap­i­tal­ism com­pared to the utopian blather mouthed at Davos con­fer­ences, or in the slick pam­phlets issued by the Omid­yar Network:

“Both reports said SKS employ­ees had ver­bally harassed over-indebted bor­row­ers, forced them to pawn valu­able items, incited other bor­row­ers to humil­i­ate them and orches­trated sit-ins out­side their homes to pub­licly shame them. In some cases, the SKS staff phys­i­cally harassed default­ers, accord­ing to the report com­mis­sioned by the com­pany. Only in death would the debts be for­given. 

“The videos and reports tell stark sto­ries: 

“One woman drank pes­ti­cide and died a day after an SKS loan agent told her to pros­ti­tute her daugh­ters to pay off her debt. She had been given 150,000 rupees ($3,000) in loans but only made 600 rupees ($12) a week. 

“Another SKS debt col­lec­tor told a delin­quent bor­rower to drown her­self in a pond if she wanted her loan waived. The next day, she did. She left behind four children.

“One agent blocked a woman from bring­ing her young son, weak with diar­rhea, to the hos­pi­tal, demand­ing pay­ment first. Other bor­row­ers, who could not get any new loans until she paid, told her that if she wanted to die, they would bring her pes­ti­cide. An SKS staff mem­ber was there when she drank the poi­son. She sur­vived. 

“An 18-year-old girl, pres­sured until she handed over 150 rupees ($3)—meant for a school exam­i­na­tion fee—also drank pes­ti­cide. She left a sui­cide note: ‘Work hard and earn money. Do not take loans.’”

As a result of the bad press this scan­dal caused, the Omid­yar Net­work deleted its Uni­tus invest­ment from its website—nor does Omid­yar boast of its invest­ments in SKS Micro­fi­nance any longer. Mean­while, Uni­tus mys­te­ri­ously dis­solved itself and laid off all of its employ­ees right around the time of the IPO, under a cloud of sus­pi­cion that Uni­tus insid­ers made huge per­sonal prof­its from the ven­ture, prof­its that in the­ory were sup­posed to be rein­vested into expand­ing micro-lending for the poor.

Thus spoke the profit motive.

Curi­ously, in the after­math of the SKS micro-lending scan­dal, Omid­yar Net­work was dragged into another polit­i­cal scan­dal in India when it was revealed that Omid­yar and the Ford Foun­da­tion were plac­ing their own paid researchers onto the staffs of India’s MPs. The pro­gram, called Leg­isla­tive Assis­tants to MPs (LAMPs), was funded with $1 mil­lion from Omid­yar Net­work and $855,000 from the Ford Foun­da­tion. It was shut down last year after India’s Min­istry of Home Affairs com­plained about for­eign lob­by­ing influ­enc­ing Indian MPs, and promised to inves­ti­gate how Omidyar-funded research for India’s par­lia­ment may have been “col­ored” by an agenda.

But SKS is not the only micro­fi­nanc­ing invest­ment gone bad. The biggest and most rep­utable micro-lenders, includ­ing those funded by the Omid­yar Net­work, have come under seri­ous and sus­tained crit­i­cism for preda­tory inter­est rates and their aggres­sive debt-collection techniques.

Take BRAC, another big ben­e­fi­ciary of Omidyar’s efforts to boost “finan­cial inclusion.”

Started in the early 1970s as a war relief orga­ni­za­tion, BRAC has grown into the largest non-governmental orga­ni­za­tion in the world. It employs over 100,000 peo­ple in coun­tries across the globe. While BRAC is known mostly for its micro-lending oper­a­tion activ­i­ties, the out­fit is a diver­si­fied non­profit busi­ness oper­a­tion. It is involved in edu­ca­tion, health­care and even devel­ops its own hybrid seed vari­eties. Much of BRAC’s oper­a­tions are financed by its micro-lending activities.

Omid­yar Net­work praises BRAC for its work to “empower the poor to improve their own lives,” and has given at least $8 mil­lion to help BRAC set up micro-lending bank­ing infra­struc­ture in Liberia and Sierra Leone.

But BRAC seems to worry more about its own bot­tom line than it does about the well-being of its impov­er­ished bor­row­ers, the major­ity of whom are women and who pay an aver­age annual inter­est rate of 40 percent.

This twisted sense of pri­or­ity could be seen after one of the worst cyclones in the his­tory of Bangladesh left thou­sands dead in 2007, destroy­ing entire vil­lages and towns in its path. In the cyclone’s wake, the Omidyar-funded BRAC micro-lending debt col­lec­tors showed up at the dis­as­ter zone along with other micro-lenders, and went to work aggres­sively shak­ing down bor­row­ers, forc­ing some vic­tims (mostly women) to go so far as to sell their relief/aid mate­ri­als, or to take out sec­ondary loans to pay off the first loans.

Accord­ing to a study about micro-lenders in the after­math of Cyclone Sidr:

“Sidr vic­tims who lost almost every­thing in the cyclone, expe­ri­enced pres­sure and harass­ment from non­governmental organ­i­sa­tions (NGOs) for repay­ment of micro­cre­dit instal­ments. Such intense pres­sure led some of the Sidr ­affected bor­row­ers to sell out the relief mate­ri­als they received from dif­fer­ent sources. Such pres­sure for loan recov­ery came from large organ­i­sa­tions such as BRAC, ASA and even the Nobel Prize win­ning organ­i­sa­tion Grameen Bank. 

“Even the most severely affected peo­ple are expected to pay back in a weekly basis, with the pre­vail­ing inter­est rate. No sys­tem of ‘break’ or ‘hol­i­day’ period is avail­able in the banks’ cur­rent char­ter. No excep­tions are made dur­ing a time of nat­ural calamity. The harsh rules prac­tised by the micro­cre­dit lender organ­i­sa­tions led the dis­as­ter affected peo­ple even sell­ing their relief assis­tance. Some even had to sell their left­over belong­ings to pay back their weekly instalments.”

These tac­tics may be harsh, but they pay off for micro-lenders. And it’s a lucra­tive oper­a­tion: BRAC pri­mar­ily tar­gets women, offers loans with preda­tory inter­est rates and uses tra­di­tional val­ues and close vil­lage rela­tion­ships to shame and pres­sure bor­row­ers into sell­ing and doing what­ever they can to make their weekly pay­ments. It works. Loan recov­ery rates for the indus­try aver­age between 95 and 98 per­cent. For BRAC, that rate was a comfy 99.3 percent.

So do preda­tory micro-loans really help lift the world’s poor­est peo­ple out of poverty? Neolib­eral ide­ol­ogy says they do — and the Omid­yar Net­work rep­re­sents one of the purest dis­til­la­tions of that ide­ol­ogy put into prac­tice in the poor­est and most vul­ner­a­ble parts of the world.

As Cam­bridge Uni­ver­sity eco­nom­ics pro­fes­sor Ha-Joon Chang argued, say­ing of micro-lending:

“[It] con­sti­tutes a pow­er­ful insti­tu­tional and polit­i­cal bar­rier to sus­tain­able eco­nomic and social devel­op­ment, and so also to poverty reduc­tion. Finally, we sug­gest that con­tin­ued sup­port for micro­fi­nance in inter­na­tional devel­op­ment pol­icy cir­cles can­not be divorced from its supreme ser­vice­abil­ity to the neoliberal/globalization agenda.”

Omid­yar Net­work has fol­lowed the same dis­as­trous neolib­eral script in other areas of invest­ment, par­tic­u­larly its invest­ments into pri­va­tiz­ing pub­lic schools in the US and in poor regions of Africa.

One of the ear­li­est Omid­yar invest­ments went to an online pri­vate char­ity web­site for needy pub­lic schools here in the US. As David Sirota wrote, huge bil­lion­aire foun­da­tions and cor­po­ra­tions have been hold­ing chil­dren hostage by starv­ing public-school fund­ing and replac­ing it with “char­ity” money from the likes of the Wal-Mart Foun­da­tion, Bill and Melinda Gates Foun­da­tion and Broad Foun­da­tion. We can add the Omid­yar Net­work to this list as well.

Omidyar’s foun­da­tion invested in the same idea, but with a web 2.0 crowd-source twist: DonorsChoose.org allows indi­vid­u­als to pledge amounts as small as $10, and allows school teach­ers to get online ask­ing for small sums to help their class­rooms. The end result, of course, is that it nor­mal­izes the con­tin­ued stran­gling of pub­lic schools and the sense that only pri­vate fund­ing can save education.

Omid­yar poured mil­lions into DonorsChoose and orga­nized dona­tions from other Sil­i­con Val­ley donors. At first, most pub­lic school teach­ers didn’t see the angle; many used the resource to raise funds for their own classrooms.

It wasn’t until DonorsChoose announced its part­ner­ship with the anti-public-education film “Wait­ing For Super­man” that teach­ers real­ized they’d beenduped. The movie pro­moted the myth that edu­ca­tion could only be saved by the likes of Tea Party-backed school “reform” advo­cate Michelle Rhee. Teach­ers orga­nized a boy­cott of DonorsChoose after the Omidyar-funded group announced it was essen­tially brib­ing its mem­bers with a $15 gift cer­tifi­cate to any­one who bought tick­ets for “Wait­ing for Superman.”

Two years later, DonorsChoose part­nered and pro­moted yet another right-wing teacher-bashing pro­pa­ganda film, “Won’t Back Down.”

