George Soros is a Hungarian-American
business magnateA business magnate, sometimes referred to as a capitalist, czar, mogul, tycoon, baron, oligarch, or industrialist, is an informal term used to refer to an entrepreneur who has reached prominence and derived a notable amount of wealth from a particular industry .-Etymology:The word magnate itself...
,
investorAn investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...
, philosopher, and
philanthropistA philanthropist is someone who engages in philanthropy; that is, someone who donates his or her time, money, and/or reputation to charitable causes...
. He is the chairman of
Soros Fund ManagementSoros Fund Management LLC is an American, privately held, hedge fund management firm founded in 1969 by George Soros. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.-Overview:Soros Fund Management...
. Soros supports progressive-liberal causes. He is known as "The Man Who Broke the Bank of England" because of his in investment profits during the 1992
Black Wednesday UK currency crisisIn politics and economics, Black Wednesday refers to the events of 16 September 1992 when the British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism after they were unable to keep it above its agreed lower limit...
.
Between 1979 and 2011, Soros gave away over $8 billion to human rights, public health, and education causes. He played a significant role in the peaceful transition from communism to capitalism in
HungaryHungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
(1984–89), and provided Europe's largest-ever higher education endowment to
Central European UniversityFor other uses, see European University Central European University is a graduate-level, English-language university offering degrees in the social sciences, humanities, law, public policy, business management, environmental science, and mathematics...
in
BudapestBudapest is the capital of Hungary. As the largest city of Hungary, it is the country's principal political, cultural, commercial, industrial, and transportation centre. In 2011, Budapest had 1,733,685 inhabitants, down from its 1989 peak of 2,113,645 due to suburbanization. The Budapest Commuter...
. Soros is also the chairman of the
Open Society InstituteThe Open Society Institute , renamed in 2011 to Open Society Foundations, is a private operating and grantmaking foundation started by George Soros, aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform...
and a former member of the Board of Directors of the
Council on Foreign RelationsThe Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...
.
Early life
Soros was born in
BudapestBudapest is the capital of Hungary. As the largest city of Hungary, it is the country's principal political, cultural, commercial, industrial, and transportation centre. In 2011, Budapest had 1,733,685 inhabitants, down from its 1989 peak of 2,113,645 due to suburbanization. The Budapest Commuter...
,
Kingdom of HungaryThe Kingdom of Hungary also known as the Regency, existed from 1920 to 1946 and was a de facto country under Regent Miklós Horthy. Horthy officially represented the abdicated Hungarian monarchy of Charles IV, Apostolic King of Hungary...
, the son of the
Esperantistis the most widely spoken constructed international auxiliary language. Its name derives from Doktoro Esperanto , the pseudonym under which L. L. Zamenhof published the first book detailing Esperanto, the Unua Libro, in 1887...
writer Tivadar Soros and Elizabeth Soros. Tivadar (also known as Teodoro) was a Hungarian Jew, who was a
prisoner of warA prisoner of war or enemy prisoner of war is a person, whether civilian or combatant, who is held in custody by an enemy power during or immediately after an armed conflict...
during and after World War I and eventually escaped from Russia to rejoin his family in Budapest. Tivadar taught George to speak Esperanto from birth. Soros later said that he grew up in a Jewish home and that his parents were cautious with their religious roots. Soros was thirteen years old in March 1944 when
Nazi GermanyNazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
occupied HungaryHungary during World War II was a member of the Axis powers. In the 1930s, the Kingdom of Hungary relied on increased trade with Fascist Italy and Nazi Germany to pull itself out of the Great Depression. By 1938, Hungarian politics and foreign policy had become increasingly pro-Fascist Italian and...
. Soros took a job with the Jewish Council, which had been established during the Nazi occupation of Hungary to carry out Nazi and Hungarian government anti-Jewish measures. Soros later described this time to writer
Michael LewisMichael Lewis is an American non-fiction author and financial journalist. His bestselling books include The Big Short: Inside the Doomsday Machine, Liar's Poker, The New New Thing, Moneyball: The Art of Winning an Unfair Game, The Blind Side: Evolution of a Game, Panic and Home Game: An...
:
The Jewish Council asked the little kids to hand out the deportation notices. I was told to go to the Jewish Council. And there I was given these small slips of paper...It said report to the rabbi seminary at 9 am...And I was given this list of names. I took this piece of paper to my father. He instantly recognized it. This was a list of Hungarian Jewish lawyers. He said, "You deliver the slips of paper and tell the people that if they report they will be deported."
Later that year, at age 14, Soros lived with and posed as the
godsonA godparent, in many denominations of Christianity, is someone who sponsors a child's baptism. A male godparent is a godfather, and a female godparent is a godmother...
of an employee of the Hungarian Ministry of Agriculture. On one occasion, the official was ordered to inventory the remaining contents of the estate of a wealthy Jewish family that had fled the country. Rather than leave the young Soros alone in the city, the official brought him along. The following year, Soros survived the
Battle of BudapestThe Siege of Budapest centered on the Hungarian capital city of Budapest. It was fought towards the end of World War II in Europe, during the Soviet Budapest Offensive. The siege started when Budapest, defended by Hungarian and German troops, was first encircled on 29 December 1944 by the Red Army...
, in which
SovietThe Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
and German forces fought house-to-house through the city.
Soros immigrated to England in 1947 and, as an impoverished student, lived with his uncle, an
Orthodox JewOrthodox Judaism , is the approach to Judaism which adheres to the traditional interpretation and application of the laws and ethics of the Torah as legislated in the Talmudic texts by the Sanhedrin and subsequently developed and applied by the later authorities known as the Gaonim, Rishonim, and...
. His uncle paid his living expenses while he attended the
London School of EconomicsThe London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
, where he received a Bachelor of Science in
PhilosophyPhilosophy is the study of general and fundamental problems, such as those connected with existence, knowledge, values, reason, mind, and language. Philosophy is distinguished from other ways of addressing such problems by its critical, generally systematic approach and its reliance on rational...
in 1952. While a student of the philosopher
Karl PopperSir Karl Raimund Popper, CH FRS FBA was an Austro-British philosopher and a professor at the London School of Economics...
, Soros worked as a railway
porterA porter, also called a bearer, is a person who shifts objects for others.-Historical meaning:Human adaptability and flexibility early led to the use of humans for shifting gear...
and as a waiter. A
University tutorA don is a fellow or tutor of a college or university, especially traditional collegiate universities such as Oxford and Cambridge in England.The term — similar to the title still used for Catholic priests — is a historical remnant of Oxford and Cambridge having started as ecclesiastical...
requested aid for Soros, and he received from a
Religious Society of Friends (Quaker)The Religious Society of Friends, or Friends Church, is a Christian movement which stresses the doctrine of the priesthood of all believers. Members are known as Friends, or popularly as Quakers. It is made of independent organisations, which have split from one another due to doctrinal differences...
charity. He eventually secured an entry-level position with London
merchant bankA merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to....
Singer & Friedlander.
Immigration to the United States
In 1956, Soros moved to New York City, where he worked as an
arbitrageIn economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
traderA trader is someone in finance who buys and sells financial instruments such as stocks, bonds, commodities and derivatives. A broker who simply fills buy or sell orders is not a trader, as they are merely executing instructions given to them. According to the Wall Street Journal in 2004, a managing...
with F. M. Mayer (1956–59) and as an
analystA financial analyst, securities analyst, research analyst, equity analyst, or investment analyst is a person who performs financial analysis for external or internal clients as a core part of the job.-Job:...
with
Wertheim & Co.Wertheim & Co. was an investment firm founded in 1927 by Maurice Wertheim and Joseph Klingenstein, who met when they worked together at Hallgarten & Company...
