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FTR #812 Kim Dotcom and Divine Laissez Faire Economics

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Side 1  Side 2

Ibn Khaldun

Introduction: In the aftermath of the 2012 arrest of Kim Schmitz aka “Kim Dotcom” in the wake of the MegaUpload takedown by the federal government, Herr Doctom has been variously portrayed as a martyr for internet freedom and the Second Coming of Christ by his cyber-libertarian supporters and as the Beast of the Apocalypse by his detractors. There is another possibility that suggests itself.

Perhaps Kim is actually in cahoots with some of the very same interests he would have us believe he opposes. One should attempt to “follow the money,” as was advised to Watergate investigators Bob Woodward and Carl Bernstein.
A number of things are apparent when one examines Herr Dotcommandant:
  • This guy is a 1 percenter and proud of it, given to nothing so much as conspicuous consumption.
  • There’s more to this guy than meets the eye and there is PLENTY of him that meets the eye.
  • At the time of his arrest, he had a bunch of credit cards in different names and multiple passports in various names. (Schmitz/Dotcom changes names frequently, a practice that would impede database searches for his name.)
  • QUICK: How many different credit cards and passports in how many different names do YOU have?
  • Schmitz/Dotcom is a “turned hacker”–a hacker who forsook his life of crime to cooperate with the authorities to develop computer security systems. Julian Assange appears to be another “turned hacker.’
  • As such, Dotcommandant may be viewed as an “inside player,” at least to an extent.
  • He was convicted of a number of crimes, which did not prevent relatively prestigious companies from backing some of his fraudulent undeertakings.
  • Convicted in what was the largest insider trading scandal in Germany up to that time, he fled Germany and was given 20 months probation and a 100,000 euro fine. The Dotcommandant allegedly earned $115,000 a day in his latest gig. A 100,000 euro fine is basically docking the guy a day’s pay. He got 20 months probation–no jail time. That altogether gentle wrist slap may indicate that he has good relations with the powers that be. It certainly was not a punishment that would deter the likes of the Dotcommandant. (Note that, in general, European sentencing in criminal cases is lighter than in the U.S. Still, that’s not much of a sentence for the largest insider trading scheme in Germany up to that point in time. Remember he fled the country to escape justice. The article below describes the punishment meted out to do Schmitz as “repeated lashes with a wet noodle.” Why?
  • Food for Thought:
  • With his over-the-top persona and jet set lifestyle, he’s not the best poster boy for cyber-libertariansim. Looking like a Goth Drew Carey on steroids, he presents a bizarre physical appearance to go with his “1 persenseless” behavior, making it difficult for many to feel sympathy.
  • MegaUpload appears to have taken commercial product produced by others and then taken it to market at considerable profit for themselves. In essence, that’s theft. Seen by his supporters as something of a modern Robin Hood, that construct would have more validity if Our Hero were to distribute some of his evident wealth to the grips and other little folks who worked on the films MegUpload pirates. If, for the sake of argument, one of these giant media corporations were brought down by pirated download, the Big Boys (and Girls) will float gently to earth on their golden parachutes, while the grips go into “white knuckle mode.”
  • Note that pirated download, among other things, deprives governments at various levels of sales and income tax revenues, placing added strain and their budgets. Ultimately, the more those budgets are strained, the more people get laid off from their jobs–police, firefighters, DMV clerks etc . In FTR #732, we noted that the Pirate Bay case featured a clash between two right-wing views: it’s OK to steal revenue from governments but NOT OK to steal revenue from corporations. The same appears to apply in the MegaUpload case.
  • The Dotcommandant has apparently engaged in a variety of criminal activities in the past.
  • ‘The timing of this bust, coming so soon after the justifiable debate over draconian Internet legislation that may have seriously limited the potential for this remarkable medium, sets this observer to wonder if he actually was working to generate sympathy for SOPA. Perhaps other interests were manipulating Our Hero, running him “on a leash.”
  • In the past, we’ve seen Nazi/fascist money man Carl Lundstrom financing the Pirate Bay download site. He has also allegedly been involved in financing a second free download site.
  • We’ve seen the Underground Reich engage in money-making criminal conspiracies ranging in size from the short-selling that occurred before the assassination of President Kennedy and the 9/11 attacks to the Great Train Robbery in Britain.
  • Is the Dotcommandant actually generating money for the Bormann capital network while discrediting advocates of Internet freedom? Note the money laundering charges against Our Hero, as well as the shockingly light sentence imposed on him by the German courts.
  • The other people involved with MegaUpload are Germans and people from areas that were occupied by the Nazis in WWII, such as Slovakia. (Slovakia was, like Croatia, a nominally independent Nazi puppet state, controlled by the collaborationist Hlinka party.)