Over­seas, the Omid­yar Net­work is embark­ing on a school pri­va­ti­za­tion pro­gram that will make DonorsChoose look like Mother Theresa’s hand­i­work. Omid­yar pro­vided seed cap­i­tal for a new Africa-based for-profit pri­vate school enter­prise for the poor called Bridge Inter­na­tional. In 2009, ON gave Bridge a total of $1.8 mil­lion; Matt Ban­nick, the top fig­ure (man­ag­ing part­ner) in the Omid­yar Net­work, sits on Bridge International’s board of directors.

Bridge International’s first schools are being built in Kenya, and are slated to expand across the sub-Sahara, hop­ing to rope mil­lions of poor African kids into its schools. Bridge’s strate­gic part­ner is the for-profit edu­ca­tion giant, Pear­son. Diane Rav­itch, for­mer US Assis­tant Sec­re­tary of Edu­ca­tion and critic of school “reform” efforts, has warned about Pearson’s near-monopolistic power influ­enc­ing the pri­va­ti­za­tion of Amer­i­can edu­ca­tion (see Ravitch’s arti­cle“The Pear­son­iza­tion of the Amer­i­can Mind.”)

The idea behind Bridge Inter­na­tional is to pro­vide a fran­chised “school in a box” model under which each school teaches the exact same cur­ricu­lum at the exact same time to every stu­dent. Teach­ers are given min­i­mal training—they’re merely required to teach accord­ing to the script given to them and read out to their stu­dents, scripts deliv­ered through Nook tablets. Stu­dents pay $5 a month—a lot for each stu­dent in areas as poor as sub-Saharan Africa. Cur­rently one new Bridge Inter­na­tional school is open­ing every 2.5 days around Kenya, over­tak­ing pub­lic education—with plans to expand further.

It sounds like a good idea, but the prob­lem is that Bridge’s busi­ness model has a very nar­row set of sup­port­ers, namely: free-market think-tanks, the global for-profit edu­ca­tion indus­try and pro­po­nents of a neolib­eral utopia who want to defund pub­lic edu­ca­tion and replace it with pri­vate school­ing. Bridge is only a few years old, but crit­i­cism of its edu­ca­tional model is already pil­ing up—even from cen­trist pro-business think­tanks like the Brook­ings Insti­tu­tion. Even at $4 or $5 a month, Bridge’s “low cost” edu­ca­tion is too expen­sive for many in the devel­op­ing world, forc­ing chil­dren to go to work and mak­ing fam­i­lies choose between buy­ing food and pay­ing for edu­ca­tion. Nat­u­rally, food wins out. And that sim­ply means that many chil­dren can’t afford to go school, which only increases and rein­forces strat­i­fi­ca­tion and inequality.

The fight against illit­er­acy requires free, qual­ity edu­ca­tion that’s avail­able to all chil­dren. What it doesn’t need is a bunch of neolib­eral techno-disruptors who want to turn edu­ca­tion into a for-profit indus­try that pro­vides school­ing only to those who can afford it. And any­way, the very notion that you can squeeze enough profit from mil­lions of the poor­est chil­dren in the world to attract mega ven­ture cap­i­tal, while pro­vid­ing qual­ity edu­ca­tion is absurd. That profit money is extracted from the very peo­ple Bridge is sup­pos­edly try­ing to help.

Still think that Pierre Omid­yar is a “dif­fer­ent” type of bil­lion­aire? Still con­vinced he’s a one-of-a-kind “civic-minded” idealist?

Then you might want to ask your­self why Omid­yar is so smit­ten by the ideas of an econ­o­mist known as “The Friedrich Hayek of Latin Amer­ica.” His name is Her­nando de Soto and he’s been adored by every­one from Mil­ton Fried­man to Mar­garet Thatcher to the Koch broth­ers. Omid­yar Net­work poured mil­lions of non­profit dol­lars into sub­si­diz­ing his ideas, help­ing put them into prac­tice in poor slums around the devel­op­ing world.

In Feb­ru­ary 2011, the Omid­yar Net­work announced a hefty $4.96 mil­liongrant to a Peru-based free-market think tank, the Insti­tute for Lib­erty & Democ­racy (ILD).

Per­haps no sin­gle invest­ment by Omid­yar more clearly reveals his ortho­dox neolib­eral vision for the world—and what con­sti­tutes “civic-mindedness”—than his sup­port for the ILD and its founder and pres­i­dent, Her­nando De Soto, whom the ON has tapped to par­tic­i­pate in other Omidyar-sponsored events.

De Soto is a celebrity in the world of neoliberal/libertarian gurus. He and his Insti­tute for Lib­erty & Democ­racy are cred­ited with pop­u­lar­iz­ing a free-market ver­sion of Third World land reform and turn­ing it into pol­icy in city slums all across the devel­op­ing world. Whereas “land reform” in coun­tries like Peru—dominated by a tiny hand­ful of landown­ing families—used to mean land redis­tri­b­u­tion, Her­nando De Soto came up with a counter-idea more amenable to the Haves: give prop­erty title to the country’s poor masses, so that they’d have a secure and legal title to their shanties, shacks, and what­ever land they might claim to live on or own.

De Soto’s pitch essen­tially comes down to this: Give the poor masses a legal “stake” in what­ever mea­ger prop­erty they live in, and that will “unleash” their inner entre­pre­neur­ial spirit and all the national “hid­den cap­i­tal” lying dor­mant beneath their shanty floors. De Soto claimed that if the poor liv­ing in Lima’s vast shan­ty­towns were given legal title own­er­ship over their shacks, they could then use that legal title as col­lat­eral to take out micro­fi­nance loans, which would then be used to launch their micro-entrepreneurial careers. Newly-created prop­erty hold­ers would also have a “stake” in the rul­ing polit­i­cal and eco­nomic sys­tem. It’s the sort of cant that makes per­fect sense to the Davos set (where De Soto is a star) but that has absolutely zero rel­e­vance to prob­lems of entrenched poverty around the world.

Since the Omid­yar Net­work names “prop­erty rights” as one of the five areas of focus, it’s no sur­prise that Omid­yar money would even­tu­ally find its way into Her­nando De Soto’s free-market ideas mill. In 2011, Omid­yar not only gave De Soto $5 mil­lion to advance his ideas—he also tapped De Soto to serve as a judge in an Omidyar-sponsored com­pe­ti­tion for projects focused on improv­ing prop­erty rights for the poor. The more you know about Her­nando De Soto, the harder it is to see Omidyar’s finan­cial back­ing as “ide­al­is­tic” or “civic-minded.”

For one thing, De Soto is the favorite of the very same bil­lion­aire broth­ers who play vil­lains to Omidyar’s sup­posed hero—yes, the reviled Koch broth­ers. In 2004, the lib­er­tar­ian Cato Insti­tute (neé “The Charles Koch Foun­da­tion”) awarded Her­nando De Soto its bian­nual “Mil­ton Fried­man Prize”—which comes with a hefty $500,000 check—for “empow­er­ing the poor” and “advanc­ing the cause of lib­erty.” De Soto was cho­sen by a prize jury con­sist­ing of such notable human­i­tar­i­ans as for­mer Pinochet labor min­is­terJose Piñera, Vladimir Putin’s eco­nomic advi­sor Andrei Illar­i­onov, Wash­ing­ton Post neo­con­ser­v­a­tive colum­nist Anne Apple­baum, FedEx CEO Fred Smith, and Mil­ton Friedman’s wife Rosie. Mil­ton was in the audi­ence dur­ing the awards cer­e­mony; he heartily approved.

Indeed, Her­nando De Soto is de facto roy­alty in the world of neoliberal-libertarian gurus—he’s been called “The Friedrich von Hayek of Latin Amer­ica,” not least because Hayek launched De Soto’s career as a guru more than three decades ago.

So who is Her­nando De Soto, where do his ideas come from, and why might Pierre Omid­yar think him deserv­ing of five mil­lion dol­lars — ten times the amount the Koch Broth­ers awarded him?

De Soto was born into an elite “white Euro­pean” fam­ily in Peru, who fled into exile in the West fol­low­ing Peru’s 1948 coup—his father was the sec­re­tary to the deposed pres­i­dent. Her­nando spent most of the next 30 years in Switzer­land, get­ting his edu­ca­tion at elite schools, work­ing his way up var­i­ous inter­na­tional insti­tu­tions based in Geneva, serv­ing as the pres­i­dent of a Geneva-based cop­per car­tel out­fit, the Inter­na­tional Coun­cil of Cop­per Export­ing Coun­tries, and work­ing as an offi­cial in GATT (Gen­eral Agree­ment on Trade and Tariffs).

De Soto didn’t return to live in Peru until the end of the 1970s, to over­see a new gold placer min­ing com­pany he’d formed with a group of for­eign investors. The min­ing company’s prof­its suf­fered due to Peru’s weak prop­erty laws and almost non-existent cul­tural appre­ci­a­tion of prop­erty title, espe­cially among the country’s poor masses—De Soto’s investors pulled out of the min­ing ven­ture after vis­it­ing the company’s gold mines and see­ing hun­dreds of peas­ants pan­ning on the company’s con­ces­sions. That expe­ri­ence inspired De Soto to change Peru­vians’ polit­i­cal assump­tions regard­ing prop­erty rights. Rather than start off by try­ing to con­vince them that for­eign min­ing firms should have exclu­sive rights to gold from tra­di­tion­ally com­mu­nal Peru­vian lands, De Soto came up with a clever end-around idea: giv­ing prop­erty title to the masses of Peru’s poor liv­ing in the vast shanties and shacks in the slums of Lima and cities beyond. It was a long-term strat­egy to alter cul­tural expec­ta­tions about prop­erty and own­er­ship, thereby improv­ing the invest­ment cli­mate for min­ing com­pa­nies and other investors. The point was to align the masses’ assump­tions about prop­erty own­er­ship with those of the banana republic’s hand­ful of rich landown­ing families.

