The critical philanthropist 0

There are many businessmen who pretend to be philanthropic but are really furthering their own interests. So I am suspicious of them and journalists are right to be suspicious of me.

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Soros 255x203

Gints Grube talks with philanthropist George Soros

What are the myths about George Soros and can you use them to your advantage?

There are many such myths. In China, for instance, they call me “the Crocodile” – that, of course, was a result of the Asian financial crisis. The image of George Soros as the archenemy and speculator is widespread. Then there is the image of Soros as Midas – that everything he touches turns to gold. And then there is the image of Soros as a benefactor – so, for instance, in Russia I have been held in very high esteem, mainly because of the International Science Foundation. Aid was delivered at a crucial time and people know that they received it. And then there are a lot of other ideas, and a lot of people are confused, they can’t really understand what makes me tick.

Is it true that at the beginning you didn’t have a very clear idea about philanthropy and why get involved with it?

I was very critical of philanthropic activities and I remain very critical because most people do good in order to feel good and therefore they are subject to deception – people tell them things that they want to hear and then get money and do what they want to do, so it’s a feeling that lends itself to hypocrisy and there are a lot of unintended consequences.

What power do you have and what is the source of that power?

Obviously, the main element is money but, really, the money by itself would not have the effect that the foundations have had. The foundations work because there are people in these countries who take responsibility for what the foundation does and they use my money in that way. If they weren’t there, if they didn’t take responsibility, first of all I wouldn’t want to spend money there, so there wouldn’t be a foundation and, secondly, it wouldn’t be effective. So the foundation is not the money – what makes it powerful is a set of ideas and people who make use of these ideas.

What would have been different in Eastern Europe if you hadn’t been around?

Very difficult to say. I think some things would not have developed perhaps as far as they have, maybe some harm has also been avoided, for instance, take Latvia and the Baltic States – there was a real problem with the ethnic situation – namely, half of the people of Latvia are not Latvians, and the anxiety on the part of Latvians is to protect their national identity and it met with a lot of resistance, to not give citizenship to non-Letts. And I think the foundation has made it its business to facilitate the process by providing Latvian language instruction, generally helping with integration. Obviously, it wasn’t the foundation’s work alone, but the foundation made a significant contribution to what has been, I think, generally a very satisfactory, promising development. There could have been a real conflict – I have been in the Baltics and in the Balkans, so I know the difference between the two and the foundation was only one element, but I think it was a very positive accomplishment.

You have claimed you wanted to influence the history process. Have you succeeded?

No. I mean, I’ve tried. And I’m still trying but so far I haven’t succeeded.

In Potsdam 1989 you proposed a version of Marshall plan for Eastern Europe. Why was it not taken seriously then and what would have changed if it were accepted?

That was one of the most embarrassing moments of my life because people were publicly laughing at me and it was reported in the Frankfurter Allgemeine, on the front page, that my proposal was met with amusement. But I have never regretted having made it, and had it been accepted, history would have taken a different course. Subsequently, in 1992, I proposed that the IMF support for Russia, which was 15 billion dollars, should be earmarked for payment of pensions and unemployment benefits – that the same money that was given to the government should be given to the people who were entitled to these payments – at that time, it would have been only six dollars a month – that was the pension, so 15 billion would have been enough. Had my proposal been accepted, again, I think that history would have taken a very different course – for instance, all the pensioners who now vote for the Communists would have received something from the IMF and their views would be different. I continue to make proposals of this kind and, in a funny way, in my book on globalization, for instance, I propose mutual special drawing rights for the rich countries who donate international assistance. And while this proposal was not accepted, the U.S. government did propose what is now called the ‘Millenium Challenge’ and this was at the Monterrey conference that was organized by the United Nations, and the offer was five billion dollars over three years, starting 2004. I was in Monterrey and I gave a speech where I accused the U.S. government of deceptive packaging. I said, this package is only for a billion dollars each year, and that’s really absolutely inadequate. And then the government discovered that they’d made a mistake and they meant to say that they would give five billion dollars each year after three years, so I can’t say that it was due to my speech, but the fact is that they have actually changed their announcement.

Are your motives for operating in a certain area often questioned? Do you support such questioning by the media, as doubts and questioning are part of the critical thinking you promote?