Kim Dotcom demonstrating the lifestyle of the socially and politically repressed.

Have Schmitz/Dotcom been buttressed and fueled with Nazi venture capital, in exchange for part of the profits?

The view here is that MegaUpload and Schmitz/Dotcom’s media antics will serve to discredit the cause of internet freedom and may serve as pretext for the big corporations to crack down hard–and I mean hard–on internet freedom.

That would be deeply tragic.

Program Highlights Include: The Dotcommandant’s rare edition of Mein Kampf, autographed by Hitler himself; The Dotcommandant’s taste for Nazi memorabilia and war gear; The Dotcommandant’s founding of an encrypted e-mail service, just as Germanya and Brazil were launching technology projects supposedly initiated in the wake of the Snowden disclosures; The Dotcommandant’s early political outreach to John Banks and the ACT Party, a far-right New Zealand political cadre; review of the divine laissez faire economic doctrine of The Fellowship (also known as “The Family,” not to be confused with the mind control cult which figures in Julian Assange’s background); comparison of the divine laissez faire doctrine of the Fellowship with that of the Muslim Brotherhood and its economic theoretician Ibn Khaldun; “ex” CIA officer Graham E. Fuller’s endorsement of Muslim free-market theory; the similarity in the corporatism of the Muslim Brotherhood and that of the GOP.

1. Now, about the Dotcommandant:

“The Fast, Fabulous, Allegedly Fraudulent Life of MegaUploads Kim Dotcom”by Sean Gallagher; Wired.com;  1/26/2012.

. . . . Schmitz’s efforts to branch into the “legit” world of security consulting with his security company Data Protect initially backfired by exposing his real identity—and by allowing it to be connected to his hacker credentials. In March of 1994, he was arrested by police for trafficking in stolen phone calling card numbers. He was held in custody for a month, then arrested again on additional hacking charges shortly afterward — and again released. In 1998, he was convicted of 11 counts of computer fraud, 10 counts of data espionage, and an assortment of other charges. He received a two-year suspended sentence—because, at just 20, he was declared “under age” at the time the crimes were committed.

But Schmitz used the notoriety to boost his security business. He soon landed a security contract for Data Protect with the airline Lufthansa by demonstrating an apparent security vulnerability—though according to claims by others in the German hacking community, his connection to the airline was thanks to collaboration with an insider there, and to the hacking skills of an accomplice. . . . .

. . . . With insider trading charges pending over LetsBuyIt, Schmitz decided it was time to lay low (by his standards); “in fear for his life,” he fled to Thailand in January of 2002. On his website, he hinted at possible suicide, saying he would be crossing “to a new world,” Hale-Bopp cult style. But instead of offing himself, he declared that he wanted to be known as “King Kimble the First, Ruler of the Kimpire” — a label he would apply to his future projects. (It’s listed as his title on LinkedIn.)

As it turned out, Thailand wasn’t happy to see him. He was promptly arrested and fast-track deported to Germany to stand trial. However, the few nights in a Thai jail turned out to be the worst of it, as fears of prison in Germany were unfounded—he was sentenced to 20 months probation and slapped with a €100,000 fine. In 2003, he pleaded guilty to embezzlement charges over the Monkey “loan” and received another two years of probation.

After the law’s repeated lashes with a wet noodle, Schmitz left Germany and moved to Hong Kong to start the next level of Mega-insanity. . . .

2a. More about Our Hero:

“Who is Kim Dotcom? The Story Behind Megauploads Larger-than-Life-Founder” by Lincoln Feast and Sarah Marsh; The Huffington Post; 1/21/2012.

. . . . But in 2002, he was convicted in what was then the largest insider-trading case in German history.