(1959–63). Throughout this time, Soros developed a philosophy of
reflexivityReflexivity refers to circular relationships between cause and effect. A reflexive relationship is bidirectional with both the cause and the effect affecting one another in a situation that does not render both functions causes and effects...
based on the ideas of
Karl PopperSir Karl Raimund Popper, CH FRS FBA was an Austro-British philosopher and a professor at the London School of Economics...
. Reflexivity, as used by Soros, is the belief that the action of beholding the
valuationIn finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or on liabilities...
of any market, by its participants, affects said valuation of the market in a
procyclicalProcyclical is a term used in economics to describe how an economic quantity is related to economic fluctuations. It is the opposite of countercyclical. However, it has more than one meaning.-Meaning in business cycle theory:...
"virtuous or vicious" circle.
Soros realized, however, that he would not make any money from the concept of reflexivity until he went into investing on his own. He began to investigate how to deal in
investmentInvestment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
s. From 1963 to 1973, he worked at
Arnhold and S. BleichroderArnhold and S. Bleichroeder was a New York-based investment bank that remains as a fund management company under the control of the Arnhold family. The core constituent was of a merger between the banking firm of S...
, where he attained the position of Vice-President. Soros finally concluded that he was a better investor than he was a philosopher or an executive. In 1967, he persuaded the company to set up First Eagle, an
offshore investment fundAn offshore fund is a collective investment scheme domiciled in an Offshore Financial Centre such as the British Virgin Islands, Luxembourg, or the Cayman Islands; it is typically sold exclusively to 'foreign' investors...
for him to run; and, in 1969, it founded the Double Eagle
hedge fundA hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
for him.
In 1973, when investment regulations restricted his ability to run the funds as he wished, he resigned his position and established a private investment company, which evolved into the Quantum Fund. He has stated that his intent was to earn enough money on
Wall StreetWall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
to support himself as an author and philosopher – he calculated that $500,000 after five years would be possible and adequate.
He also once had a small stake in the
Carlyle GroupThe Carlyle Group is an American-based global asset management firm, specializing in private equity, based in Washington, D.C. The Carlyle Group operates in four business areas: corporate private equity, real assets, market strategies and fund-of-funds, through its AlpInvest subsidiary...
.
Career
In 1970, Soros founded
Soros Fund ManagementSoros Fund Management LLC is an American, privately held, hedge fund management firm founded in 1969 by George Soros. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.-Overview:Soros Fund Management...
and became its Chairman with the firm's day-to-day operations being managed by Soros's two elder sons and the firm's
Chief Investment OfficerThe chief investment officer is a job title for the board level head of investments within an organization. The CIO's purpose is to understand, manage, and monitor their organization's portfolio of assets, devise strategies for growth, act as the liaison with investors, and recognize and avoid...
Keith Anderson. In August 2010, Soros bought a 4 per cent stake in the
Bombay Stock ExchangeThe Bombay Stock Exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was 1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest...
(BSE) for about $35 million.
In July 2011, Soros announced that he had returned funds from outside investors' money (valued at $1 billion) and instead invested funds from his $24.5 billion family fortune due to U.S. Securities and Exchange Commission disclosure rules.
Currency speculation
On September 16, 1992,
Black WednesdayIn politics and economics, Black Wednesday refers to the events of 16 September 1992 when the British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism after they were unable to keep it above its agreed lower limit...
, Soros's fund sold short more than $10 billion in
poundThe pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
s, profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other
European Exchange Rate MechanismThe European Exchange Rate Mechanism, ERM, was a system introduced by the European Community in March 1979, as part of the European Monetary System , to reduce exchange rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of...
countries or to
floatA floating exchange rate or fluctuating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency....
its currency.
Finally, the UK withdrew from the European Exchange Rate Mechanism,
devaluingDevaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
the pound, earning Soros an estimated $1.1 billion. He was dubbed "the man who broke the Bank of England". In 1997, the
UK TreasuryHM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
estimated the cost of Black Wednesday at £3.4 billion.
On Monday, October 26, 1992,
The Times quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the
devaluationDevaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."
Stanley DruckenmillerStanley Freeman Druckenmiller is an American hedge fund manager, he is the former Chairman and President of Duquesne Capital, which he founded in 1981. He closed the fund in August 2010 because he felt unable to deliver high returns to his clients...
, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position."
In 1997, during the Asian financial crisis, the Prime Minister of Malaysia
Mahathir bin MohamadTun Dr. Mahathir bin Mohamad . is a Malaysian politician who was the fourth Prime Minister of Malaysia. He held the post for 22 years from 1981 to 2003, making him Malaysia's longest serving Prime Minister. His political career spanned almost 40 years.Born and raised in Alor Setar, Kedah, Mahathir...
accused Soros of using the wealth under his control to punish the
Association of Southeast Asian Nations (ASEAN)The Association of Southeast Asian Nations, commonly abbreviated ASEAN rarely ), is a geo-political and economic organization of ten countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has...
for welcoming
MyanmarBurma , officially the Republic of the Union of Myanmar , is a country in Southeast Asia. Burma is bordered by China on the northeast, Laos on the east, Thailand on the southeast, Bangladesh on the west, India on the northwest, the Bay of Bengal to the southwest, and the Andaman Sea on the south....
as a member. Following on a history of antisemitic remarks, Mahathir made specific reference to Soros's Jewish background ("It is a Jew who triggered the currency plunge") and implied Soros was orchestrating the crash as part of a larger Jewish conspiracy. Nine years later, in 2006, Mahathir met with Soros and afterwards stated that he accepted that Soros had not been responsible for the crisis. In 1998's
The Crisis of Global Capitalism: Open Society Endangered Soros explained his role in the crisis as follows:
The financial crisis that originated in Thailand in 1997 was particularly unnerving because of its scope and severity.... By the beginning of 1997, it was clear to Soros Fund Management that the discrepancy between the trade account and the capital account was becoming untenable. We sold short the Thai baht and the Malaysian ringgit early in 1997 with maturities ranging from six months to a year. (That is, we entered into contracts to deliver at future dates Thai Baht and Malaysian ringgit that we did not currently hold.) Subsequently Prime Minister Mahathir of Malaysia accused me of causing the crisis, a wholly unfounded accusation. We were not sellers of the currency during or several months before the crisis; on the contrary, we were buyers when the currencies began to decline – we were purchasing ringgits to realize the profits on our earlier speculation. (Much too soon, as it turned out. We left most of the potential gain on the table because we were afraid that Mahathir would impose capital controls. He did so, but much later.)
The nominal U.S. dollar
GDPGross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
of the ASEAN fell by $9.2 billion in 1997 and $218.2 billion (31.7%) in 1998.
Economist
Paul KrugmanPaul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
is critical of Soros's effect on financial markets.
"[N]obody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is 'Soroi.'"
Public predictions
Soros' book,
The New Paradigm for Financial Markets (May 2008), described a "superbubble" that had built up over the past 25 years and was ready to collapse. This was the third in a series of books he has written that have predicted disaster. As he states:
He ascribes his own success to being able to recognize when his predictions are wrong.
In February 2009, Soros said the world financial system had effectively disintegrated, adding that there was no prospect of a near-term resolution to the crisis.
"We witnessed the collapse of the financial system[...]It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."
