George Soros … On Giving Rather than Getting

GUEST: George Soros
VTR: 12/04/1997

I’m Richard Heffner, your host on The Open Mind. And this is the second of two programs with George Soros, self-made billionaire critic of the dominant belief in our society today in the totally benevolent magic of the marketplace. The social Darwinian doctrine of laissez-faire capitalism hold that “the common good is best served by the uninhibited pursuit of self-interest.”. Well, he disagrees, and at the same time chooses now to spend on a variety of causes the fortune he has accumulated and indeed adds to every day.

So what I would like to ask Mr. Soros today is, what personal imperatives and what sense of the nature of human nature inform the massive philanthropies he now engages in here at home and around the world? Is that a fair question to put to a man who spends as much as you do on good causes?

Soros: Why not? Why not? I ask myself why I’m doing it. And, in a way, I really got sucked into it, because I’m a critic of philanthropy. I think it’s very often a corrupting influence, or it is corrupt because it is not properly, no proper feedback mechanism, and so on. So, I’m actually a critic of philanthropy, and so it’s a bit ironic that I should be also practitioner.

Heffner: More than a bit. A few billion dollars worth of irony.

Soros: Right, right.

Heffner: But what does inform your sense of having gotten over your critical aspect, or at least set it aside to do what it is you are doing, what sense about what we’re like informs that?

Soros: Well, I would actually like to make the world a better place. This is sort of a rather pretentious thing to say, but that is really why I’m doing it. It’s not philanthropy in the traditional sense. It’s certainly not charity. We not giving money away. We are trying to, I’m trying to make things work better. So I got involved in the communist countries trying to change the system. And when the Soviet system collapsed, that requires a lot of help. And so I wanted to provide whatever help I could. I was hoping that the rest of the world would joint me, that, you know, that there would be a Marshall plan, as there was after the Second World War. I was hopelessly naïve on that issue. But I did what I could in my personal capacity, and it actually, I can say it actually amounts to something and we have actually done something.

Heffner: Why wasn’t there a Marshall Plan? The opportunity was there.

Soros: Absolutely. And it as a tremendous missed opportunity. And I was, you know, doing everything I could at the time to try to draw attention to this issue. But we were actually dominated by this believe in laissez-faire, that you can’t interfere in other people’s lives, that they have to organize, they have to fend for themselves, that let the market mechanism take care of everything. And actually that was one of the worst., let say, side effects of that belief. I was trying desperately to get to Margaret Thatcher, who was the one person who could have had a Thatcher Plan, because she had a respect of the United States and she had position in Europe. And she understood what was going on, but she didn’t respond because she didn’t believe that it is the role of the state to get engaged in any kind of aid or philanthropy or whatever.

Heffner: Despite the success of the Marshall Plan after World War II?


Soros: Yes. Yes. That was a different, it was a different era. And this was perhaps my biggest mistake, that I thought that the Western democracies would be motivated by a belief in their system and would want to propagate that system and would want to help the formerly Communist countries to make the transition. And since capitalism… sorry. Since Democracy and open society, which includes of course a market economy, is a more sophisticated system than Communism, you can’t make the transition, when Communism collapses, you can’t make the transition in one step unless there is somebody from the outside giving you a helping hand. And that’s what we missed. We should have done that. And I did it in my personal capacity. And what I did personally has been, I think, helpful, but it was obviously not enough.

Heffner: You frequently talk about the open society. And I know that the open society is the basis for your various foundation and philanthropic works. What do you mean by it? I man, I love it that The Open Mind, my program, over all these years, can ask you that question.

Soros: Well, in a superficial sense it really is just a broader definition of democracy; not just rule of the majority, but respect for the minority, respect for the law, and so on. But if you look at it, it’s really, the concept itself is based on the recognition that our understanding of the world in which we live is imperfect, and whatever, we cannot have a blueprint, we cannot have a perfect society. Therefore, we must content ourselves with the second best, that is, an open society and a society that is open to improvement where you recognize that things are not as good as they should be, and you are looking to improve them.