Prosecutors said Schmitz bought shares in an online business and drove up the share price by announcing plans to invest millions to rescue the company from insolvency. After selling his shares for a profit, he fled to Thailand, was arrested and deported.

A Munich court sentenced the then 28-year-old to 20 months probation and a 100,000-euro fine.

After his conviction, Schmitz disappeared from public view, reappearing a couple of years ago in New Zealand, having legally changed his name to Dotcom. . . .

. . . . The FBI estimates that Dotcom personally made around $115,000 a day during 2010 from his empire. The list of property to be forfeited, including almost 20 luxury cars, one of them a pink Cadillac, hints at a lavish lifestyle which may be about to be put on hold. . . .

2b. If you can find a way to convince yourself that Kim Dotcom is trustworthy you might be able to use text searchable strongly enrypted email services that even the goverment can‘t read.

Mega to Fill Secure Email Gap Left by Lavabit” by Rob O’Neill; ZDNet; 8/11/2013.

Kim Dotcom’s “privacy company” Mega is developing secure email services to run on its entirely non-US-based server network as intense pressure from US authorities forces other providers to close.

Last week, Lavabit, which counted NSA leaker Edward Snowden as a user, closed and Silent Circle closed its secure email service. Lavabit’s owner, Ladar Levison, said he was shutting it down to avoid becoming “complicit in crimes against the American people”.

Last week, Mega chief executive Vikram Kumar told ZDNet that the company was being asked to deliver secure email and voice services. In the wake of the closures, he expanded on his plans.

Kumar said work is in progress, building off the end-to-end encryption and contacts functionality already working for documents in Mega.

“The biggest tech hurdle is providing email functionality that people expect, such as searching emails, that are trivial to provide if emails are stored in plain text (or available in plain text) on the server side,” Kumar said.

“If all the server can see is encrypted text, as is the case with true end-to-end encryption, then all the functionality has to be built client side. [That’s] not quite impossible, but very, very hard. That’s why even Silent Circle didn’t go there.”

A big issue is handling emails to and from non-encrypted contacts when Mega’s core proposition is end-to-end encryption, Kumar said.

“On this and other fronts, Mega is doing some hugely cutting-edge stuff,” he said. “There is probably no one in the world who takes the Mega approach of making true crypto work for the masses, our core proposition.”

Kumar said Mega is taking theoretic sounding technology such as Bloom filters, and making them work for the masses. Work is also under way to keep Mega secure, even if SSL/TLS is compromised.

“[It’s] exciting stuff, but very hard, so I think it will take months more to crack it,” he said. “But Mega will never launch anything that undermines its end-to-end encryption core security proposition and doesn’t work for the mythical grandmother.”

Meanwhile, Kim Dotcom has said that he may have to pull parts of Mega out of New Zealand if new surveillance legislation is passed into law.

Dotcom told TorrentFreak that the US government and the other Five Eyes partners, the UK, Canada, Australia, and New Zealand, are pushing new spy legislation to provide backdoors into internet services.

“The NZ government is currently aggressively looking to extend its powers with the GCSB [Government Computer Services Bureau] and the [Telecommunications Interception Capabilities] Act, which will force service providers with encryption capabilities to give them secret decryption access,” Dotcom said.

He added that it might force some relocation of Mega’s network to other jurisdictions, such as Iceland.

Dotcom explained that by design, Mega doesn’t hold decryption keys to customer accounts and “never will”.

Lavabit’s Levison said: “This experience has taught me one very important lesson: Without congressional action or a strong judicial precedent, I would — strongly — recommend against anyone trusting their private data to a company with physical ties to the United States.”

3. The Dotcommandant presides over a political party in New Zealand that was poised to win seats in that country’s parliament or even participate in a coalition government. The Dotcommandant is proposing to end New Zealand’s participation in the Five Eyes spying program–a major focal point of the apparent BND “op” executed by Edward Snowden.

In Australia–like New Zealand, part of the Five Eyes arrangement–Dotcommandant associate Julian Assange founded the WikiLeaks Party. It also formed far-right and fascist allegiances, while attracting attention from the so-called progressive sector.

Note that the Dotkommandant is being assisted by the major players  in the Snowden “op”: Nazi fellow-traveler Glenn Greenwald, Julian Assange and Eddie the Friendly Spook himself.