Insider trading conviction
In 1988 Soros was interested in purchasing shares in French companies. The Socialist party had lost its majority of seats in the Assembly, and the new government under
ChiracChirac may refer to:* Jacques Chirac, the President of the French Republic.* Bernadette Chirac, the wife of President Jacques Chirac** Their two daughters, Claude Chirac and Laurence...
had instituted an aggressive privatization program. Many people considered shares in the newly privatized companies undervalued. During this period, a French financier named Georges Pébereau contacted one of Soros’ advisors in an effort to assemble a group of investors to purchase a large amount of shares in
Société GénéraleSociété Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La...
, a leading French bank that was part of the program.
The advisor reported to Soros that Pébereau's plan was ambiguous and included an implausible
takeoverIn business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
plan (it would indeed fail). On that advice, and without ever meeting the financier, Soros decided against participating. He did, however, move forward with his strategy of accumulating shares in four French companies: Société Générale, as well as Suez, Paribas and the Compagnie Générale d’Électricité.
In 1989, the Commission des Opérations de Bourse (the French stock exchange regulatory authority) conducted an investigation of whether Soros' transaction in Société Générale should be considered insider trading. Soros had received no information from the Société Générale, and had no insider knowledge of the business, but he did possess knowledge that a group of investors was planning a takeover attempt. The COB concluded that the statutes, regulations and case law relating to
insider tradingInsider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
did not clearly establish that a crime had occurred, and that no charges should be brought against Soros.
Several years later, a Paris-based prosecutor reopened the case against Soros and two other French businessmen, disregarding the COB's findings. This resulted in Soros' 2005 conviction for insider trading by the Court of Appeals (he was the only one of the three to receive a conviction). The French Supreme Court confirmed the conviction on June 14, 2006, but reduced the penalty to the minimum.
Punitive damages were not sought because of the delay in bringing the case to trial. Soros denied any wrongdoing, saying news of the takeover was public knowledge and it was documented that his intent to acquire shares of the company predated his own awareness of the takeover.
His insider trading conviction was upheld by the highest court in France on June 14, 2006. In December 2006, he appealed to the
European Court of Human RightsThe European Court of Human Rights in Strasbourg is a supra-national court established by the European Convention on Human Rights and hears complaints that a contracting state has violated the human rights enshrined in the Convention and its protocols. Complaints can be brought by individuals or...
on various grounds including that the 14-year delay in bringing the case to trial precluded a fair hearing. On the basis of
Article 7Article 7 of the European Convention on Human Rights is an article of the European Convention on Human Rights which prevents retrospective punishment for crimes.The article states:...
of the
European convention on human rightsThe Convention for the Protection of Human Rights and Fundamental Freedoms is an international treaty to protect human rights and fundamental freedoms in Europe. Drafted in 1950 by the then newly formed Council of Europe, the convention entered into force on 3 September 1953...
, stating that no person may be punished for an act that was not a criminal offense at the time that it was committed, the Court agreed to hear the appeal. In October 2011, the court rejected his appeal in a 4–3 decision, saying that Soros has been aware of the risk of breaking insider trading laws.
Sports
In 2005, Soros was a minority partner in a group that tried to buy the
Washington NationalsThe Washington Nationals are a professional baseball team based in Washington, D.C. The Nationals are a member of the Eastern Division of the National League of Major League Baseball . The team moved into the newly built Nationals Park in 2008, after playing their first three seasons in RFK Stadium...
, a
Major LeagueMajor League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
baseball team. Some Republican lawmakers suggested that they might move to revoke baseball's antitrust exemption if Soros bought the team. In 2008, Soros' name was associated with AS Roma, an Italian football team but the club was not sold. Soros was also a financial backer of Washington Soccer L.P., the group that owned the operating rights to
Major League SoccerMajor League Soccer is a professional soccer league based in the United States and sanctioned by the United States Soccer Federation . The league is composed of 19 teams — 16 in the U.S. and 3 in Canada...
club
D.C. UnitedD.C. United is an American professional soccer club based in Washington, D.C. which competes in Major League Soccer , the top professional soccer league in the United States and Canada. It is one of the ten charter clubs of MLS, having competed in the league since its inception, in 1996.Over the...
when the league was founded in 1995, but the group lost these rights in 2000.
Philanthropy
Soros has been active as a philanthropist since the 1970s, when he began providing funds to help black students attend the
University of Cape TownThe University of Cape Town is a public research university located in Cape Town in the Western Cape province of South Africa. UCT was founded in 1829 as the South African College, and is the oldest university in South Africa and the second oldest extant university in Africa.-History:The roots of...
in apartheid South Africa, and began funding dissident movements behind the
iron curtainThe concept of the Iron Curtain symbolized the ideological fighting and physical boundary dividing Europe into two separate areas from the end of World War II in 1945 until the end of the Cold War in 1989...
.
Soros' philanthropic funding includes efforts to promote non-violent
democratizationDemocratization is the transition to a more democratic political regime. It may be the transition from an authoritarian regime to a full democracy, a transition from an authoritarian political system to a semi-democracy or transition from a semi-authoritarian political system to a democratic...
in the
post-Soviet statesThe post-Soviet states, also commonly known as the Former Soviet Union or former Soviet republics, are the 15 independent states that split off from the Union of Soviet Socialist Republics in its dissolution in December 1991...
. These efforts, mostly in
CentralCentral Europe or alternatively Middle Europe is a region of the European continent lying between the variously defined areas of Eastern and Western Europe...
and Eastern Europe, occur primarily through the
Open Society InstituteThe Open Society Institute , renamed in 2011 to Open Society Foundations, is a private operating and grantmaking foundation started by George Soros, aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform...
(OSI) and national
Soros FoundationA Soros Foundation is one of a network of national foundations, mostly in Central and Eastern Europe, which fund volunteer socio-political activity, created by George Soros, international financier and self-proclaimed philanthropist, and coordinated since early 1994 by a management team called the...
s, which sometimes go under other names (such as the
Stefan Batory FoundationThe Stefan Batory Foundation is the name of the national Soros Foundation in Poland. It was named after Stephen Báthory of Poland, the 16th-century Polish king....
in Poland). As of 2003,
PBSThe Public Broadcasting Service is an American non-profit public broadcasting television network with 354 member TV stations in the United States which hold collective ownership. Its headquarters is in Arlington, Virginia....
estimated that he had given away a total of $4 billion. The OSI says it has spent about $500 million annually in recent years.
In 2003, former Federal Reserve Chairman
Paul VolckerPaul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
wrote in the foreword of Soros' book
The Alchemy of Finance:
George Soros has made his mark as an enormously successful speculator, wise enough to largely withdraw when still way ahead of the game. The bulk of his enormous winnings is now devoted to encouraging transitional and emerging nations to become 'open societies,' open not only in the sense of freedom of commerce but – more important – tolerant of new ideas and different modes of thinking and behavior.
Time magazine in 2007 cited two specific projects – $100 million toward Internet infrastructure for regional
Russian universities, and $50 million for the
Millennium PromiseMillennium Promise, or The Millennium Promise Alliance, Inc., is a non-profit organization incorporated under the laws of the State of Delaware, dedicated to ending extreme poverty within our lifetime...
to eradicate extreme poverty in Africa – while noting that Soros had given $742 million to projects in the U.S., and given away a total of more than $7 billion.
