The Tragedy of George Soros

A true hero deserves a better legacy, or at least be better remembered.

George Soros is not exactly a polarizing figure. To one side he’s the leader of a vast global conspiracy of the rich bent on suppressing the common people for their own gains. To the other side, well, he’s not part of the conversation at all. This is strange, because Soros is one of the most remarkable figures of the 21st Century. All evidence points to a most likely self-sacrificing idealist committed to building a free and open society, a conviction built by a tragic and yet inspiring upbringing. Nonetheless, Soros is the hero no one wants.

Born in 1930 in what was then the Kingdom of Hungary to an upper-middle class Jewish family, Soros’s family survived the Holocaust using forged documents attesting that they were Christians. The boy then lived through the Siege of Budapest during which Soviet and German soldiers fought a brutal urban battle. He studied at the London School of Economics, where his liberal moral foundation forged in the shadow of Nazism was enhanced by an economics framework of thinking. Soros spent the formative years of his career in the London and New York financial scene. He originally planned to study philosophy after, but the first signs of his hamartia showed. Soros stayed in finance, the safer path to glory. He developed his Theory of Reflexivity. The theory wasn’t that original — it was effectively that finance, just like any other sub branch of sociology, was circular. Future expectations can affect the pricing of assets, which then affect the present, which in turn affects the future. Thus cycles of boom and bust occur in finance, and an equilibrium can never be reached. There’s more to it, but the conclusion is obvious. It’s hardly the apex of his legacy.

In the 1970s Soros started his hedge fund with Jim Rogers and Stanley Druckenmiller, among others. It would later become the legendary Quantum Fund that would make him one of the greatest investors in history, and through which he made some of his most daring bets that are now studied in economic textbooks. Soros’s ascend to the top coincided with drastic political upheaval and the liberalization of societies around the world. He was vilified for shorting currencies that helped to trigger national financial crises. This perhaps scarred his conscience. Eventually, Soros’s political inclinations overpowered his financial proclivities. Nursing his bruised ego after being branded a villain, he helped to shore up currencies of burgeoning yet unstable Asian capitalist democracies hoping that they would prosper. A younger and more objective (cold-blooded) Soros would have known to short them, thereby triggering crises that would yielding massive profits, at the expense of democratic stability. Losses triggered by those bets led to his split with Druckenmiller to focus on political philanthropy. Soros would devote his wealth to funding organizations that promote the development of open societies, particularly in Eastern Europe.

And yet here we are today, facing a world in which open societies are in recession. After the end of the Cold War, democracy’s biggest allure was its ability to inspire. It promised people both a free society and a rich one, in which people have the economic comfort and political freedom to pursue self-actualization. That allure faded as democratic capitalist societies descended into economic stagnation and political dysfunction. Instead of rich and free, people felt indebted and oppressed, whether or not they actually were. Meanwhile Soros identified his newest enemy, the autocrat of the world’s fastest advancing society.

Tides of freedom and repression are pushed by the mood of the populace and the leaders who ride those tides. Trajectories of nations are set by self-serving politicians battling in the arena. The idealistic billionaire could only watch from the sidelines, throwing money into the ring, but to no effect. His home country of Hungary pioneered the model of “illiberal democracy” under Orban, a former liberal himself. The Central European University Soros founded in Budapest had to relocate to Vienna after the Hungarian government refused to grant it permission to continue operations. Austria too, like most of central Europe, is no longer a stranger to far-right politics. Soros once considered George W. Bush the greatest evil, unable to imagine a more chaotic and regressive American president who later would scar the world’s oldest democratic process. The European project should have been a lodestar for open societies everywhere, but instead it descended into a currency crisis that pitted member against member. Soros himself became a lightning rod for antisemitism, caricatured as a smiling puppet-master of all the world’s evils.

