Emperor Soros’s new clothes

Matthew Lynn

10 May 2008

Matthew Lynn says hedge-fund pioneer and currency speculator George Soros is still a brilliant player of markets — but as a philosopher, frankly, he’s incomprehensible

So why the constant stream of books? One reason might be an eye for publicity. Great money managers have an ear for the noise of the crowd. They can tell what the markets will think a few seconds before the markets know it themselves, which is enough time to make a big profit.

So it is for his books. He knows what will make a splash and command an audience — which is to invert expectations. A book by a billionaire financier saying the system is dandy and that the poor should pull themselves up by their bootstraps would be unremarkable. But a book in which the billionaire says the whole system is about to smash itself to bits and that nobody should mind because it was all rotten anyway gets lots of attention.

It comes at a price, however, and the price is credibility. Soros’s book and lectures seem to be more about working out his own demons than they are about the financial system. Perhaps he can no longer handle the pressure of being the human face of the financial system. To seek to put some kind of recognisable face to strange impersonal forces is a natural impulse. Most of us can’t quite understand the markets. We merely sense they are, like hurricanes, vicious and powerful things that can rip up communities before blowing elsewhere. Just as primitive peoples had gods of wind and rain, so we have latched on to Soros as the man who personifies forces that would otherwise be incomprehensible.

Being the face of the markets might be profitable, but it isn’t much fun. Outside the City and Wall Street, nobody likes you much. Greedy, callous, brutal and cruel are the kind of adjectives you find stuck in front of your name. And every time homes start getting repossessed and businesses closed because of financial turmoil, you end up taking the rap.

That Soros should be tired of all this is hardly surprising. Turning around and saying the system sucks is just a convoluted way of saying, ‘Don’t blame me.’ But that doesn’t mean we should listen. The convulsions in the global markets this year do need serious analysis, but Soros’s abstruse undergraduate twitterings add little to the debate. ‘I have been fortunate in making a lot of money and spending it well,’ Soros writes. ‘But I have always wanted to be a philosopher, and finally I may have become one.’ In a sense that’s true. Just not a very good one. And, as Soros himself appears to sense, if it weren’t for the money, no one would be very interested in the philosophy.

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Alan Scott

May 8th, 2008 6:41pm Report this comment

Soros is obviously a man of great intelligence, strategical analytical capacity etc. Would have made a good Roman Emperor in the time of Justinian, perhaps. But his confusion of the worth of financial skills - and in him,there can be no doubt about that - with philosophy or the understanding of or empathy with the human condition, is evidence of his Cyclopean condition. And I yield to noone in my admiration of his philanthropical activities.
It is yet again a reflection of our celebrity obsessed culture - that a person who excels in one sphere is automatically assumed to be competent to act in/ pronounce upon/be listened to in other spheres.

Fredd Kambo

May 9th, 2008 2:08pm Report this comment

George Soros did not invent the hedge fund industry. Alfred Winslow Jones did so in 1949, including the practice of charging the fee of 20% of performance. Hedge funds were in fact quite popular in the 1960s, a popularity that declined in the following decades. It could be argued that Soros and men like him ignited their resurgence to the fashinable status they enjoy today. A philosopher, he is not however.

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