George Soros/Political, social, and economic philosophy
George Soros is a wealthy, progressive political activist who
seeks to attain his ideal of open society through donating to and
founding political and social organizations that enact and encourage
national and global change.
This page concerns the philosophy behind Soros' political and
philanthropic activity. Soros is guided by Karl Popper's notion of an open society and by his own economic theory of reflexivity.
To read more about Soros' career, political activity, and other work, click here.
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Open society
Soros' political and philanthropic activity has been influenced by
his belief in an idea of open society, a concept put forth by Karl
Popper. Soros himself says, "In my definition an open society is an
imperfect society that holds itself open to improvement."
[1]
Soros studied Popper’s theory of open society while attending the
London School of Economics. He wrote the following about Popper's
philosophy on open societies:
[2]
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George Soros speaks about the concept of Open Society
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Popper argued that the empirical truth cannot be known with absolute
certainty. Even scientific laws can’t be verified beyond a shadow of a
doubt: they can only be falsified by testing. One failed test is enough
to falsify, but no amount of conforming instances is sufficient to
verify. Scientific laws are hypothetical in character and their truth
remains subject to testing. Ideologies which claim to be in possession
of the ultimate truth are making a false claim; therefore, they can be
imposed on society only by force. This applies to Communism, Fascism and
National Socialism alike. All these ideologies lead to repression.
Popper proposed a more attractive form of social organization: an
open society in which people are free to hold divergent opinions and the
rule of law allows people with different views and interests to live
together in peace.[3]
Having lived through both Nazi and Communist occupation here in Hungary
I found the idea of an open society immensely attractive.[4]
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Although Soros adopted Popper's notion of an open society, he later
published an essay in 2011 criticizing aspects of Popper's concept:
[5]
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The war on terror forced me to reconsider the concept of open
society. My experiences in the former Soviet Union had already taught me
that the collapse of a closed society does not automatically lead to an
open one; the collapse may be seemingly bottomless, to be followed by
the emergence of a new regime that has a greater resemblance to the
regime that collapsed than to an open society. Now I had to probe deeper
into the concept of open society that I had adopted from Karl Popper in
my student days, and I discovered a flaw in it.
Popper had argued that free speech and critical thinking would
lead to better laws and a better understanding of reality than any
dogma. I came to realize that there was an unspoken assumption embedded
in his argument, namely that the purpose of democratic discourse is to
gain a better understanding of reality. It dawned on me that my own
concept of reflexivity brings Popper’s hidden assumption into question.
If thinking has a manipulative function as well as a cognitive one, then
it may not be necessary to gain a better understanding of reality in
order to obtain the laws one wants. There is a shortcut: 'spinning'
arguments and manipulating public opinion to get the desired results.
Today our political discourse is primarily concerned with getting
elected and staying in power. Popper’s hidden assumption that freedom of
speech and thought will produce a better understanding of reality is
valid only for the study of natural phenomena. Extending it to human
affairs is part of what I have called the 'Enlightenment fallacy.'[4]
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Despite his criticism of Popper's ideology, Soros' continued belief
in and dedication to the idea of open societies continues to spur him to
support various social and political causes, especially his
Open Society Foundations, in order to sustain open societies and help closed societies become open.
Economic reflexivity theory
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George Soros speaks about his General Theory of Reflexivity
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Soros developed an economic theory of reflexivity that he has said
allowed him to anticipate the ebb and flow of financial markets. While
he does not claim to have discovered the idea of reflexivity itself, he
does claim to apply it to economics in a new way.
[2]
Soros has stated the main idea of his theory as follows:
[2]
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I can state the core idea in two relatively simple propositions. One
is that in situations that have thinking participants, the participants’
view of the world is always partial and distorted. That is the
principle of fallibility. The other is that these distorted views can
influence the situation to which they relate because false views lead to
inappropriate actions. That is the principle of reflexivity. For
instance, treating drug addicts as criminals creates criminal behavior.
It misconstrues the problem and interferes with the proper treatment of
addicts. As another example, declaring that government is bad tends to
make for bad government.[4]
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David J. Lynch wrote in a 2008
USA Today article, "In his latest work,
The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means,
Soros traces a straight line between today's financial turmoil and what
he says are fatally flawed conventional assumptions about how markets
behave. If banks, investors and regulators had embraced reflexivity
years ago, there never would have been a financial crisis, Soros
insists."
[6]
In the same 2008 article, Lynch went on to summarize Soros' application of reflexivity to economics as follows:
[6]
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To Soros, the conventional approach is rubbish. Instead of a world of
near-identical actors, coolly assessing their economic interests and
acting with clear-eyed precision, he sees a world (and markets) governed
by passion, bias and self-reinforcing errors. Because fallible human
beings are both involved in, and trying to make sense of, this world,
they inevitably make mistakes. Those mistakes then feed on themselves in
'reflexive' ways that, when taken to extremes, result in situations
such as the now-deflating U.S. housing bubble. Standard economic theory
is flawed, Soros says, because it treats markets populated by thinking
human beings as if they operated according to the natural laws that
govern atoms and molecules. Economists say Soros badly exaggerates the
limitations of standard theory and ignores subsequent refinements. But
if conventional economics teaches that markets are always (eventually)
right, Soros insists they are always wrong.[4
- GoergeSoros.com, "Interview with Harvey Blume," August 20, 2006
- Financial Times, "Soros: General Theory of Reflexivity," October 26, 2009
- Bolded emphasis added by Ballotpedia to highlight the meaning of the term open society.
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- GeorgeSoros.com, "My Philanthropy," accessed May 25, 2016
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