In another life, perhaps Soros could have become a Mandela, Ben-Gurion, Kennedy, or Lee Kuan-Yew. He had the intellectual capacity and desire to build states. Instead, Soros preferred the comfort of the sidelines. He thought he could stay in finance, amass his wealth, and that his spending alone could shape the world to his will. Instead of becoming the change he wanted to see, he tried to pay for it. But the people who truly made a difference weren’t sheltered in the shining skyscrapers of Manhattan. They chose the risker route of jumping into the discourse on the battlefield of political ideas. They knew failure would result in a life of impoverished obscurity or death, but they wanted to control the levers of power badly enough to take the plunge anyway. Therein lies the tragedy of Soros — an idealistic man who wanted to change the world, but too afraid of personal discomfort to truly engender it. Or maybe he knew playing it safe couldn’t be that impactful, but tricked himself into believe it could be. Near his dying days, everything he bought is crumbling.

Poetically, Soros designated his latest mortal enemy to be Xi Jinping, the leader of history’s most powerful and successful autocracy, a role model for what a closed society can hope to achieve. Xi was Soros’s character foil. They both survived brutal political oppression that shaped their political views. But while Soros went down the safe route of finance, Xi rejected the opportunity to leverage his rehabilitated family lineage into a lucrative commercial career. He built his own ladder and power base that would carry him to the apex of global power. Both were self-made men, but one was watching, and the other was fighting.

Fresh from defying nature and redirecting the world’s largest economy, Xi is at the top of his game. Meanwhile, Soros, 91, is ailing. He was already used to being ignored — during the Eurozone Crisis, Soros wrote extensively on his proposed solutions. The series of articles were detailed and methodical. He promoted them wherever he could. Yet there was no audience. The Eurocrats forged their own path, patching together a series of policies that delayed the reckoning. Worse to Soros’s ego, China stepped in as the financial anchor. Now his mental faculties seem to be fading. His articles feature more generalizations than analyses. This could be exemplified by his article on China on the eve of the Beijing Winter Olympics. Some passages were very telling.

On hypersonic missiles: “The U.S. has nothing comparable and doesn’t intend to compete. I think that is the right policy because Xi Jinping’s hypersonic achievement doesn’t change the balance of mutually assured destruction that will stop the enemies from attacking each other.” This is an understandable knowledge gap for a financier. The purpose of a hypersonic missile isn’t to nuke America — it’s to deter American forces from approaching the Chinese island chains (A2/AD). China knows that in a war, it will be defending against an American invasion. It just has to make that invasion too costly, and missiles fired from home at targets near home do the job perfectly. And the US is very actively developing hypersonic missiles.

“Out of this turmoil a new leader emerged, Deng Xiaoping, who recognized that China was woefully lagging behind the capitalist world […] He invited foreigners to invest in China, and that led to a period of miraculous growth that continued even after Xi Jinping came to power in 2013.” Another understandable knowledge gap — Chinese reforms started under Hua Guofeng, whom Deng supplanted. But the ending sentence betrays some dishonesty by Soros — growth continued after Xi’s transition, but became increasing unstable and uneven, just like in populist nations. Something had to be done.

“Since then, Xi Jinping has done his best to dismantle Deng Xiaoping’s achievements. He brought the private companies established under Deng under the control of the CCP and undermined the dynamism that used to characterize them.” This is misunderstanding is less understandable. China’s economy today is much more liberalized than the state-centric behemoth Deng designed. The economic was dynamic under Deng because the government provided the foundation needed for growth, such as efficient infrastructure, investment frameworks, and cheap labor, just as the US government created the foundations for Silicon Valley through its designated military investments in that area. That government is still providing foundations for growth, such as through its Little Giants program. The problem with Soros’s claim is that China doesn’t move in one direction. It’s way messier.