Heffner: That’s a very difficult concept for people to hold onto.

Soros: It is. It is. And it was relatively easy when you had a cold war and we stood for open society and they were clearly a closed society. So you had this dichotomy: open and closed. So we are open society; no problem. It was clear. Now that Communism has collapsed and all we have is our system, people don’t have an understanding of what an open society is. And this is why I’m , let’s say, at loggerheads with the dominant belief in lessaiz fair which says, “no, you don’t need a system. You just let people fend for themselves, let the market take care of everything.” That is the dominant belief today, and that belief is wrong, because we do have a society, we do have common values, we need to have some common bases and some institutions even to preserve the market mechanism. And we are unaware of it, and we have failed, in the case of the Soviet collapse, and I’m afraid that we may be failing in preserving the global capitalist system.

Heffner: Explain that.

Soros: Well, because markets are not perfect. We have a false ideology. We’re supposed to have a scientific base. The scientific base is economic theory. Now, economic theory is based on certain assumptions. Those assumptions do not apply in the real world. But we believe…. You see, economic theory tells you how the markets achieve equilibrium. Now, they do achieve equilibrium if certain conditions are given. But those conditions, in reality, are not given. And so you don’t have equilibrium. Therefore, you don’t have this beautiful outcome that the theory gives you. So people think, well, there’s a tendency towards equilibrium. But that is false, because there is no equilibrium, and sometime there is no tendency toward equilibrium. In fact, sometime there is tendency to get far away from equilibrium. Financial markets can collapse. They can be very, very unstable. And we have a false understanding, for instance, of how financial markets operate. The prevailing wisdom happens to be wrong.

Heffner: What are we doing? Substituting chaos then?


Soros: Well, the chaos is the extreme of far-from-equilibrium conditions. Actually, life is conducted at the edge of chaos, near equilibrium, No equilibrium. Our understanding the world is always biased, always deficient. There’s always something wrong in the way we construct things. All our constructs, all our institutions have something that doesn’t withstand the test of time. So we have to be constantly on the alert to correct the deficiencies, to keep the system going near equilibrium, to avoid breakdown.

Heffner: But isn’t that one of the bases for the critics, even of your philanthropy, that you invest so much, there is such an overwhelming amount of money that you are putting into your various projects, that you prevent us – and now I’m thinking in terms of open-market notions, marketplace notions – from seeing what the faults are? To seeing what the faults are in your own thinking?

Soros: Right.

Heffner: Do you guard against this?

Soros: No, no, because I, however much money I pour into a country, I cannot correct the deficiencies. And I’m not pouring the money into correcting the deficiencies; I’m empowering people to work towards correcting them. So we are not there, for instance, to substitute for the budget, the state budget. Certain things the state has to take care of. We are not trying to do that. We are trying to do, give people better education, give them opportunities to try out new ways of doing things. Civil society, to organize itself, to make itself heard. So we are not… And we don’t have a blueprint of how problems ought to be solved, because we don’t know the solution. If you recognize, if you accept your own fallibility, you know that you don’t know the final answer. Therefore you have to help the people in that country to develop better solutions, and that’s what we’re doing.

Heffner: Well, I know from the time two years ago that Dr. Foley, who heads your project on death and dying, was here, that there is an open-mindedness, not single solutions. But also there are people who are very, very annoyed with you, Mr. Soros, for the money that you are putting into projects that relate, for instance, to drugs in the market.

Soros: Very much so. And I’m happy that I irritate some people, because I know that I’m doing something. But that the project on death. Death is a problem that you cannot overcome. However, the way you approach it can make it worse or better. And in our country there is a, generally speaking, there’s a denial of death. We are not willing to come to terms with it. Families are not willing to accept it. The persons themselves, you know, fight, but can’t come to terms with it. The medical profession cannot accept that their patients are dying. They are unwilling to treat dying patients. So they need to learn to accept the fact that patients do die. So the project actually is doing, making quite and impression.

