Soros, George 1930–
Soros, George 1930–
PERSONAL: Born August 12, 1930, in Budapest, Hungary; emigrated to United States, 1956; naturalized U.S. citizen, 1961; son of Tivadar Soros (a lawyer and writer) and Elizabeth Szucs; married Annaliese Witschak, 1961 (divorced, 1981); married Susan Weber (an art historian), 1983; children: (first marriage) three; (second marriage) two. Education: London School of Economics, B.A. and B.S., 1952. Religion: Jewish.
ADDRESSES: Office—Open Society Institute, 400 W. 59th St., New York, NY 10019.
CAREER: Handbag and jewelry salesman, Blackpool, England, 1952; during early career, also a trainee at British investment bank Singer and Friedlander; arbitrage trader for various firms, including Wertheim & Co., F.M. Mayer, and Arnhold & S. Bleichroader, 1956–66; created Quantum Fund, 1969; president of Soros Fund Management, 1973–. Open Society Institute, chair, set up Open Society Fund, 1979. Philanthropist, 1979–; established the Central European University in both Budapest, Hungary, and Prague, Czechoslovakia, 1990; since 1991 has set up numerous funds, including Quantum Emerging Growth, Quantum Realty Trust, Quasar International, and Quota; established the International Science Foundation, 1992; founded Global Power Investments, 1994. Council on Foreign Relations, member of board of directors, director, beginning 1995.
AWARDS, HONORS: Laurea Honoris Causa, University of Bologna, 1995; named honorary citizen of Budapest, Hungary; honorary degrees from Oxford University, the New School for Social Research, Budapest University of Economics, University of Bologna, and Yale University.
The Alchemy of Finance: Reading the Mind of the Market, Simon & Schuster (New York, NY), 1987, reprinted, J. Wiley (Hoboken, NJ), 2003.
Opening the Soviet System, Weidenfeld and Nicolson (London, England), 1990.
(With Byron Wien and Krisztina Koen) Soros on Soros: Staying Ahead of the Curve, J. Wiley, (New York, NY), 1995.
The Crisis of Global Capitalism: Open Society Endangered, PublicAffairs, (New York, NY), 1998.
George Soros Speaks: Insight from the World's Greatest Financier, compiled by Janet Lowe, J. Wiley, (New York, NY), 1999.
Open Society: Reforming Global Capitalism, PublicAffairs (New York, NY), 2001.
George Soros on Globalization, PublicAffairs (New York, NY), 2002.
The Bubble of American Supremacy: Correcting the Misuse of American Power, PublicAffairs (New York, NY), 2004.
The Age of Fallibility: The Consequences of the War on Terror, PublicAffairs (New York, NY), 2006.
Contributor to periodicals, including Atlantic Monthly.
SIDELIGHTS: George Soros's life is one of the most spectacular rags-to-riches stories ever told. As one of the shrewdest investors to take on stock markets around the world, he has risen from a penniless immigrant to a man whose personal wealth is calculated in the billions of dollars. When Soros makes public his investment strategies, ripple effects appear in markets everywhere as other investors scramble to copy his tactics.
Soros was born in 1930 to an upper-middle-class Jewish couple living in Budapest, Hungary. Although the family was not orthodox, the ravages of World War II and the Nazi regime hit very close to home. The Nazis invaded Hungary in 1944 and, by the time of their defeat in 1945, approximately 400,000 of the one million Jews living in Hungary had perished in the Holocaust. The Soros family withstood the Nazi occupation by obtaining false identification papers. Young George pretended to be the son of a Hungarian government official. George and his parents lived with the constant threat of being exposed as Jews and executed, but the family ultimately survived the war.
In 1947 George Soros left Hungary, which was then under Soviet authority, and went to London. He became a student at the London School of Economics and worked a series of part-time jobs to support himself. While at school, Soros became acquainted with philosophy professor Karl Popper. Popper taught his theory of an "open society," which Soros embraced wholeheartedly. Popper taught that communism and fascism were "closed societies" in which the upper and ruling classes held that only they could possess knowledge and truth, which was hoarded through force. On the opposite side, said Popper, were "open societies" in which the people realized that knowledge is flawed and encouraged this through debate.