“In contrast to Deng, Xi Jinping is a true believer in Communism. Mao Zedong and Vladimir Lenin are his idols. At the celebration of the 100-year anniversary of the CCP he was dressed like Mao while the rest of the audience was wearing business suits.” Now we descend into nonsense. Why would Xi idolize Mao, the man who tortured his father to the point that he couldn’t recognize his son? Xi’s idols aren’t communist leaders, they are revered Chinese emperors who held absolute power and led China to its past glories. All Chinese leaders wear a Mao suit during certain celebrations. And it’s called a Mao suit only in the West — in China it’s named after Sun Yat-sen, the founder of the Republic that now reside in Taiwan. Soros saw imagery that didn’t exist.

Soros’s reverence for Deng is strange, and must be attributed to ignorance. Deng rushed to lead a system (the CCP) that committed to liberalization. He wasn’t the genius that started it. But he was the one who ordered the crackdown on Tiananmen Square before leaving office.

“Xi Jinping […] rules by intimidation and nobody dares to tell him what he doesn’t want to hear. As a result, it is difficult to shake his beliefs, even as the gap between his beliefs and reality has grown ever wider.” This is a confusing statement — if Xi relies only on himself and no one dares to question him, then is China’s momentum since his inauguration to be attributed to one omniscient man? Political insiders know that China’s system actually embraces rigorous debate behind closed doors, as evidenced by the obvious constant adjustments and fine-tuning of policies. He subsequently delves into the Evergrande crisis, characterizing high real estate prices in 2021 as a uniquely Chinese phenomenon. Soros must own at least one house?

“Omicron threatens to be Xi Jinping’s undoing. It is much more infectious than any previous variant, although it is much less harmful for all those who have been properly vaccinated. But Chinese people have been vaccinated only against the Wuhan variant and Xi Jinping’s guilty secret is bound to be revealed either during the Winter Olympics or soon thereafter.” This is a fitting conclusion to this chapter of the tragedy. Soros for some reason claims that China is only vaccinated against the “Wuhan variant”. Obviously there aren’t actually variant specific vaccines yet. A more fitting conclusion would have been that a reopening plan for the Wuhan variant was replaced by a more stringent plan for the Omicron variant, but that would have been a sign of a highly functioning state, not a decaying one. What “guilty secret” is he referring to? That COVID is bad and spreading? That should have been evident in the daily scare-mongering by Chinese state TV about how COVID is bad and spreading. Bringing up COVID is a poor argument as more autocratic societies (including Asian democracies) are more adept at mass mobilization. COVID cemented Xi’s popularity and refreshed his political mandate. The Chinese economy outperformed the rest of the world earlier on because its manufacturing didn’t suffer prolonged disruptions and instead took market share. China avoided the mass deaths seen elsewhere specifically because of its draconian lockdowns. Its still nascent pharmaceutical sector was somehow able to rush out several vaccines that lowered death rate significantly, despite not being able to test them at home because no one was getting COVID. And once developed, instead of prioritizing the domestic population like the free world, China exported them abroad first because it didn’t have a COVID crisis itself. Disease management is a dictatorship’s forte. This is like criticizing the USSR for not able to host parades. Parading was its specialty.

The concern this article reveals isn’t that there’s much Soros doesn’t known. The concern is that Soros doesn’t know what he doesn’t know, and weaves his conclusions out of misguided claims. These writings aren’t lies — they are mistakes.

The final chapter in the Soros tragedy is that while his allies ignore him, so do his enemies. They don’t play his game. They don’t fight him on ideology. His chosen foe, Xi, hasn’t one. Xi isn’t married to Communism — he very much enjoys tighter interest rates that support sound monetary policy. His signature “Chinese Dream” motto very glaring has no substance, and even supporters couldn’t adequately explain what it is. At the age of 91, Soros is a lone knight holding a sword he can barely lift, bracing against a dragon that didn’t show up. He is a living warning to idealists everywhere, that altruism and intellectualism alone aren’t enough to build a better world — they have to take the necessary actions themselves, no matter the risk. To slay dragons, a knight has to pick up the sword.