In the bookcase in George Soros’s South Kensington drawing-room, neatly lined up beside works on Kant, Adam Smith and Karl Popper, are multiple copies of Open Society, written by one of today’s aspiring philosophers: Soros himself. The literary line-up is testament to the Hungarian–American billionaire’s search for something that money can’t buy — acceptance at the same table as these great thinkers. But his cash has paid for a place on the same shelf, at least in his own home. And last week Soros was in London to talk about his latest book, The Age of Fallibility: Consequences of the War on Terror (Weidenfeld).
Despite giving away $5 billion of his personal fortune to propagate his beliefs, Soros will always be remembered for the $1 billion he made from the crisis in which sterling was forced out of the European Exchange Rate Mechanism in 1992. He became known as ‘the man who broke the Bank of England’ and the tag has overshadowed everything he has done since. ‘I’m very happy to have had that billion dollars,’ he says, ‘and it hasn’t done Europe or Britain any damage. I’m actually very pleased with that particular incident.’
The financier turned philanthropist, now 75, began his career as a door-to-door salesman in Wales, progressed to the financial markets, and with his legendary Quantum Fund amassed a fortune for himself and his investors: a £1,000 stake in it 30 years ago would now be worth about £4 million. He is no longer actively involved with the fund, which is run by his two sons. But he is trying to change the course of history again — as a promoter of ideas. He has given up making money to concentrate on funding a network of foundations promoting democracy and open societies around the world. In the past his foundations encouraged democracy in Eastern bloc countries, but he will announce plans in the next few weeks to launch an Open Society Foundation in Western Europe — because he thinks the EU is failing.
He also has some fixed views on how philanthropy should be conducted. He thinks Microsoft’s Bill Gates is just a figurehead at the Bill and Melinda Gates Foundation. ‘I am actively engaged in setting up my network of foundations,’ says Soros. ‘It is not comparable to Gates, who has engaged professionals to run his foundation. He’s a figurehead advocating the policies, which is different to what I do. While I do have great respect for the Gates Foundation — we work very closely together on some issues — I think I am more actively engaged in the management of my foundation. That’s what sets me apart. I manage the foundation with the same intensity as I used to manage my hedge fund.’
He is speaking on a glorious summer’s day from his house on one of London’s most exclusive squares. As you might expect from the world’s 71st richest man, it comes complete with a butler — who shows me through a hallway strewn with children’s trainers and tennis rackets, to a reception room with French windows opening on to communal gardens. The room is filled with an eclectic mix of objects, from tasteful period furniture to a modern aircraft-style reclining chair. Photographs of a grandchild wearing a bearskin hat sit next to a large plastic model of a pound coin — a souvenir, perhaps, of Soros’s part in freeing sterling from the ERM, just as his ‘open society’ work helped free the Czechs and Poles from the shackles of communism.
Soros spreads out on a sofa. I ask why he is not sitting in his airline recliner: he looks quizzical, scans the room and says, ‘I didn’t know I had it.’ With $7 billion in the bank, Soros is probably allowed to lose track of the odd asset, but when it comes to spending cash on his own foundations he does not miss a beat.
‘In a way it’s much harder to spend it in a socially responsible way than to earn it,’ he says, sweeping back his hair, which has turned more silver since we last met five years ago. ‘When you’re making money you have simple criteria, which is the bottom line. When you want to be socially responsible you affect different people in different ways, which is much harder to measure.’
His new book follows on from his attempt to pry George Bush out of the White House at the last election. It offers his views on the fatal flaws of the Bush administration, how it has lost direction in providing a beacon for good governance around the world. After 9/11, he says, ‘Bush exploited fear in American people. The Bush administration reinforced the threat posed by terrorists and declared war on terror, making it the centre piece of his policy — it is really exploitational.’
Is he worried that such trenchant anti-Bush views might get him sent to Guantanamo? ‘No,’ he says. ‘Actually my concern is that we don’t learn enough from this. I’m really very concerned about Europe’s role. The practical message for Europeans is that the world really needs a strong European Union with a mission which is different to America’s priorities.’
In part this is why Soros is about to announce an initiative to fund foundations to promote democracy in Western Europe. ‘The construction of the European Union has now missed a step,’ he says, sliding down the sofa until he is almost horizontal. ‘The political will moving the process forward has run out of steam. It is too unwieldy for the size of its membership, it is opaque and bureaucratic, and the democratic influence is too indirect, so that people feel alienated. For many years my foundation network has been active in the accession countries, and I believe that the time is right to extend our activities into the rest of the European Union.’ His first Western European foundation is likely to be set up in London or Paris.
Soros is himself a quintessential new European. The son of a Hungarian Jewish lawyer, he grew up in Budapest during the second world war and found fighting for survival exhilarating. ‘You can be either paralysed or stimulated,’ he says. He studied at the London School of Economics under Popper, whose work on the principles of open societies profoundly influenced him. After various menial jobs he went to the City to make his fortune and achieve that rare status of an investor whose words move markets. He still likes making predictions. ‘There is an impending global correction,’ he warns. ‘It will be prompted by higher interest rates. We are in a bear market …but then I may be wrong.’
Another current Soros hobby-horse is the flotation of Rosneft: he accuses prospective investors in the Russian energy group, which made its debut on the stock market this week, of folly. ‘It will be a very risky investment,’ says Soros, tugging at an overgrown eyebrow. ‘Investors are buying into a company over which they have no control. Russia wants to use energy as a ruse for reasserting its dominance over Europe. The London Stock Exchange ought to be more discriminating in its listing of foreign companies.’
As Soros rights himself ready to get to his feet, I ask whether his legacy will be tainted by failing to overturn an insider dealing charge that was recently upheld by a French court. His response seems less motivated by vanity than by pragmatism; the charge, he says, is giving the Bush camp ammunition against his Open Society Foundations. ‘My enemies keep referring to me as a “convicted insider trader”.’ For this reason he is taking the case to the European Court of Human Rights. His words have moved markets for 20 years; now he wants them to move governments, and he doesn’t want his past to get in the way.
Rupert Steiner is City editor of the Business.