F.A. Hayek

Politics Has Made George Soros Dumber

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So George Soros walks into the Cato Institute, and….

No really–George Soros walked into the Cato Institute yesterday, along with libertarian legal super-academic Richard Epstein, preeminent F.A. Hayek scholar Bruce Caldwell, and moderator Ronald Hamowy, to discuss and debate Hayek, particularly his The Constitution of Liberty, a new edition of which (edited by Hamowy) has just been brought out by the University of Chicago Press. You can watch it here:

It might be news to some that Soros studied under and was profoundly influenced by Hayek's best friend, the Austrian classical liberal economist/philosopher Karl Popper, and in fact (as Soros said yesterday), sided with Hayek in some of the famous-for-economics pre-war debates between the two econo-pals over methodology and principle. Before shifting his non-investment spending focus on "regime change" in America during George W. Bush's first term, Soros' main contributions to applied economic philosophy were creating Economics and Philosophy departments at his Central European University (at which much Austrian econ can be found), and flogging his own Popper-derived "Theory of Reflexivity" to explain how irrational market actors working with incomplete information create feedback loops that produce bubbles, instability, and (most importantly to his own life, though not to the success of propagating his philosophy) excellent investment opportunities. The puzzle for those of us who've been watching the guy for two decades is how Soros could travel so decisively from Popper and Hayek to a startlingly reactionary stance against "market fundamentalism."

Fundies in their undies!

That puzzle was cleared up somewhat yesterday. One of Popper's great insights (which is shot through the works of Václav Havel and Virginia Postrel, to name two liberty-lovers I greatly admire), was that we should fear those who claim to have a monopoly on truth and exclusive knowledge of the One True Way, particularly if they hold power. What Soros' remarks made painfully clear was that–much like latter-day Havel, I am sad to say–he has simply (in all senses of the word) transposed that critique onto an allegedly monolothic, allegedly menacing ism that is all too reminiscent of the commun and fasc of Central European yore: free-market fundamentalism. "As I see it, the two sides in the current disputes have each got hold of one half of the truth which they proclaim to be the whole truth," Soros said, in a formulation he used three times yesterday without once addressing why it is that he has invested at least $50 million in the half-truth business.

Perhaps to unconsciously illustrate his oft-repeated point that everyone (including Hayek, and even the great billionare philosopher himself) is subject to political and ideological bias, Soros showed how far his anti-market-fundamentalism-ism has degenerated by repeatedly equating Hayek interchangeably with the "Chicago School" of economics. Here's how he distilled it in a version of his remarks published today in Politico:

The fonts were just BETTER then

Friedrich Hayek is generally regarded as the apostle of a brand of economics which holds that the market will assure the optimal allocation of resources — as long as the government doesn't interfere. It is a formalized and mathematical theory, whose two main pillars are the efficient market hypothesis and the theory of rational expectations.

This is usually called the Chicago School, and it dominates the teaching of economics in the United States. I call it market fundamentalism.

Key words: "generally regarded". As Jason Sorens noted, "So Soros fundamentally misunderstands Hayek." Arnold Kling flushes out the complaint:

I doubt that anyone else on the panel or in the room shared this view of Hayek. However history views Hayek, I do not expect him to get credit for anticipating Fama or Lucas. In fact, as Frydman and Goldberg point out in Imperfect Knowledge Economics, rational expectations runs counter to Hayek's theory of local knowledge, which is one of his most important contributions. I do not see how Hayek could approve of any form of representative-agent modeling.

Hayek, in fact, was frequently at odds with the Chicago School. This is not some super-obscure, hair-splitting distinction; it's right there on Wikipedia:

Though a faculty member at the University of Chicago, his faculty position was unpaid and he is usually categorized not as a member of the Chicago School, but rather more associated with his time at the London School of Economics, as well as the Austrian school of economics.

When Bruce Caldwell corrected Soros' basic errors about Hayek yesterday, the world's most famous Esperanto speaker hemmed and hawed, talking more about how Hayek has been expropriated by these nasty market fundamentalists, and that it's good that we're coming together to get back to Hayek's original words, blah blah blah.

The world's most expensive case of BDS

It is no small irony that a man whose career is largely based on mapping how ideology and politics warps human behavior is now reduced to grossly misrepresenting the very intellectual tradition that both set him on his way and became the explicit target of his late-in-life philanthropy. In the always-worth-re-reading Jane Mayer New Yorker profile of Soros from 2004, he almost foreshadowed how this sudden lurch into domestic politics was going to make him dumber:

"This is not my strength," he confessed. "I'm eager to get out of this partisan position that I'm pigeonholed into. I heartily dislike it." He added, "I've always been against dividing the world into 'us' versus 'them.' So this 'us'-versus-'them' campaign is very uncomfortable for me."

Soros expressed so many reservations about partisan politics that it was almost difficult to understand why he had got so enmeshed.