In 1979, De Soto orga­nized a con­fer­ence in Peru’s cap­i­tal Lima, fea­tur­ing Mil­ton Fried­man and Friedrich von Hayek as speak­ers and guests. At the time, both Fried­man and Hayek were serv­ing as key advi­sors to Gen­eral Augusto Pinochet’s “shock ther­apy” pro­gram in nearby Chile, an eco­nomic exper­i­ment that com­bined lib­er­tar­ian mar­ket poli­cies with con­cen­tra­tion camp terror.

Two years after De Soto’s suc­cess­ful con­fer­ence in Lima, in 1981, Hayek helped De Soto set up his own free-market think tank in Lima, the “Insti­tute for Lib­erty and Democ­racy” (ILD). The ILD became the first of a large inter­na­tional net­work of right-wing neolib­eral think tanks con­nected to the Mother Ships—Cato Insti­tute, Her­itage Foun­da­tion, and Britain’s Insti­tute for Eco­nomic AffairsMar­garet Thatcher’s go-to think tank. By 1983, De Soto’s Insti­tute was also receiv­ing heavy fund­ing from Reagan’s Cold War front group, the National Endow­ment for Democ­racy, which pro­moted free-market think tanks and pro­grams around the world, and by the end of Rea­gan decade, De Soto pro­duced his first man­i­festo, “The Other Path”—a play on the name of Peru’s Maoist guer­rilla group, Shin­ing Path, then fight­ing a bloody war for power. But whereas the Shin­ing Path’s polit­i­cal pro­gram called for nation­al­iz­ing and redis­trib­ut­ing prop­erty, most of which was in the hands of a few rich fam­i­lies, De Soto’s “Other Path” called for main­tain­ing prop­erty dis­tri­b­u­tion as it was, and legal­iz­ing its cur­rent struc­ture by democ­ra­tiz­ing prop­erty titles, the pieces of paper with the stamps. Every­one would become a micro-oligarch and micro-landowner under this scheme…

With help and fund­ing from US and inter­na­tional insti­tu­tions, De Soto quickly became a pow­er­ful polit­i­cal force behind the scenes. In 1990, De Soto insin­u­ated him­self into the inner cir­cle of newly-elected pres­i­dent Alberto Fuji­mori, who quickly turned into a bru­tal dic­ta­tor, and is cur­rently serv­ing a 25-year prison sen­tence for crimes against human­ity, mur­der, kid­nap­ping, and ille­gal wiretapping.

Under De Soto’s influ­ence, Fujimori’s pol­i­tics sud­denly changed; almost overnight, the pop­ulist Keyn­sian can­di­date became the free-market author­i­tar­ian “Chinochet” he gov­erned as. As Fujimori’s top advi­sor, Her­nando De Soto was the archi­tect of so-called “Fujishock” ther­apy applied to Peru’s econ­omy. Offi­cially, De Soto served as Fujimori’s drug czar from 1990–1992, an unusual role for an econ­o­mist given the fact that Peru’s army was fight­ing a bru­tal war with Peru’s pow­er­ful cocaine drug lords. At the time Peru was the world’s largest cocaine pro­ducer; as drug czar, Her­nando De Soto there­fore posi­tioned him­self as the point-man between Peru’s mil­i­tary and secu­rity ser­vices, America’s DEA and drug czar under the first Pres­i­dent Bush, and Peru’s pres­i­dent Alberto Fuji­mori. It’s the sort of posi­tion that you’d want to have if you wanted “deep state” power rather than mere min­is­te­r­ial power.

Dur­ing those first two years when De Soto served under Fuji­mori, human rights abuses were ram­pant. Fuji­mori death squads—with names like the “Grupo Colina”—targeted labor unions and gov­ern­ment crit­ics and their fam­i­lies. Two of the worst mas­sacres com­mit­ted under Fujimori’s reign, and for which he was later jailed, took place while De Soto served as his advi­sor and drug czar.

The harsh free-market shock-therapy pro­gram that De Soto con­vinced Fuji­mori to imple­ment resulted in mass mis­ery for Peru. Dur­ing the two years De Soto served as Fujimori’s advi­sor, real wages plunged 40%, the poverty rate rose to over 54% of the pop­u­la­tion, and the per­cent­age of the work­force that was either unem­ployed or under­em­ployed soared to 87.3%.

But while the coun­try suf­fered, De Soto’s Insti­tute for Lib­erty and Democracy—the out­fit that Omid­yar gave $5 mil­lion to in 2011—thrived: its staff grew to over 100 as funds poured in. A World Bank staffer who worked with the ILD described it as,

“a kind of school for the coun­try. Most of the impor­tant min­is­ters, lawyers, jour­nal­ists, and econ­o­mists in Peru are ILD alumni.”

In 1992, Fuji­mori orches­trated a con­sti­tu­tional coup, dis­band­ing Peru’s Con­gress and its courts, and impos­ing emer­gency rule-by-decree. It was another vari­a­tion of the same Pinochet blueprint.

Just before Fujimori’s coup, De Soto indem­ni­fied him­self by offi­cially resign­ing from the cab­i­net. How­ever in the weeks and months after the coup, De Soto pro­vided cru­cial PR cover, down­play­ing the coup to the for­eign press. For instance, De Soto told the Los Ange­les Times that the pub­lic should tem­per their judg­ment of Fujimori’s coup:

“You’ve got to see this as the trial and error of a pres­i­dent who’s try­ing to find his way.”

In the New York Times, De Soto spun the coup as willed by the peo­ple, the ulti­mate demo­c­ra­tic politics:

“Peo­ple are fed up, fed up…[Fujimori] has attacked two hated insti­tu­tions at just the right time. There is an enor­mous need to believe in him.”

Years later, Fujimori’s noto­ri­ous spy chief Vladimiro Mon­tesinos tes­ti­fied to Peru’s Con­gress that De Soto helped mas­ter­mind the 1992 coup. De Soto denied involve­ment; but in 2011, two years after Fuji­mori was jailed forcrimes against human­ity, De Soto joined the pres­i­den­tial cam­paign for Keiko Fuji­mori, the jailed dictator’s daugh­ter and leader of Fujimori’s right-wing party. Keiko Fuji­mori ran on a plat­form promis­ing to free her father from prison if she won; De Soto spent much of the cam­paign red-baiting her oppo­nent as a Com­mu­nist. That led Peru’s Nobel Prize-winning author Mario Var­gas Llosa to denounce De Soto as a “fuji­mon­te­senista” with “few demo­c­ra­tic credentials.”

So in the same year that De Soto was try­ing to put the daugh­ter of Peru’s Pinochet in power and to spring the dic­ta­tor from prison, Omid­yar Net­work awarded him $5 million.

It was dur­ing Fujimori’s dic­ta­to­r­ial emer­gency rule, from 1992–94, that De Soto rolled out a property-title pilot pro­gram in Lima, in which 200,000 house­holds were given for­mal title. In 1996, Fuji­mori imple­mented De Soto’s property-titling pro­gram on a national scale, with help from the World Bank and a new gov­ern­ment prop­erty agency staffed by peo­ple from De Soto’s Insti­tute for Lib­erty and Democ­racy. By 2000, the mag­i­cal promise of an explo­sion in bank cred­its to all the new micro-property own­ers never mate­ri­al­ized; in fact, there was no notice­able dif­fer­ence in bank lend­ing to the poor what­so­ever, whether they had prop­erty title or not.

The World Bank and the project’s neolib­eral sup­port­ers led by Her­nando De Soto were not happy with data show­ing no uptick in lend­ing, which threat­ened to unravel the entire happy the­ory behind prop­erty titling as the answer to Third World poverty. De Soto was in the process of ped­dling the same property-titling pro­gram to coun­tries around the world; data was needed to jus­tify the pro­gram. So the World Bank funded a new study in Peru in the early 2000s, and dis­cov­ered some­thing star­tling: In homes that had for­mal prop­erty titles, the par­ents in those homes spent up to 40% more time out­side of their homes than they did before they were given title. De Soto took that sta­tis­tic and argued that it was a good thing because it proved giv­ing prop­erty title to home­own­ers made them feel secure enough to leave their shanties and shacks. The assump­tion was that in the dark days before shanty dwellers had legal titles, they were too scared to leave their shacks lest some other sav­age steal it from them while they were out shopping.

No one ever con­clu­sively explained why shanty par­ents were spend­ing so much more time out­side of their homes, but the impor­tant thing was that it made every­one for­get the utter fail­ure of the prop­erty title program’s core promise—that prop­erty titles would ignite micro-lending thanks to the col­lat­eral of the micro-entrepreneur’s micro-shack as col­lat­eral. Thanks to De Soto’s sales­man­ship and the back­ing of the world’s neolib­eral nomen­klatura — Bill Clin­ton called De Soto “the world’s great­est liv­ing econ­o­mist” and he was praised by every­one from Mil­ton Fried­man to Vladimir Putin to Mar­garet Thatcher. The dis­ap­point­ing results in Peru were ignored, and De Soto’s pro­gram was extended to devel­op­ing coun­tries around the world includ­ing Egypt, Cam­bo­dia, the Philip­pines, Indone­sia and else­where. And in nearly every case, De Soto’s Insti­tute for Lib­erty and Democ­racy has taken the lead in advis­ing gov­ern­ments and sell­ing the dream of turn­ing titled slum-dwellers into micro-entrepreneurs.

The real change brought by De Soto’s property-titling pro­gram has ranged from nil to night­mar­ish.