“Online Renegade, Wanted in U.S., Shakes Up New Zealand Election” by Jonathan Hutchinson; The New York Times; 9/19/2014.

It was not an ordinary political rally, but it has been anything but an ordinary election.

The hundreds of people who packed Auckland Town Hall on a recent evening were regaled by speeches by Glenn Greenwald, a Pulitzer Prize-winning journalist; Julian Assange, the WikiLeaks founder; and Edward J. Snowden, the former National Security Agency contractor, the last two appearing by Internet video link. Mr. Greenwald and Mr. Snowden said the New Zealand government had carried out, or at least participated in, mass domestic surveillance.

But at the center of the show was the event’s organizer, Kim Dotcom, an Internet entrepreneur accused of mass copyright theft whose fledgling Internet Party stands a chance at winning seats in Parliament in the national elections on Saturday.

“We are going to work really, really hard to stop this country from participating in mass surveillance,” Mr. Dotcom told the crowd. “And we’ll close one of the Five Eyes,” he added, referring to the intelligence alliance that consists of Australia, Britain, Canada, New Zealand and the United States. The crowd erupted in cheers. . . .

. . . . The party advocates . . . . repealing surveillance legislation and amending copyright laws to protect Internet companies from “civil liability arising from the action of their users,” a fix that could shield hosting services like Mega.

There is widespread suspicion, as well, that if his party wins a place in the government, it will try to block his extradition. . .

. . . Mr. Dotcom has sunk at least 3.5 million New Zealand dollars, or $2.9 million, into the Internet Party, the largest personal contribution to a political party on record in New Zealand, according to the national Electoral Commission. . . .

4a. Our Hero–now a denizen of the so-called progressive sector–originally sought out, and contributed money to, the far right ACT party head John Banks when beating the political bush in New Zealand.

Chris Bar­ton: Get back to Your Roots Kim Dot­com” by Chris Barton; The New Zealand Her­ald; 2/4/2014.

Watch­ing Kim Dotcom’s slow strip reveal­ing his Inter­net Party plans has been excru­ci­at­ing: the leak to Wha­le­oil, the can­cel­la­tion of the extrav­a­ganza launch party, the com­pro­mise of jour­nal­is­tic inde­pen­dence by unmasked party sec­re­tary Alas­tair Thomp­son, and his sub­se­quent res­ig­na­tion. As a polit­i­cal party launch, this wasn’t a fiasco, it was a train wreck. . . .

. . . . It is weird, how­ever, that the left has taken up with Dot­com. The left is not his nat­ural home. When he first came to New Zealand, he sought out the far right in the shape of John Banks for assis­tance. He’s clearly pro tax min­imi­sa­tion for busi­nesses — evi­denced by his set­ting up Megau­pload in Hong Kong where it was on a 4 per cent tax rate. It’s also plain to see he’s a busi­ness­man who likes to make obscene amounts of money, flaunt his wealth with extrav­a­gant spend­ing and have ser­vants respond­ing to his beck and call — hardly the hall­mark of a left-winger.

4b. More about the relationship between Kim Dotcom and the ACT Party’s John Banks. 

“NZ Minister Resigns Over Kim Dotcom Donation Allegations” [Bloomberg]; The Guardian [UK]; 10/16/2014.  

A campaign donation by internet entrepreneur and alleged copyright pirate Kim Dotcom has forced the resignation of a New Zealand government minister.

John Banks resigned on Wednesday as minister for regulatory reform and small business after the Auckland district court ordered him to stand trial over allegations of electoral fraud relating to Dotcom’s NZ$50,000 ($44,144) donation.

Banks is accused of knowingly filing a false election return in his failed 2010 Auckland mayoral bid, listing donations from Dotcom and casino operator SkyCity Entertainment Group Ltd as anonymous when he knew who they were from – an offence under the Electoral Act. . . . .

4c. Our Hero has a rare copy of Mein Kampf, personally autographed by Hitler.

“Kim Dot­com Launched His Polit­i­cal Party” by Victoria Turk; Motherboard.Vice.com; 3/27/2014.