Did appearing at Cato to discuss Hayek amount to a first step out of the partisan ditch Soros has dug for himself? Though Politico is semi-teasing that storyline, and though Soros did cause some jaws to drop by agreeing with Richard Epstein about a presumption against regulation, I seriously doubt it. You don't spend six years building up mirror institutions to what you perceive as the institutional attack-dog Right unless you on some level think the them has grown far too dangerous to go unopposed. That remains true even if us regains the White House and Congress, outnumbers the media them by any sane measure, and mangles Hayek in the service of slandering Chicagoans. Shoddy intellectualism in the defense of anti-market-fundamentalism is and will likely remain no vice.

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50 responses to “Politics Has Made George Soros Dumber

  1. Hmm, Esperanto. Sounds like a solution looking for a problem…

    1. I will be a spoil sport and be the FIRST to mention a certain Shatner movie.

      1. Ok, my curiosity got the best of me, and I found a youtube of a movie called Incubus with The Shat. Is that what you’re referring to?

          1. The premiere of Incubus took place at the San Francisco Film Festival in 1966, where, according to producer Taylor, a group of 50 to 100 Esperanto enthusiasts “screamed and laughed” at the actors’ poor pronunciation of the language.[1]

            Are Esperanto speakers largely pedantic gits, or would this scenario be considered an outlier?

            1. The guy who created the language was asked once by a lady at one of the Esperanto conventions if she was pronouncing the language correctly.

              He asked her if people (ie. other Esperanto speakers) understood her when she spoke.

              “Yes,” she replied.

              “Then you’re pronouncing the language correctly.”

        1. It’s actually not bad; the black and white cinematography is quite good, and it’s kind of fun in a weird way. Plus: Shatner.

    2. I think it would be a good idea if more people were on board with it. It would sort of be a nice neutral language that everyone could learn.

      It has some pretty serious problems, though. The most serious and fatal problem it has is letters with accents, which it has for no reason that I can determine other then to make it more confusing, and curse it to irrelevance in the age of the keyboard.

  2. In other news, the Koch brothers will speak at the Kos convention . . . in a bullet-proof booth.

    1. Nah!

      According to Krugnuts, only The Right? is suited to political violence.

      1. Except when you got two guys that need some killin’, like the Kochs.

  3. Great article Matt. “Shoddy intellectualism” indeed. Being one of history’s most famous money-men was just a little too prosaic for our Mr. Soros. He’s always struck me as a seriously conflicted individual.

  4. So long as Soros keeps dumping millions in ending the drug war i can’t hate him very much.

    In fact i think it is kind of weird that Cato had him over to their house and did not try to get him to go along with some left/libertarian alliance in an attempt to work out a plan to end the drug war.

    To argue about economics instead seems like such wasted potential.

    1. But he really cares more about philosophy than anything else. Also, for fun, do a search on the Center for American Progress’ website on “Proposition 19.” It is stunning how little Soros’ mirror institutions care about the one domestic issue he was really fired up about one decade ago.

      1. It would be interesting to ask Soros why he thinks that might be?

        1. Good idea. I suspect he may be startlingly honest about it — once you get heavy into professional two-party power politics, you can kiss many of your fringe ideas good-bye. Even when it’s your money.

          It’s not entirely unlike what you can and can’t get away with when you edit a publication. Even one that you own!

          1. Exactly. He stumbled into a role – that of the GOP-hating businessman – that is lucrative for him egotistically if not financially.

          2. Like our machines, Soros shaped the Democratic Party, then it shaped him.

      2. It is stunning how little Soros’ mirror institutions care about the one domestic issue he was really fired up about one decade ago.

        He gave a shit pot of money to prop 19. I simply think of Center for American progress much the same as I think of the Reason Foundation and the Kochs.

        he gave a bunch of money to like minded robots and now the robots go about their business without much interference from the big money robot.

        The change in the organizations I think is more of a reflection of the changes in the left then the changes in Soros….and if Soros had anything to do with it I suspect he was simply distracted by getting rid of Bush.

        I think you should write him a letter and ask for money to hire an anti-drug war correspondent at Reason.com. =)

  5. Compare this sober, rational, calm analysis and critique of Soros with the Democratic Party hatchet job on Koch vomited by Jane Mayer in New Yorker.

    Reverend Bayes would have no problem instantly siding with the “koch-funded libertarians” on most issues if he saw the irrationality and hackery spewed by the organs of the institutional press

  6. Do you know who else confiscated the property of Jews during the Holocaust?

  7. Generally regarded! What a heretic!

    Matt “The Rodent” Welch is a very deep thinker.

    1. Full of beans again today it seems, Edward. What’s your blood pressure, by the way? I hope it’s sky high.

      1. Don’t be too hard on him. I remember being 15.

    2. so?ci?o?path? ?/?so?si??p??, ?so??i-/ Show Spelled
      [soh-see-uh-path, soh-shee-] Show IPA

      ?noun Psychiatry .
      a person, as a psychopathic personality, whose behavior is antisocial and who lacks a sense of moral responsibility or social conscience.

