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THE CAPITALIST THREAT - by George Soros (1997)

Atlantic Monthly ^ | February 1997 | George Soros

Posted on by Dan from Michigan

THE CAPITALIST THREAT

What kind of society do we want? "Let the free market decide!" is the often-heard response. That response, a prominent capitalist argues, undermines the very values on which open and democratic societies depend.

by George Soros

In The Philosophy of History, Hegel discerned a disturbing historical pattern -- the crack and fall of civilizations owing to a morbid intensification of their own first principles. Although I have made a fortune in the financial markets, I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.

The term "open society" was coined by Henri Bergson, in his book The Two Sources of Morality and Religion (1932), and given greater currency by the Austrian philosopher Karl Popper, in his book The Open Society and Its Enemies (1945). Popper showed that totalitarian ideologies like communism and Nazism have a common element: they claim to be in possession of the ultimate truth. Since the ultimate truth is beyond the reach of humankind, these ideologies have to resort to oppression in order to impose their vision on society. Popper juxtaposed with these totalitarian ideologies another view of society, which recognizes that nobody has a monopoly on the truth; different people have different views and different interests, and there is a need for institutions that allow them to live together in peace. These institutions protect the rights of citizens and ensure freedom of choice and freedom of speech. Popper called this form of social organization the "open society." Totalitarian ideologies were its enemies.

Written during the Second World War, The Open Society and Its Enemies explained what the Western democracies stood for and fought for. The explanation was highly abstract and philosophical, and the term "open society" never gained wide recognition. Nevertheless, Popper's analysis was penetrating, and when I read it as a student in the late 1940s, having experienced at first hand both Nazi and Communist rule in Hungary, it struck me with the force of revelation.

I was driven to delve deeper into Karl Popper's philosophy, and to ask, Why does nobody have access to the ultimate truth? The answer became clear: We live in the same universe that we are trying to understand, and our perceptions can influence the events in which we participate. If our thoughts belonged to one universe and their subject matter to another, the truth might be within our grasp: we could formulate statements corresponding to the facts, and the facts would serve as reliable criteria for deciding whether the statements were true.

There is a realm where these conditions prevail: natural science. But in other areas of human endeavor the relationship between statements and facts is less clear-cut. In social and political affairs the participants' perceptions help to determine reality. In these situations facts do not necessarily constitute reliable criteria for judging the truth of statements. There is a two-way connection -- a feedback mechanism -- between thinking and events, which I have called "reflexivity." I have used it to develop a theory of history.

Whether the theory is valid or not, it has turned out to be very helpful to me in the financial markets. When I had made more money than I needed, I decided to set up a foundation. I reflected on what it was I really cared about. Having lived through both Nazi persecution and Communist oppression, I came to the conclusion that what was paramount for me was an open society. So I called the foundation the Open Society Fund, and I defined its objectives as opening up closed societies, making open societies more viable, and promoting a critical mode of thinking. That was in 1979.

My first major undertaking was in South Africa, but it was not successful. The apartheid system was so pervasive that whatever I tried to do made me part of the system rather than helping to change it. Then I turned my attention to Central Europe. Here I was much more successful. I started supporting the Charter 77 movement in Czechoslovakia in 1980 and Solidarity in Poland in 1981. I established separate foundations in my native country, Hungary, in 1984, in China in 1986, in the Soviet Union in 1987, and in Poland in 1988. My engagement accelerated with the collapse of the Soviet system. By now I have established a network of foundations that extends across more than twenty-five countries (not including China, where we shut down in 1989).

Operating under Communist regimes, I never felt the need to explain what "open society" meant; those who supported the objectives of the foundations understood it better than I did, even if they were not familiar with the expression. The goal of my foundation in Hungary, for example, was to support alternative activities. I knew that the prevailing Communist dogma was false exactly because it was a dogma, and that it would become unsustainable if it was exposed to alternatives. The approach proved effective. The foundation became the main source of support for civil society in Hungary, and as civil society flourished, so the Communist regime waned.

After the collapse of communism, the mission of the foundation network changed. Recognizing that an open society is a more advanced, more sophisticated form of social organization than a closed society (because in a closed society there is only one blueprint, which is imposed on society, whereas in an open society each citizen is not only allowed but required to think for himself), the foundations shifted from a subversive task to a constructive one -- not an easy thing to do when the believers in an open society are accustomed to subversive activity. Most of my foundations did a good job, but unfortunately, they did not have much company. The open societies of the West did not feel a strong urge to promote open societies in the former Soviet empire. On the contrary, the prevailing view was that people ought to be left to look after their own affairs. The end of the Cold War brought a response very different from that at the end of the Second World War. The idea of a new Marshall Plan could not even be mooted. When I proposed such an idea at a conference in Potsdam (in what was then still East Germany), in the spring of 1989, I was literally laughed at.