Take drugs. Drugs,, a serious problem. However, the way we are handling it is doing a lot more damage than drugs themselves. Look at the people in prison. The abuse of power involved actually in many of those cases. The disruption of entire communities. The racist aspect of our war on drugs. A lot more damage is done by our attempt to deal with drugs the wrong way, the war that cannot be won, instead of accepting the fact that there is a drug problem and we have to try to make it better, we have to treat people, we have to give them a chance to get out of the drug habit. People who are in the drug habit can kick it, and they do kick it after a while, if they survive. So I think that our drug policy is wrong.


Now, I happened to touch on a particularly sensitive nerve.

Heffner: Indeed.

Soros: I mean, when I talk to politicians who don’t dare to touch it, they call it the “third rail.” You touch it, and you dead, as a politician. Now, I’m in a privileged position because, you know, I’m an independent person, so I can speak my mind. And that’s what I do.

Heffner: Isn’t that was tees off so many people?

Soros: Yes, yes.

Heffner: That you can do…

Soros: Yes.

Heffner: …what you please?

Soros: Yes, yes. And I think it is annoying for others, and it’s a bit dangerous for me.

Heffner: Dangerous?

Soros: Yes, yes, because nobody is really independent. I mean, I am part of this society, and I’m not all-powerful, and I can easily slip up and do the wrong thing, something, and get hurt. So, I’m aware of that. But nevertheless, I think it’s worthwhile to speak out. I’m actually really interested in getting closer to understanding the world in which we live.

Heffner: Well, let me just ask you, you talk about “in danger of getting hurt.” Let’s put that aside. Do you question, because you are very much aware of the uses of power, you’re very much aware of the power of the marketplace and its powerlessness at times, are you concerned about the power that you have and that you are now exercising in your philanthropies?

Soros: I’m very concerned about it. Actually, I’ve got a lot more power than I ever thought I would. It has kind of accelerated. It has kind of grown. Partly because I’ve become a public figure, and part of my power is because I’m talking to you and people are watching me and listening to me. So that’s a very important part of it. And it’s a tremendous responsibility. And almost for the first time in my life I feel that I can actually make an impact. I can actually change certain things. And that makes me really wonder what it is that I want to accomplish. So it makes me question myself a lot more than I used to, because before I knew exactly what I wanted to do, and I couldn’t do it. Now that I can actually do it, I’m no so sure exactly what I want to do. (Laughter).

Heffner: Do you think there’s something more than the possibility that exists that anything will happen, that George Soros will say at some point, because you made the decision to become involved at a certain point in your life, say, “I can’t assume this responsibility or use this power any longer.”:

Soros: Well, because I have that responsibility, I can’t walk away from it. I mean, I’m trying to actually give away my wealth while I’m alive, and then I’ll walk away from it. I probably won’t succeed actually, but I would like to do as much of it as I can while I’m alive exactly be cause I feel a sense of responsibility.

Heffner: You know, it’s interesting, when I asked you the question about what informs your giving, I was thinking of a document that I included in my Documentary History of the United States. It was Andrew Carnegie’s Essay on Wealth. And he was very much involved with the thought of the damage that a rich man can do by interfering with the natural processes….

Soros: With the market, with the market, yes, yes, yes.

Heffner: Right. Precisely. Or using his wealth to bring about a change that would not have occurred perhaps, most likely, if he didn’t use his personal wealth that way.

Soros: Well, there’s an intelligent man.

Heffner: A very intelligent man, who did wait, to a very large extent, to have his philanthropies work into place after his death. And you want your monies to be gone, if possible.

Soros: Yes, because of my critical attitude towards philanthropy. Because I think that I can’t really trust the people who would administer my estate to have that critical attitude. I know I have it. So that’s why I want to use it while I’m around. And I think philanthropies generally would benefit from having a donor who actually exercises critical supervision over how the money is spent. People, when they give money away, they want to feel good about it. But it doesn’t mean that they do good, because there are all the unintended consequences, exactly as Carnegie pointed out also. So wanting to feel good is not enough; you actually have to do good. And it’s much tougher, in many ways, than to make money, to give it away well,, because when you make money, you have got one criterion, the bottom line that tells you, you know, quantitatively, how successful you have been.