Other notable projects have included aid to scientists and universities throughout Central and Eastern Europe, help to civilians during the
siege of SarajevoThe Siege of Sarajevo is the longest siege of a capital city in the history of modern warfare. Serb forces of the Republika Srpska and the Yugoslav People's Army besieged Sarajevo, the capital city of Bosnia and Herzegovina, from 5 April 1992 to 29 February 1996 during the Bosnian War.After Bosnia...
, and
Transparency InternationalTransparency International is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide...
. Soros also pledged an endowment of €420 million to the
Central European UniversityFor other uses, see European University Central European University is a graduate-level, English-language university offering degrees in the social sciences, humanities, law, public policy, business management, environmental science, and mathematics...
(CEU). The
Nobel Peace PrizeThe Nobel Peace Prize is one of the five Nobel Prizes bequeathed by the Swedish industrialist and inventor Alfred Nobel.-Background:According to Nobel's will, the Peace Prize shall be awarded to the person who...
winner
Muhammad YunusMuhammad Yunus is a Bangladeshi economist and founder of the Grameen Bank, an institution that provides microcredit to help its clients establish creditworthiness and financial self-sufficiency. In 2006 Yunus and Grameen received the Nobel Peace Prize...
and his
microfinanceMicrofinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
bank
Grameen BankThe Grameen Bank is a microfinance organization and community development bank started in Bangladesh that makes small loans to the impoverished without requiring collateral...
received support from the OSI.
According to
National ReviewNational Review is a biweekly magazine founded by the late author William F. Buckley, Jr., in 1955 and based in New York City. It describes itself as "America's most widely read and influential magazine and web site for conservative news, commentary, and opinion."Although the print version of the...
the Open Society Institute gave $20,000 in September 2002 to the Defense Committee of
Lynne StewartLynne Irene Stewart is a former attorney who represented controversial, poor, and often unpopular defendants who was convicted on charges of conspiracy and providing material support to terrorists in 2005, and sentenced to 28 months in prison. Her felony conviction led to her being automatically...
, the lawyer who has defended alleged terrorists in court and was sentenced to 2⅓ years in prison for "providing material support for a terrorist conspiracy" via a press conference for a client. An OSI spokeswoman said "it appeared to us at that time that there was a right-to-counsel issue worthy of our support."
In September 2006 Soros pledged $50 million to the Millennium Promise, led by economist
Jeffrey SachsJeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...
to provide educational, agricultural, and medical aid to help villages in Africa enduring poverty.
The New York TimesThe New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
termed this endeavor a "departure" for Soros whose philanthropic focus had been on fostering democracy and good government, but Soros noted that most poverty resulted from bad governance.
He received honorary doctoral degrees from the New School for Social Research (New York), the University of Oxford in 1980, the
Corvinus University of BudapestThe Corvinus University of Budapest is one of the most prestigious Hungarian universities located in Budapest, Hungary. The university offers degrees in multiple disciplines, but it is characterised by its programmes in economics and management. -History:...
, and
Yale UniversityYale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States...
in 1991. Soros also received the Yale International Center for Finance Award from the
Yale School of ManagementThe Yale School of Management is the graduate business school of Yale University and is located on Hillhouse Avenue in New Haven, Connecticut, United States. The School offers Master of Business Administration and Ph.D. degree programs. As of January 2011, 454 students were enrolled in its MBA...
in 2000 as well as the Laurea Honoris Causa, the highest honor of the
University of BolognaThe Alma Mater Studiorum - University of Bologna is the oldest continually operating university in the world, the word 'universitas' being first used by this institution at its foundation. The true date of its founding is uncertain, but believed by most accounts to have been 1088...
in 1995.
Soros played a role in the peaceful transition from communism to capitalism in
HungaryHungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
(1984–89) and provided Europe's largest-ever higher education endowment to
Central European UniversityFor other uses, see European University Central European University is a graduate-level, English-language university offering degrees in the social sciences, humanities, law, public policy, business management, environmental science, and mathematics...
in
BudapestBudapest is the capital of Hungary. As the largest city of Hungary, it is the country's principal political, cultural, commercial, industrial, and transportation centre. In 2011, Budapest had 1,733,685 inhabitants, down from its 1989 peak of 2,113,645 due to suburbanization. The Budapest Commuter...
. Later, the Open Society Institute's programs in
GeorgiaGeorgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the southwest by Turkey, to the south by Armenia, and to the southeast by Azerbaijan. The capital of...
were considered by Russian and Western observers to have been crucial in the success of the
Rose RevolutionThe "Revolution of Roses" was a change of power in Georgia in November 2003, which took place after having widespread protests over the disputed parliamentary elections...
.
In the United States, he donated large sums of money in an effort to defeat President
George W. BushGeorge Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
's bid for re-election in 2004. In 2010, he donated $1 million in support of Proposition 19, which would have legalized marijuana in the state of California. He was an initial donor to the
Center for American ProgressThe Center for American Progress is a progressive public policy research and advocacy organization. Its website states that the organization is "dedicated to improving the lives of Americans through progressive ideas and action." It has its headquarters in Washington D.C.Its President and Chief...
, and he continues to support the organization through the Open Society Foundations. The Open Society Institute has active programs in more than 60 countries around the world with total expenditures currently averaging approximately $600 million a year. Between 1979 and 2011, Soros gave away over $8 billion to human rights, public health, and education causes.
United States
In an interview with
The Washington PostThe Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
on November 11, 2003, Soros said that removing President
George W. BushGeorge Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
from office was the "central focus of my life" and "a matter of life and death." He said he would sacrifice his entire fortune to defeat President Bush, "if someone guaranteed it." Soros gave $3 million to the
Center for American ProgressThe Center for American Progress is a progressive public policy research and advocacy organization. Its website states that the organization is "dedicated to improving the lives of Americans through progressive ideas and action." It has its headquarters in Washington D.C.Its President and Chief...
, $2.5 million to MoveOn.org, and $20 million to
America Coming TogetherAmerica Coming Together was a liberal, political action, 527 group dedicated to get-out-the-vote activities. ACT did not specifically endorse any political party, but mostly worked on behalf of Democratic candidates. It was the largest 527 group in 2004 and was planning to be involved in future...
. These groups worked to support Democrats in the 2004 election. On September 28, 2004 he dedicated more money to the campaign and kicked off his own multi-state tour with a speech:
Why We Must Not Re-elect President Bush delivered at the National Press Club in Washington, DC. The online transcript to this speech received many hits after
Dick CheneyRichard Bruce "Dick" Cheney served as the 46th Vice President of the United States , under George W. Bush....
accidentally referred to
FactCheck.orgFactCheck.org is a non-partisan, nonprofit website that describes itself as a consumer advocate' for voters that aims to reduce the level of deception and confusion in U.S. politics." It is a project of the Annenberg Public Policy Center of the Annenberg School for Communication at the University...
as "factcheck.com" in the Vice Presidential debate, causing the owner of that domain to redirect all traffic to Soros's site. Asked in 2006 about his statement in
The Age of Fallibility that "the main obstacle to a stable and just world order is the United States", Soros responded that "it happens to coincide with the prevailing opinion in the world. And I think that's rather shocking for Americans to hear. The United States sets the agenda for the world. And the rest of the world has to respond to that agenda. By declaring a 'war on terror' after September 11, we set the wrong agenda for the world. [...] when you wage war, you inevitably create innocent victims."
Soros was not a large donor to US political causes until the 2004 presidential election, but according to the Center for Responsive Politics, during the 2003–2004 election cycle, Soros donated $23,581,000 to various
527 groupsA 527 organization or 527 group is a type of American tax-exempt organization named after "Section 527" of the U.S. Internal Revenue Code...
dedicated to defeating President Bush. A 527 group is a type of American tax-exempt organization named after a section of the United States tax code, 26 U.S.C. § 527.
