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Soros is Dead! Whoops, Not, Reuters Pulled Trigger Early

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George Soros, along with being the man who broke the pound in 1992, has the interesting privilege of being able to read his own obituary. This is something money can’t buy. Reuters launched the report of the hedge fund pioneer/philanthropist’s demise a tad prematurely.

Ed Harrison snagged the text:

George Soros, enigmatic financier, liberal philanthropist dies at XX
by Todd Eastham, reuters.com
April 18th 2013 4:41 PM
WASHINGTON, XXX (Reuters) – George Soros, who died XXX at age XXX, was a predatory and hugely successful financier and investor, who argued paradoxically for years against the same sort of free-wheeling capitalism that made him billions.

He was known as “the man who broke the Bank of England” for selling short the British pound in 1992 and helping force the United Kingdom to withdraw from the European Exchange Rate Mechanism, which devalued the pound and earned Soros more than $1 billion.

And his Soros Fund Management was widely blamed for helping trigger the Asian financial crisis of 1997, by selling short the Thai baht and Malaysian ringgit.

“Subsequently, Prime Minister Mahatir of Malaysia accused me of causing the crisis, a wholly unfounded accusation,” Soros wrote in The Crisis of Global Capitalism: Open Society Endangered,” in 1998.

“We were not sellers of the currency during or several months before the crisis; on the contrary … we were purchasing ringgits to realize profits on our earlier speculation.”

Still, economist Paul Krugman, was one of many observers who accused Soros of helping trigger the crisis.

In 1999, Krugman wrote that “nobody 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 fund and profit.”

Still, Soros has written extensively on the folly of what he has called free market “fundamentalism,” the belief of many conservative economists that markets will correct themselves with no need for government intervention.

In Soros’ view, markets and investors are subject to “mood” swings, or a prevailing positive or negative bias which can be exploited by savvy investors but which inevitably lead to damaging market bubbles and boom/bust cycles.

An enigma, wrapped in intellect, contradiction and money.

A Jew born in Hungary as the Nazis were gaining power in Germany, Soros survived World War Two and then emigrated to Great Britain, where he earned a degree from the London School of Economics in 1952, and landed his first job in the financial industry largely through pure stubborn chutzpah.

OPEN SOCIETY INSTITUTE

While at the London School, Soros studied under the economist and philosopher Karl Popper and a main vehicle for his philanthropy, the Open Society Institute, is named for Popper’s two-volume work, “The Open Society and Its Enemies.”

In that work, Popper develops the philosophy of reflexivity, a theory first articulated by William Thomas in the 1920s that posits that individual biases enter into market transactions, coloring the perception of economic fundamentals. Soros has attributed his own financial success in part to his understanding of the reflexive effect.

Key to understanding that effect is recognizing when markets are in a condition of near-equilibrium, or in disequilibrium. Soros has observed that when markets are rising or falling rapidly, they are typically marked by rising disequilibrium, and the dispassionate investor can capitalize on that recognition.

While Soros has benefited enormously from this understanding (Forbes put his wealth in 2013 at $19 billion, making him the world’s 30th richest person, not counting the roughly $8 billion he has given away through various charitable entities he controls), he has argued nevertheless for strong central government regulation to correct for and counterbalance the excesses of greed, fear and the free market.

Popper’s idea of fallibilism, which posits that anything one believes may in fact be wrong, is another key principle that has guided Soros in his career, and his philanthropy.

Soros’ philanthropy since the 1970s, when he began funding the studies of black students at the University of Cape Town in South Africa, has been marked as much by his personal journey as by the needs of the communities he has set out to serve.

His efforts through the Open Society Institute and the Soros Foundations have been skewed toward the effort to promote democratic values in the post-Soviet economies of Central and Eastern Europe, where he witnessed the rise of communism in Hungary after World War Two.

“The bulk of his enormous winnings (as an investor and speculator) is now devoted to encouraging transitional and emerging nations to become ‘open societies,’” former Federal Reserve Chairman Paul Volcker wrote in the foreword to Soros’ “The Alchemy of Finance” (2003).

“Open,” Volcker wrote, “not only in the sense of freedom of commerce but – more important – tolerant of new ideas and different modes of thinking and behavior.”

PHILANTHROPY, POLITICS

Soros also pledged $50 million in 2006 to the Millennium Promise, led by economist Jeffrey Sachs, to provide educational, agricultural and medical aid to help poor villages in Africa. And the Open Society Institute has expanded its giving to more than 60 countries around the world, giving away roughly $600 million a year.

Soros was an early supporter of the peaceful transformation of the Solidarity movement in Poland and Open Society Institute programs were considered by many Western observers to be a key factor in the success of the “Rose Revolution” in Georgia.

While his philanthropy has earned him friends around the world, his political giving has earned him both friends and enemies. Former President George W. Bush, who Soros blamed for turning the United States into “the main obstacle to a stable and just world order,” was perhaps the biggest single target of his political wrath.

“By declaring a ‘war on terror’ after Sept. 11, we set the wrong agenda for the world,” Soros told Newsweek magazine in a 2006 interview. “When you wage war, you inevitably create innocent victims.”

