Philanthropist George Soros, long loathed by the radical right, is spending billions to support liberal democracy and fight hate crimes.
The bank incident occurred in 1992. Britain wanted to keep the pound close to Germany’s then Deutschmark, hoping to be part of the European Exchange Rate Mechanism (ERM). But Germany’s inflation rate was low, and Britain’s was high. Soros shorted the pound, a currency manipulation technique of selling currency and undertaking to buy it back. If the currency increases in value, the trader loses; if the currency decreases in value, the trader makes money. Soros’ bet was that Britain would have to devalue. It worked. Soros made US$1 billion and forced Britain to leave the ERM. He wasn’t the only currency speculator involved, but his was the biggest bet, and it earned him the reputation of being the world’s best.
Soros was already rich before 1992 and had supported various philanthropic causes since 1979, including helping black students in South Africa, but it was the Open Society Foundations he established that became the main channel for his philanthropy. In this, he was influenced by Karl Popper, a philosopher who wrote The Open Society and Its Enemies (1945). Popper, already with a formidable reputation in Europe, wrote the book while teaching at Canterbury University College, the predecessor to the University of Canterbury. He was a critic of totalitarian societies and believed societies needed freedom.
By 2017, Soros had transferred more than US$30 billion of his own fortune to the Open Society Foundations, which has a network extending to more than 100 countries. The organisation seeks to build tolerant, accountable governments, strengthen the rule of law and advance respect for human rights, minorities, diverse opinions, justice, education and independent media.
Soros’ background and experiences have influenced his thinking. He was born in Hungary in 1930, and survived Nazi occupation and the Holocaust with the rest of his Jewish family after they changed their identities. Hundreds of thousands of Hungarian Jews were killed by Nazi Germany. After the war, Hungary became communist. Soros emigrated to Britain and studied at the London School of Economics, where Popper was then teaching. He emigrated to the US in 1956. There, he traded mainly in currencies and launched his own hedge funds, including Quantum Fund and Soros Fund Management. He eventually decided he had enough money and that he would devote himself to philanthropy.
In 1991, Soros established the Central European University, whose main campuses are in Budapest and Vienna. It has a US$880 million endowment. The university is ranked highly for political and international studies and a basic tenet of its teaching is the promotion of open societies.
As a supporter of dissidents and civil rights groups, particularly in Eastern Europe, Soros, through the Open Society Foundations, favoured supplying photocopying machines, a strategy that helped ensure that a government was not the sole source of information through any news organisations it controlled.
He didn’t escape criticism for his currency trading. Thailand, Malaysia, Indonesia, Japan and Russia at various times blamed him for effects on their exchange rates, but it has been, and continues to be, his outspoken and financial support for liberal causes that he is now most often criticised.
He publishes widely and is always invited to give a talk to the World Economic Forum at Davos, Switzerland. His 2018 talk was about social media, and he railed against Facebook and Google. He blamed them, particularly Facebook, for deliberately using techniques he thought were addictive, but his main concern was that they had the potential to be used to support authoritarian governments. His 2019 address was highly critical of China’s censorship practices.
Facebook employed a public relations firm to investigate and attack Soros after the 2018 criticism. Mark Zuckerberg, Facebook’s chief executive and chairman, and Sheryl Sandberg, the company’s chief operating officer, both denied knowledge of hiring the PR firm. Sandberg vehemently denied it was an attack influenced by the fact that Soros is Jewish, saying that she was Jewish herself. One of the lines of Facebook’s investigation was to find out whether Soros had attempted to profit from a drop in the price of socialmedia shares.
Soros has long been a target of the radical right and is particularly hated by the Hungarian Government, which uses anti-Soros posters and whose measures to curb the activities of NGOs have become known as the anti-Soros laws. Ironically enough, Hungary’s Prime Minister, Viktor Orbán, was once a beneficiary of Soros’ wealth when he campaigned against the then communist government. Orbán’s Fidesz party has recently been suspended from the European People’s Party, which represents centre-right parties in the EU. The suspension was partly a response to Hungary’s treatment of the university that Soros founded.
A summary of why the radical right and authoritarian governments demonise Soros includes:
- Populists oppose his favouring of international organisations rather than nationalism or tribalism. He is labelled as a globalist.
- Countries or groups who want to control what is said about their history or activities – their own narrative – object to freedom of speech, especially speech that might differ from the official line.
Soros’ influence through the organisations he supports and through his writings amounts to an alternative centre of power. He funds certain civil rights groups that a political party in government might see as critics or as undoing what the government wants. The aims of the Open Society Foundations, including liberal democracy and freedom of speech, are against the intentions of some governments. Russia has thrown out the Open Society Foundations. Hungary has forced the Central European University to close some of its courses.
Shamefully, some people attack him with the old conspiracy theory that Jews control the international economy. He has become the bogeyman of people who espouse that belief and other conspiracy theorists. Larry Mitchell Hopkins, leader of the United Constitutional Patriots, an American militia group that sought to patrol borders, apparently told the Federal Bureau of Investigation that he had once planned to assassinate Barack Obama, Hillary Clinton and Soros.
Soros is a strong supporter of Britain’s remaining in the European Union. After talks involving EU commissioner Pierre Moscovici, former British prime minister Tony Blair and Soros, about a second referendum in Britain, the EU declined to release any details, no doubt fearing it might be interpreted as EU interference in Britain’s political decisions.
In a way, Soros’ support for the survival and growth of liberal democracy amounts to his biggest bet – a bet he sometimes doubts will come off.
Stuart McMillan is a senior fellow in the Centre for Strategic Studies at Victoria University of Wellington.
This article was first published in the May 18, 2019 issue of the New Zealand Listener.