After Bush's re-election, Soros and other donors backed a new political fundraising group called
Democracy AllianceThe Democracy Alliance is a partnership of business and philanthropic leaders who commit to making make human and financial donations to organizations the Alliance has endorsed...
, which supports progressive causes and the formation of a stronger progressive infrastructure in America.
In August 2009, Soros donated $35 million to the state of New York to be ear-marked for under-privileged children and given to parents who had benefit cards at the rate of $200 per child aged 3 through 17, with no limit as to the number of children that qualified. An additional $140 million was put into the fund by the state of New York from money they had received from the 2009 federal recovery act.
On October 26, 2010, Soros donated $1 million, the largest donation in the campaign, to the
Drug Policy AllianceThe Drug Policy Alliance is a New York City-based non-profit organization, led by executive director Ethan Nadelmann, with the principal goal of ending the American "War on Drugs"...
to fund Proposition 19, that would have legalized marijuana in the state of California if it had passed in the
November 2, 2010 electionsThe California state elections, November 2010 were held on November 2, 2010.On a year marked by a strong Republican wave nationwide, the State of California elected Democrats to the state's top offices of Governor, Lieutenant Governor, State Controller, State Treasurer, Superintendent of Public...
.
In October 2011 a
ReutersReuters is a news agency headquartered in New York City. Until 2008 the Reuters news agency formed part of a British independent company, Reuters Group plc, which was also a provider of financial market data...
story titled "Soros: not a funder of
Wall Street protests"Occupy Wall Street is an ongoing series of demonstrations initiated by the Canadian activist group Adbusters which began September 17, 2011 in Zuccotti Park, located in New York City's Wall Street financial district...
was published after several commentators pointed out errors in an earlier Reuters story headlined "Who's behind the Wall St. protests?"with a lede stating that the Occupy Wall Street movement "may have benefited indirectly from the largesse of one of the world's richest men [Soros]". Reuters' follow-up article also reported a Soros spokesperson and
AdbustersThe Adbusters Media Foundation is a Canadian-based not-for-profit, anti-consumerist, pro-environment organization founded in 1989 by Kalle Lasn and Bill Schmalz in Vancouver, British Columbia...
' co-founder Kalle Lasn both saying that Adbusters – which was the catalyst for the first Occupy Wall Street protests – had never received any contributions from Soros, contrary to Reuters' earlier story which reported that "indirect financial links" existed between the two as late as 2010.
Central and Eastern Europe
According to Neil Clark in the
New StatesmanNew Statesman is a British centre-left political and cultural magazine published weekly in London. Founded in 1913, and connected with leading members of the Fabian Society, the magazine reached a circulation peak in the late 1960s....
, Soros's role was crucial in the collapse of communism in
Central and Eastern EuropeCentral and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
. From 1979, as an advocate of '
open societiesThe open society is a concept originally developed by philosopher Henri Bergson and then by Austrian and British philosopher Karl Popper. In open societies, government is purported to be responsive and tolerant, and political mechanisms are said to be transparent and flexible...
', Soros financially supported dissidents including Poland's Solidarity movement,
Charter 77Charter 77 was an informal civic initiative in communist Czechoslovakia from 1976 to 1992, named after the document Charter 77 from January 1977. Founding members and architects were Václav Havel, Jan Patočka, Zdeněk Mlynář, Jiří Hájek, and Pavel Kohout. Spreading the text of the document was...
in Czechoslovakia and
Andrei SakharovAndrei Dmitrievich Sakharov was a Soviet nuclear physicist, dissident and human rights activist. He earned renown as the designer of the Soviet Union's Third Idea, a codename for Soviet development of thermonuclear weapons. Sakharov was an advocate of civil liberties and civil reforms in the...
in the
Soviet UnionThe Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
donating $3 million a year according to Clark. In 1984, he founded his first
Open Society InstituteThe Open Society Institute , renamed in 2011 to Open Society Foundations, is a private operating and grantmaking foundation started by George Soros, aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform...
in Hungary and pumped millions of dollars into opposition movements and independent media. Since the fall of the Soviet Union, Soros' funding has continued to play an important role in the former Soviet sphere. His funding of pro-democratic programs in
GeorgiaGeorgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the southwest by Turkey, to the south by Armenia, and to the southeast by Azerbaijan. The capital of...
was considered by Russian and Western observers to be crucial to the success of the
Rose RevolutionThe "Revolution of Roses" was a change of power in Georgia in November 2003, which took place after having widespread protests over the disputed parliamentary elections...
, although Soros has said that his role has been "greatly exaggerated." Alexander Lomaia, Secretary of the Georgian Security Council and former Minister of Education and Science, is a former Executive Director of the Open Society Georgia Foundation (
Soros FoundationA Soros Foundation is one of a network of national foundations, mostly in Central and Eastern Europe, which fund volunteer socio-political activity, created by George Soros, international financier and self-proclaimed philanthropist, and coordinated since early 1994 by a management team called the...
), overseeing a staff of 50 and a budget of $2,500,000.
Former Georgian Foreign Minister
Salomé ZourabichviliSalomé Zourabichvili is a Georgian politician, from 2004 to 2005 Foreign Minister of Georgia and a former diplomat in the French service. Currently she is the Coordinator of the Panel of Experts assisting the UN Security Council’s Iran Sanctions Committee.-Biography:Zourabichvili was born in...
wrote that institutions like the Soros Foundation were the cradle of democratisation and that all the NGOs which gravitated around the Soros Foundation undeniably carried the revolution. She opines that after the revolution the Soros Foundation and the NGOs were integrated into power.
Some Soros-backed pro-democracy initiatives have been banned in
KazakhstanKazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
and
TurkmenistanTurkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...
. Ercis Kurtulus, head of the Social Transparency Movement Association (TSHD) in
TurkeyTurkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
, said in an interview that "Soros carried out his will in Ukraine and Georgia by using these NGOs...Last year Russia passed a special law prohibiting NGOs from taking money from foreigners. I think this should be banned in Turkey as well." In 1997, Soros had to close his foundation in
BelarusBelarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...
after it was fined $3 million by the government for "tax and currency violations". According to
The New York Times, the Belarusian president
Alexander LukashenkoAlexander Grigoryevich Lukashenko has been serving as the President of Belarus since 20 July 1994. Before his career as a politician, Lukashenko worked as director of a state-owned agricultural farm. Under Lukashenko's rule, Belarus has come to be viewed as a state whose conduct is out of line...
has been widely criticized in the West and in Russia for his efforts to control the Belarus Soros Foundation and other independent NGOs and to suppress civil and human rights. Soros called the fines part of a campaign to "destroy independent society".
In June 2009, Soros donated $100m to Central Europe and Eastern Europe to counter the impact of the economic crisis on the poor, voluntary groups and non-government organisations.
Africa
The
Open Society Initiative for Southern AfricaOpen Society Initiative for Southern Africa is a Southern African organization which "collaborates with other organizations on issues surrounding the rule of law, democracy building, human rights, economic development, education, the media, and access to technology and information...
is a Soros-affiliated organization. Its director for
ZimbabweZimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
is Godfrey Kanyenze, who also directs the
Zimbabwe Congress of Trade UnionsThe Zimbabwe Congress of Trade Unions is the dominant central trade union federation in Zimbabwe. The general secretary of ZCTU is Wellington Chibebe and the president is Lovemore Matombo....