The collapse of communism laid the groundwork for a universal open society, but the Western democracies failed to rise to the occasion. The new regimes that are emerging in the former Soviet Union and the former Yugoslavia bear little resemblance to open societies. The Western alliance seems to have lost its sense of purpose, because it cannot define itself in terms of a Communist menace. It has shown little inclination to come to the aid of those who have defended the idea of an open society in Bosnia or anywhere else. As for the people living in formerly Communist countries, they might have aspired to an open society when they suffered from repression, but now that the Communist system has collapsed, they are preoccupied with the problems of survival. After the failure of communism there came a general disillusionment with universal concepts, and the open society is a universal concept.

These considerations have forced me to re-examine my belief in the open society. For five or six years following the fall of the Berlin Wall, I devoted practically all of my energies to the transformation of the formerly Communist world. More recently I have redirected my attention to our own society. The network of foundations I created continues to do good work; nevertheless, I felt an urgent need to reconsider the conceptual framework that had guided me in establishing them. This reassessment has led me to the conclusion that the concept of the open society has not lost its relevance. On the contrary, it may be even more useful in understanding the present moment in history and in providing a practical guide to political action than it was at the time Karl Popper wrote his book -- but it needs to be thoroughly rethought and reformulated. If the open society is to serve as an ideal worth striving for, it can no longer be defined in terms of the Communist menace. It must be given a more positive content.

THE NEW ENEMY

OPPER showed that fascism and communism had much in common, even though one constituted the extreme right and the other the extreme left, because both relied on the power of the state to repress the freedom of the individual. I want to extend his argument. I contend that an open society may also be threatened from the opposite direction -- from excessive individualism. Too much competition and too little cooperation can cause intolerable inequities and instability.

Insofar as there is a dominant belief in our society today, it is a belief in the magic of the marketplace. The doctrine of laissez-faire capitalism holds that the common good is best served by the uninhibited pursuit of self-interest. Unless it is tempered by the recognition of a common interest that ought to take precedence over particular interests, our present system -- which, however imperfect, qualifies as an open society -- is liable to break down.

I want to emphasize, however, that I am not putting laissez-faire capitalism in the same category as Nazism or communism. Totalitarian ideologies deliberately seek to destroy the open society; laissez-faire policies may endanger it, but only inadvertently. Friedrich Hayek, one of the apostles of laissez-faire, was also a passionate proponent of the open society. Nevertheless, because communism and even socialism have been thoroughly discredited, I consider the threat from the laissez-faire side more potent today than the threat from totalitarian ideologies. We are enjoying a truly global market economy in which goods, services, capital, and even people move around quite freely, but we fail to recognize the need to sustain the values and institutions of an open society.

The present situation is comparable to that at the turn of the past century. It was a golden age of capitalism, characterized by the principle of laissez-faire; so is the present. The earlier period was in some ways more stable. There was an imperial power, England, that was prepared to dispatch gunboats to faraway places because as the main beneficiary of the system it had a vested interest in maintaining that system. Today the United States does not want to be the policeman of the world. The earlier period had the gold standard; today the main currencies float and crush against each other like continental plates. Yet the free-market regime that prevailed a hundred years ago was destroyed by the First World War. Totalitarian ideologies came to the fore, and by the end of the Second World War there was practically no movement of capital between countries. How much more likely the present regime is to break down unless we learn from experience!

Although laissez-faire doctrines do not contradict the principles of the open society the way Marxism-Leninism or Nazi ideas of racial purity did, all these doctrines have an important feature in common: they all try to justify their claim to ultimate truth with an appeal to science. In the case of totalitarian doctrines, that appeal could easily be dismissed. One of Popper's accomplishments was to show that a theory like Marxism does not qualify as science. In the case of laissez-faire the claim is more difficult to dispute, because it is based on economic theory, and economics is the most reputable of the social sciences. One cannot simply equate market economics with Marxist economics. Yet laissez-faire ideology, I contend, is just as much a perversion of supposedly scientific verities as Marxism-Leninism is.