I think they are entitled to have their doubts, and I encourage them to have their doubts because I am, in fact, a very unlikely creature. It’s really quite unusual. There are many other businessmen who pretend to be philanthropic but are really furthering their own interests. So I am suspicious of them and journalists are right to be suspicious of me.

For how long do you think the processes in Eastern Europe will be analyzed on the basis of post-Communist theories and arguments? In your opinion, do they still provide explanation for what’s going on here?

Well, the transition paradigm is now being exhausted. There was, in fact, a moment of transition, a historic moment, an evolutionary moment when the old system collapsed – it was a total collapse, the most far-reaching collapse that you could imagine, because it involved politics, the economic system, and it was a moral collapse as well, because the communist system, had been so comprehensive. So you had that moment, and that was a moment of great opportunity, and also chaos, but now things have settled down and you now have the beginnings of a new system that has emerged. But they are different in different countries, so increasingly, you have to differentiate between countries and also between regions. Thus, for instance, at the foundation we now distinguish between the accession countries – it is one set of circumstances – and Russia, Central Asia and the Balkans and the Caucasus – these are different areas and within those areas you have different situations for the individual countries.

At the lecture earlier today you said that the open society needs its enemies. What enemy do you propose for Latvia to choose?

Well, actually corruption is a pretty good enemy. I think Latvia right now is on a very good course to free itself from what is now called “state captured” -- that is to say, a state that is corrupt, influences effected have captured the state.

There is a view that it would be necessary to spread the open society ideas also in the stable Western European democracies. Do you think that there is a trend towards a more closed society in the Western civilisation and if so, what is the reason for this trend?

I didn’t say that. The second sentence, the second part, doesn’t follow from the first. I think, Western democracies basically are open societies, because open societies are imperfect societies that hold themselves open to improvement, and certainly Western societies qualify as being imperfect. There is a problem to give the concept of an open society a positive meaning. There is this distinction between an open society and a closed society and it was very useful when the West was confronted by the Soviet Union. Then you could talk about a closed society and an open society, but now that the Soviet Union and Soviet system have collapsed, what is the positive content that would inspire and hold together Western democracies? That is where we have a deficit. And I have been defied to give an open society a positive content. But that is, in a way, to push the concept too far because I’d be giving my specific version of an open society and other people are entitled to have other views. My view includes some degree of social concern, that is, concern with others. Whereas you could also have a view that everybody working for his own benefit actually provides the greatest public benefit – that is what I call the market fundamentalist view. This is the difference between Hayek and Popper and Hayek was a believer in open society, but he believed that markets would lead to an open society, and I believe that it is false. So this in an issue for debate.

You have said that the US is suffering from a strong identity crisis. Do you think that the events of the past year have contributed to overcoming this crisis?

Well, earlier I used to say that the United States has not decided whether it wants to be a superpower and a leader of the free world, because it confronted the Soviet empire it could be both, it was a very heavy constellation, to be both a leader and have the rest of the free world follow very happily and willingly the American leadership – that situation was ended by the collapse of the Soviet Union. There wasn’t a proper discussion or a debate about what the United States should do. And now, clearly, this administration has a very definite view of the US role in the world as the sole superpower and a country that is more equal than the others. You have the Bush doctrine, which has the two pillars, one is that the United States is entitled to engage in preemptive action, meaning military action, to protect its interests and the other that the United States is determined to maintain its unquestioned military superiority, and, if you put these two pillars together, what you have is two classes of sovereignty – one is the sovereignty of the United States, which is sacrosanct and not limited by international treaties or international law, and then there are the other nations whose sovereignty is subject to the exceptional conditions of the sovereignty of the United States -- and that, I don’t think is an acceptable basis, I don’t think it represents what America stands for, and even if now, because of what I call the politics of fear, the people are backing the president, the rest of the world cannot accept this. So this is, in my opinion, the wrong choice. We have, currently, made that choice but I hope we will change our minds.

How would you explain that even the media that were critical of the Bush foreign policy are now acting rather cautiously?

Well, this is the politics of fear. This really is the effect of the terrorist attack of September 11. It has really shaken people to their core and enabled the Bush administration, which had these ideas before September 11, to gain the support of the people. Before September 11 Bush had the majority of one in the Supreme Court, so the country was very evenly divided. After September 11, he has an overwhelming support and that has allowed this what I call extremist group, the believers in American supremacy, to become dominant within the Bush administration. There is another group within the administration represented by Colin Powell that is much more balanced in its views, much more moderate. But the balance between the extremist and the moderate factions has swung the American policy very much into this extremist position.