After graduating in 1952, Soros eventually landed a position at a British investment bank, where he was able to finally gain firsthand experience with stock markets. After emigrating to the United States, he became an arbitrage trader for a series of investment firms, while at the same time continuing his philosophical reflections on an open society that he learned at school. In 1962 Soros and his investment partner, Jim Rogers, created their own private hedge fund from several million dollars in start-up capital culled from wealthy investors. The Quantum Fund, as they named it, was established in Curaçao, in the Netherlands Antilles. Such an "offshore" fund is not subject to the same stringent rules and regulations as other funds established in the United States. Hedge funds are also more typically risky investments than the average mutual or pension funds. Soros invested in everything he could in any country: stocks, bonds, currencies, futures, and commodities. With Soros at the helm, Quantum eventually became one of the most prosperous hedge funds ever created.
In 1987 Soros completed his first book, The Alchemy of Finance: Reading the Mind of the Market, in which he detailed his philosophical approach to financial markets. According to Soros, his personal theory of "reflexivity" has been his touchstone to success. Soros's theory states that there is no such thing as a perfect market because all systems and strategies are flawed because the people that created them are inherently flawed. He takes advantage of seeing the market as imperfect to create wealth. A reviewer for the Economist wondered whether Soros's theories offer a new insight or simply state the obvious. The same reviewer observed that "what nobody should doubt, though, is that 'reflexivity' as a tool has helped Mr. Soros make a fortune." The Alchemy of Finance remained on the New York Times bestseller list for many weeks.
In 1979 Soros set up the Open Society Fund, which would become his personal vehicle to promote the ideas he had gleaned from Karl Popper while in school. The Open Society Fund seeks to give money to help "closed" societies become "open." The fund has given money to many nations, including South Africa, Hungary, China, the Soviet Union, Poland, the Ukraine, Albania, Kyrgyzstan, Croatia, Serbia, Bosnia, Sarajevo, the Czech Republic, and Belarus. Money is given for items and programs that can aid in promoting democratic ideas, including scholarships, research grants, photocopying machines, newspapers, magazines, and travel grants. Soros's foundations also give humanitarian aid. In some instances, Soros's level of aid has exceeded that of the United States.
In Soros's 1990 book, Opening the Soviet System, Soros tells how he and his foundations contributed to the downfall of communism. He also explains how the Russians desperately need Western aid to stabilize their monetary system and prevent civil war. An Economist critic lauded Soros for his well-placed aid and grants in opening up communism, reporting that "these were seeds of civil society that helped crack the communist concrete."
Underwriting Democracy: Encouraging Free Enterprise and Democratic Reform among the Soviets and in Eastern Europe, Soros's 1991 book, expands upon the crisis plaguing the Soviet Union at the time. He continues to argue why the West should give financial aid to Soviet reformers who can transform the country into an open society while at the same time expressing that he feels all hope is lost. Soros also admits to having a messiah complex. He states that his new goal is to personally oversee, through his donations, the transition for the Soviet Union from former communist state to an open society. Soros uses Underwriting Democracy to further expand upon his theories of reflexivity and the open society. Robert Reich, writing in the New Republic, felt that "the reader is given the impression of a talented man who no longer knows where the boundary lies between himself and a grandiose fantasy of himself."
Soros on Soros: Staying Ahead of the Curve, Soros's 1995 autobiographical book, expounds upon his philosophies, the reasons for his extensive philanthropy, and his ideas on politics in Europe. In the book, which is in essence a series of interviews, Soros details his childhood during the Holocaust and the steps he took to become a successful and wealthy man. In the Times Literary Supplement, Roger Boyes commented that "the truth about Soros is not that he is a secret unrecognized philosopher … but that he is a gambler. He bets on currencies and becomes rich."
The Crisis of Global Capitalism: Open Society Endangered, published in 1998, once again forwards Soros's views on reflexivity and the open society. He also goes further and develops his own ideas on saving financial marketplaces that are on the brink of collapse. Soros intersperses these visions with his own thoughts on social and universal values. "It is an important book for this confused moment in economic history, and Soros is a rare voice, willing to risk his own legendary status and speak directly," William Greider enthusiastically wrote in the Nation.
In the 1990s Soros began to turn his philanthropic efforts toward the United States. He supported projects that give aid to immigrants and research centers that are looking at alternatives to prisons. Soros has also given money in support of needle exchange programs, legalized marijuana referendums, and assisted suicide.
