From the pages of Z Magazine
An Anti-capitalist Billionaire?
George Soros and the capitalist "threat"
By Rico Cleffi
Certain segments of the business media have been buzzing lately over a "controversial" article entitled "The Capitalist Threat," written by billionaire investor George Soros. The article, which was the cover story of Februarys Atlantic Monthly, attacked the irreconcilability of laissez-faire capitalism and "open societies." Recently National Public Radios "Marketplace" (2/23) ran a gushing commentary by a Brookings Institute fellow, who likened Soros to a "Wall Street Paul Revere," warning of the dangers of capitalism run amok. The investment king has also drawn attention on PBS "Lehrer News Hour," and in the pages of the Economist, where he was attacked for "hallucinating." So whats all the hype about? Who is this Soros character, and why would a Wall Street billionaire pen an article with a seemingly anti-capitalist title?
George Soros is the highest paid executive on Wall Street and made $1.1 billion in 1993 alone. As one might expect from a billionaire, "The Capitalist Threat" bemoans not the threat of capitalism, but "the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life." The financier harks back to the work of philosopher Karl Popper, who embraced neither communism nor Nazism, but "another view of society, which recognizes that nobody has a monopoly on truth; different people have different views and different interests, and there is a need for institutions that allow them to live together in peace." Soros never quite specifies whether the stock market is such an institution, but he does decry the UNs inability to maintain global stability.
At first I was angered by Soross piece, but then who in their right mind would expect a major capitalist to really have a problem with capitalism. The article is written in an extremely self-congratulatory tone, as the billionaire gloats over the success of his Open Society Fund, which he makes out to have lead the march toward human freedom behind the Iron Curtain. In fact, it was "the main source of support for civil society in Hungary [Soross home country], and as civil society flourished, so the Communist regime waned." Okay, so Soros hates communism, but was it his desire for an "open society" or an open market behind his unsuccessful 1994 drive to buy 18 percent of Hungarys biggest state bank? (Reuters Business Report 5/8/95)
He attacks Marxism and free market ideology for considering themselves sciences. He also dogs the survival-of-the-fittest reasoning behind free market thought (on grounds that inheritance isnt really fair). Also tackled is the fact that "Society has lost its anchor," and now money shapes all of our value systems, leaving us a society in which "[p]eople deserve respect and admiration because they are rich," and "[a]nything goes, as long as you can get away with it." Youve really gotta wonder whether Soros appreciates the irony of such phrases, or whether he fancies himself to be some kind of exception, perhaps an overachiever who "earned" his wealth on the stock market.
"The Capitalist Threat" is truly specious. Its almost semi-decent sounding in a few placesbut overall its heavy on lightweight analysis, and devoid of solutions. The billionaire stresses human cooperation, and bashes "robber capitalism" (when its going on in Russia and elsewhere). He honestly admits that "[w]ealth does accumulate in the hands of its owners, and if there is no mechanism for redistribution, the inequities can become intolerable." The crux of his argument is revealed, however, when he states that "a laissez-faire ideology is incompatible with the concept of the open society," and "[h]istory has shown that financial markets do break down, causing economic depression and social unrest." Soros is no idiot, he has made enough money to know that in a capitalist society, free markets are both impractical and undesirable.
Perhaps the best thing about "The Capitalist Threat"aside from the admission that free markets dont workis the title. Its here that Soros really misses the boat; the threat is capitalism itself, along with its beneficiaries, like Soros. In the U.S., close to 50 percent of publicly held stock, as well as about 80 percent of bonds, are concentrated in the hands of the richest 1 percent of the population. During the current bonus season on Wall Street "The security industrys 1,500,000 workers in New York City are expected to pull down bonuses of more than $8.1 billion, 30 percent more than the previous high of $6.2 billion in 1995 an average of $54,000 a person, with bonuses ranging from $10 million or more for the biggest winners to a few thousand for the lowliest clerks" (New York Times 2/1/97; emphasis added). But as disgusting as these facts are, none of them are anomaliesthis is capitalism functioning at its best; in an extremely brutal manner.