The main scientific underpinning of the laissez-faire ideology is the theory that free and competitive markets bring supply and demand into equilibrium and thereby ensure the best allocation of resources. This is widely accepted as an eternal verity, and in a sense it is one. Economic theory is an axiomatic system: as long as the basic assumptions hold, the conclusions follow. But when we examine the assumptions closely, we find that they do not apply to the real world. As originally formulated, the theory of perfect competition -- of the natural equilibrium of supply and demand -- assumed perfect knowledge, homogeneous and easily divisible products, and a large enough number of market participants that no single participant could influence the market price. The assumption of perfect knowledge proved unsustainable, so it was replaced by an ingenious device. Supply and demand were taken as independently given. This condition was presented as a methodological requirement rather than an assumption. It was argued that economic theory studies the relationship between supply and demand; therefore it must take both of them as given.

As I have shown elsewhere, the condition that supply and demand are independently given cannot be reconciled with reality, at least as far as the financial markets are concerned -- and financial markets play a crucial role in the allocation of resources. Buyers and sellers in financial markets seek to discount a future that depends on their own decisions. The shape of the supply and demand curves cannot be taken as given because both of them incorporate expectations about events that are shaped by those expectations. There is a two-way feedback mechanism between the market participants' thinking and the situation they think about -- "reflexivity." It accounts for both the imperfect understanding of the participants (recognition of which is the basis of the concept of the open society) and the indeterminacy of the process in which they participate.

If the supply and demand curves are not independently given, how are market prices determined? If we look at the behavior of financial markets, we find that instead of tending toward equilibrium, prices continue to fluctuate relative to the expectations of buyers and sellers. There are prolonged periods when prices are moving away from any theoretical equilibrium. Even if they eventually show a tendency to return, the equilibrium is not the same as it would have been without the intervening period. Yet the concept of equilibrium endures. It is easy to see why: without it, economics could not say how prices are determined.

In the absence of equilibrium, the contention that free markets lead to the optimum allocation of resources loses its justification. The supposedly scientific theory that has been used to validate it turns out to be an axiomatic structure whose conclusions are contained in its assumptions and are not necessarily supported by the empirical evidence. The resemblance to Marxism, which also claimed scientific status for its tenets, is too close for comfort.

I do not mean to imply that economic theory has deliberately distorted reality for political purposes. But in trying to imitate the accomplishments (and win for itself the prestige) of natural science, economic theory attempted the impossible. The theories of social science relate to their subject matter in a reflexive manner. That is to say, they can influence events in a way that the theories of natural science cannot. Heisenberg's famous uncertainty principle implies that the act of observation may interfere with the behavior of quantum particles; but it is the observation that creates the effect, not the uncertainty principle itself. In the social sphere, theories have the capacity to alter the subject matter to which they relate. Economic theory has deliberately excluded reflexivity from consideration. In doing so, it has distorted its subject matter and laid itself open to exploitation by laissez-faire ideology.

What allows economic theory to be converted into an ideology hostile to the open society is the assumption of perfect knowledge -- at first openly stated and then disguised in the form of a methodological device. There is a powerful case for the market mechanism, but it is not that markets are perfect; it is that in a world dominated by imperfect understanding, markets provide an efficient feedback mechanism for evaluating the results of one's decisions and correcting mistakes.

Whatever its form, the assertion of perfect knowledge stands in contradiction to the concept of the open society (which recognizes that our understanding of our situation is inherently imperfect). Since this point is abstract, I need to describe specific ways in which laissez-faire ideas can pose a threat to the open society. I shall focus on three issues: economic stability, social justice, and international relations.

ECONOMIC STABILITY

ECONOMIC theory has managed to create an artificial world in which the participants' preferences and the opportunities confronting participants are independent of each other, and prices tend toward an equilibrium that brings the two forces into balance. But in financial markets prices are not merely the passive reflection of independently given demand and supply; they also play an active role in shaping those preferences and opportunities. This reflexive interaction renders financial markets inherently unstable. Laissez-faire ideology denies the instability and opposes any form of government intervention aimed at preserving stability. History has shown that financial markets do break down, causing economic depression and social unrest. The breakdowns have led to the evolution of central banking and other forms of regulation. Laissez-faire ideologues like to argue that the breakdowns were caused by faulty regulations, not by unstable markets. There is some validity in their argument, because if our understanding is inherently imperfect, regulations are bound to be defective. But their argument rings hollow, because it fails to explain why the regulations were imposed in the first place. It sidesteps the issue by using a different argument, which goes like this: since regulations are faulty, unregulated markets are perfect.

