The political left loves to prattle about the plight of the poor, but their darlings are increasingly culled from a small club of the world’s richest men. Last year it was media mogul Ted Turner who won leftist affections by advocating population control and bailing out the United Nations.
This year, it is George Soros, the billionaire hedge-fund operator who has turned like a snake on the system of economics that made him rich. His new book is The Crisis of Global Capitalism, which argues for a world central bank and an army of new global regulators to straighten out the world monetary mess, according to the Sorosian prescription.
Like Turner before him, Soros also has a message about morality. He believes that currency traders and international financiers, operating in a cruel and amoral market, have far too much influence. That influence must be restrained by more national and international government power.
No need to go on characterizing Soros’s Grand Theory. The declaration that capitalism must be hobbled has been made ten thousand times since socialist thinking became the vogue a century ago. As usual, behind it is a deep distrust of human freedom combined with an unwarranted faith in government control.
Of course, Soros may be right that the world monetary system is systematically unraveling. But today’s system was constructed by the very planners that Soros says ought to be given the power to redesign the world economy once again. In fact, what we need is a monetary system that manages itself the way the gold standard used to.
What’s more interesting is the psychology of billionaires who want to deny others the opportunities that made them rich and influential. Out of guilt or a desire to block others from following in their footsteps, they adopt a redistributionist mentality, not just in their philanthropy but in their politics. So intense is his faith in government that he has even advocated even a centralized Department of Bereavement.
Yet the roots go deeper to a rejection of economics. Back in 1992, Soros’s hedge fund speculated against an overvalued British pound. That nation’s central bank chose the brainless path of “defending” the currency and thereby depleted its reserves. The press began to call Soros “the man who broke the Bank of England.” He began to believe it.
“It is sort of a disease when you consider yourself some kind of god, the creator of everything,” the New Oxford Review quotes him as observing. “But I feel comfortable about it now since I began to live it out.”
Of course, the pound went down not because Soros wanted it to, but because of real economic factors having to do with British monetary mismanagement. But he wants to give himself the credit, and later, when his power proved for naught in other situations, came to believe that no other man should have such influence.
In a market economy, no man has the power to shape the world on his own. Entrepreneurs excel at anticipating consumer behavior and acting on it; they do not control the behavior itself. Speculators excel at predicting future values; they do not control those values. Capitalism means allowing people to get rich by serving the needs of others. But becoming a billionaire apparently temps some to a form of meglomania.
This disease has other effects. Tired of competing for their place in the market economy, they long to impose their wisdom on the masses by means of state power. This is why they are inclined to adopt an anti-capitalist credo. They imagine that their wealth and power will give them a leg up when it comes time to design the world according to socialist strictures.
So long as we are psychologizing about billionaires turning to leftist ideology, we must not forget the all-important motive of self interest. In Soros’s case, this was on ugly display during the Russian debt collapse. Desperate for hard currency and facing a fiscal crisis, the Russian government guaranteed wildly high returns on its debt instruments. Believing that Russia would never be allowed to fail, Soros took huge positions in its bonds.
His conversion to the cause of financial socialism began as Congress refused to bailout Russia, and Soros’s fund started bearing the weight of margin calls. Eventually, the losses would total $2 billion. His new book admits that he burned up the phonelines calling for governments to loot their taxpayers on his behalf, with additional panicked calls to central bankers and finance officials to pressure them into doing so.
Soros made the wrong bet, lost one of his shirts, and turned against capitalism. He believed himself to be the most powerful man in the world. It turned out that there is something more powerful, which is the market itself.
So Soros, the new poster child of the left, turns out to be nothing more than a disgruntled rich guy tired of the risks that made him wealthy. In similar fashion, we see Netscape, Oracle, and Sun Microsystems calling on the government to crush Microsoft because it beat them in a free and competitive marketplace.
Speculators like Soros have done great good for the world when they have used their talents within the framework of the market economy. But when they decide to cozy up to politicians, pose as philosopher kings, and urge government planning on the world, they are capable of doing enormous evil. Recall that Friedrich Engels was a wealthy businessman too.
If George Soros wants to repudiate capitalism, let him begin by eschewing the market that is currently selling his book. We’re waiting, George.