Have the September 11 events influenced your own business in any way?

Business or thinking?


To talk about its effect on my business is much more difficult, but it has certainly influenced my thinking because it has been a very significant event which has really changed attitudes in the United States and has turned me into a more vocal critic of the American administration.

Would you say that the US status as superpower will decrease in the nearest future?

No. I think that the dominance of the United States is clearly, well, secure in the sense that it is difficult to see how any other state or combination of states could rival the U.S. position for decades. Where the U.S. is more vulnerable is the non-state actors. It is amazing what effect a few terrorists have been able to exert on such a powerful nation.

At one time, reacting to the American death-denial mentality, you launched the so-called Project Death. What existential questions do you consider the most important and is death among them?

Not in any way. I would say that the connection is very distant and indirect. But at the same time that we introduced the project on death, which, incidentally, has been very successful, we are now concluding it, the change has been brought about and is moving on its own, we also started a war on the “war on drugs”. The war on drugs and the war on terrorism do have some similarities because, in a way, they are both false metaphors that take on a life of their own and have unintended consequences. In the case of the war on drugs, I am convinced that the war on drugs has done more damage than the use of drugs. In other words, I am not denying that the use of drugs can be very harmful, but the war on drugs has done a lot more harm. And there is something similar in the war on terrorism. Nobody would deny that terrorism is a terrible thing, one cannot condone terrorism in any way, but the war on terrorism is, in a way, doing some of the work that the terrorists wanted. The reaction is what they wanted to provoke. Because once you wage a war on terrorism, and you can’t find the terrorists, then you have to hit someone else, namely, innocent people and then innocent people are hurt and offended and that does a lot of damage. So this insistence on war on terrorism actually creates the environment out of which terrorists are born. This is a little far fetched as far as the United States is concerned, but if you look at what is happening in Israel and Palestine, there you can clearly see a vicious circle of terrorist attacks which then result in countermeasures that hurt innocent people that then actually create new terrorists. There is Jenin, a town that has been a source of terrorists, but before the suicide bombers emerged, there were 50 people killed in Jenin as a result of the Israeli counterterrorist measures – it was four months after the beginning of the intifada that the first suicide bomber emerged from Jenin. So if you look at that situation, you can see how this vicious circle of violence creating victims who turn violent in turn. This is the kind of vicious circle that we are now, I am afraid, creating.

Is there anything in this world that you do not subject to your critical analysis and simply believe in?

If there is, I am not aware of it and that’s why I can’t analyze it critically. I am sure, however, that I am full of prejudices and things that I take for granted.

What existential issues are the most important ones for you?

Well, I think death is a very big issue. It is something that I spend a lot of time thinking about and it is very difficult to reconcile your consciousness with your death because death means the end of your consciousness, so whatever you think becomes meaningless in terms of death. That is anathema – consciousness and death are anathema. That has bothered me a lot of time, until I reached my own solution, which satisfies me but may not satisfy you. That is, our view of reality does not correspond to reality, there is always a divergence or a lack of correspondence, so it follows that the reality of death is not the same as our view of death. And what we find unacceptable – what I find unacceptable – is the idea of death. I think that the fact of death is not so bad. And the older I get, the more I begin to accept it emotionally as well as logically. That is to say, consciousness and death are anathema, but life and death are really one and the same thing, there is no contradiction there. Death is a normal part of life, it’s the ending of life, an acceptable ending. So that has helped me in dealing with the death issue. But, of course, this is on the level of ideas. But we also have the sympathetic nervous system, which means that you feel in your stomach, not in your head and, as far as my stomach is concerned, I am probably still afraid of death.

Does your personal philosophy make your life easier or more difficult?

I think it’s a part of my life. My thinking is my identity. I am a thinking person, that’s what makes me who I am.

Are you not discomfited by the awareness that human understanding is limited?

No, because you can turn it around. The fact that one’s understanding is imperfect means that it can be improved, it leaves room for invention, for fantasy, for imagination, for creativity. I think a perfect world would be a very boring world.