The argument rests on the assumption of perfect knowledge: if a solution is wrong, its opposite must be right. In the absence of perfect knowledge, however, both free markets and regulations are flawed. Stability can be preserved only if a deliberate effort is made to preserve it. Even then breakdowns will occur, because public policy is often faulty. If they are severe enough, breakdowns may give rise to totalitarian regimes.

Instability extends well beyond financial markets: it affects the values that guide people in their actions. Economic theory takes values as given. At the time economic theory was born, in the age of Adam Smith, David Ricardo, and Alfred Marshall, this was a reasonable assumption, because people did, in fact, have firmly established values. Adam Smith himself combined a moral philosophy with his economic theory. Beneath the individual preferences that found expression in market behavior, people were guided by a set of moral principles that found expression in behavior outside the scope of the market mechanism. Deeply rooted in tradition, religion, and culture, these principles were not necessarily rational in the sense of representing conscious choices among available alternatives. Indeed, they often could not hold their own when alternatives became available. Market values served to undermine traditional values.

There has been an ongoing conflict between market values and other, more traditional value systems, which has aroused strong passions and antagonisms. As the market mechanism has extended its sway, the fiction that people act on the basis of a given set of nonmarket values has become progressively more difficult to maintain. Advertising, marketing, even packaging, aim at shaping people's preferences rather than, as laissez-faire theory holds, merely responding to them. Unsure of what they stand for, people increasingly rely on money as the criterion of value. What is more expensive is considered better. The value of a work of art can be judged by the price it fetches. People deserve respect and admiration because they are rich. What used to be a medium of exchange has usurped the place of fundamental values, reversing the relationship postulated by economic theory. What used to be professions have turned into businesses. The cult of success has replaced a belief in principles. Society has lost its anchor.

SOCIAL DARWINISM

BY taking the conditions of supply and demand as given and declaring government intervention the ultimate evil, laissez-faire ideology has effectively banished income or wealth redistribution. I can agree that all attempts at redistribution interfere with the efficiency of the market, but it does not follow that no attempt should be made. The laissez-faire argument relies on the same tacit appeal to perfection as does communism. It claims that if redistribution causes inefficiencies and distortions, the problems can be solved by eliminating redistribution -- just as the Communists claimed that the duplication involved in competition is wasteful, and therefore we should have a centrally planned economy. But perfection is unattainable. Wealth does accumulate in the hands of its owners, and if there is no mechanism for redistribution, the inequities can become intolerable. "Money is like muck, not good except it be spread." Francis Bacon was a profound economist.

The laissez-faire argument against income redistribution invokes the doctrine of the survival of the fittest. The argument is undercut by the fact that wealth is passed on by inheritance, and the second generation is rarely as fit as the first.

In any case, there is something wrong with making the survival of the fittest a guiding principle of civilized society. This social Darwinism is based on an outmoded theory of evolution, just as the equilibrium theory in economics is taking its cue from Newtonian physics. The principle that guides the evolution of species is mutation, and mutation works in a much more sophisticated way. Species and their environment are interactive, and one species serves as part of the environment for the others. There is a feedback mechanism similar to reflexivity in history, with the difference being that in history the mechanism is driven not by mutation but by misconceptions. I mention this because social Darwinism is one of the misconceptions driving human affairs today. The main point I want to make is that cooperation is as much a part of the system as competition, and the slogan "survival of the fittest" distorts this fact.

INTERNATIONAL RELATIONS

LAISSEZ-FAIRE ideology shares some of the deficiencies of another spurious science, geopolitics. States have no principles, only interests, geopoliticians argue, and those interests are determined by geographic location and other fundamentals. This deterministic approach is rooted in an outdated nineteenth-century view of scientific method, and it suffers from at least two glaring defects that do not apply with the same force to the economic doctrines of laissez-faire. One is that it treats the state as the indivisible unit of analysis, just as economics treats the individual. There is something contradictory in banishing the state from the economy while at the same time enshrining it as the ultimate source of authority in international relations. But let that pass. There is a more pressing practical aspect of the problem. What happens when a state disintegrates? Geopolitical realists find themselves totally unprepared. That is what happened when the Soviet Union and Yugoslavia disintegrated. The other defect of geopolitics is that it does not recognize a common interest beyond the national interest.

With the demise of communism, the present state of affairs, however imperfect, can be described as a global open society. It is not threatened from the outside, from some totalitarian ideology seeking world supremacy. The threat comes from the inside, from local tyrants seeking to establish internal dominance through external conflicts. It may also come from democratic but sovereign states pursuing their self-interest to the detriment of the common interest. The international open society may be its own worst enemy.