Heffner: Right.

Soros: When you are giving money away you are having social impact, and that’s all everything that’s above the line, and it’s all sort of unintended consequences, and you really have to measure, try to anticipate what the consequences of your action area.

Heffner: Particularly with your concern about human fallibility, which is the basis for your philosophy.

Soros: Yes, yes, yes. And that’s why I recognize that I’m a little bit of a paradoxical situation. But I think, being a thinking human being is a paradoxical situation, you see, because we are trying to understand that in which we participate. Now, to have knowledge, you need to make statements which correspond to the facts. But when you are a participant, you see, your actions are what you are thinking about. So this separation between statements and facts, which has made science what it is, is missing. So our understanding of the world in which we live cannot possibly be like science.

Heffner: You know, the only trouble with that is that, in the science of your giving, we mustn’t forget the fact that you are very much involved.

Soros: Yes. But I don’t call it “science”, I call it “alchemy.” You see?

Heffner: Okay.

Soros: I wrote a book called Alchemy of Finance because I think that, you see, while you can’t change dross into gold because of the laws of chemistry, that the alchemist came up against, you can actually change the world in which you are a participant by making statements about it. So you can, for instance, make a lot of money in financial markets by incantation, and by all kinds of promotions. So we are dealing in a different world when we are dealing in the human world.

Heffner: I like that, “making money in incantation.” That’s spin-control.

Soros: Absolutely. And you might as well recognize it. Of course, we deny it because we pretend to be scientific about it.

Heffner: Is that what the economists do?

Soros: There’s a large element of that, you see. Because in order to be accepted as a science, you have to have the trappings of science. But in actual fact, the doctrine of perfect competition has had a tremendous effect on the way society is organized, because it’s that theoretical abstract construct that is at the basis of this laissez-faire believe. You see? So it is a form on incantation.

Now, my spiritualist mentor, Carol Popper, brilliantly showed how Carl Marx has used spurious science to change history. Here you have economists who genuinely don’t want to change the world, actually changing it, unintentionally. So actually I upset them when I say so.

Heffner: (Laughter). Let me ask you a question. We just have a couple of minutes left. When the president of the Rockefeller Foundation was once on this program, I asked Peter about the appropriateness of a foundation – and that goes for an individual with vast sums – doing something in the public realm that the official representations of the people have rejected. If our public policy relating to drugs is one thing, how appropriate is it for George Soros to try to establish a different kind of policy?

Soros: Well, obviously, what we do has to be within the law. We would like to, for instance, experiment with giving heroin to heroin addicts by doctors under controlled conditions. This is not allowed. We can’t do it. And we won’t do it until we are allowed to do it. But we are allowed to do certain things. And those are the things we are doing, let’s say, needle exchange. It saves lives.


Now, I doing it, can say that we ought to be doing more about needle exchange. And that is not against the law. That’, I’m a citizen, I’m allowed to express my views. As a foundation, we are, of course, strictly limited to what is allowed by law. So, for instance, when I’m advocating legalizing marijuana for medical purposes, I give my own money, with is not tax deductible, because that is, of course, trying to…

Heffner: Because the foundation can’t do it.

Soros: A foundation should not do it, cannot do it. So I’m doing it separately. I’ve a separate entity that gives that money. But that is after-tax dollars.

Heffner: George Soros, I’m so pleased that you joined me today. I’ve learned so much. I’m not so sure I’ve learned enough, but I appreciate your being here, and I hope you’ll come back.

Soros: It’s a pleasure.

Heffner: Thanks.

And thanks, too, to you in the audience. I hope you come back with us again next time. And if you would like a transcript of today’s program, please send $4 in check or money order to: THE OPEN MIND, P. O. Box 7977, FDR Station, New York, New York 10150.

Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. (from original program transcriptionist ): Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.

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