In a bid to stop Bush’s re-election, Soros donated $23.5 million to more than 500 liberal and progressive groups during the 2003-2004 U.S. election cycle.

Other causes that have attracted Soros’ generosity include drug policy reform. He donated $1.4 million to promote California’s Proposition 5 in 2008, a failed initiative that would have expanded drug rehabilitation programs as alternatives to prison for non-violent drug offenders, and $400,000 to the successful 2008 Massachusetts initiative to decriminalize possession of less than an ounce (28 grams) of marijuana.

He has also been a vocal supporter of the right to die in dignity, revealing in 1994 that he had offered to help his own mother, a member of the Hemlock Society, commit suicide.

While Soros’ life has been marked by remarkable success in his far-flung endeavors, it has not been without defeat. His investment in France’s Societe Generale following Jacques Chirac’s aggressive program of privatization led to charges of insider trading, which he disputed, and eventual conviction and the payment of a small penalty.

And he was a minority partner in a group that failed to acquire the Washington Nationals Major League baseball team.

But these failings stand out in the life of this remarkably successful Hungarian-American financier, philanthropist and thinker, in contrast to his stubborn refusal to fail in virtually every other venture.

Soros also stands out for his longevity as an investor. His was one of the very early hedge funds to build a reputation. Interestingly, the Reuters piece does not mention his early sponsorship of and continuing large role in the Institute for New Economic Thinking, nor does it mention his recent efforts to influence European policymakers on banking and economics policies, in the hopes of salvaging the Eurozone.

Soros is enough of a contrarian that this premature report might provoke him to live to be 100.

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19 comments

  1. Ken Ward

    This “obituary” fails to mention Soros’s role in financing the establishing and continuing to support the International Crisis Group based in Brussels, which among other activities produces some of the best analyses of conflict zones and other regions throughout the world.

  2. psychohistorian

    I want to know where all his money goes when he is dead?

    And how will it be used, for social good or elite evil?

    What will the real legacy of Soros’ wealth be?

  3. Jon Claerbout

    When the Soviet Union collapsed it was a tragedy for its scientists. I received from the Soros Foundation requesting my evaluation research proposals of many scientists in the ex-USSR. I have no idea how many proposals they funded.

    1. Nathanael

      As many as Soros could afford.

      For about a decade, before the replacement governments started funding their universities again, Soros was basically funding as much of the entire Eastern Bloc university system (not just the USSR, all the client states as well) as he could manage.

      Even with his wealth, he couldn’t fund the entire thing. But he did his best, funding science, humanties, and arts, through the entire Eastern Bloc.

      It was one of the most valuable acts of philanthropy in world history. And that is the real legacy of Soros’s wealth, to answer Psychohistorian’s question.

      1. psychohistorian

        Thanks for that information, got links?

        I suspect that a similar truth telling of the Bush folks, for example, wold not show as positive a legacy.

      2. neretva

        am I recognizing sarcasm? If No, any link(s)?

        “Soros was basically funding as much of the entire Eastern Bloc university system” Wow.

        Now, on serious note. In my ex-country HE brought few servers for some so-called NGO. He provide money for courses of English language and yes he supported some professors’ from University whose he deemed ideologically suitable.

  4. SqueekyFromm

    Well, this just begs for a really sophisticated and like existential type of Irish Poem! Sooo, here goes. . .

    A Bit Of Oh!

    There once was a fellow named Soros,
    Who died, but there wasn’t much pathos.
    But wait! He ain’t dead!
    Reuters screwed up, instead!
    OMG! (Is the “o” long in “bathos”???)

    Squeeky Fromm, Girl Reporter

  5. BJBB

    ‘Still, economist Paul Krugman, was one of many observers who accused Soros of helping trigger the crisis.’

    EXTRA COMMA. I CRUSH YOU!

  6. annie

    i recall christopher hitchens appearing with brian lamb on a sunday morning cspan show. at the end hitchens took questions from viewers.
    one asked: who is this george soros?
    hitchens replied: he’s a jew ….and went on to say soros had once lost him, hitchens, a lot of money.
    this obit has a similar cast.

    1. diptherio

      Christopher Hitchens seemed like one of the world’s biggest a-holes to me. He took self-righteous pomposity to entirely new levels. Thank gawd his obit was the real deal.

    2. harry

      Christopher Hitchens did seem to be mostly about Christopher Hitchens. Smooth writing style, dreadful non-sequitors masqerading as logic. Proof of the power of rhetoric. It doesnt matter what you say as long as you say it well.

      But wasnt Hitchens part Jewish too? Doesnt that put this comment into a different light?

  7. Jerry

    With all these thoughtful readers, can the bomb episode in Boston be discussed with a critical eye…..if they are terrorist with cell links, why didn’t they blow themselves up? or why didn’t they have a get away car, get away money, ….get away plan. Why is everyone considered a terrorist?

  8. Joe Firestone

    Error of fact in the obit. Popper attributed the idea of reflexivity, which he called “the Oedipus Effect” to the historicists, and this suggests that it may have originated with the Greeks, and not with W. I. Thomas in the 1920s. Sure enough, Barry Sandywell has written a book on Pre-Socratic Reflexivity that makes the case that reflexivity began with Thales.

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