The Cold War was an extremely stable arrangement. Two power blocs, representing opposing concepts of social organization, were struggling for supremacy, but they had to respect each other's vital interests, because each side was capable of destroying the other in an all-out war. This put a firm limit on the extent of the conflict; all local conflicts were, in turn, contained by the larger conflict. This extremely stable world order has come to an end as the result of the internal disintegration of one superpower. No new world order has taken its place. We have entered a period of disorder.

Laissez-faire ideology does not prepare us to cope with this challenge. It does not recognize the need for a world order. An order is supposed to emerge from states' pursuit of their self-interest. But, guided by the principle of the survival of the fittest, states are increasingly preoccupied with their competitiveness and unwilling to make any sacrifices for the common good.

There is no need to make any dire predictions about the eventual breakdown of our global trading system in order to show that a laissez-faire ideology is incompatible with the concept of the open society. It is enough to consider the free world's failure to extend a helping hand after the collapse of communism. The system of robber capitalism that has taken hold in Russia is so iniquitous that people may well turn to a charismatic leader promising national revival at the cost of civil liberties.

If there is any lesson to be learned, it is that the collapse of a repressive regime does not automatically lead to the establishment of an open society. An open society is not merely the absence of government intervention and oppression. It is a complicated, sophisticated structure, and deliberate effort is required to bring it into existence. Since it is more sophisticated than the system it replaces, a speedy transition requires outside assistance. But the combination of laissez-faire ideas, social Darwinism, and geopolitical realism that prevailed in the United States and the United Kingdom stood in the way of any hope for an open society in Russia. If the leaders of these countries had had a different view of the world, they could have established firm foundations for a global open society.

At the time of the Soviet collapse there was an opportunity to make the UN function as it was originally designed to. Mikhail Gorbachev visited the United Nations in 1988 and outlined his vision of the two superpowers cooperating to bring peace and security to the world. Since then the opportunity has faded. The UN has been thoroughly discredited as a peacekeeping institution. Bosnia is doing to the UN what Abyssinia did to the League of Nations in 1936.

Our global open society lacks the institutions and mechanisms necessary for its preservation, but there is no political will to bring them into existence. I blame the prevailing attitude, which holds that the unhampered pursuit of self-interest will bring about an eventual international equilibrium. I believe this confidence is misplaced. I believe that the concept of the open society, which needs institutions to protect it, may provide a better guide to action. As things stand, it does not take very much imagination to realize that the global open society that prevails at present is likely to prove a temporary phenomenon.

THE PROMISE OF FALLIBILITY

IT is easier to identify the enemies of the open society than to give the concept a positive meaning. Yet without such a positive meaning the open society is bound to fall prey to its enemies. There has to be a common interest to hold a community together, but the open society is not a community in the traditional sense of the word. It is an abstract idea, a universal concept. Admittedly, there is such a thing as a global community; there are common interests on a global level, such as the preservation of the environment and the prevention of war. But these interests are relatively weak in comparison with special interests. They do not have much of a constituency in a world composed of sovereign states. Moreover, the open society as a universal concept transcends all boundaries. Societies derive their cohesion from shared values. These values are rooted in culture, religion, history, and tradition. When a society does not have boundaries, where are the shared values to be found? I believe there is only one possible source: the concept of the open society itself.

To fulfill this role, the concept of the open society needs to be redefined. Instead of there being a dichotomy between open and closed, I see the open society as occupying a middle ground, where the rights of the individual are safeguarded but where there are some shared values that hold society together. This middle ground is threatened from all sides. At one extreme, communist and nationalist doctrines would lead to state domination. At the other extreme, laissez-faire capitalism would lead to great instability and eventual breakdown. There are other variants. Lee Kuan Yew, of Singapore, proposes a so-called Asian model that combines a market economy with a repressive state. In many parts of the world control of the state is so closely associated with the creation of private wealth that one might speak of robber capitalism, or the "gangster state," as a new threat to the open society.

I envisage the open society as a society open to improvement. We start with the recognition of our own fallibility, which extends not only to our mental constructs but also to our institutions. What is imperfect can be improved, by a process of trial and error. The open society not only allows this process but actually encourages it, by insisting on freedom of expression and protecting dissent. The open society offers a vista of limitless progress. In this respect it has an affinity with the scientific method. But science has at its disposal objective criteria -- namely the facts by which the process may be judged. Unfortunately, in human affairs the facts do not provide reliable criteria of truth, yet we need some generally agreed-upon standards by which the process of trial and error can be judged. All cultures and religions offer such standards; the open society cannot do without them. The innovation in an open society is that whereas most cultures and religions regard their own values as absolute, an open society, which is aware of many cultures and religions, must regard its own shared values as a matter of debate and choice. To make the debate possible, there must be general agreement on at least one point: that the open society is a desirable form of social organization. People must be free to think and act, subject only to limits imposed by the common interests. Where the limits are must also be determined by trial and error.