With later works, Soros demonstrated that he was still concerned with the multifaceted issues generated by global capitalism and globalization. Two additional books explore these subjects and concepts in considerable depth. In Open Society: Reforming Global Capitalism Soros makes a case for the establishment of open societies throughout the world that are willing not only to entertain the possibility of change and improvement, but to implement strategies and policies that will make such change and improvement a reality. With a strong background in helping to open up previously closed societies such as Soviet Russia, Soros speaks from direct experience. He posits that the global economy as it exists is already a form of open society, and one that has felt the devastation of economic policies that do not work in areas such as Asia's economic crisis in the late 1990s and the evaporation of Russia's currency.
Soros "reflects an almost anticapitalist bias" in the book, observed Library Journal reviewer Richard Drezen. For critic David C. Korten, writing in Tikkun, Soros presents an interesting view of capitalism but offers suggestions for reforms that will ultimately be unworkable. "After presenting a devastating critique of capitalism sure to beguile progressives and infuriate market fundamentalists, [Soros] concludes that global capitalism is the best of all possible worlds and sets forth a program of 'reforms' that on close reading are little more than a call to give yet more money and power to the stewards of global capitalism—the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank," Korten remarked. Korten concluded that as readers of Soros's work, "we must be skeptical of the public pretensions of persons of means who profess to serve two masters," benevolent desire for world improvement and the demonstrated adherence to the strongest forms of capitalism.
Soros again examines the subject of globalization, a concept which he looks upon with favor, in George Soros on Globalization. Tackling complicated issues in simplified ways, Soros looks at the wide disparity between those who would remove all impediments—such as taxation and regulation—that provide any sort of barriers to international investing and economic activity, and those who see globalization as an immoral, even evil force in the world. Soros "contends that the market is amoral but that certain reforms are necessary to ensure ethical standards," stated Mary Frances Wilkens in a Booklist review. "Instead of dismantling existing international financial and trade institutions, though, Soros suggests reform," noted a Publishers Weekly critic.
Soros advises in George Soros on Globalization. that steps should be taken to stabilize the often tumultuous global financial markets. He seeks to make global financial organizations such as the IMF and the WTO more responsive to the needs and interests of developing nations that do not have the financial strength or stability to withstand global market turbulence. Soros suggests implementing what he calls Special Drawing Rights, or SDRs, which are particular kinds of reserve monies available to all countries through the IMF. Under his plan, developing nations would keep the funds from their SDRs to use when needed, and richer developed nations would contribute their SDRs to the cause of development and providing global public goods. He suggests a means whereby Western aid for development projects in poorer nations receives greater screening and oversight by a panel of appropriate independent experts who can determine who is eligible for aid and can further evaluate aid recipients that have been chosen. Soros also wants more aid to go toward countries meeting international standards in areas such as education, environment, and labor. A reviewer for the Economist observed that Soros's book "demonstrates that he has laudable goals and some good instincts." Soros's suggestions, "wisely implemented … would give economic change a more humane face," commented Jedediah Purdy in Ethics & International Affairs. A Business Week critic concluded that "the book is useful as an eloquent summary of the chief criticisms leveled against global institutions—even if you disagree with Soros's proposals for reform."
Among the reasons behind Soros's notoriety is his virulent dislike of the presidency and policies of George W. Bush. In addition to spending millions of dollars of his own money in an attempt to prevent Bush's reelection, he also puts his intellectual abilities and economic prowess behind sharp criticism of the Bush administration's policies and functions. In The Bubble of American Supremacy: Correcting the Misuse of American Power "Soros uses the metaphor of the economic bubble to show that the Bush administration's foreign policy is based on assumptions that are not only incorrect and deceptive but also will eventually burst," explained Ilene Cooper in Booklist. "Using the analogy of a financial boom-and-bust, Soros speculates that the convergence of the neo-conservatives' objectives with the paralyzing of normal restraints produced by the 11 September 2001 terrorist attacks has produced exaggerated rhetorical goals beyond America's capacity to sustain materially or politically," observed Stephen Hoadley in the New Zealand International Review. Further, Hoadley noted: "U.S. policies are alienating allies and friends, undermining world order, and perpetrating injustice."
