Opinion

Chrystia Freeland

The imperfect world of George Soros

Chrystia Freeland
Nov 30, 2012 19:27 UTC

As it appears in the December 2012 issue of Foreign Policy magazine.

George Soros cites Isaiah Berlin as an important intellectual influence, so it makes sense to see Soros through one of the Riga-born philosopher’s best-known lenses — the division of the world into foxes and hedgehogs. In his public life, Soros is a broad-minded fox: As a hedge fund manager, his success rested on his ability to make many different bets every day. In his philanthropy, Soros is foxy too, supporting, under the broad umbrella of “open society” dozens of causes in dozens of countries.

But intellectually, Soros is a more narrowly focused hedgehog. He has been pondering, articulating, elaborating, and publicizing variations on one big idea for more than half a century. The way he describes that central thought today is “the significance of imperfect understanding as a motive force or determinant of history.”

Over the years, Soros’s written expositions of this concept have sometimes met with bafflement, even as his financial prowess and philanthropic accomplishments have been widely admired. For Soros himself, though, his big idea and many public initiatives are intimately connected; his intellectual framework, he believes, is what has made him good at everything else. And, to his delight, after years of struggling to be accepted as a public intellectual, the turmoil in the world economy has finally made the rest of us more receptive to his insight.

“The present moment is a potent illustration” of how imperfect understanding shapes bad outcomes, Soros told me when I interviewed him recently for Foreign Policy. “We have had 25 years of a superboom, interspersed by financial crises. Each time, the authorities intervened by reinforcing the credit and leverage in the economy, until it became unsustainable. Then you had the crash of 2008, where the financial system actually collapsed and had to be put on life support, which consisted of substituting sovereign credit for the financial credit that was no longer credible.”

Soros sees this boom-and-bust cycle as a real-world example of his theory, illustrating how flawed ideas shape events: “It was all due to a false dogma which postulated that financial markets tend towards equilibrium.”

Income inequality: government, Warren Buffett and growth

Chrystia Freeland
Nov 30, 2012 18:57 UTC

When Branko Milanovic, a World Bank economist, published “The Haves and the Have-Nots,” a study of global income inequality last year, one of his most striking observations was the extent to which the subject was taboo in the United States.

As Milanovic explained, “I was once told by the head of a prestigious think tank in Washington, D.C., that the think tank’s board was very unlikely to fund any work that had ‘income’ or ‘wealth inequality’ in its title. Yes, they would finance anything to do with poverty alleviation, but inequality was an altogether different matter.”

“Why?” Milanovic asked. “Because ‘my’ concern with the poverty of some people actually projects me in a very nice, warm glow: I am ready to use my money to help them. Charity is a good thing; a lot of egos are boosted by it, and many ethical points earned even when only tiny amounts are given to the poor. But inequality is different: Every mention of it raises, in fact, the issue of the appropriateness or legitimacy of my income.”

Making the most of diversity

Chrystia Freeland
Nov 16, 2012 15:17 UTC

For America, 2012 will go down in history as the year of the Latinos, the blacks, the women and the gays. That rainbow coalition won President Barack Obama his second term. This triumph of the outsiders is partly due to America’s changing demographics. And it is not just the United States that is becoming more diverse. Canada is, too, as is much of Europe.

That is why it is worth thinking hard about how to make diverse teams effective, and how people who straddle two cultural worlds can succeed. Three academics, appropriately enough a diverse group based in Asia and America, have been doing some provocative research that suggests that our ability to comfortably integrate our different identities – or not – is the key.

In “Connecting the Dots Within: Creative Performance and Identity Integration,” Chi-Ying Cheng of Singapore Management University, Jeffrey Sanchez-Burks of the Ross School of Business at the University of Michigan, and Fiona Lee, also at the University of Michigan, argue that ethnic minorities and women in male-dominated professions are most creative when they have found a way to believe that their “multiple and conflicting social identities are compatible.”

Obama, the super-rich and the election

Chrystia Freeland
Nov 9, 2012 18:03 UTC

Among the losers in the United States this week are the super-rich, who spent unprecedented millions to evict President Barack Obama from the White House. The investing class turned sharply and vociferously against the president many of them had supported in 2008. On Tuesday night, the plutocrats lost their shirts.

“Boy, they threw away a lot of money,” Theda Skocpol, a Harvard professor, told me. “It was very interesting to hear on Tuesday night about all the corporate jets packed in Logan Airport” for Mitt Romney’s party in Boston.

One of the important questions in the United States today – and, eventually, in all democracies where income inequality has risen sharply, which is to say in pretty much all democracies – is what impact the political ineffectiveness of the super-rich at the ballot box will have on how the country is actually governed.

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