Soros, George 1930–

SOROS THE FINANCIER

SOROS THE PHILANTHROPIST AND PHILOSOPHER

BIBLIOGRAPHY

George Soros, Hungarian-born American financier and philanthropist, is the second son of Tivadar and Erzebet Soros. He was thirteen years old when Nazi Germany invaded Hungary. To escape the German genocide of the Jews, the Soros family survived the occupation in secret hideouts under fake identities. In 1946 George Soros immigrated to England from the Russian-controlled country and attended the London School of Economics.

After graduation, Soros managed to break into the nepotistic merchant banking industry in London, where he was hired to be a trainee by a Hungarian managing director at Singer and Friedlander. In 1956 he was hired by another trainee’s father to work in international arbitrage at his small brokerage firm in New York. In the European investment boom following the formation of the Coal and Steel Community, Soros made a name for himself as an analyst in European securities at Wertheim and Company and later at Arnold and S. Bleichroeder.

SOROS THE FINANCIER

In 1966 Soros started managing a $100,000 model portfolio of American securities for Arnold and S. Bleichroeder, which was later turned into an investment fund and, in 1969, a hedge fund. In 1973 Soros left the firm to start his own hedge fund, which evolved into the Quantum Fund. Assets under his management reportedly returned 3,365 percent from 1969 to 1980, compared to 47 percent for the Standard and Poor’s stock index. The spectacular investment success caught public attention in 1981, when Soros was billed by Institutional Investor as “the world’s greatest money manager.” Unfortunately 1981 became the first year that he lost money. He subsequently left daily management of the fund to outside managers and later an internal staff, satisfied to be the owner and coach.

Soros is probably best known as “the man who broke the Bank of England.” His fund bet heavily on the devaluation of the British pound in the fall of 1992 and made over $1 billion from the bet and other related derivatives transactions. The ensuing infamy left Soros undisturbed as he saw the devaluation as something bound to happen and insisted he operated within the rules. He is also widely believed to have been a force behind the currency speculations during the Asian financial crisis in 1997, an accusation he denied. The former Malaysian prime minister Mahatir Mohamad, one of Soros’s fervent critics at the time, said in 2006 that he now believed Soros had not been involved.

SOROS THE PHILANTHROPIST AND PHILOSOPHER

Soros’s philanthropic activities, which started long before his rise to fame, have centered around his pursuit of open societies. He has written extensively on the subject, which resonated deeply with his teenage experience. He believes that the markets are always wrong and that he himself is just as fallible. Society is inundated with similar fallibilities. He believes that, under an open society where free expression is cherished and differences in opinions are allowed, people are best equipped to keep their own biases to the minimum.

Soros believes the United States has justifiably pursued an open market policy thanks to its economic and political might. Developed legal systems, a business-friendly economic environment, and possession of the world’s main trading currency have attracted capital to the United States. The negative effects on certain domestic industries have been limited by trade restrictions posed by the World Trade Organization.

Soon after he earned his first $25 million, Soros started giving his wealth away to promote the principles of open society. In 1979 he provided scholarships to black students at Cape Town University. South Africa’s racial segregation policies at the time made it a prominent closed society. Soros thought the university championed open society by treating black students equally. He withdrew support eventually after he found out that scholarships were not all used to fund additional black students as he intended.

In 1984 Soros created the Soros Foundation in Hungary to provide financial support for scholars on a competitive basis. By 2006 the network had expanded to thirty-two foundations spanning eastern Europe, Africa, and Central America. The most profound impact has been in eastern Europe, where Soros funded scholarships for academics to study abroad and supported libraries and health education programs. Although each foundation developed its own program according to its specific needs, all operated under the expectation that they would be prototypes of open society. In 1991 Soros set up and financed the Central European University, with campuses in the early twenty-first century in Budapest, Prague, and Warsaw, to train graduate students in various subjects of the humanities in the hope that they would promote the practice of open society.

SEE ALSO Apartheid; Currency; Development; Economic Crises; Exchange Rates; Financial Markets; Foundations, Charitable; Freedom; Holocaust, The; Mahathir Mohamad; Nazism; Philanthropy; Segregation

BIBLIOGRAPHY

Open Society Institute and Soros Foundations Network. http://www.soros.org.

Slater, Robert. 1996. Soros: The Life, Times, and Trading Secrets of the World’s Greatest Investor. Burr Ridge, IL: Irwin Professional Publishers.

Soros, George. 1995. Soros on Soros: Staying Ahead of the Curve. New York: Wiley.

Soros, George. 2002. George Soros on Globalization. New York: Public Affairs.

Shi Larry Cao

George Soros , 1930–, American stock trader and philanthropist, b. Budapest, Hungary, as George Schwartz. He studied under Sir Karl Popper at the London School of Economics (grad. 1952). He emigrated from Hungary to Great Britain (1947) and then to the United States (1956). Soros mostly worked as a financial analyst, and in 1969 he founded the first of his offshore hedge funds . His Quantum funds grew in value tremendously, partly through speculation in foreign currency. He earned (1992) $1 billion on the fall of the British pound and notoriety as "the man who broke the Bank of England." In the late 1990s, financial analysts and government officials charged that this speculation had helped destabilize Asian and Latin American national economies. His reputation for financial acumen was tarnished somewhat, however, when the value of the funds fell 20% in early 2000.

As president of the Soros Management Fund, he has used his wealth to create a network of wealthy foundations , many of which are intended to aid former Communist countries in creating the kind of anti-Marxist "open society" advocated by Popper. Others fund health initiatives and aid immigrants in the United States. He also established (1991) the Central European Univ., based in Budapest. In the United States, he has funded political campaigns, most notably by organizations opposed to President George W. Bush. Soros has written several books, including Opening the Soviet System (1990; rev. ed. 1991), The Alchemy of Finance (1994), The Crisis of Global Capitalism (1998), Open Society: Reforming Global Capitalism (2000), and The Bubble of American Supremacy: Correcting the Misuse of American Power (2003).

Bibliography: See his autobiography Soros on Soros (with B. Wien and K. Koenen, 1995); biographies by R. Slater (1995) and M. T. Kaufman (2002).