In Cam­bo­dia, where the World Bank imple­mented De Soto’s land-titling pro­gram in 2001, poor and vul­ner­a­ble peo­ple in the cap­i­tal Phnom Penh have suf­fered at the hands of land devel­op­ers and spec­u­la­tors who’ve used arson, police cor­rup­tion and vio­lence to forcibly evict roughly 10% of the city’s pop­u­la­tion from their homes in more valu­able dis­tricts, relo­cat­ing them to the city outskirts.

An arti­cle in Slate titled “The De Soto Delu­sion” described what hap­pened in Cam­bo­dia when the land-titling pro­gram was first implemented:

“In the nine months or so lead­ing up to the project kick­off, a dev­as­tat­ing series of slum fires and forced evic­tions purged 23,000 squat­ters from tracts of unti­tled land in the heart of Phnom Penh. These squat­ters were then plopped onto dusty relo­ca­tion sites sev­eral miles out­side of the city, where there were no jobs and where the price of com­mut­ing to and from cen­tral Phnom Penh (about $2 per day) sur­passed what­ever daily wage they had been earn­ing in town before the fires. Mean­while, the burned-out inner city land passed imme­di­ately to some of the wealth­i­est prop­erty devel­op­ers in the country.”

De Soto and his Insti­tute for Lib­erty and Democ­racy have advised property-title pro­grams else­where too—Haiti, Domini­can Repub­lic, Panama, Russia—again with results rang­ing from nil to bad. Even where it doesn’t lead to mass evic­tions and vio­lence, it has the effect of shift­ing a greater tax bur­den onto the poor, who end up pay­ing more in prop­erty taxes, and of forc­ing them to pony up for costly fil­ing fees to gain title, fees that they often can­not afford. Prop­erty title in and of itself—without a whole range of reforms in gov­er­nance, cor­rup­tion, edu­ca­tion, income, wealth dis­tri­b­u­tion and so on—is clearly no panacea. But it does pro­vide an alter­na­tive to pro­grams that give money to the poor and redis­trib­ute wealth, and that alone is a good thing, if you’re the type smit­ten by Her­nando De Soto—as Omid­yar clearly is.

Stud­ies of property-titling pro­grams in the slums of Brazil and Manila revealed that it cre­ated a new bit­terly com­pet­i­tive cul­ture and bifur­ca­tion, in which a small hand­ful of titled slum dwellers quickly learn to ben­e­fit by turn­ing into micro-slumlords rent­ing out dwellings to lesser slum dwellers, who sub­se­quently find them­selves forced to pay monthly fees for their shanty rooms—creating an under­class within the under­class. De Soto has described these slums as “acres of diamonds”—wealth wait­ing to be unlocked by prop­erty titling—and his acolytes even coined a new acronym for slums: “Strate­gic Low-income Urban Man­age­ment Systems.”

All of which begs the obvi­ous ques­tion: If De Soto’s property-title pro­gram is such a proven fail­ure in case after case, why is it so pop­u­lar among the world’s polit­i­cal and busi­ness elites?

The answer is rather obvi­ous: It offers a sim­ple, low-cost, tech­no­cratic mar­ket solu­tion to the prob­lem of global poverty—a com­plex and costly prob­lem that can only be alle­vi­ated by ded­i­cat­ing huge amounts of resources and a very dif­fer­ent pol­i­tics from the one that tells us that mar­kets are god, mar­kets can solve every­thing. Even before Omid­yar com­mit­ted $5 mil­lion to the dark plu­to­cratic “ide­al­ism” De Soto rep­re­sents, he was Tweet­ing his admi­ra­tion for De Soto:

“Bril­liant din­ner with Her­nando de Soto. Prop­erty rights under­lie and enable everything.”

Indeed, prop­erty rights under­lie and enable every­thing Omid­yar wants to hear—but dis­tract and divert from what the tar­gets of those pro­grams might actu­ally need or be ask­ing for.

Which brings us back to the won­der­ful words writ­ten about Pierre Omid­yar last month: Where is the proof that he’s a “civic-minded” bil­lion­aire, a “dif­fer­ent” bil­lion­aire, an “ide­al­is­tic” bil­lion­aire who’s in it for ideals and not for profit? How is Omid­yar any dif­fer­ent from any other billionaire—when he is fund­ing the same pro­grams and push­ing the same vision for the world backed by the Kochs, Soros, Gates, and every other neolib­eral billionaire?

When you scratch the sur­face of his invest­ments and get a sense of what sort of ideal world he’d like to make, it becomes clear that Omid­yar is no dif­fer­ent from his peers.

And the rea­son that mat­ters, of course, is because Pierre Omidyar’s dystopian vision is merg­ing with Glenn Greenwald’s and Laura Poitras’ monop­oly on the crown jew­els of the National Secu­rity Agency — the world’s secrets, our secrets — and using the value of those secrets as the cap­i­tal for what’s being billed as an entirely new, ide­al­is­tic media project, an ide­al­ism that the CJR and oth­ers promise will not shy away from tak­ing on power.

The ques­tion, how­ever, is what defines power to a neolib­eral mind? We’re going to take a wild guess here and say: The State.

So brace your­self, you’re about to get some­thing you’ve never seen before: billionaire-backed jour­nal­ism tak­ing on the power of the state. How rad­i­cal is that? To quote “60 Min­utes” pro­ducer Low­ell Bergman:

“What has been adju­di­cated and estab­lished in the wake of Viet­nam and the Civil Rights move­ment is the abil­ity of the press to basi­cally write or broad­cast almost any­thing about the government.There’s very few restric­tions in that way. It’s not true when we’re talk­ing about pri­vate power, espe­cially major For­tune 500 cor­po­ra­tions, or peo­ple worth more than, say, a bil­lion dollars.”

In other words: look out Gov­ern­ment, you’re about to be pum­meled by a cru­sad­ing, right­eous bil­lion­aire! And cor­po­rate Amer­ica? Ah, don’t worry. Your dirty secrets—freshly trans­ferred from the nasty non-profit hands of the Guardian to the aggres­sively for-profit hands of Pierre Omidyar—are safe with us.

2. Greenwald was Ron Paul’s first guest on the latter’s new internet television show.

“Ron Paul Launches New Inter­net Chan­nel” by Court­ney Coren; News­Max; 8/14/2013.

Former Repub­li­can pres­i­den­tial can­di­date Ron Paul is back with a vengeance, using his new online TV chan­nel to attack the poli­cies of the Obama admin­is­tra­tion and any­thing else he sees as a chal­lenge to his lib­er­tar­ian views.

The for­mer Texas con­gress­man launched The Ron Paul Channel Mon­day with an exclu­sive inter­view with Glenn Green­wald, one of two jour­nal­ists who first dis­closed the secret National Secu­rity Agency tele­phone and inter­net data col­lec­tion pro­gram, based on leaks from for­mer NSA con­trac­tor Edward Snowden. . . .

3. Citizen Greenwald also was selected by CAIR to give the keynote speech at their Los Angeles dinner. Misrepresented as a Muslim civil rights organization, the Council on American-Islamic Relations is a Muslim Brotherhood front group.

“Con­tro­ver­sial Jour­nal­ist to Keynote CAIR-LA Ban­quet” by gmb watch; Global Mus­lim Broth­er­hood Daily Watch; 11/4/2013.

US media has reported that con­tro­ver­sial jour­nal­ist Glenn Green­wald will be the keynote speaker for a din­ner event put on this week by the  Los Ange­les chap­ter of the Coun­cil on American-Islamic Rela­tions (CAIR). . . .

. . . . CAIR was founded in 1994 by three offi­cers of the Islamic Asso­ci­a­tion of Pales­tine, part of the U.S. Hamas infra­struc­ture at that time.  Documents dis­cov­ered in the course of the the ter­ror­ism trial of the Holy Land Foun­da­tion con­firmed that the founders and cur­rent lead­ers of CAIR were part of the Pales­tine Com­mit­tee of the Mus­lim Broth­er­hood and that CAIR itself is part of the US. Mus­lim Brotherhood. . . .

Discussion

7 comments for “FTR #763 The Adventures of Eddie The Friendly Spook, Part 9: Citizen Greenwald’s Financial Angel”

  1. Note that NSFWFCorp, lacking a Libertarian billionaire sugar-daddy, was just force to lay off three of their employees. It’s something to keep in mind this holiday season.

    And for that special someone that’s impossible to buy gifts for, there’s still a condo left in the NSFWCorp Conflict Tower. Just think of them as super scarce untradable Bitcoins that pay dividends in the form of NSFWCorp stories.

    Posted by Pterrafractyl | November 20, 2013, 8:11 pm
  2. Mark Ames has a followup piece on Pierre Omidyar’s new investigative journalism outfit. It explores the potential conflicts of interest with having an uber-Libertarian tech-billionaire becoming the sole founder and CEO an investigative journalism outfit focused on reporting on the Snowden files. The timing of the piece was appropriate since NSFWCorp just got gobbled up by PandoMedia, prompting Gleen Greenwald to tweet about the irony and hypocrisy since one of Pando’s original investors is Peter Thiel (a $200k investment out of the original $2.8 million investment). The NSFWCorp team’s response, along with pledges of no-kid-gloves-for-Thiel and challenges to Greenwald to respond in kind, are at the bottom of the article:

    PandoDaily
    Keeping Secrets: Pierre Omidyar, Glenn Greenwald and the privatization of Snowden’s leaks

    By Mark Ames
    On November 27, 2013

    Who “owns” the NSA secrets leaked by Edward Snowden to reporters Glenn Greenwald and Laura Poitras?

    Given that eBay founder Pierre Omidyar just invested a quarter of a billion dollars to personally hire Greenwald and Poitras for his new for-profit media venture, it’s a question worth asking.