The Declaration of Independence may be taken as a pretty good approximation of the principles of an open society, but instead of claiming that those principles are self-evident, we ought to say that they are consistent with our fallibility. Could the recognition of our imperfect understanding serve to establish the open society as a desirable form of social organization? I believe it could, although there are formidable difficulties in the way. We must promote a belief in our own fallibility to the status that we normally confer on a belief in ultimate truth. But if ultimate truth is not attainable, how can we accept our fallibility as ultimate truth?

This is an apparent paradox, but it can be resolved. The first proposition, that our understanding is imperfect, is consistent with a second proposition: that we must accept the first proposition as an article of faith. The need for articles of faith arises exactly because our understanding is imperfect. If we enjoyed perfect knowledge, there would be no need for beliefs. But to accept this line of reasoning requires a profound change in the role that we accord our beliefs.

Historically, beliefs have served to justify specific rules of conduct. Fallibility ought to foster a different attitude. Beliefs ought to serve to shape our lives, not to make us abide by a given set of rules. If we recognize that our beliefs are expressions of our choices, not of ultimate truth, we are more likely to tolerate other beliefs and to revise our own in the light of our experiences. But that is not how most people treat their beliefs. They tend to identify their beliefs with ultimate truth. Indeed, that identification often serves to define their own identity. If their experience of living in an open society obliges them to give up their claim to the ultimate truth, they feel a sense of loss.

The idea that we somehow embody the ultimate truth is deeply ingrained in our thinking. We may be endowed with critical faculties, but we are inseparably tied to ourselves. We may have discovered truth and morality, but, above all, we must represent our interests and our selves. Therefore, if there are such things as truth and justice -- and we have come to believe that there are -- then we want to be in possession of them. We demand truth from religion and, recently, from science. A belief in our fallibility is a poor substitute. It is a highly sophisticated concept, much more difficult to work with than more primitive beliefs, such as my country (or my company or my family), right or wrong.

If the idea of our fallibility is so hard to take, what makes it appealing? The most powerful argument in its favor is to be found in the results it produces. Open societies tend to be more prosperous, more innovative, more stimulating, than closed ones. But there is a danger in proposing success as the sole basis for holding a belief, because if my theory of reflexivity is valid, being successful is not identical with being right. In natural science, theories have to be right (in the sense that the predictions and explanations they produce correspond to the facts) for them to work (in the sense of producing useful predictions and explanations). But in the social sphere what is effective is not necessarily identical with what is right, because of the reflexive connection between thinking and reality. As I hinted earlier, the cult of success can become a source of instability in an open society, because it can undermine our sense of right and wrong. That is what is happening in our society today. Our sense of right and wrong is endangered by our preoccupation with success, as measured by money. Anything goes, as long as you can get away with it.

If success were the only criterion, the open society would lose out against totalitarian ideologies -- as indeed it did on many occasions. It is much easier to argue for my own interest than to go through the whole rigmarole of abstract reasoning from fallibility to the concept of the open society.

The concept of the open society needs to be more firmly grounded. There has to be a commitment to the open society because it is the right form of social organization. Such a commitment is hard to come by.

I believe in the open society because it allows us to develop our potential better than a social system that claims to be in possession of ultimate truth. Accepting the unattainable character of truth offers a better prospect for freedom and prosperity than denying it. But I recognize a problem here: I am sufficiently committed to the pursuit of truth to find the case for the open society convincing, but I am not sure that other people will share my point of view. Given the reflexive connection between thinking and reality, truth is not indispensable for success. It may be possible to attain specific objectives by twisting or denying the truth, and people may be more interested in attaining their specific objectives than in attaining the truth. Only at the highest level of abstraction, when we consider the meaning of life, does truth take on paramount importance. Even then, deception may be preferable to the truth, because life entails death and death is difficult to accept. Indeed, one could argue that the open society is the best form of social organization for making the most of life, whereas the closed society is the form best suited to the acceptance of death. In the ultimate analysis a belief in the open society is a matter of choice, not of logical necessity.

