An Anti-capitalist Billionaire?

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 February’s Atlantic Monthly,
attacked the irreconcilability of laissez-faire capitalism
and "open societies." Recently National Public
Radio’s "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 what’s 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
UN’s inability to maintain global stability.

At first I was angered by Soros’s
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
[Soros’s 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 Hungary’s 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 isn’t 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." You’ve 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. It’s almost semi-decent sounding in a
few places—but overall it’s heavy on lightweight
analysis, and devoid of solutions. The billionaire stresses
human cooperation, and bashes "robber capitalism"
(when it’s 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 don’t work—is the title. It’s
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
industry’s 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 anomalies—this is
capitalism functioning at its best; in an extremely brutal

Apparently Soros has no problem with
gross inequality, as long as everything’s 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 far—he thinks
regulators are too lax about protecting markets, for
example—but 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 isn’t 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.

Soros’s 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
Soros’s 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

Okay, so it’s no real surprise
that Soros had a really weak take on capitalism (after all,
he’s a billionaire), but he has a less obvious reason
for glossing over the issue of a free and democratic media.
Soros, who’s 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 Mirror’s 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:
"We’re happy with the direction," that the
company was taking.

An anti-capitalist crusader with his
hands all over the means of information—he’s 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 Jersey’s The Record

According to Florida’s Sun-Sentinel
(2/14/96), news that one of Soros’s funds beefed up
financing in Sensormatic Electronics coincided with the
announcement that the company would fire 775 workers.
Apparently, Soros’s vision of an "open
society" doesn’t 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). I’d say that’s
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 he’s 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 Clinton’s
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 welfare—Soros’s article
doesn’t deal with welfare at all. It makes no mention of
an over-bloated defense budget getting priority over social
services. This isn’t 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 manage—essentially a big fat giveaway. Soros
didn’t 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 Soros’s 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
. 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. Soros’s views aren’t
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.