Soros is particularly critical of the administration's seemingly unending War on Terror and the war in Iraq. To begin recovering from these troubles, Soros offers numerous suggestions that begin at the fundamental level of the people, rather than at the level of the state. He is adamant that foreign aid be spent so that it benefits people locally and directly, and he also believes that revenues from a country's natural resources should benefit the people who live there. He offers further suggestions based largely on his concept of the open society, policy changes that would create a "balance between sovereignty and terror prevention" and "cooperative initiatives and international assistance," stated Library Journal reviewer Jack Forman.
BIOGRAPHICAL AND CRITICAL SOURCES:
Kaufman, Michael T., Soros: The Life and Times of a Messianic Billionaire, Knopf (New York, NY), 2002.
Soros, George, Byron Wien, and Krisztina Koen, Soros on Soros: Staying Ahead of the Curve, J. Wiley, (New York, NY), 1995.
Tier, Mark, The Winning Investment Habits of Warren Buffet and George Soros, St. Martin's Griffin (New York, NY), 2006.
Booklist, March 15, 2002, Mary Frances Wilkens, review of George Soros on Globalization, p. 1196; December 15, 2003, Ilene Cooper, review of The Bubble of American Supremacy: Correcting the Misuse of American Power, p. 706.
Business Week, April 8, 2002, "Soros' Moment," review of George Soros on Globalization, p. 18.
Ecologist, June, 2001, Caspar Henderson, review of Open Society: Reforming Global Capitalism, p. 55.
Economist, October 10, 1987, review of The Alchemy of Finance, p. 89; July 28, 1990, review of Opening the Soviet System, p. 73; May 4, 2002, "Globalization under Scrutiny," review of George Soros on Globalization; January 31, 2004, ldquo;The Virtuous Rage of George Soros: American Foreign Policy," review of The Bubble of American Supremacy, p. 81.
Ethics & International Affairs, October, 2002, Jedediah Purdy, "The Values of the Market," review of George Soros on Globalization, p. 143.
Independent (London, England), July 7, 2006, Boyd Tonkin, "A Week in Books," review of The Age of Fallibility: The Consequences of the War on Terror.
Library Journal, September 1, 1991, review of Underwriting Democracy: Encouraging Free Enterprise and Democratic Reform among the Soviets and in Eastern Europe, p. 214; November 15, 2000, Richard Drezen, review of Open Society, p. 79; March 15, 2003, Susan C. Awe, review of George Soros on Globalization, p. 64; March 1, 2004, Jack Forman, review of The Bubble of American Supremacy, p. 93.
Nation, February 15, 1999, William Greider, review of The Crisis of Global Capitalism: Open Society Endangered, p. 25.
National Interest, fall, 2002, Harold James, "Capital Ideas," review of George Soros on Globalization, p. 132.
New Republic, October 14, 1991, Robert Reich, review of Underwriting Democracy, p. 50.
New Statesman, June 2, 2003, Neil Clark, profile of George Soros; March 15, 2004, Robert Skidelsky, "The Global Guru," review of The Bubble of American Supremacy, p. 50.
New York Times, October 8, 1995, Adam Smith, review of Soros on Soros: Staying ahead of the Curve, p. 34.
New Zealand International Review, July-August, 2004, Stephen Hoadley, review of The Bubble of American Supremacy, p. 29.
Publishers Weekly, March 18, 2002, review of George Soros on Globalization, p. 91.
Reason, March, 2003, Charles Oliver, "Global Speculators," review of George Soros on Globalization, p. 59.
Spectator, March 6, 2004, Mark Archer, "Patent Medicine for Mankind," review of The Bubble of American Supremacy, p. 46.
Systems Research and Behavioral Science, November-December, 2001, John N. Warfield, review of The Crisis of Global Capitalism, p. 577.
Tikkun, March, 2001, David C. Korten, "The World According to George Soros," review of Open Society, p. 71.
Time, September 1, 1997, William Shawcross, "Turning Dollars into Change," profile of George Soros, p. 48.
Times Literary Supplement, March 1, 1996, Roger Boyes, review of Soros on Soros, p. 10.
Forbes Online, http://www.forbes.com/ (September 10, 2006), biography of George Soros.
George Soros Home Page, http://www.georgesoros.com (September 10, 2006).
Primebiography.com, http://www.primebiography.com/ (September 10, 2006), biography of George Soros.