That is not all. Even if the concept of the open society were universally accepted, that would not be sufficient to ensure that freedom and prosperity would prevail. The open society merely provides a framework within which different views about social and political issues can be reconciled; it does not offer a firm view on social goals. If it did, it would not be an open society. This means that people must hold other beliefs in addition to their belief in the open society. Only in a closed society does the concept of the open society provide a sufficient basis for political action; in an open society it is not enough to be a democrat; one must be a liberal democrat or a social democrat or a Christian democrat or some other kind of democrat. A shared belief in the open society is a necessary but not a sufficient condition for freedom and prosperity and all the good things that the open society is supposed to bring.

It can be seen that the concept of the open society is a seemingly inexhaustible source of difficulties. That is to be expected. After all, the open society is based on the recognition of our fallibility. Indeed, it stands to reason that our ideal of the open society is unattainable. To have a blueprint for it would be self-contradictory. That does not mean that we should not strive toward it. In science also, ultimate truth is unattainable. Yet look at the progress we have made in pursuing it. Similarly, the open society can be approximated to a greater or lesser extent.

To derive a political and social agenda from a philosophical, epistemological argument seems like a hopeless undertaking. Yet it can be done. There is historical precedent. The Enlightenment was a celebration of the power of reason, and it provided the inspiration for the Declaration of Independence and the Bill of Rights. The belief in reason was carried to excess in the French Revolution, with unpleasant side effects; nevertheless, it was the beginning of modernity. We have now had 200 years of experience with the Age of Reason, and as reasonable people we ought to recognize that reason has its limitations. The time is ripe for developing a conceptual framework based on our fallibility. Where reason has failed, fallibility may yet succeed



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Know our enemy.



To: Dan from Michigan

Soros forgets Nazism and Socialism are and were just as anti-capitalist as Communism.



by 2 posted onby finnman69 (cum puella incedit minore medio corpore sub quo manifestus globus, inflammare animos)

To: Dan from Michigan

good fit for the Demos



To: Pikamax

Exactly what I was thinking...



I'm waiting for the perfect time to spring this one on a lib... Whenever they say "I'm not a socialist, I like capitalism", I'll ask them if they didn't have a problem taking Soros' money.



To: Dan from Michigan

An open society is not merely the absence of government intervention and oppression. His key and unexamined assumption.



To: Taliesan

The guy makes money from anarchy... It's no wonder he would makes these kinds of statements.



Anyone who thinks this guy acts on "morals" is completely insane.



To: Dan from Michigan

"I contend that an open society may also be threatened from the opposite direction -- from excessive individualism. This from a billionaire who's throwing millions to the RATS to further his goals. Does anyone else sense some hypocrisy?



To: Dan from Michigan; swarthyguy; Orion78; Brian S; Paul Ross; Noswad; JohnOG; lavaroise; ...

He claims to have helped collapsed Communism in the East Bloc. Without going into a whole lot of detail there is a model which asserts that the collapse was faked, in order to put the West to sleep. Now, here we've got Soros, associated with said fake collapse. And now he's railing against Capitalism and working actively to get rid of Bush, if not via coup, then via electoral manipulation. What is going on here?



by 8 posted onby GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)

To: Dan from Michigan

Sounds like more bass-ackwards blame the victim liberal screwed up thinking.



by 9 posted onby tkathy (The islamofascists and the democrats are trying to destroy this country)

To: belmont_mark

What is going on here? My 2 cents. Soros and the Dem party are now gunning to make the US a wholly dependent subsidiary of the UN. They want to ensure that the US's hands are so tied in the future that it will be incapacitated. Remember Gulliver tied down by a million threads by the little people. The Democrat Party, utterly bankrupt in the field of foreign policy and realistic thinking has given up the ghost and wants to make US dance to the UN ONLY. Watch for subterranean warfare carried out by the financial forces of Soros to weaken the US and Bush in preparation for the election next year. The bright spot on the horizon? A civil war in Saudi which forces Bush to grasp the nettle and do what's necessary, rallying the American people to his cause and re-election at the same time.



To: swarthyguy

Matt 12:29 "Or else how can one enter into a strong man's house, and spoil his goods, except he first bind the strong man? and then he will spoil his house."





To: swarthyguy

The bright spot on the horizon? A civil war in Saudi which forces Bush to grasp the nettle and do what's necessary, rallying the American people to his cause and re-election at the same time. Perhaps. But even as we speak, South America is going Communist...and GWB is failing to 'grasp the nettle and do what's necessary' there. Too many components of his own inner circle are compromised...James Baker III, Jack Kemp, and of course, Colin Powell. Even Dick Cheney for Pete's sake. What a predicament.