(ZCTU), which was the main force behind the founding of the
Movement for Democratic Change, the principal indigenous organization promoting
regime change"Regime change" is the replacement of one regime with another. Use of the term dates to at least 1925.Regime change can occur through conquest by a foreign power, revolution, coup d'état or reconstruction following the failure of a state...
in Zimbabwe.
Drug policy reform
Soros has funded worldwide efforts to promote
drug policy reformDrug policy reform, also known as drug law reform, is a term used to describe proposed changes to the way most governments respond to the socio-cultural influence on perception of psychoactive substance use...
. In 2008, Soros donated $400,000 to help fund a successful ballot measure in Massachusetts known as the
Massachusetts Sensible Marijuana Policy InitiativeThe Sensible Marijuana Policy Initiative, also known as Massachusetts Ballot Question 2, was an initiated state statute that replaced prior criminal penalties with new civil penalties on adults possessing an ounce or less of marijuana. The initiative appeared on the November 4, 2008 ballot in...
which decriminalized possession of less than 1 oz (28g) of marijuana in the state. Soros has also funded similar measures in California, Alaska, Oregon, Washington, Colorado, Nevada and Maine. Among the drug decriminalization groups that have received funding from Soros are the
Lindesmith CenterThe Lindesmith Center was an Open Society Institute project which has conducted research related to drug reform. It was founded in 1994 by Ethan Nadelmann with financial support from George Soros...
and Drug Policy Foundation. Soros donated $1.4 million to publicity efforts to support California's
Proposition 5California Proposition 5, or the Nonviolent Offender Rehabilitation Act was an initiated state statute that appeared as a ballot measure on the November 2008 ballot in California...
in 2008, a failed ballot measure that would have expanded
drug rehabilitationDrug rehabilitation is a term for the processes of medical or psychotherapeutic treatment, for dependency on psychoactive substances such as alcohol, prescription drugs, and so-called street drugs such as cocaine, heroin or amphetamines...
programs as alternatives to prison for persons convicted of non-violent drug-related offenses.
In October 2010, Soros donated $1 million to support California's
Proposition 19California Proposition 19 was a ballot initiative on the November 2, 2010 statewide ballot...
.
According to remarks in an interview in October 2009, it is Soros's opinion that marijuana is less addictive but not appropriate for use by children and students. He himself has not used marijuana for years.
Death and dying
The Project on Death in America, active from 2001 to 2003, was one of the Open Society Institute's projects, which sought to "understand and transform the culture and experience of dying and bereavement." In 1994, Soros delivered a speech in which he reported that he had offered to help his mother, a member of the
Hemlock SocietyThe Hemlock Society USA was a national right-to-die organization founded in Santa Monica, California by Derek Humphry in 1980. Its primary missions included providing information to dying persons and supporting legislation permitting physician-assisted suicide. In 1992, following the publication of...
, commit suicide. In the same speech, he also endorsed the Oregon Death with Dignity Act, the campaign which he helped fund.
Education and beliefs
His philosophical outlook is influenced by
Karl PopperSir Karl Raimund Popper, CH FRS FBA was an Austro-British philosopher and a professor at the London School of Economics...
, under whom he studied at the
London School of EconomicsThe London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
(LSE). His Open Society Institute is named after Popper's two volume work,
The Open Society and Its EnemiesThe Open Society and Its Enemies is an influential two-volume work by Karl Popper written during World War II. Failing to find a publisher in the United States, it was first printed in London by Routledge in 1945...
, and Soros's ongoing philosophical commitment to the principle of
fallibilismFallibilism is the philosophical principle that human beings could be wrong about their beliefs, expectations, or their understanding of the world...
(that anything he believes may in fact be wrong, and is therefore to be questioned and improved) stems from Popper's philosophy.
Reflexivity, financial markets, and economic theory
Soros' writings focus heavily on the concept of
reflexivityReflexivity refers to circular relationships between cause and effect. A reflexive relationship is bidirectional with both the cause and the effect affecting one another in a situation that does not render both functions causes and effects...
, where the biases of individuals enter into market transactions, potentially changing the perception of fundamentals of the economy. Soros argues that such transitions in the perceptions of fundamentals of the economy are typically marked by disequilibrium rather than equilibrium, and that the conventional economic theory of the market (the '
efficient market hypothesisIn finance, the efficient-market hypothesis asserts that financial markets are "informationally efficient". That is, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.There are...
') does not apply in these situations. Soros has popularized the concepts of
dynamic disequilibrium,
static disequilibrium, and
near-equilibrium conditions.
Reflexivity is based on three main ideas:
- Reflexivity is best observed under special conditions where investor bias grows and spreads throughout the investment arena. Examples of factors that may give rise to this bias include (a) equity leveraging or (b) the trend-following habits of speculators.
- Reflexivity appears intermittently since it is most likely to be revealed under certain conditions; i.e., the character of the equilibrium process is best considered in terms of probabilities.
- Investors' observation of and participation in the capital markets may at times influence valuations and fundamental conditions or outcomes.
A current example of reflexivity in modern financial markets is that of the debt and equity of housing markets. Lenders began to make more money available to more people in the 1990s to buy houses. More people bought houses with this larger amount of money, thus increasing the prices of these houses. Lenders looked at their balance sheets which not only showed that they had made more loans, but that their equity backing the loans – the value of the houses, had gone up (because more money was chasing the same amount of housing, relatively). Thus they lent out more money because their balance sheets looked good, they were guaranteed by the Federal Government, and prices went up more.
This was further amplified by public policy. Many governments see home ownership as a positive outcome and so first home owners grant and other financial subsidies – or influences to buy a home such as the exemption of a primary residence from capital gains taxation – mean that house purchases were seen as a good thing. Prices increased rapidly, and lending standards were relaxed. The salient issue regarding reflexivity is that it explains why markets gyrate over time, and do not just stick to equilibrium – they tend to overshoot or undershoot.
View of potential problems in the free market system
Despite working as an investor and currency speculator, he argues that the current system of financial speculation undermines healthy economic development in many underdeveloped countries. Soros blames many of the world's problems on the failures inherent in what he characterizes as
market fundamentalismMarket fundamentalism is a pejorative term applied to a strong belief in the ability of laissez-faire or free market economic views or policies to solve economic and social problems....
. His opposition to many aspects of globalization has made him a controversial figure.
Victor NiederhofferVictor Niederhoffer is a hedge fund manager, champion squash player, bestselling author and statistician.Victor Niderhoffer was born in Brooklyn to a Jewish family. His father, Arthur, graduated from Brooklyn Law School but went to work in the police. Victor’s mother, Elaine was a teacher....
said of Soros: "Most of all, George believed even then in a
mixed economyMixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety...
, one with a strong central international government to correct for the excesses of self-interest."
Soros claims to draw a distinction between being a participant in the market and working to change the rules that market participants must follow. According to Mahathir bin Mohamed, Prime Minister of
Malaysia from July 1981 to October 2003, Soros – as the hedge fund chief of Quantum – may have been partially responsible for the economic crash in 1997 of East Asian markets when the Thai currency relinquished its peg to the US dollar. According to Mahathir, in the three years leading to the crash, Soros invested in short-term speculative investment in East Asian stock markets and real estate, then divested with "indecent haste" at the first signs of currency devaluation. Soros replied, saying that Mahathir was using him "as a scapegoat for his own mistakes", that Mahathir's promises to ban currency trading (which Malaysian finance officials hastily retracted) were "a recipe for disaster" and that Mahathir "is a menace to his own country".
