Column on Soros’ Follies Again

Soros’ Follies Again
Tibor R. Machan
In the late 60s I was invited to listen to a fellow Hungarian refugee in
Los Angeles discuss communism. I nearly walked out when he began with the
refrain about how communism is such a wonderful ideal but, sadly,
unattainable in practice. What wonderful ideal? The prospect of a
worldwide intelligent ant colony, bound together completely with no
individual initiative in play anywhere, all automatically serving
humanity–is that some wonderful ideal? It is hell, so far as I can
Well, I tell this story to give you a little idea how it strikes me
whenever that famous financier George Soros, himself a Hungarian refugee
from the Nazis and Communists, comes out with various political-economic
pronouncements. He isn’t by any means someone deluded about the idealism
of communism but he does, quite mistakenly, favor a widely regulated
Soros was interviewed recently in The New York Review of Books and
presented his version of the late Karl Popper’s middle way politics, one
that’s neither socialist nor capitalist. (Popper was a famous 20th century
philosopher of science and political theorist.) As Soros put it,
“Now, we should not go back to a very highly regulated economy because the
regulators are imperfect. They’re only human and what is worse, they are
bureaucrats. So you have to find the right kind of balance between
allowing the markets to do their work, while recognizing that they are
imperfect. You need authorities that keep the market under scrutiny and
some degree of control. That’s the message that I’m trying to get across.”
(TNYRB, 5/15/08, p. 10).
This is a mess. First it tries to build some kind of coherent
political-economic idea on the Popperian view that all our knowledge is
imperfect, fallible, merely probable; nothing certain. OK but what follows
from this? What justification is there for drawing any conclusion at all
from such a position since that conclusion will itself only be uncertain,
probable, iffy? Second, if the regulators, bureaucrats all of them, are
especially imperfect–which is what public choice theory teaches, noting
their institutional disorientation as
persons-with-power-and-no-rational-restraints–why trust them at all?
These “authorities” will only cause trouble and will not help at all with
any mishaps in the market place where mishaps tend to be self-correcting,
at least over time. (It’s no different in markets from what it is in life:
freedom may not work the impossible dream of perfection but it enhances
self-responsibility!) Third, of course, “markets” don’t do anything–they
are but spheres of human activity, in this case mostly commercial,
business or economic, and as such they are homes to innumerable forms of
human conduct. No one can possibly control them except to cause them to
experience distortions far worse than free men and women ever produce.
Finally, how will this “right kind of balance between allowing the markets
to do their work” and government regulation come about? Who will do this
“allowing”–some king or other “authority” who is wiser than market
agents? (This interview is replete with reference to this mythical
“authority” that will fix things for us all!)
George Soros no doubt has a knack for global finance–he has proved it big
time–although even that applies mainly to highly regulated state
financial markets. He has never been tested in a fully free market of
money and banking. But this knack gives absolutely no hint of wisdom
concerning the broader sphere of political economy, of understanding how
human beings think and act as citizens, as friends, as professionals, a
vacationers, and as social and economic agents. For instance, while some
of us are no doubt ill informed about some matters we ought to know
better, it is silly to make a broad generalization that our knowledge is
always imperfect. Well, some of if may be but in some other matters we are
pretty knowledgeable and certainly this would not be improved upon by
having a bunch of “authorities” barge in to mess with our decisions and
actions wherever these “authorities” decide to do so.
One can, of course, read Soros’s mentor Karl Popper more generously to
mean only that people know well enough but never in some final, timeless
fashion. The world is constantly developing, changing, and knowledge will
always need to be modified by new information. But nothing from this
implies that we need authorities to regulate us–and, oddly, Soros himself
seems to realize this when he sees the hazards of bureaucracy. Why he
doesn’t draw the right conclusions form that beats me.

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