. . . Before the party even launched, he’s been embroiled in polit­i­cal ten­sions. He ini­tially planned a free “Party party” to kick off the polit­i­cal ven­ture, but was forced to can­cel when the Elec­toral Com­mis­sion warned it could be seen as buy­ing votes. Then accord­ing to local news sites, he’s been in the awk­ward posi­tion this week of hav­ing to defend own­ing Nazi mem­o­ra­bilia includ­ing a signed copy of Hitler’s Mein Kampf . . . . 

6. The Dotcommandant’s party tanked in the elections. Interestingly, some observers felt that it was the Dotcommandant himself who doomed the party’s chances, as well as that of other so-called progressive political parties. Was that the intent? Recall that the Australian WikiLeaks Party also gravitated to far-right and fascist elements, damaging the Greens in the process.

“New Zealand’s Ruling National Party Is Re-Elected” by Jonathan Hutchinson; The New York Times; 9/21/2014.

. . . . The Internet Mana party — a political alliance that includes the Internet Party, founded and bankrolled by Kim Dotcom, the German entrepreneur accused of widespread Internet piracy — failed to win a seat in Parliament. Its main candidate, Hone Harawira, lost his local race, and Internet Mana’s 1.26 percent of the party vote fell well short of the 5 percent needed.

The Internet Party leader, Laila Harré, blamed the National Party for undermining Mr. Harawira’s support, but Mr. Dotcom disagreed.

“I take full responsibility for this loss tonight, because the brand — the brand Kim Dotcom — was poison for what we were trying to achieve,” he told reporters. “I did not see that before, and it only became apparent to me in the last couple of weeks.” Mr. Dotcom put at least $2.9 million into the Internet Party since May 26, according to Electoral Commission records.

A co-leader of the Green Party, Russel Norman, said Mr. Dotcom’s presence in the election had tarnished left-leaning parties like his. The Green Party won just 10 percent of the vote, down from 11 percent in 2011.

“I did say that to Kim Dotcom,” he said. “Remember, I did say a long time ago that it was a bad idea. But anyway, there you go.”


7. More about John Banks and his ACT Party:

“John Banks Does It Again”; OTAGosh; 8/20/2012.

He has a glowing resume in the world of Kiwi politics. Well, glowing may overstate it; his reputation has been well and truly tarnished by controversy over the years. John Banks was a minister in a previous National government and then, for a time, mayor of Auckland. These days he’s the sole representative in New Zealand’s parliament for the far right Act Party, and in a formal coalition with his former National Party buddies.

Life just keeps turning up roses for John. The man who was turfed out of parliament once before by voters, then lost the mayoralty, was thrown a sop for his single one-man-band vote, a juicy cabinet position. Described (jokingly?) as “barely literate” by a radio commentator, Mr Banks once again pulls in a handsome salary, this time not as a fringe radio talk-back host, but as associate Education Minister. . . .

. . . . Banks is reported in the NZ Herald as declaring “he believes the Genesis account of the start of life on Earth,” telling Radio Rhema he has “no doubts the first chapters of Genesis are true.” “God made the world in six days, with Adam and Eve his last act of creation.” . . .

8. More about the ideology of the ACT Party:

“ACT New Zealand;” Wikipedia.com

ACT New Zealand is a free market political party in New Zealand. The party’s current leader is Jamie Whyte. Until the 2011 New Zealand general election it was led by former National Party leader and Reserve Bank Governor Don Brash.

According to former party leader Rodney Hide, the party stands for “individual freedom, personal responsibility, doing the best for our natural environment and for smaller, smarter government in its goals of a prosperous economy, a strong society, and a quality of life that is the envy of the world”.[1]

The name comes from the initials of the Association of Consumers and Taxpayers, founded in 1993 by Roger Douglas and Derek Quigley, from which the party grew in 1994. The party is commonly known by the acronym “ACT” and pronounced as a word rather than as initials. . . .

9. Throughout the course of the “Arab Spring,” we noted that it was not a spontaneous event, but a covert operation, tapping the deservedly righteous frustration of many of the peoples in that region in order to usher the Islamo-fascist Muslim Brotherhood into power. The “turn to the Brotherhood” took place during the second administration of George W. Bush and has continued under Obama.