    It’s especially worth asking since it became clear that Greenwald and Poitras are now the only two people with full access to the complete cache of NSA files, which are said to number anywhere from 50,000 to as many as 200,000 files. That’s right: Snowden doesn’t have the files any more, the Guardian doesn’t have them, the Washington Post doesn’t have them… just Glenn and Laura at the for-profit journalism company created by the founder of eBay.

    Edward Snowden has popularly been compared to major whistleblowers such as Daniel Ellsberg, Chelsea Manning and Jeffrey Wigand. However, there is an important difference in the Snowden files that has so far gone largely unnoticed. Whistleblowing has traditionally served the public interest. In this case, it is about to serve the interests of a billionaire starting a for-profit media business venture. This is truly unprecedented. Never before has such a vast trove of public secrets been sold wholesale to a single billionaire as the foundation of a for-profit company.

    He justified this purely on grounds of self-interest, calling Omidyar’s offer “a once-in-a-career dream journalistic opportunity.” Speaking to the Washington Post, Greenwald used crude careerist terminology to justify his decision to privatize the Snowden secrets:

    “It would be impossible for any journalist, let alone me, to decline this opportunity.”

    Let alone me.

    News about Greenwald-Poitras’ decision to privatize the NSA cache came just days after the New York Times reported on Greenwald’s negotiations with major movie studios to sell a Snowden film. This past summer, Greenwald sold a book to Metropolitan Books for a reportedly hefty sum, promising that some of the most sensational revelations from Snowden’s leaks would be saved for the book.

    Indeed what makes the NSA secrets so valuable to Greenwald and Poitras is that the two of them have exclusive access to the entire cache. Essentially they have a monopoly over secrets that belong to the public. For a time, it was assumed that Snowden had kept copies of the leaked documents, possibly on a number of laptops he was carting around the world. Greenwald and Poitras were simply conduits between Snowden’s cache and the public. In late August, Greenwald disclosed for the first time in a statement to BuzzFeed:

    “Only Laura and I have access to the full set of documents which Snowden provided to journalists.”

    Later, from his hideout in Russia, Snowden released a statement claiming he had left all the NSA files behind in Hong Kong for Greenwald and Poitras to take. A third Guardian journalist in Hong Kong at the time, Ewen MacAskill, confirmed to me on Twitter that only Greenwald and Poitras took with them the full cache. Even the Guardian was not allowed access to the motherlode.

    Clearly, in a story as sensational and global and alluring as Snowden’s Secrets™, exclusive access equals value. And for the first time in whistleblower history, that value has been extracted in full through privatization.

    It is one thing for Greenwald to maintain that exclusivity — or monopoly — while working with the Guardian, a nonprofit with institutional experience in investigative journalism. It is quite another for him to sell them to a guy with a history of putting profits before public interest. As Yasha Levine and I wrote at NSFWCORP, Omidyar invested in a third-world micro-loans company whose savage bullying of debtors resulted in mass suicides. Rather than acknowledge this tragedy, Omidyar Network simply deleted reference to the company from his website when the shit hit the fan.

    This — this? — is the guy we’re supposed to trust with the as-yet unpublished NSA files? He’s the one we’re relying on to reveal any dark secrets about the tech industry’s collusion with the NSA? Let’s hope there’s nothing in there about eBay. Whoops! Deleted!

    Since we first raised our concerns, Yasha and I have been swamped with responses from Greenwald’s followers. The weird thing is, not all of those responses have been negative: even Wikileaks — Wikileaks!responded that, “We have not [fallen out with Greenwald] but @Pierre is seriously compromised by Paypal’s attacks on our organisation and supporters.”

    Greenwald’s leftist and anarchist fans have always had an almost cult-like faith in his judgment, seeing him as little less than a digital-age Noam Chomsky. But now they’re reeling from cognitive dissonance, trying to understand why their hero would privatize the most important secrets of our generation to a billionaire free-marketeer like Omidyar, whose millions have, in some cases, brought market-based misery into some of the poorest and most desperate corners of the planet.

    A Greenwald-Omidyar partnership is as hard to swallow as if Chomsky proudly announced a new major venture with Sheldon Adelson, on grounds that it’s a “once-in-a-career dream academic opportunity.”

    WikiLeaks’ concern about Omidyar can be traced back to PayPal’s decision in December 2010 to blockade users from sending money to WikiLeaks. PayPal (founded by Pando investor, Peter Thiel — more on that below) is owned by eBay, where Omidyar has served as the chairman of the board since 2002. Before the blockade, PayPal was the principal medium for WikiLeaks donations, according to the Washington Post.

    More troubling for fans is that Greenwald has repeatedly provided cover for Omidyar, claiming that he “had nothing to do with [the blockade]” despite his board status. Whether or not eBay’s chairman really was ignorant of his company’s most controversial decision in years, there’s no denying that Omidyar is also eBay’s largest shareholder. At nearly 10%, his stake is worth billions and is more than twice as large as that of the next largest shareholder.

    By Greenwald’s reasoning, even though Omidyar is the founder, largest shareholder, and chairman of the body responsible for eBay/PayPal management oversight, he had “nothing to do with” its policy towards Wikileaks. Zero. None. He was as helpless as you, me, Batkid, or Grumpy Cat.

    Fortunately, as the single investor, founder and CEO of “NewCo”, Omidyar’s self-professed helplessness at eBay doesn’t extend to his new journalistic venture. With that level of autonomy, no one — not even Glenn Greenwald, who has admitted that Omidyar’s money is irresistibly persuasive — can tell him which secrets to publish on his new site, and which should remain hidden forever.

    We can all rest easy in our beds, then, knowing that Omidyar is in charge of our secrets. Information of national importance, such as which major tech companies colluded with the US government to spy on private citizens, will be published at the discretion of the founder and largest shareholder of one of those companies.

    Robbing Peter to Pay Paul (and Mark). An important footnote about Peter Thiel and Pando, by Paul Carr

    When NSFWCORP’s acquisition by Pando was announced, Greenwald raced to Twitter to accuse us of hypocrisy because Peter Thiel (another billionaire whose previous business dealings could fill a book, and who sold PayPal to eBay in the first place) once invested $200,000 in PandoDaily, through his Founders Fund.

    That’s absolutely true. Founders Fund’s investment is disclosed here on Pando’s main about page, along with the names of the other investors who collectively invested the remaining $2.8m raised by Pando.

    The difference between us selling our company to a media outlet that once received a minority investment from Founders Fund and Greenwald being personally hired by Omidyar should be obvious to anyone with a brain. But at the risk that category excludes Glenn’s most ardent supporters, we’re happy to spell out the difference (apart from the monetary difference of $249,800,000 between Thiel’s $200k and Omidyar’s $250 million, of course):

    Peter Thiel has no involvement with the running of Pando. Zero. He doesn’t make hiring or firing or any other kind of decisions (nor do any other investors), Founders Fund isn’t Pando’s only (or even closest largest) investor and no one from Founders Fund has a board seat, voting rights or any other input in business or editorial policy. In other words, Thiel has less ability to dictate editorial policy here, in fact, than the guy who cleans the coffee cups (at least that guy has a key to the office).

    Pierre Omidyar is personally hiring the journalists for his new project, starting with Greenwald himself. He is the venture’s sole backer. But, you know what? All of that would still be OK if Greenwald would make a simple, unequivocal, public pledge: to cover any bad behavior by Pierre Omidyar in the same way that he would cover someone who wasn’t backing him with millions of dollars.

    Should be a simple thing to promise, right?

    Here’s our absolute, unequivocal pledge: we will cover Peter Thiel and Pando’s other investors just as fiercely as we cover Pierre Omidyar or anyone else. In fact, it’s likely due to proximity that we will cover Pando’s investors even more fiercely. That’s how we always worked at NSFWCORP — and it’s how we’ll work here. Our past coverage of Thiel can be found all over the web, including here, here and even right here on Pando. Or see how we’ve covered NSFWCORP/Pando investors CrunchFund and Vegas Tech Fund.

    When we asked Glenn to make that same pledge about his single investor, in light of our coverage of Omidyar, he responded simply: “I can’t speak for Omidyar Network,” adding he had “no idea” about Omidyar’s involvement in micro loans.

    We contacted Omidyar Network for comment on this story but neither had responded at press time. We’ll update here if they do.

    While it was sad to hear about the subsumption of NSFWCorp into PandoMedia, one of the nice things that could emerge from having Peter Thiel indirectly employ someone Glenn Greenwald presumably really dislikes (Mark Ames) is that we could end up seeing a lot more reporting about the NSA’s work with Palantir. Greenwald was a key target of the HBGary/Palantir operations against Wikileaks so one might expect some pretty aggressive reporting by Greenwald if there was anything on Palantir in those files (despite Alex Karp’s apologies to Greenwald after getting caught). But other than the PRISM-mystery, there has been virtually no coverage of Palantir’s activities with the intelligence community from the Snowden reports. Maybe there’s just not very much about Palantir in the Snowden files? It’s possible but it would also be kind of amazing all things considered.

    Posted by Pterrafractyl | November 29, 2013, 12:23 am
  3. “The Friedrich Hayek of Latin America”, Hernando de Soto, has a cure of terrorism. Surprise! The solution is more capitalism:

    The Wall Street Journal
    The Capitalist Cure for Terrorism
    Military might alone won’t defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment

    By Hernando de Soto
    Oct. 10, 2014 4:43 p.m. ET

    As the U.S. moves into a new theater of the war on terror, it will miss its best chance to beat back Islamic State and other radical groups in the Middle East if it doesn’t deploy a crucial but little-used weapon: an aggressive agenda for economic empowerment. Right now, all we hear about are airstrikes and military maneuvers—which is to be expected when facing down thugs bent on mayhem and destruction.

