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.)

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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.

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.

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. . . .


8 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:

    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:

    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.


    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
  8. Here’s a look at the lat­est scheme by Pierre Omid­yar for nor­mal­iz­ing the idea that the mass col­lec­tion and com­mer­cial­iza­tion of per­son­al data (like giv­ing banks access to your smart­phone so they can assess your cred­it­wor­thi­ness) is actu­al­ly a pos­i­tive and empow­er­ing ser­vice for the rab­ble: behold digi.me, the Omid­yar Net­work’s new per­son­al data aggre­ga­tion ser­vice. Cur­rent­ly, it just aggre­gates the pic­tures and posts you make on social media (like Face­book and Twit­ter) on your smart­phone and let’s you choose which parts of that col­lect­ed data you want to sell to com­pa­nies for ser­vices and rewards. In the future they’d like to see it cov­er areas like health, finan­cial ser­vices, and shop­ping habits. So it’s basi­cal­ly a smart­phone app to facil­i­tate the sale of per­son­al data to Omid­yar Net­work com­pa­nies, includ­ing types of data that the data ware­hous­ing indus­try might not actu­al­ly be able to col­lect on us yet like health data or your bank account. So while you might be so poor that you might not have a real­is­tic alter­na­tive to sell­ing your per­son­al data for com­mer­cial ser­vices, don’t wor­ry about this increas­ing­ly-inva­sive-per­son­al-data-for-ser­vices trend because you’re total­ly in con­trol!


    The Invest­ment Firm From eBay’s Founder Fund­ed This Data Out­fit

    by David Mey­er

    Sep­tem­ber 27, 2016, 9:44 AM EDT

    The com­pa­ny helps peo­ple share their own data with busi­ness­es.

    The invest­ment firm set up by eBay founder Pierre Omid­yar has put $1 mil­lion into a British start­up called digi.me, which aims to give peo­ple an easy way to sell or share their own per­son­al data.

    Digi.me is a response to the dom­i­nant online busi­ness mod­el, which is to gath­er up infor­ma­tion about peo­ple and sell it to bro­kers who most­ly use it to tar­get ads. The idea with the plat­form is to give peo­ple more con­trol over where their data goes, and what they get in return.

    The data in ques­tion would ulti­mate­ly cov­er areas such as health, finan­cial ser­vices, and shop­ping habits—although the cur­rent ver­sion of the digi.me app only pulls in pic­tures and posts from major social net­works, such as Face­book and Twit­ter.

    Rather than digi.me get­ting its own hands on this data, it says that its app “sim­ply aggre­gates, nor­mal­izes and encrypts” the infor­ma­tion, which is then stored by the user, who can share it with busi­ness­es in exchange for ser­vices or rewards.

    The Omid­yar Network’s invest­ment clos­es a $7 mil­lion Series A round that was revealed a few months back, with the lead investor being rein­sur­ance giant Swiss Re.

    At the time, Swiss Re talked approv­ing­ly about how digi.me would give peo­ple “full trans­paren­cy over how they can use their data to access ser­vices and ben­e­fits.”

    On Tues­day, digi.me founder and chair­man Julian Ranger said that being part of the Omid­yar Net­work “fam­i­ly” would give the start­up “access to amaz­ing busi­ness­es and non-for-prof­it orga­ni­za­tions for which the trans­par­ent use of per­son­al data will enable deep­er cus­tomer rela­tion­ships.”‘


    Digi.me isn’t the only start­up dab­bling in the area of giv­ing peo­ple more con­trol over their per­son­al data. Anoth­er ser­vice called Cit­i­zen­Me gives peo­ple “insights” about them­selves based on their social media activ­i­ties, while also act­ing as a mar­ket research tool for brands.

    “Digi.me is a response to the dom­i­nant online busi­ness mod­el, which is to gath­er up infor­ma­tion about peo­ple and sell it to bro­kers who most­ly use it to tar­get ads. The idea with the plat­form is to give peo­ple more con­trol over where their data goes, and what they get in return.”

    So pre­sum­ably we’re sup­posed to ignore the fact that ser­vices like this don’t actu­al­ly stop the ram­pant data col­lec­tion that will still take place out­side of digi.me’s net­work and all this is doing is mak­ing it eas­i­er for the Omid­yar Net­work’s com­mer­cial part­ners to get even more access to more of your per­son­al data in exchange for ser­vices and rewards that are pre­sum­ably worth less than the data they’re col­lect­ing. And we just also prob­a­bly ignore the fact that the poor aren’t real­ly going to have any oth­er option than to sell their per­son­al data sim­ply to access ser­vices, espe­cial­ly in the devel­op­ing world which is the tar­get mar­ket for the Omid­yar Net­work’s show-us-your-smart­phone-if-you-want-cred­it schemes.

    Just focus on the mes­sage: you’re in con­trol! Or maybe under con­trol. Don’t sweat the details. Just hand them over.

    Posted by Pterrafractyl | September 29, 2016, 2:22 pm

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