(Tragically, one of the most important developments in the investigation into 9/11–the Operation Green Quest raids of 3/20/2002–has been overlooked. That investigation revealed profound operational links between the GOP and its chief “privatization” ideologues (Grover Norquist and Karl Rove) and the Muslim Brotherhood, including elements and individuals involved in financing al-Qaeda. It stands as a resounding indictment of this country’s citizenry, journalistic establishment and political class that the United States continues to suffer under the “austerity” onslaught manifested as “the sequester.” The core of the GOP political axis–Norquist and Rove–should  be awaiting trial at Guantanamo as the traitors they in point of fact are. The utterly gutless journalists and politicos deserve the blame for this failure.)

Ultimately, Obama and/or the Democratic Party will take the heat for the actions initiated by Bush, Rove and Norquist.

There is every indication that powerful, transnational corporate forces envisioned and then dictated the “turn to the Brotherhood.”

The World Bank overtly endorsed the economic agenda of the Brotherhood, seeing in their “corporatist” ideology a blueprint for advancing free-market ideology in the Muslim world.

When the World Bank gives voice to such thinking, the message resonates powerfully in the corridors of economic power. (We note in passing that the article detailing the Brotherhood’s free-market principles appeared in Newsweek, part of the Graham publishing empire at the time. The Graham publishing interests are second only to The New York Times as a “voice” the American establishment.)

Noteworthy in this context is the similarity in the IMF’s interpretation of “Islamic free-market” principles and the “Christian free-market” ideology espoused by the powerful group known as “The Family” or The Fellowship.” (They are not to be confused with the Santikenetan Park Association discussed in FTR #724.)

Borrowing a page from the Calvinist book, The Family sees great success in business as proof of God’s blessing on the successful.

Both the Muslim Brotherhood and The Family see free-market/laissez-faire principles as being divine in nature, ordained by the Creator.

Of course both the Brotherhood and The Family are strongly connected to the Underground Reich.

We note that “ex” CIA officer Graham Fuller, one of the architects of the “turn to the Brotherhood,” as we call it, articulated the attraction of Islam for Western conservatives/corporatists.

“Elite Fundamentalism – The Fellowship’s Gospel of Capitalist Power”;  Religion Report [Australian Broadcast Company]; 9/3/2008.

Stephen Crit­ten­den: Now the book is basi­cally about a shad­owy organ­i­sa­tion called The Fam­ily, or The Fel­low­ship that was founded by a guy called Abra­ham Vereide, a Nor­we­gian immi­grant to the United States in the 1930s. Tell us about him and the foun­da­tion of this organisation.

Jeff Sharlet: Vereide is a fas­ci­nat­ing char­ac­ter. This guy who comes to Amer­ica from Nor­way, because he sees America’s the land of the Bible unchained. Even from a boy he’s given to what he thinks are prophetic visions. He believes that God comes to him and talks to him in very lit­eral words. He comes to Amer­ica and he makes quite a name for him­self, becomes a preacher and starts preach­ing to guys like Henry Ford and titans of the steel indus­try and so on, and then has this Epiphany, this real­i­sa­tion in the mid­dle of our Great Depres­sion in the 1930s. He decides that the Great Depres­sion is actu­ally a pun­ish­ment from God for dis­obey­ing God’s law, and how are we dis­obey­ing God’s law? Well it’s because we are try­ing to reg­u­late the econ­omy, we are try­ing to take mat­ters into our own hands. Well we just have to com­pletely trust God, and those he chooses, men like Henry Ford and the CEO of US Steel and so on.

Stephen Crit­ten­den: Yes, it’s a mus­cu­lar Chris­tian­ity. You’d almost say he had a min­istry to bring that indus­trial class back into religion.

Jeff Sharlet: Absolutely. This must be a Chris­tian­ity on steroids. They were build­ing on this tra­di­tion of this kind of macho Christ, and tak­ing it to these busi­ness­men who didn’t really care about church or the Bible or any­thing like that. What they cared about was organ­ised labour, and in fact, par­tic­u­larly in Aus­tralia. Harry Bridges was a major, major labour leader here in the United States. And they just saw him the Devil Incar­nate, and began to organ­ise against him. And that’s what this group has become — and are to this day. They still see God’s inter­ests as those of the absolutely unreg­u­lated free mar­kets — a very sort of macho, mus­cu­lar Chris­tian­ity that tends to serve the inter­ests of those involved. . . .