In an interview regarding the late-2000s recession, Soros referred to it as the most serious crisis since the 1930s. According to Soros, market fundamentalism with its assumption that markets will correct themselves with no need for government intervention in financial affairs has been "some kind of an ideological excess". In Soros' view, the markets' moods – a "mood" of the markets being a prevailing bias or optimism/pessimism with which the markets look at reality – "actually can reinforce themselves so that there are these initially self-reinforcing but eventually unsustainable and self-defeating boom/bust sequences or bubbles".
In reaction to the late-2000s recession, he founded the
Institute for New Economic ThinkingThe Institute for New Economic Thinking is a New York City-based nonprofit think tank founded in October 2009 with a $50 million pledge by George Soros as a result of the Financial crisis of 2007-2010.It has nobel laureates George Akerlof, Sir James Mirrlees, A...
in October 2009. This is a think tank composed of international economic, business and financial experts, mandated to investigate radical new approaches to organising the international economic and financial system.
Views on antisemitism
At a Jewish forum in New York City, November 5, 2003, Soros partially attributed a recent resurgence of antisemitism to the policies of Israel and the United States, and the role of wealthy and influential individuals:
There is a resurgence of anti-Semitism in Europe. The policies of the Bush administration and the SharonAriel Sharon is an Israeli statesman and retired general, who served as Israel’s 11th Prime Minister. He has been in a permanent vegetative state since suffering a stroke on 4 January 2006....
administration contribute to that. It's not specifically anti-Semitism, but it does manifest itself in anti-Semitism as well. I'm critical of those policies... If we change that direction, then anti-Semitism also will diminish. I can't see how one could confront it directly... I'm also very concerned about my own role because the new anti-Semitism holds that the Jews rule the world... As an unintended consequence of my actions... I also contribute to that image.
In a subsequent article for
The New York Review of BooksThe New York Review of Books is a fortnightly magazine with articles on literature, culture and current affairs. Published in New York City, it takes as its point of departure that the discussion of important books is itself an indispensable literary activity...
, Soros emphasized that
I do not subscribe to the myths propagated by enemies of Israel and I am not blaming Jews for anti-Semitism. Anti-Semitism predates the birth of Israel. Neither Israel's policies nor the critics of those policies should be held responsible for anti-Semitism. At the same time, I do believe that attitudes toward Israel are influenced by Israel's policies, and attitudes toward the Jewish community are influenced by the pro-Israel lobby's success in suppressing divergent views.
Views on China
Soros has expressed concern about the growth of Chinese economic and political power. "China has risen very rapidly by looking out for its own interests ... They have now got to accept responsibility for world order and the interests of other people as well." Regarding the political gridlock in America, he said, "Today China has not only a more vigorous economy, but actually a better functioning government than the United States".
Wealth
On September 21st 2011,
ForbesForbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
announced that Soros, at 81, has for the first time made the list of the 10 wealthiest Americans, with a net worth estimated at $22.0 billion. According to this list, Soros is the 46th richest person in the world. Soros has given away $8 billion to various causes since 1979.
Relation to Hungarian politics
In the 1980's
Viktor OrbánViktor Orbán is a Hungarian populist and conservative politician and current Prime Minister of Hungary...
, a future Chairman of Fidesz (1994–2000, 2000–) and Hungarian Prime Minister (1998–2002, 2010–), along with
László KövérLászló Kövér is a Hungarian politician. He was a founding member of Fidesz from 1988, and he served as Minister without portfolio for the Civilian Intelligence Services during the Viktor Orbán administration...
, a future Chairman of Fidesz (2000), Secret Service Minister (1998–2002) and Speaker of the
National Assembly of HungaryThe National Assembly or Diet is the parliament of Hungary. The unicameral body consists of 386 members elected to 4-year terms. Election of members is based on a complex system involving both area and list election; parties must win at least 5% of the popular vote in order to enter list members...
(2010–), were Soros scholarship recipients. Deputy Prime Minister
István StumpfIstván Stumpf is a Hungarian scholar, political scientist and politician. A former member of the ruling Communist Hungarian Socialist Workers' Party, he was the last Vice President of National Council of the Patriotic People's Front from 1989 to 1990. He also served as Minister of Prime Minister's...
– now a member of the
Constitutional CourtThe Constitutional Court of Hungary is a special court of Hungary, making judicial review of the acts of the Parliament of Hungary. The official seat of the Constitutional Court is Esztergom....
– was a member of Soros Foundation's Board of Trustees between 1994 and 2002.
Personal life
Soros' family changed their name from Schwartz to Soros in 1936, in response to growing
anti-semitismAntisemitism is suspicion of, hatred toward, or discrimination against Jews for reasons connected to their Jewish heritage. According to a 2005 U.S...
with the rise of fascism. Tivadar liked the new name because it is a
palindromeA palindrome is a word, phrase, number, or other sequence of units that can be read the same way in either direction, with general allowances for adjustments to punctuation and word dividers....
and because of its meaning. Although the specific meaning is left unstated in
Kaufman'sMichael T. Kaufman was a writer for the New York Times. He won the 1978 George Polk Award for foreign reporting for coverage of Africa. He died at St...
biography, in Hungarian,
soros means "next in line", or "designated successor"; and, in
Esperantois the most widely spoken constructed international auxiliary language. Its name derives from Doktoro Esperanto , the pseudonym under which L. L. Zamenhof published the first book detailing Esperanto, the Unua Libro, in 1887...
, it means "will soar".
Married and divorced twice, Soros has three children with Annaliese Witschak (Robert, Andrea, Jonathan) and two with
Susan Weber SorosSusan Weber Soros is the founder and director of the Bard Graduate Center for studies in the Decorative Arts, Design History, and Material Culture affiliated with Bard College....
(Alexander and Gregory). His elder brother, Paul Soros, also a private investor and philanthropist, is an engineer who headed Soros Associates and established the Paul and Daisy Soros Fellowships for Young Americans. Soros' nephew Peter Soros, a son of Paul Soros, married the former
Flora FraserFlora Fraser Soros is an English writer of historical biographies.-Family:She is the daughter of historian and historical biographer Lady Antonia Fraser and the late Sir Hugh Fraser, a British Conservative politician. Her stepfather was the playwright Harold Pinter, the 2005 Nobel Laureate in...
– a daughter of
Lady Antonia FraserLady Antonia Margaret Caroline Fraser, DBE , née Pakenham, is an Anglo-Irish author of history, novels, biographies and detective fiction, best known as Antonia Fraser...
and the late
Sir Hugh FraserMajor Sir Hugh Charles Patrick Joseph Fraser MBE was a British Conservative politician and first husband of the author Lady Antonia Fraser.-Youth and military career:...
and a stepdaughter of the late 2005
Nobel LaureateSince 1901, the Nobel Prize in Literature has been awarded annually to an author from any country who has, in the words from the will of Alfred Nobel, produced "in the field of literature the most outstanding work in an ideal direction"...
Harold PinterHarold Pinter, CH, CBE was a Nobel Prize–winning English playwright and screenwriter. One of the most influential modern British dramatists, his writing career spanned more than 50 years. His best-known plays include The Birthday Party , The Homecoming , and Betrayal , each of which he adapted to...
. Fraser and Soros separated in 2009.