  8. The word “dumber” is not so well chosen.
    2 seconds ago Unable to post comment. Try Again

  9. Facebook would not allow the use of the word “dumber” LOL

  10. What a long post to ding Soros for saying that Hayek is lumped with the Chicago school. Is it any wonder, considering this very magazine propagates the most inanely simplistic version of these ideas in a way that could be called something like I dunno “free market fundamentalism.”

    1. In other words, as usual, I can’t address the substance of the post so I’ll just make a snide remark about “teh fundamentalism!”

      1. There is no substance to this post is what I’m saying.

        1. Welch recapitulates Soros’ entire bumbling journey from Popper to partisan right there in the 2nd paragraph. Not sure how much more substance you’ve a right to expect in this format.

          Apparently we’ve found a plutocrat you like. Specifically, the self-hating kind.

        2. Of course Tony doesn’t count what he doesn’t understand as substantive. Therefore, any discussion of philosophy above a rudimentary level will not be seen as substance by Tony.

          1. It’s a good thing the two of you came around to make conversation with the troll. I was afraid if he was ignored for much longer he would have gone away forever.

            1. Oh, I think Tony’s sincere. I also suspect he’s been here a while, and will be here a while longer.

              I’ve seen remarkably few true trolls in the short time I’ve been coming here. Probably something to do with the libertarian hypersensistivity to irony. Real trolls just get bored and wander off.

              Even Max seems sincere, in a spittle-flecked sort of way.

              1. Troll = one who disagrees with me.

    2. What a long post to ding Soros for saying that Hayek is lumped with the Chicago school.

      If he does not understand the argument he is arguing against then how can one see his argument as valid.

      By calling Hayek wrong because he is of the Chicago school is the height of setting up a strawman.

      Also Soros did go to the debate and his intent was to discuss the issues…one would assume it was not to go in there and set up strawmen if he was in any way serious.

  11. You don’t spend six years building up mirror institutions to what you perceive as the institutional attack-dog Right unless you on some level think the them has grown far too dangerous to go unopposed. That remains true even if us regains the White House and Congress, outnumbers the media them by any sane measure, and mangles Hayek in the service of slandering Chicagoans.

    “The most promising acolyte left us, not out of the lesser folly of sentiment, but the greater folly of anger. His heart was clouded, and his balance was lost, but his abilities were unmatched. Even then, we knew to watch him most carefully.” -Keeper Annals

    1. The ancient corruption was again contained. To do more would have upset the
      balance, but we knew to remain ever vigilant lest it resurface.

      1. “I’ve always equated “feelings” with “getting caught”…they both get in the way of my money. Unfortunately not everyone is as committed to their work as I am.”

  12. Soros is one sorry egomanical POS.

  13. Glad to see this article, shoddy is definitely the right word to describe Soros thinking. Popper and his idea of “open society” did not actually imply big governments in bed with big business.

  14. Soros made a shrewd speculative bet that paid off.

    That doesn’t make Soros all-wise in all aspects of living.

    From his own writings and many interviews, Soros comes across as most, suffering from mind disorder.

    However, because Soros has an incredible sum of money at his hand, Soros can indulge his mind disorder by funding much wackiness.

    Shame on all who confuse momentary success in one aspect of life — regardless of magnitude — with the capacity for success in all aspects of living.

    1. Shame on all who confuse momentary success in one aspect of life — regardless of magnitude — with the capacity for success in all aspects of living.

      What’re you saying?

  15. Everyone needs to listen to what Epstein says.

    you will probably have to listen to it multiple times.

    I particularly like how he noted that any transaction between two voluntary participant will have overwhelming positive externalities in terms of third parties welfare.

    A voluntary transaction between two parties will leave those two parties better off. If those two parties are better off then they and their greater resources will be available for third party interactions.

  16. “I’m eager to get out of this partisan position that I’m pigeonholed into. I heartily dislike it.” He added, “I’ve always been against dividing the world into ‘us’ versus ‘them.’ So this ‘us’-versus-‘them’ campaign is very uncomfortable for me.”

    What duplicitous, passive-aggressive bullshit. Soros revels in this stuff, or he wouldn’t be so brazenly involved and shoveling his cash into partisan political enterprises.

  17. What is really driving change is Libertarianism. For examples of people using Libertarian tools see http://www.Libertarian-International.org

  18. Given Soros’s history, does anyone else think that his big plan is to create the conditions necessary to make a windfall off of short-selling the dollar?

  19. I thought Richard Epstein was going to say he’d like to have Soros’s debit card.

  20. There’s a video of public domain folk song, “George Philanthropist,” that might interest readers, that’s posted at following protestfolk channel link:
    http://www.youtube.com/watch?v=3vA-XRXmUv4

  21. There’s a video of public domain folk song, “George Philanthropist,” that might interest readers, that’s posted at following protestfolk channel link:
    http://www.youtube.com/watch?v=3vA-XRXmUv4

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