Apparently Soros has no problem with gross inequality, as long as everythings running smoothly. Back in 1995, he told the Washington Post that the present epoch was "the golden age of capitalism." According to the Post, "even he is beginning to have doubts about whether this global love affair with capitalism has gone too farhe thinks regulators are too lax about protecting markets, for examplebut as long as the affair lasts, he sees money to be made" (10/1/95). Soros saw no threat in the market until it had come to dominate all aspects of public life instead of just most of them. Despite all the tooting of his own horn, he isnt entirely free of blame. He saw no need to worry about the excesses of the market while the Cold War social contract was still in place. But in the post-Cold War era, he has good reason to worry about domestic attacks on vital social services. The image that springs to mind is that of a master arsonist, who lives high on the hilltops, complaining as flames near his privileged abode.
Soross article will surely be touted by Keynesian liberals as proof that even the best capitalists are in favor of some kind of welfare state. Excerpts may be read on the house floor in order to bolster arguments for slight regulation, or U.S. participation in joint "peace keeping" missions.
But it is important to question Soross claim that "an open society, which is aware of many cultures and religions, must regard its own values as matter of debate and choice." Why, if Soros wants such a debate to occur, does he fail to mention control of the media (or the very nature of the stock market) anywhere in his article?
Okay, so its no real surprise that Soros had a really weak take on capitalism (after all, hes a billionaire), but he has a less obvious reason for glossing over the issue of a free and democratic media. Soros, whos got his money sunk into everything from burritos to gold mines to satellite systems, also happens to be 1 of 4, 5 percent investors in the Times Mirror media empire, which owns the Los Angeles Times, and shut down New York Newsday in 1995. According to the LA Times, "Times Mirrors first quarter earnings from continuing operations rose 85 percent" in 1996, after a "restructuring [which] involved eliminating 3,000 jobs company-wide." A Soros lackey responded: "Were happy with the direction," that the company was taking.
An anti-capitalist crusader with his hands all over the means of informationhes also 5 percent owner of New World Communications which, aside from owning 10 TV stations, "produce[s] and distribute[s] movies of the week, series, mini-series, soap operas and own[s] interest in [a] company which publishes a monthly entertainment magazine." Soros has also poured over $50 million into Geotek, the New Jersey-based mobile telephone company which maxxed out on radio frequencies "for a fraction of what" other companies would pay (essentially a two-time handout; once for the Israeli military, and once from the U.S. which funds it (New Jerseys The Record 3/2/95).
According to Floridas Sun-Sentinel (2/14/96), news that one of Soross funds beefed up financing in Sensormatic Electronics coincided with the announcement that the company would fire 775 workers. Apparently, Soross vision of an "open society" doesnt included the right to information, or the right to not be thrown out of work in order to please investors. One business publication recently called Soros "The Carnegie of our time" (Foundation News & Commentary May/June 1996). Id say thats a pretty fair assessment; like Carnegie, Soros views workers as expendable.
Soros may not be as bad as some other capitalists, after all, he divested funds from Burma (although hes got a bundle of dough in a Chinese airline). He has reportedly set up a fund for immigrants living in the U.S., and even held a press conference (talk about an empowering mass action) against Clintons signing of the welfare bill. He has, however, praised the federal budget-cutting fervor which has been used to rationalize the gutting of welfare (Washington Post 10/1/95).
Like it or not, George Soros, despite all the liberal rhetoric, will behave like a capitalist. Take for example his stance on welfareSoross article doesnt deal with welfare at all. It makes no mention of an over-bloated defense budget getting priority over social services. This isnt too shocking, considering that Soros is in tight with some of the biggest welfare cheats in the country: defense contractors. Along with Lockheed, Bechtel, and others, he owns Airport Group International. The company buys airports from governments, and runs the Burbank-Glendale-Pasadena Airport which, after being bought by the three cities in 1977, was handed back to the company to manageessentially a big fat giveaway. Soros didnt sign on to AGI until a few years after the buyout, but the airport is still a public entity which yields huge private profits.
It would be almost futile to continue ranting about Soross hypocrisy: there are countless other examples, but the main problem with "The Capitalist Threat" is the problem with mainstream liberal thought as best exemplified by The Atlantic Monthly. So lacking is any kind of real critique of the institutions and economic forces which shape society, that people are willing to embrace any voice that seems to somehow challenge the status quo. Soross views arent really unusual for someone in his position. Not too long ago, Foreign Affairs, the journal of the elite policy planning group, the Council on Foreign Relations (which Soros is a member of), ran articles warning of the dangers of economic inequality resulting from global exploitation. Unfortunately, the mainstream debate is so limited that some people are willing to take the farthest left wing of elite opinion as an alternative.
Rico Cleffi is a graduate of Z Media Institute and lives/agitates in Southeastern Massachusetts.