His son
Alexander SorosA native of the Greater New York City Area, Alexander G. Soros graduated from New York University in 2009. He is one of five children of philanthropist George Soros....
is also gaining prominence for his donations to social and political causes, focusing his philanthropic efforts on "progressive causes that might not have widespread support". Alexander serves on the boards of
Jewish Funds for JusticeThe Jewish Funds for Justice is an Amercian charity based in New York. Since 2005, Simon Greer has been its President & CEO.-History:The original Jewish Fund for Justice was created in 1984...
and
Global WitnessGlobal Witness is an international NGO established in 1993 that works to break the links between natural resource exploitation, conflict, poverty, corruption, and human rights abuses worldwide. The organisation has offices in London and Washington, D.C.. Global Witness states that it does not have...
and led the list of student political donors in the 2010 election cycle.
Authored or co-authored
- The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means (PublicAffairs, 2008). ISBN 1-58648-683-7
- The Age of Fallibility: Consequences of the War on Terror (PublicAffairs, 2006) ISBN 1-58648-359-5
- The Bubble of American Supremacy: Correcting the Misuse of American Power (PublicAffairs, 2003) ISBN 1-58648-217-3 (paperback; PublicAffairs, 2004; ISBN 1-58648-292-0)
- George Soros on Globalization (PublicAffairs, 2002) ISBN 1-58648-125-8 (paperback; PublicAffairs, 2005; ISBN 1-52648-278-5)
- Open Society: Reforming Global Capitalism (PublicAffairs, 2001) ISBN 1-58648-039-7
- With Mark Amadeus Notturno, Science and the Open Society: The Future of Karl Popper's Philosophy (Central European University Press, 2000) ISBN 963-9116-69-6 (paperback: Central European University Press, 2000; ISBN 943-9116-70-X)
- The Crisis of Global Capitalism: Open Society Endangered (PublicAffairs, 1998) ISBN 1-891220-27-4
- Soros on Soros: Staying Ahead of the Curve (John Wiley, 1995) ISBN 0-471-12014-6 (paperback; Wiley, 1995; ISBN 0-371-11977-6)
- Underwriting Democracy: Encouraging Free Enterprise and Democratic Reform Among the Soviets and in Eastern Europe (Free Press, 1991) ISBN 0-02-930285-4 (paperback; PublicAffairs, 2004; ISBN 1-58948-227-0)
- Opening the Soviet System (Weidenfeld & Nicolson, 1990) ISBN 0-297-82155-9 (paperback: Perseus Books, 1996; ISBN 0-8133-1205-1)
- The Alchemy of Finance (Simon & Schuster, 1988) ISBN 0-671-66338-4 (paperback: Wiley, 2003; ISBN 0-471-44549-5)
Biographies
- Soros: The Life and Times of a Messianic Billionaire by Michael T. Kaufman (Alfred A. Knopf, 2002) ISBN 0-375-40585-2
- Soros: The World's Most Influential Investor by Robert Slater (McGraw-Hill Professional, 2009) ISBN 978-0-07-160844-2
Authored
- George Soros, "Why I support legal marijuana", The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, October 26, 2010.
- George Soros, "The Crisis and the Euro", The New York Review of Books
The New York Review of Books is a fortnightly magazine with articles on literature, culture and current affairs. Published in New York City, it takes as its point of departure that the discussion of important books is itself an indispensable literary activity...
, August 19, 2010.
- George Soros, "On Israel, America and AIPAC", The New York Review of Books, April 12, 2007.
- George Soros, "The Bubble of American Supremacy", The Atlantic, December 2003.
- George Soros, The Bubble of American Supremacy, audio recording of The Atlantic article via Assistive Media, read by Grover Gardner, 18 minutes.
- George Soros, "Soros on Brazil", Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, August 13, 2002.
- George Soros, "Bitter Thoughts with Faith in Russia", Moskovskiye Novosti
Moskovskiye Novosti will be a daily newspaper in Russia to be relaunched in 2011.It was previously a long-established weekly newspaper aimed at an educated, elite audience. In 2005-2008 it was owned by Arcadi Gaydamak. It is published in the Russian language...
(Moscow NewsThe Moscow News, which began publication in 1930, is Russia’s oldest English-language publication newspaper. Many of its feature articles used to be translated from the now defunct Russian Moskovskiye Novosti.-History:...
), translated from the Russian by Olga Kryazheva, February 27, 2000.
- George Soros, "The Capitalist Threat", The Atlantic Monthly, February 1997.
- George Soros, "Paulson Cannot be Allowed a Blank Cheque", Financial Times, September 24, 2008
About
- Stephen Adams "Furious George" on Citizen – Family Issues in Policy and Culture
- John Authors, Book Review, "A successful prophet of the markets," Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, May 19, 2008.
- Laura Blumenfeld, Billionaire Soros Takes On Bush, MSNBC, November 11, 2003
- Connie Bruck, Abstract of New Yorker profile of Soros "The World According to Soros", The New Yorker, January 23, 1995
- Neil Clark Analysis of Soros' role in Eastern Europe from "New Statesman"
- Malcolm Gladwell
Malcolm Gladwell, CM is a Canadian journalist, bestselling author, and speaker. He is currently based in New York City and has been a staff writer for The New Yorker since 1996...
, "Blowing Up," The New YorkerThe New Yorker is an American magazine of reportage, commentary, criticism, essays, fiction, satire, cartoons and poetry published by Condé Nast...
, April 22 & 29, 2002, at gladwell.com.
- John Horvath The Soros Effect on Central and Eastern Europe
- Matt Welch, Open Season on 'Open Society': Why an anti-communist Holocaust survivor is being demonized as a Socialist, Self-hating Jew Reason
Reason is a libertarian monthly magazine published by the Reason Foundation. The magazine has a circulation of around 60,000 and was named one of the 50 best magazines in 2003 and 2004 by the Chicago Tribune.- History :...
magazine, December 8, 2003
- Martin Peretz
Martin H. "Marty" Peretz , is an American publisher. Formerly an assistant professor at Harvard University, he purchased The New Republic in 1974 and took editorial control soon afterwards. He retained majority ownership until 2002, when he sold a two-thirds stake in the magazine to two financiers...
, "Tyran-a-Soros: The Madness of King George," The New RepublicThe magazine has also published two articles concerning income inequality, largely criticizing conservative economists for their attempts to deny the existence or negative effect increasing income inequality is having on the United States...
, February 12, 2007.
- TIME's 25 Most Influential Americans, TIME Magazine April 21, 1997. Accessed May 21, 2007.
- The TIME 100, The Power Givers, George Soros, TIME Magazine May 14, 2007 accessed May 21, 2007.
Speeches
Interviews
External links
- Open Society Institute and Soros Foundations Network
- Institute for New Economic Thinking
- Column archives at Project Syndicate
Project Syndicate is an international not-for-profit newspaper syndicate and association of newspapers. It distributes commentaries and analysis by experts, activists, Nobel laureates, statesmen, economists, political thinkers, business leaders and academics to its member publications, and...
- Column archives at The New York Review of Books
The New York Review of Books is a fortnightly magazine with articles on literature, culture and current affairs. Published in New York City, it takes as its point of departure that the discussion of important books is itself an indispensable literary activity...
- Soros Fund Management 13F filing and Portfolio Activities
- List of articles and speeches by and about George Soros
- George Soros' Political Campaign Contributions
- Forbes.com: Forbes 400 Richest in America
- George Soros in SEC Filings
- The Money Man – New Yorker
- In depth review of The New Paradigm
- Why Does Soros Bite Hand That Feeds Him? in Investor's Business Daily
Investor's Business Daily is a national newspaper in the United States, published Monday through Friday, that covers international business, finance, and the global economy...