10. About the Muslim Brotherhood’s economic doctrine. compare this with the economic ideology of The Fellowship of Abraham Vereide.

“Islam in Office” by Stephen Glain; Newsweek; 7/3–10/2006.

Judeo-Christian scrip­ture offers lit­tle eco­nomic instruc­tion. The Book of Deuteron­omy, for exam­ple, is loaded with edicts on how the faith­ful should pray, eat, bequeath, keep the holy fes­ti­vals and treat slaves and spouses, but it is silent on trade and com­merce. In Matthew, when Christ admon­ishes his fol­low­ers to ‘give to the emperor the things that are the emperor’s,’ he is effec­tively con­ced­ing fis­cal and mon­e­tary author­ity to pagan Rome. Islam is dif­fer­ent. The prophet Muhammad—himself a trader—preached mer­chant honor, the only reg­u­la­tion that the bor­der­less Lev­an­tine mar­ket knew. . . .

. . . In Mus­lim liturgy, the deals cut in the souk become a metaphor for the con­tract between God and the faith­ful. And the busi­ness model Muham­mad pre­scribed, accord­ing to Mus­lim schol­ars and econ­o­mists, is very much in the laissez-faire tra­di­tion later embraced by the West. Prices were to be set by God alone—anticipating by more than a mil­len­nium Adam Smith’s ref­er­ence to the ‘invis­i­ble hand’ of market-based pric­ing. Mer­chants were not to cut deals out­side the souk, an early attempt to thwart insider trad­ing. . . . In the days of the caliphate, Islam devel­oped the most sophis­ti­cated mon­e­tary sys­tem the world had yet known. Today, some econ­o­mists cite Islamic bank­ing as fur­ther evi­dence of an intrin­sic Islamic prag­ma­tism. Though still guided by a Qur’anic ban on riba, or inter­est, Islamic bank­ing has adapted to the needs of a boom­ing oil region for liq­uid­ity. In recent years, some 500 Islamic banks and invest­ment firms hold­ing $2 tril­lion in assets have emerged in the Gulf States, with more in Islamic com­mu­ni­ties of the West.

British Chan­cel­lor of the Exche­quer Gor­don Brown wants to make Lon­don a global cen­ter for Islamic finance—and elic­its no howl of protest from fun­da­men­tal­ists. How Islamists might run a cen­tral bank is more prob­lem­atic: schol­ars say they would manip­u­late cur­rency reserves, not inter­est rates.

The Mus­lim Broth­er­hood hails 14th cen­tury philoso­pher Ibn Khal­dun as its eco­nomic guide. Antic­i­pat­ing supply-side eco­nom­ics, Khal­dun argued that cut­ting taxes raises pro­duc­tion and tax rev­enues, and that state con­trol should be lim­ited to pro­vid­ing water, fire and free graz­ing land, the util­i­ties of the ancient world. The World Bank has called Ibn Khal­dun the first advo­cate of pri­va­ti­za­tion. [Empha­sis added.] His found­ing influ­ence is a sign of mod­er­a­tion. If Islamists in power ever do clash with the West, it won’t be over com­merce. . . .

11. In addi­tion to the appar­ent use of Mus­lim Brotherhood/Islamist ele­ments as proxy war­riors against Rus­sia and China,the Brotherhood’s cor­po­ratist eco­nom­ics are beloved to Gra­ham Fuller, as well as cor­po­rate ele­ments cdham­pi­oned by Grover Norquist.

“Chech­nyan Power” by Mark Ames; nsfwcorp.com; 6/5/2013.

. . . . Fuller comes from that fac­tion of CIA Cold War­riors who believed (and still appar­ently believe) that fun­da­men­tal­ist Islam, even in its rad­i­cal jihadi form, does not pose a threat to the West, for the sim­ple rea­son that fun­da­men­tal­ist Islam is con­ser­v­a­tive, against social jus­tice, against social­ism and redis­tri­b­u­tion of wealth, and in favor of hier­ar­chi­cal socio-economic struc­tures. Social­ism is the com­mon enemy to both cap­i­tal­ist Amer­ica and to Wah­habi Islam, accord­ing to Fuller.