Have the activities of your foundations changed your self-perception?

Very much so. I think it has changed me a great deal. I was very much a loner, somewhat isolated. Particularly when I was involved in making money and speculating on the stock market – that is a very lonely occupation. The foundation has allowed me to open up and establish human contact, to break out of my isolation, so it has done me a lot of good.

Does the fact that you launched the Foundation have anything to do with having a bad conscience?

Not at all. It was a different process. There was a certain moment, around 1978, when I had been pretty successful in my business but running my business involved a tremendous strain, and the more successful I was, the bigger the task became – it was a Sisyphus situation – and so I really had an inner question why do I really keep doing this. So I started thinking and that’s when I decided to set up the foundation. So it was a totally different process. I was thinking about what to do with all this money – it is already more than what I need – and that’s when I decided that what I really care about is this rather abstract concept of an open society and that’s when I started the foundation. That kind of gave me a new lease on life, it also kept me making money longer than I would have otherwise.

Don’t you think it is paradoxical that leaders of Eastern European countries express their gratitude to you? Because in your activities you often turn against them, by fighting corruption and so on.

They could never admit that, so they have to express gratitude.

What should happen to end your charity foundations in any given country?

Well, we have to significantly reduce our activities in the (EU – ed.) accession countries, because, first of all, I have stopped making money, so I have less money to give away, secondly, I have shifted from the problems of transition to the problems of globalization, and that’s a different geographical area than with transition. In the accession countries we are in the process of very significantly reducing the amount of money that we are giving away and I hope that the foundations will kind of take on an existence of their own, not so dependent on the money they receive from me, either because they can get financial support from other sources or because they become concerned with issues that don’t require a lot of money rather than undertaking projects which cost a lot.

In a way, one could say that your foundations could go on forever because the goal of an open society is unattainable.

That’s right. And that’s why I hope that they will continue to exist even if they don’t get support from me.

Would you say that there cab be negative consequences to philanthropy?

Yes, easily. In fact, it’s very difficult to avoid negative consequences. It is much easier to decide what to do when you are making money than when you are engaging in philanthropy. Because when you are making money there is a simple line at the bottom – whether the results are positive or are not. When you are trying to contribute to society, then you are affecting different people in different ways and you’ve got a large number of lines that you can’t really add up because it’s very difficult to compare the benefit of one group or one activity against the harm you may be doing to another group. So it’s an extremely difficult thing and I think one has to be very cautious in deciding what to do.

To what extent can you predict the development of economic and social processes in Russia? Is there anything that still leaves you puzzled about Russia?

There is a lot that puzzles me. It is open ended. After the collapse and the revolutionary moment now there is a state of restoration. What the new regime is going to look like compared to the old regime, to what extent it is going to resemble the old regime and to what extent it will be different from it, that is still very much an open question.

To what extent in your opinion, one should seek compromises with the circumstances of reality?

I think that one is always acting on one’s view of reality, but reality exists, it is real and it is where the effects are felt. Therefore, the closer you can bring your view to reality, the more effective and the more satisfactory your actions will be.

You tend to talk openly about the mistakes you’ve made. Do you do that deliberately and have your competitors ever tried to use that against you?

I definitely do it deliberately. I believe in recognizing my mistakes, it has saved me a lot of money because particularly financial markets – it is hard to avoid making mistakes, but if you recognize your mistakes early you can avoid a lot of grief. The financial markets are not where you find any opponents, I am up against reality there and I win if I recognize my mistakes.

Would you say that it is easy to make money?

No, I don’t think it’s easy. In fact, now that I am out of practice I would find it very difficult but I did say that it’s easier to make money than to give it away in an effective way.

What is your opinion of the current political processes in the world? Is there anything that makes you wary?

I am very worried actually. It is a part of my nature but there is a lot to worry about. I think the global economic system is very close to collapse. Also, the policy that the United States is following is very dangerous because America has now become nationalist. Well, nationalism in America is much more dangerous than, say, nationalism in Latvia because of the power the United States has.

Does that mean you would be ready to change the place of residence?

No. Because it’s in America where the future of the world is being decided. People in America have the vote in Congress and that’s actually one of the distortions in the global system – it’s basically in Congress where the most important decisions are made. That’s why one has to be active in America.

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