    But if the goal is not only to degrade what President Barack Obama rightly calls Islamic State’s “network of death” but to make it impossible for radical leaders to recruit terrorists in the first place, the West must learn a simple lesson: Economic hope is the only way to win the battle for the constituencies on which terrorist groups feed.

    I know something about this. A generation ago, much of Latin America was in turmoil. By 1990, a Marxist-Leninist terrorist organization called Sendero Luminoso, or Shining Path, had seized control of most of my home country, Peru, where I served as the president’s principal adviser. Fashionable opinion held that the people rebelling were the impoverished or underemployed wage slaves of Latin America, that capitalism couldn’t work outside the West and that Latin cultures didn’t really understand market economics.

    The conventional wisdom proved to be wrong, however. Reforms in Peru gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework in which to run businesses, make contracts and borrow—spurring an unprecedented rise in living standards.

    Between 1980 and 1993, Peru won the only victory against a terrorist movement since the fall of communism without the intervention of foreign troops or significant outside financial support for its military. Over the next two decades, Peru’s gross national product per capita grew twice as fast as the average in the rest of Latin America, with its middle class growing four times faster.

    Today we hear the same economic and cultural pessimism about the Arab world that we did about Peru in the 1980s. But we know better. Just as Shining Path was beaten in Peru, so can terrorists be defeated by reforms that create an unstoppable constituency for rising living standards in the Middle East and North Africa.

    To make this agenda a reality, the only requirements are a little imagination, a hefty dose of capital (injected from the bottom up) and government leadership to build, streamline and fortify the laws and structures that let capitalism flourish. As anyone who’s walked the streets of Lima, Tunis and Cairo knows, capital isn’t the problem—it is the solution.

    Here’s the Peru story in brief: Shining Path, led by a former professor named Abimael Guzmán, attempted to overthrow the Peruvian government in the 1980s. The group initially appealed to some desperately poor farmers in the countryside, who shared their profound distrust of Peru’s elites. Mr. Guzmán cast himself as the savior of proletarians who had languished for too long under Peru’s abusive capitalists.

    What changed the debate, and ultimately the government’s response, was proof that the poor in Peru weren’t unemployed or underemployed laborers or farmers, as the conventional wisdom held at the time. Instead, most of them were small entrepreneurs, operating off the books in Peru’s “informal” economy. They accounted for 62% of Peru’s population and generated 34% of its gross domestic product—and they had accumulated some $70 billion worth of real-estate assets.

    This new way of seeing economic reality led to major constitutional and legal reforms. Peru reduced by 75% the red tape blocking access to economic activity, provided ombudsmen and mechanisms for filing complaints against government agencies and recognized the property rights of the majority. One legislative package alone gave official recognition to 380,000 informal businesses, thus bringing above board, from 1990 to 1994, some 500,000 jobs and $8 billion in tax revenue.

    These steps left Peru’s terrorists without a solid constituency in the cities. In the countryside, however, they were relentless: By 1990, they had killed 30,000 farmers who had resisted being herded into mass communes. According to a Rand Corp. report, Shining Path controlled 60% of Peru and was poised to take over the country within two years.

    Peru’s army knew that the farmers could help them to identify and defeat the enemy. But the government resisted making an alliance with the informal defense organizations that the farmers set up to fight back. We got a lucky break in 1991 when then-U.S. Vice President Dan Quayle, who had been following our efforts, arranged a meeting with President George H.W. Bush at the White House. “What you’re telling me,” the president said, “is that these little guys are really on our side.” He got it.

    This led to a treaty with the U.S. that encouraged Peru to mount a popular armed defense against Shining Path while also committing the U.S. to support economic reform as an alternative to the terrorist group’s agenda. Peru rapidly fielded a much larger, mixed-class volunteer army—four times the army’s previous size—and won the war in short order. As Mr. Guzmán wrote at the time in a document published by Peru’s Communist Party, “We have been displaced by a plan designed and implemented by de Soto and Yankee imperialism.”

    Looking back, what was crucial to this effort was our success in persuading U.S. leaders and policy makers, as well as key figures at the United Nations, to see Peru’s countryside differently: as a breeding ground not for Marxist revolution but for a new, modern capitalist economy. These new habits of mind helped us to beat back terror in Peru and can do the same, I believe, in the Middle East and North Africa. The stakes couldn’t be higher. The Arab world’s informal economy includes vast numbers of potential Islamic State recruits—and where they go, so goes the region.

    It is widely known that the Arab Spring was sparked by the self-immolation in 2011 of Mohamed Bouazizi, a 26-year-old Tunisian street merchant. But few have asked why Bouazizi felt driven to kill himself—or why, within 60 days, at least 63 more men and women in Tunisia, Algeria, Morocco, Yemen, Saudi Arabia and Egypt also set themselves on fire, sending millions into the streets, toppling four regimes and leading us to today’s turmoil in the Arab world.

    To understand why, my institute joined with Utica, Tunisia’s largest business organization, to put together a research team of some 30 Arabs and Peruvians, who fanned out across the region. Over the course of two years, we interviewed the victims’ families and associates, as well as a dozen other self-immolators who had survived their burns.

    These suicides, we found, weren’t pleas for political or religious rights or for higher wage subsidies, as some have argued. Bouazizi and the others who burned themselves were extralegal entrepreneurs: builders, contractors, caterers, small vendors and the like. In their dying statements, none referred to religion or politics. Most of those who survived their burns and agreed to be interviewed spoke to us of “economic exclusion.” Their great objective was “ras el mel” (Arabic for “capital”), and their despair and indignation sprang from the arbitrary expropriation of what little capital they had.

    Western experts may fail to see these economic realities, but they are increasingly understood in the Arab world itself, as I’ve learned from spending time there. At conferences throughout the region over the past year, I have presented our findings to business leaders, public officials and the press, showing how the millions of small, extralegal entrepreneurs like Bouazizi can change national economies.

    For example, when the new president of Egypt, Abdel Fattah Al Sisi, asked us to update our numbers for his country, we discovered that the poor in Egypt get as much income from returns on capital as they do from salaries. In 2013, Egypt had about 24 million salaried citizens categorized as “workers.” They earned a total of some $21 billion a year but also owned about $360 billion of “dead” capital—that is, capital that couldn’t be used effectively because it exists in the shadows, beyond legal recognition.

    Washington should support Arab leaders who not only resist the extremism of the jihadists but also heed the call of Bouazizi and all the others who gave their lives to protest the theft of their capital. Bouazizi and those like him aren’t marginal people in the region’s drama. They are the central actors.

    All too often, the way that Westerners think about the world’s poor closes their eyes to reality on the ground. In the Middle East and North Africa, it turns out, legions of aspiring entrepreneurs are doing everything they can, against long odds, to claw their way into the middle class. And that is true across all of the world’s regions, peoples and faiths. Economic aspirations trump the overhyped “cultural gaps” so often invoked to rationalize inaction.

    As countries from China to Peru to Botswana have proved in recent years, poor people can adapt quickly when given a framework of modern rules for property and capital. The trick is to start. We must remember that, throughout history, capitalism has been created by those who were once poor.

    Yes, the Tunisians filled with despair are sick and tired of all the corruption and endless bribes. So the solution is, obviously, more capitalism since capitalism somehow eliminate corruption. It’s unclear how exactly that happens although it appears that de Soto is once again suggesting that by simply creating a formal legal framework that normalizes the underground economy “capitalism” will suddenly thrive at which point the poor happily “claw their way into the middle class” without succumbing to the temptations of despair and extremism. After all, it worked in Peru! And if it worked in Peru why can’t it work everywhere else. All that needs to happen is for every developing country to follow Peru’s model, including turning themselves into one of the largest gold-exporters in the world, and peace and prosperity will finally arrive. Our global fixation over money isn’t the problem. It’s the solution. According to “The Friedrich Hayek of Latin America”.

    Posted by Pterrafractyl | October 24, 2014, 3:12 pm
  4. Pierre Omidyar’s budding media empire just lost another veteran journalist:

    Pando Daily
    “Welcome to the slaughterhouse”: Ken Silverstein’s account of working with Greenwald and Omidyar is brutal

    By Paul Carr
    On February 22, 2015

    Earlier today I reported that acclaimed investigative journalist Ken Silverstein had resigned from First Look media, citing management incompetence.

    Well, now Romemesko has Silverstein’s full resignation announcement and… well, holy shit. Not only does Silverstein give both barrels to Omidyar who he claims “blocked [Silverstein’s reporting] every step of the way” but he also lays into Glenn Greenwald, Laura Poitras and Betsy Reed:

    You know what’s cool about being a former employee of First Look/The Intercept? That Glenn Greenwald, Jeremy Scahill, Betsy Reed and Pierre Omidyar all believe in Free Speech and the First Amendment so they won’t mind my writing about my time working for and with them. Tentative title: “Welcome to the Slaughterhouse.”

    None of the above will come as a surprise to regular Pando readers, of course. We’ve been reporting Omidyar’s interference in the newsroom for over a year, and for over a year Greenwald has been furiously denying it. Surely a guy who helped the Guardian win a Pulitzer and is still trusted to safeguard Snowden’s secrets wouldn’t lie, would he?

    Writes Silverstein:

    [W]hile I admire them both, Matt [Taibbi] is definitely more likable than Glenn. Glenn’s role at FL is troubling in some ways, especially standing by silently (as far as I can tell) and tolerating the terrible actions of corporate management.