Accord­ing to jour­nal­ist Robert Drey­fuss’ book “Devil’s Game,” Fuller explained his attrac­tion to rad­i­cal Islam in neoliberal/libertarian terms:

“There is no main­stream Islamic organization…with rad­i­cal social views,” he wrote. “Clas­si­cal Islamic the­ory envis­ages the role of the state as lim­ited to facil­i­tat­ing the well-being of mar­kets and mer­chants rather than con­trol­ling them. Islamists have always pow­er­fully objected to social­ism and communism….Islam has never had prob­lems with the idea that wealth is unevenly dis­trib­uted.” . . . .

12. More about the corporatist economic philosophy of the Muslim Brotherhood follows. Note that Khairat el-Shater was alleged by Egyptian intelligence to have been running Mohamed Morsi. (We covered this in FTR #787.) In turn, he was reported to be serving as a liaison between Morsi and Mohamed Zawahiri, the brother of Al-Qaeda leader Ayman Zawahiri. Shater was also networked with: Anne Patterson, U.S. ambassador to Egypt, GOP Senator John McCain and GOP Senator Lidsay Graham. In turn, Shater was alleged to have transferred $50 million from the Egyptian Muslim Brotherhood to Al-Qaeda at the time that he was networking with the Americans and Morsi. Hey, what’s $50 million between friends.

“The GOP Brotherhood of Egypt” by Avi Asher-Schapiro; Salon.com; 1/25/2012.

While Western alarmists often depict Egypt’s Muslim Brotherhood as a shadowy organization with terrorist ties, the Brotherhood’s ideology actually has more in common with America’s Republican Party than with al-Qaida. Few Americans know it but the Brotherhood is a free-market party led by wealthy businessmen whose economic agenda embraces privatization and foreign investment while spurning labor unions and the redistribution of wealth. Like the Republicans in the U.S., the financial interests of the party’s leadership of businessmen and professionals diverge sharply from those of its poor, socially conservative followers.

The Brotherhood, which did not initially support the revolution that began a year ago, reaped its benefits, capturing nearly half the seats in the new parliament, which was seated this week, and vaulting its top leaders into positions of power.

Arguably the most powerful man in the Muslim Brotherhood is Khairat Al-Shater, a multimillionaire tycoon whose financial interests extend into electronics, manufacturing and retail. A strong advocate of privatization, Al-Shater is one of a cadre of Muslim Brotherhood businessmen who helped finance the Brotherhood’s Freedom and Justice Party’s impressive electoral victory this winter and is now crafting the FJP’s economic agenda.

At Al-Shater’s luxury furniture outlet Istakbal, a new couch costs about 6,000 Egyptian pounds, about $1,000 in U.S. currency. In a country where 40 percent of the population lives on less than $2 a day, Istakbal’s clientele is largely limited to Egypt’s upper classes.

Although the Brothers do draw significant support from Egypt’s poor and working class, “the Brotherhood is a firmly upper-middle-class organization in its leadership,” says Shadi Hamid, a leading Muslim Brotherhood expert at the Brookings Institution in Washington.

Not surprisingly, these well-to-do Egyptians are eager to safeguard their economic position in the post-Mubarak Egypt. Despite rising economic inequality and poverty, the Brotherhood does not back radical changes in Egypt’s economy.

The FJP’s economic platform is a tame document, rife with promises to root out corruption and tweak Egypt’s tax and subsidies systems, with occasional allusions to an unspecific commitment to “social justice.” The platform praises the mechanisms of the free market and promises that the party will work for “balanced, sustainable and comprehensive economic development.” It is a program that any European conservative party could get behind. . . .



2 comments for “FTR #812 Kim Dotcom and Divine Laissez Faire Economics”

  1. Citizenfour at 1:10:57 you’ll find an interesting note

    Posted by Mobius | March 5, 2015, 10:23 am
  2. @MOBIUS–

    For those of us who haven’t seen and/or won’t see the film, perhaps you would be kind enough to fill us in on the enigmatic allegation you have cited.


    Dave Emory

    Posted by Dave Emory | March 5, 2015, 5:37 pm

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