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Today’s Issue:


“The Capitalist Threat” Revisited

By Matt Peterson

If you’ve heard about George Soros lately, it’s probably been for the wrong reasons. His name is on the lips of conspiracists ranging from Infowars’ Alex Jones to Donald Trump. Some undoubtedly hate Soros for his identity—he was born Jewish in 1930s Hungary—or want to use him as a bogeyman to stir up ethno-nationalist fear.

Soros has worked for decades to bring his vision for the world closer to reality. “Just because the populists are paranoid,” Matt Welch wrote for The Atlantic, “doesn’t mean Soros isn’t the most important nonpolitician standing against their goals.”

Still, for all his efforts, Soros’s globally oriented, progressive worldview has been of indeterminate success. “I’m standing for principles whether I win or lose,” Soros told The New York Times Magazine earlier this year. “Unfortunately, I’m losing too much in too many places right now.”

In 1997, Soros set the benchmark for his ideal world in a cover story for The Atlantic. That outlook was prescient in some ways—especially in its critique of the kind of capitalism he practiced—but limited in others. This issue of The Masthead revisits that story; in it, you’ll find a guide to the present-day clash between nationalism and globalism.

1. What George Soros Believes

Soros’s vision is defined by what he calls the “open society,” a term he borrowed from the philosopher Karl Popper and later used as the name for his foundations. “I see the open society as occupying a middle ground, where the rights of the individual are safeguarded but where there are some shared values that hold society together,” Soros wrote in The Atlantic in 1997.

Before the fall of the Soviet Union, Soros had funded pro-democratic activists in Communist states, including in his native Hungary. “Operating under Communist regimes, I never felt the need to explain what ‘open society’ meant;” he wrote, “those who supported the objectives of the foundations understood it better than I did, even if they were not familiar with the expression.”

By 1997, the communist threat had faded. Borders were falling around the world. The open society seemed to be winning the war of ideas. But Soros saw peril and hard work ahead. “We are enjoying a truly global market economy in which goods, services, capital, and even people move around quite freely, but we fail to recognize the need to sustain the values and institutions of an open society,” he wrote. “An open society is not merely the absence of government intervention and oppression. It is a complicated, sophisticated structure, and deliberate effort is required to bring it into existence.”

2. The Threat From Capitalism

The area where Soros’s analysis resonates the loudest two decades later is his diagnosis of unmoored capitalism. Soros in the 1990s viewed himself as having thrived in a destabilized system. That allowed him to call out its flaws. “Although I have made a fortune in the financial markets,” he wrote, “I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society.” A seductive faith in unregulated competition would diminish the role of what he calls “traditional” values,” or those that start outside the marketplace.

“I cannot believe that the present boom will not be followed by a bust until history proves me wrong,” Soros wrote in a follow-up essay the next year. “We have a global economy that suffers from some deficiencies, the most glaring of which are the instability of financial markets, the asymmetry between center and periphery, and the difficulty in taxing capital.” Institutions to regulate the international banking system existed, including the Basel Committee on Banking Supervision, but they were too weak to prevent the financial crisis that broke out in Asia in 1997, Soros noted. Nor did they stop the next crisis.

Today the Basel Committee is still working on finalizing its post-2008 rules. “There will be another financial crisis,” its secretary-general warned on Wednesday. The question is when, and how severe it will be—none of the structures Soros called out in the 90s has fundamentally changed.

3. Problematic Politics

Soros believed the Western democracies were in many ways their own worst enemies. Preoccupied, they had failed to intervene in the former Soviet Union, leaving those states vulnerable. “The system of robber capitalism that has taken hold in Russia is so iniquitous that people may well turn to a charismatic leader promising national revival at the cost of civil liberties,” he wrote, anticipating Vladimir Putin’s rise two years later. “We have entered a period of disorder.”

Soros wanted a more muscular foreign policy in support of his vision of an open society. He lamented the weakness of United Nations peacekeepers and regretted that NATO had failed to intervene heavily in the former Yugoslavia. “Today the United States does not want to be the policeman of the world,” Soros wrote. But he did not anticipate what he saw as the misuse of that power under George W. Bush. “I called the war on terror and the invasion of Iraq temporary aberrations that would be corrected in the next elections,” he wrote after seeing Bush win reelection. “I must now dig deeper.”

4. An Unpopular Legacy

“I don’t think I have ever expressed an optimism that history is headed in the right direction,” Soros wrote this year in response to criticisms of his work. Pessimism is most in order for his native Hungary. His foundation, he wrote in 1997, was “the main source of support for civil society in Hungary, and as civil society flourished, so the Communist regime waned.” But that funding turned back on him in surprising ways. It financed in part the education of Hungary’s current prime minister, Viktor Orbán. Now Orbán stridently opposes Soros. (He is “not open but hiding,” Orbán has said.)

The Soros-founded Central European University announced this week that it had been forced out of Hungary. Far from coming to his aid, the American government that might once have been a bulwark of the open society suggested that the university was at fault. “It would pay to work with the government,” the U.S. ambassador to Hungary said. Soros is proud of his prominent enemies. But, he told the Times, “I wish I had more friends.”


Today’s Wrap-Up

  • Today’s question: What past Atlantic story is worth revisiting, Soros-style?
  • What’s coming: Hitting your inbox Wednesday: The journalist Susan Orlean’s responses to members’ questions from the November Book Club, which featured her new volume, The Library Book.
  • Your feedback: Tell us how much you enjoyed this story with the feedback button below.

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