    …which sits somewhat at odds with Greenwald’s own words in his giant anti-Pando screed “On the Meaning of Journalistic Independence” where he insists that, contrary to our reporting:

    I would never temper, limit, suppress or change my views for anyone’s benefit – as anyone I’ve worked with will be happy to tell you

    Apparently not anyone.

    But perhaps it’s the last paragraph that’s the most damning for Omidyar and Greenwald and all those at First Look who still insist that Omidyar has zero influence in the Intercept’s newsroom:

    You will never produce fearless, independent journalism if you live in fear of angering your media boss and pull your punches to please him/her, or to please your sources or even your friends. So I hope you all feel as good and free and liberated this Sunday as I do and enjoy the rest of your day.


    Posted by Pterrafractyl | February 22, 2015, 6:31 pm
  5. Shocker: A guy that thinks Hernando de Soto deserves a Nobel Prize for his advocacy of “more property rights will end poverty!” theories is also convinced that Bitcoin will be the vehicle to put de Soto’s theories into practice. at which point poverty ends:

    Forbes
    How Bitcoin Will End World Poverty
    Steve Forbes

    4/02/2015 @ 4:51PM

    William Blair partner Brian Singer explains how Bitcoin and blockchain encryption has a greater ability to bring more of the world’s population out of poverty than anything we’ve seen in decades.

    FORBES: And is bitcoin the currency of the future? Or is it the payment system they’re developing?

    SINGER: Bingo. It’s the payment system. It’s the blockchain encryption. And there are interesting things. I think bitcoin, or the, really, blockchain encryption that’s behind it, has a greater ability to bring more of the world’s population out of poverty than anything we’ve seen in

    FORBES: Well, for one thing, it’s a cheap payment system.

    SINGER: For one thing, it’s a cheap payment system. But it’s more important than that. It’s more important than that. Blockchain cryptography is all about digital transfer of ownership in a completely transparent and public way. Okay, I don’t want to go into any of the math and the complexity behind it, but think of what that means.

    That means that I can actually record ownership in public, in a digital means. 50% of the world’s population has a mobile phone. I read an estimate this month that in 2020, 90% of the world’s population will have mobile phones. That’s probably a high estimate, but that’s okay.

    FORBES: $25, $35 smartphones.

    SINGER: We’re throwing them away and they can ship them off to emerging markets. But what’s powerful about this, now think about Hernando de Soto.

    FORBES: Yes.

    SINGER: Okay. The Institute for Liberty and Democracy in Peru, I really think Hernando de Soto should win the Nobel prize for the work he’s done. I hope he does. But he’s going around the world and identified one of the most powerful things to the economy and the creation of wealth. And that is the ownership of property.

    FORBES: Which you can then use as collateral.

    SINGER: Which you can use as collateral and when you own it, you will develop it. The best thing you can do for the environment is to own it. Because when you own it, you make sure it’s sustainable for your future family. And that’s powerful. But they don’t have the ability to own it. If you live in a shantytown, you operate outside of the legal economy. It’s not that you want to operate outside of the legal economy, but you have no ownership of any property.

    FORBES: Although in the neighborhood, everyone knows who owns what.

    SINGER: And once you introduce blockchain cryptography, guess what they can do? Have a public ledger of ownership and transfer that cannot be denied because it’s absolutely transparent. It’s absolutely transparent. It is the means through which these individuals can get exactly what Hernando de Soto thinks they best need to bring themselves out of poverty.

    It is so much more profound than that, but at its very basis, it has the ability to give these individuals the right of ownership to property. And that has more than anything else, the ability to bring them out of poverty. And I can’t wait. It’ll be adopted elsewhere. I mean, blockchain encryption is such a powerful tool. It’ll be used by banks, it’ll be used by credit card companies, it will become a standard. But what’s more interesting is what it can do to poverty around the world to eliminate poverty.

    FORBES: Going for a sec on the eliminating poverty, but also, what does that mean, that technology mean for credit card companies and the whole payment system, crazy gobbledygook payment system we have today? Very expensive. Doesn’t that blow it away?

    SINGER: I hope so. I hope so. I mean, think about it.

    FORBES: PayPal .

    SINGER: When there was one manufacturer of phones in the U.S., the U.S. government, what did we have? This big clunky, rotary thing that sat on desks. Now what do we have? Cell phones of all flavors, sizes. I can sit in Africa and on my cell phone, take courses at MIT because they’re public record. It’s absolutely astounding what happens when you can actually innovate around the world and compete.

    And what is happening is blockchain cryptography, forget bitcoin, creates a competitive technology, a competitive innovation that these credit card companies will have to adopt. The ones that adopt it first will bring their cost base down. And importantly, if you think about a retail store, and I have this with my kids, my kids are off in college, and they go to a retail store, they use their credit card. And the credit card company

    FORBES: Costs the retailer three to six.

    SINGER: Right. Well, first the fee is high. And then they reject the transaction because why is this card suddenly showing up in some city, some place, where I don’t live? So it gets cut off. Well, with blockchain cryptography, the buyer and the seller automatically trust each other over an untrusted network. That’s what’s so powerful about it.

    Yep, it’s not the lack of an adequate income that’s crushing the poor. It’s the fact that we still have too many “commons” that need to be privatized so then all these poor people around the world can trade their newly privatized wealth using bitcoins!

    It’s also apparently nice how you can use your bitcoins anywhere in the world without pesky things like fraud detection:

    And what is happening is blockchain cryptography, forget bitcoin, creates a competitive technology, a competitive innovation that these credit card companies will have to adopt. The ones that adopt it first will bring their cost base down. And importantly, if you think about a retail store, and I have this with my kids, my kids are off in college, and they go to a retail store, they use their credit card. And the credit card company

    FORBES: Costs the retailer three to six.

    SINGER: Right. Well, first the fee is high. And then they reject the transaction because why is this card suddenly showing up in some city, some place, where I don’t live? So it gets cut off. Well, with blockchain cryptography, the buyer and the seller automatically trust each other over an untrusted network. That’s what’s so powerful about it.

    Yay?

    Posted by Pterrafractyl | April 2, 2015, 3:07 pm
  6. Mark Ames has a new update on the ever evolving nature of Pierre Omidyar’s new media empire: First is now investing in a new international “fact checking” service with the National Endowment for Democracy. He also invested in a Ukrainian news service set up on the eve of the Maidan revolution. And it looks like there could be many more investments in media organizations yet to come because it now looks like the whole model for First Look Media has changed: instead of setting up a constellation of separate investigative journalistic outlets, First Look is just going to start investing in existing media enterprises. And he might start with none other than the Gawker.

    So the organization that has its hands on the Snowsen cache is about to get a whole lot closer to Gawker:

    Pando Daily
    What Pierre did next

    After helping the State Department fund revolution in Ukraine, Omidyar is reportedly ready to invest in Gawker.

    By Mark Ames
    July 31, 2015

    The Guardian reported on Tuesday that the National Endowment for Democracy has just been banned from Russia, under strict new laws regulating NGOs acting as foreign agents.

    In that story, the Guardian cited the fact that Intercept publisher Pierre Omidyar co-funded Ukraine revolution groups with USAID and the National Endowment for Democracy (NED).

    If the Omidyar connection sounds familiar, that’s because it was Pando that first broke the story in February 2014 (the Guardian linked to our original scoop in its coverage.)

    In the 18 months since we broke the story, Ukraine has collapsed into war and despair, with up to 10,000 people killed and one and a half million internally-displaced refugees — and top US brass talk openly of a new Cold War with nuclear-armed Russia, while US military advisors train and arm Ukrainians to wage war on Russian-backed separatists.

    Svitlana Zalishchuk, one of the leaders of the Omidyar-funded NGO that helped organize last year’s revolution in Kiev, is now in power as an MP in Ukraine’s parliament, a member of the new, pro-NATO president’s party bloc. She’s gone from plucky Omidyar-funded adversarial activist, to heading a parliamentary subcommittee tasked with integrating Ukraine into NATO.

    I can’t think of another media tycoon who co-funded a pro-US regime change with American intelligence cutouts like USAID and the National Endowment for Democracy. That Putin targeted the NED does not mean it’s either heroic or evil—the NED’s story speaks for itself: The brainchild of Reagan’s CIA director Bill Casey, the National Endowment for Democracy was set up as an intelligence cutout to support US geopolitical power and undermine unfriendly regimes. One of the NED co-founders, Allen Weinstein, explained its purpose to the Washington Post:

    “A lot of what we do today was done covertly 25 years ago by the CIA.”

    Throughout its 30-year history it’s been mired in very typical CIA controversies: In the 80s, the NED was caught funding an outlawed extreme-right French paramilitary gang during Socialist president Mitterand’s rule; funding a military leader’s victorious election in Panama against a more moderate civilian candidate; and financing rightwing opponents of Costa Rica’s democratically-elected Nobel Peace Prize-winning president, whose sin was opposing Reagan’s deadly, dirty war in Nicaragua.

    More recently, the NED was caught funding groups that organized the 2002 coup against Venezuela’s democratically-elected president Hugo Chavez; planting a “free-lance journalist” in the AP and New York Times to report on Haiti while the NED was simultaneously funding rightwing groups to undermine Haiti’s ruling party; and co-funding Ukraine regime-change groups with Pierre Omidyar.