To: Dan from Michigan; hchutch; Chancellor Palpatine

Soros makes his money by engaging in speculative currency trades. His "dog in the fight" is less about the UN and more about preserving international banking secrecy, which is being threatened by the war on terrorism. In short, he wants to be able to trash other country's economies at his own whim, even if it means allowing al-Qaeda to kill a few thousand or more people at one time. After all, you can't make an omelet without breaking a few eggs. Currency speculators are, by their nature, shady characters without especially firm codes of ethics. They frequently have to procure information not generally available to the public; said information is often found in the hands of goobermint employees or elected officials. (Can you say "bribery," boys and girls?" I knew you could!) They frequently come across other shady persons engaged in nefarious actions. They usually do not report this stuff to the authorities, because it will engender all manner of awkward questioning re: how they happened to learn about the nefarious actions.



by 13 posted onby Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Major Vic Deakins, USAF)

To: Poohbah





Interesting in light of the following piece from FT.



A new UN report, obtained by the Financial Times, reveals that despite "considerable progress" in combating terrorist financing, al-Qaeda related businesses and charities continue to operate across the globe.



It highlights the activities of Youssef Nada and Idris Nasreddin, directors of al-Taqwa, a financial group the US believes was the most important fund-raising operation for al-Qaeda.



The report says the two men continue to maintain commercial interests and property in Italy and Switzerland, despite their designation as terrorist financiers. It says Mr Nada travelled to Liechtenstein in January and tried to re-register two al-Taqwa related companies under new names. By doing so he violated a UN-sanctioned travel ban.



http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1066565876294&p=1012571727088

>>>>he wants to be able to trash other country's economies at his own whim, even if it means allowing al-Qaeda to kill a few thousand or more people at one time.Interesting in light of the following piece from FT.A new UN report, obtained by the Financial Times, reveals that despite "considerable progress" in combating terrorist financing, al-Qaeda related businesses and charities continue to operate across the globe.It highlights the activities of Youssef Nada and Idris Nasreddin, directors of al-Taqwa, a financial group the US believes was the most important fund-raising operation for al-Qaeda.The report says the two men continue to maintain commercial interests and property in Italy and Switzerland, despite their designation as terrorist financiers. It says Mr Nada travelled to Liechtenstein in January and tried to re-register two al-Taqwa related companies under new names. By doing so he violated a UN-sanctioned travel ban.

To: Dan from Michigan

THis guy makes his money first. Then he turns around and b------ about business.



To: Poohbah; Chancellor Palpatine; BOBTHENAILER; PhiKapMom; Miss Marple

I'd use variations of manipulation, myself to describe what Soros is up to... speculation is, IMO, legitimate to a degree. It implies that one SPECULATES on what might happen.



Soros is more interested in a "sure thing" on that front - ergo, I consider him to be into currency MANIPULATION.



by 16 posted onby hchutch ("I don't see what the big deal is, I really don't." - Major Vic Deakins, USAF (ret.))

To: hchutch

Excellent clarification.



However, "speculation" is a necessary term of art--actively admitting that you're trying to manipulate national currencies is a great way to, for example, be declared an "Enemy of the Realm" by Her Majesty's Government (which he richly earned after crashing the pound in 1991).



by 17 posted onby Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Major Vic Deakins, USAF)

To: Dan from Michigan

...laissez-faire ideology has effectively banished income or wealth redistribution. I can agree that all attempts at redistribution interfere with the efficiency of the market, but it does not follow that no attempt should be made. Then the hypocrit ought to redistribute HIS wealth. I volunteer to relieve Soros of his filty lucre.



To: Poohbah

The clarification is essential, IMHO.



If I buy stock, I am betting the company is going to perform well, and thus increase the stock price. The only active involvement a speculator has is to buy the stock.



If I were to do with stocks what Soros does to currency, I'd sell short, and then I'd have a bunch of my buddies talk down the company just before it's time for me to buy back the stock I sold short.



The latter would get me some VERY long discussions with people from the Securities and Exchange Commission, and it could mean time in substandard federally subsidized housing facility.



by 19 posted onby hchutch ("I don't see what the big deal is, I really don't." - Major Vic Deakins, USAF (ret.))

To: hchutch

Exactly.



How Soros has lived as long as he has--74 years--is a mystery to me. If I'd been John Major in 1991, I would've invited M to lunch at my club and made a discreet inquiry about whether or not Commander Bond, RNVR, was available for assignment.



by 20 posted onby Poohbah ("Would you mind not shooting at the thermonuclear weapons?" -- Major Vic Deakins, USAF)

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