    This week, Omidyar Network announced yet another partnership with the National Endowment for Democracy and the Poynter Institute to create an international online fact-checking hub. Given the power that a monopoly on “objective” fact-checking offers, the tie-up with the NED takes the Omidyar alliance with the US empire and media to newer, creepier levels. In yet another Omidyar-as-private-arm investment, Omidyar invested in the slick new Ukrainian media, Hromadske.tv, which was set up on the eve of the Maidan revolution with initial seed funding coming from the US Embassy in Kiev. Omidyar’s involvement in Ukraine media and “fact-checking” is all the more serious given that now Washington and NATO talk about “countering” Russia’s overhyped “information war” on the West and on Ukraine—this “information war” which I covered a bit in my piece on Peter Pomerantsev, is considered a top and urgent geostrategic priority for NATO and the West.

    And now in the last week, the latest twist to the farcical “journalism paradise” shitshow: Omidyar is reportedly in talks with the king of online tabloid-sleaze, Nick Denton, to invest in the latter’s perma-sued organization. As Pando’s Paul Carr wrote earlier this week, the ground seems to be being prepared for a full-on merger of the Intercept and Gawker, backed by Omidyar’s cash.

    As of yesterday, Nick Denton appointed John Cook — formerly editor of the Intercept — to be the “temporary” executive editor of Gawker. When Cook departed the Intercept, he wrote that “Working with my Intercept colleagues has been one of the most fulfilling things I’ve done in my career, and my decision to leave was a painful one to make.”

    At the same time, IBT reported that Chief Revenue Officer, Michael Rosen, had resigned from First Look Media. Rosen’s departure comes just a week after John Temple, First Look’s “President, Audience and Products,” stepped down from his job saying “There clearly is much excitement ahead for First Look, but I feel my contribution is largely complete.”

    Perhaps it’s a coincidence that both the guy who is in charge of building an audience for the Intercept and the guy tasked with making it profitable have left. Or perhaps not: IBT quotes a source explaining that “First Look would soon be moving away from trying to create a constellation of magazines and begin to focus on empowering ‘content creators.’ That is, Omidyar will be investing cash in sites like Gawker, alongside his investments in fact-checking sites and Ukraine revolutionary groups.

    How will the Intercept’s audience, which accepted Greenwald’s decision to privatize the Snowden secrets to Omidyar, react if Omidyar then sells journalism paradise to journalism sleaze and the Snowden secrets — our secrets, the public’s secrets — wind up as capital assets in First Gawker Media?

    Snowden revealed that NSA spooks were spying on their lovers online habits — how will that be monetized in First Gawker Media? Where will Denton’s 20% sleaze discount be applied?

    “First Look would soon be moving away from trying to create a constellation of magazines and begin to focus on empowering ‘content creators.’”
    So guy that basically owns the Snowden documents has a new plan for saving journalism: First Gawker Media. This is going to be interesting.

    Posted by Pterrafractyl | August 1, 2015, 5:13 pm
  7. Here’s the latest reminder that the big plan for getting the global poor hooked on credit and debt is going to center around feeding Big Business’s insatiable personal information addiction. And yes, that means getting a loan could involve handing over personal digital data like texts, emails, and anything deemed to be potentially useful in assessing one’s credit-worthiness. Texts and emails and anything else on your smartphone. That’s the plan. The explicit plan:

    The Wall Street Journal
    Lending Startups Look at Borrowers’ Phone Usage to Assess Creditworthiness
    Smartphones allow lenders’ apps to detect subtle patterns of behavior that correlate with repayment or default

    By Elizabeth Dwoskin
    Nov. 30, 2015 8:28 p.m. ET

    A handful of Silicon Valley-backed startups are looking to revolutionize lending in the developing world, where banks are scarce and many would-be borrowers have no credit history.

    Their strategy: Show me your smartphone, and my app will find out how creditworthy you are.

    Smartphones can dramatically reduce the cost of lending, experts say, because the apps they run generate huge amounts of data—texts, emails, GPS coordinates, social-media posts, retail receipts, and so on—indicating thousands of subtle patterns of behavior that correlate with repayment or default.

    Even obscure variables such as how frequently a user recharges the phone’s battery, how many incoming text messages they receive, how many miles they travel in a given day or how they enter contacts into their phone—the decision to add last name correlates with creditworthiness—can bear on a decision to extend credit.

    In Kenya, Branch.co offers an Android app that lets users apply for a loan and get immediate approval and access to funds. The loans average $30, enough for a taxi driver to pay for gas or a fruit seller to stock up on produce. Branch charges between 6% and 12% interest—based on the borrower’s creditworthiness—and loans are usually repaid between three weeks and six months later.

    Traditional microlending tends to be far more expensive—interest rates often exceed 25%—partly because lenders must visit borrowers in the field to assess their ability to repay. Banks have steered clear due to the high cost of building physical branches.

    These app-based lending startups are backed by some of Silicon Valley’s biggest names. Branch, which was founded by microlending pioneer Matt Flannery , has received funding from Joe Lonsdale, co-founder of data miner Palantir Technologies. InVenture, based in Los Angeles, is headed by a former United Nations officer and funded by venture investors Chris Sacca and Zachary Bogue. Saida is funded by startup incubator Y Combinator. Omidyar Network—an investment firm and foundation established by eBay Inc. founder Pierre Omidyar—holds a stake in Lenddo, a lender that determines creditworthiness by analyzing social networks like Facebook.

    By installing these apps on their smartphones, users grant them access to any information that may help assess the borrower’s creditworthiness—from the content of their texts and emails to the duration and volume of their calls.

    InVenture’s algorithms, for instance, found that users who wait until after 10 p.m. to make calls—when rates are lower—are lower-risk borrowers. Somewhat counterintuitively, Branch found that users who are known gamblers—something the app would find out by scanning messages or payments to a gambling company—are more likely to repay a loan than nongamblers.

    “You’re able to get in and really understand the daily life of these customers,” said InVenture CEO Shivani Siroya. Her company’s scoring formula, or algorithm, analyzes 10,000 so-called signals per customer.

    These lending startups build on the popularity of mobile banking in many developing countries and the rapid rise of smartphone use. A Pew Research Center report from April shows that 34% of South Africans, 27% of Nigerians and 15% of Kenyans already own a smartphone.

    Customers of Branch and InVenture in Nairobi, Kenya, said they used the loans to pay for running or improving small businesses. Some had access to banks but felt the smartphone interest rates were better; others had been borrowing informally from neighbors at high interest rates.

    The owner of a beauty and weight management center said small loans covered items such as skin cleansers when her bank account ran low.

    Samuel Njuguna, a chef, said he bought plates, cutlery, and pots. “I’ve had to turn down a few business opportunities because of lack of equipment,” Mr. Njuguna said. Now, he says he is plowing most of the money back into his business.

    “These are people that don’t have a credit score,” said Branch’s Mr. Flannery, whose earlier venture, Kiva.org, helped expand microlending. “Your digital trail can establish your financial track record.”

    Lending startups like Branch could bring formal credit for the first time to between 325 million and 580 million people in emerging economies, according to a recent report by Omidyar Network.

    While the smartphone lenders focus on emerging markets, their efforts to assess risk based on nontraditional data sources is part of a wider trend in Silicon Valley. Affirm, LendUp, ZestFinance and others use data from sources such as social media, online behavior and data brokers to determine the creditworthiness of tens of thousands of U.S. consumers who don’t have access to loans.

    And competitors with deeper pockets are entering the field. Visa Inc. has built mobile payment applications in Rwanda and is working with International Business Machines Corp. to use records of retail transactions or remittances to create a surrogate credit score. Chinese e-commerce giant Alibaba Group Holding Ltd. recently launched a credit-scoring program that uses the company’s own trove of transaction data to assess risk.

    Privacy advocates have complained that borrowers might be denied a loan because of a Twitter post such as “my car has broken down.” U.S. companies have wide discretion to offer loans as long as they don’t sell credit scores or discriminate against minorities, women, or people with disabilities.

    The Omidyar Network surveyed dozens of individuals in developing countries about the privacy trade-offs, and most said they had no problem sharing personal details in exchange for much-needed funds.

    Yep, our the Big Data future is going to be built on the smallest details. And not just the details of yoru texts and emails, but also things like whether or not you input people’s last names in your contacts list and call volume:

    Their strategy: Show me your smartphone, and my app will find out how creditworthy you are.

    Smartphones can dramatically reduce the cost of lending, experts say, because the apps they run generate huge amounts of data—texts, emails, GPS coordinates, social-media posts, retail receipts, and so on—indicating thousands of subtle patterns of behavior that correlate with repayment or default.

    Even obscure variables such as how frequently a user recharges the phone’s battery, how many incoming text messages they receive, how many miles they travel in a given day or how they enter contacts into their phone—the decision to add last name correlates with creditworthiness—can bear on a decision to extend credit.

    These app-based lending startups are backed by some of Silicon Valley’s biggest names. Branch, which was founded by microlending pioneer Matt Flannery , has received funding from Joe Lonsdale, co-founder of data miner Palantir Technologies. InVenture, based in Los Angeles, is headed by a former United Nations officer and funded by venture investors Chris Sacca and Zachary Bogue. Saida is funded by startup incubator Y Combinator. Omidyar Network—an investment firm and foundation established by eBay Inc. founder Pierre Omidyar—holds a stake in Lenddo, a lender that determines creditworthiness by analyzing social networks like Facebook.

    By installing these apps on their smartphones, users grant them access to any information that may help assess the borrower’s creditworthiness—from the content of their texts and emails to the duration and volume of their calls.

    The Omidyar Network surveyed dozens of individuals in developing countries about the privacy trade-offs, and most said they had no problem sharing personal details in exchange for much-needed funds.

    “The Omidyar Network surveyed dozens of individuals in developing countries about the privacy trade-offs, and most said they had no problem sharing personal details in exchange for much-needed funds.”

    Posted by Pterrafractyl | December 1, 2015, 3:58 pm

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