Former Federal Reserve Chairman Paul Volcker wrote in 2003 in the foreword of Soros' book The Alchemy of Finance:

"George Soros has made his mark as an enormously successful speculator, wise enough to largely withdraw when still way ahead of the game. The bulk of his enormous winnings is now devoted to encouraging transitional and emerging nations to become 'open societies,' open not only in the sense of freedom of commerce but - more important - tolerant of new ideas and different modes of thinking and behavior."

Biography

Family

George Soros is the son of the Esperanto writer Tivadar Soros. According to Kaufmann's biography Soros (2002), Tivadar was a prisoner of war during and after World War I and eventually escaped from Russia to rejoin his family in Budapest.

The family changed its name in 1936 (see Kaufmann, p.24) from Schwartz to Soros, in response to the Fascist threat to Jews. Tivadar liked the new name because it is a palindrome and because it has a meaning. Though the specific meaning is unstated by Kaufmann, in Hungarian "soros" means "next in line, or designated successor", and in Esperanto it is the future tense of "to soar". Tivadar wrote of his ordeal to survive Fascist Hungary, and help many people escape it, in his book Maskerado.

George Soros has been married to Annaliese Witschak and to Susan Weber Soros. He is now divorced. He has five children: Robert, Andrea, Jonathan (with his first wife, Annaliese), Alexander and Gregory (with his second wife, Susan). His older brother Paul Soros is an engineer, and is also a well-known philanthropist, investor, and New York socialite.

Early life

Soros was thirteen years old when Nazi Germany took military control over its ally Hungary (March 19, 1944), and started exterminating over 500,000 Hungarian Jews (about two-thirds of the prewar population) [1]. In the following year, Soros survived the battle of Budapest, as Soviet and Nazi forces fought house-to-house through the city. George first traded currencies during the Hungarian hyperinflation of 1945-46.

In 1946, Soros escaped the Soviet occupation by participating in an Esperanto youth congress in the West. Soros was taught to speak the language from birth and thus is one of the rare native Esperanto speakers.

Soros emigrated to England in 1947 and graduated from the London School of Economics in 1952. In 1956 he moved to the United States. He has stated that his intent was to earn enough money on Wall Street to support himself as an author and philosopher. His net worth reached an estimated $11 billion.

Business

Soros is the founder of Soros Fund Management. In 1970 he co-founded the Quantum Fund with Jim Rogers. It returned 3,365% during the next ten years, and created the bulk of the Soros fortune.

Currency speculation

On Black Wednesday (September 16, 1992), Soros became instantly famous when he sold short more than $10bn worth of pounds, profiting from the Bank of England's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency. Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England."

The Times October 26, 1992, Monday quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member. Later, he called Soros a moron. [2] Thai extremists have called Soros "an economic war criminal" who "sucks the blood from the people". [3]

Insider trading conviction

In 1988, he was asked to join a takeover attempt of the French bank Société Générale. He declined to participate in the bid, but did later buy a relatively small number of shares in the company. Fourteen years later, in 2002, a French court ruled that it was insider trading as defined under French securities laws and fined him $2 million. Soros denied any wrongdoing and said news of the takeover was public knowledge. PBS

His insider trading conviction was upheld by the highest court in France on June 14, 2006. [4]

Philanthropy

Soros has been active as a philanthropist since the 1970s, when he began providing funds to help black students attend the University of Cape Town in apartheid South Africa, and began funding dissident movements behind the iron curtain. Soros' philanthropic funding in Eastern Europe mostly occurs through the Open Society Institute (OSI) and national Soros Foundations, which sometimes go under other names, e.g. the Stefan Batory Foundation in Poland. As of 2003, PBS estimated that he had given away a total of $4 billion. The OSI says it has spent about $400 million annually in recent years. Notable projects have included aid to scientists and universities throughout Central and Eastern Europe, help to civilians during the siege of Sarajevo, worldwide efforts to repeal drug prohibition laws, and Transparency International. Soros also pledged an endowment of 420 million euros to the Central European University (CEU).

He received honorary doctoral degrees from the New School for Social Research (New York), the University of Oxford in 1980, the Budapest University of Economics, and Yale University in 1991. Soros also received the Yale International Center for Finance Award from the Yale School of Management in 2000 as well as the Laurea Honoris Causa, the highest honor of the University of Bologna in 1995.

Philosophy

Education and beliefs

Soros has a keen interest in philosophy, and his philosophical outlook is largely influenced by Karl Popper, whom he studied under at the London School of Economics. His Open Society Institute is named after Popper's two volume work, The Open Society and Its Enemies, and Soros's sincere and ongoing philosophical commitment to the principle of 'fallibilism' (that anything he believes may in fact be wrong, and is therefore to be questioned and improved) stems from Popper's philosophy. Some critics argue that Soros's static political beliefs appear to conflict with the critical rationalism espoused by Popper, though Soros argues that these beliefs were arrived at through such rationalism.

Reflexivity, financial markets, and economic theory

Soros's writings focus heavily on the concept of reflexivity, where the biases of individuals are seen as entering into market transactions, potentially changing the fundamentals of the economy. Soros argued that such transitions in the fundamentals of the economy are typically marked by disequilibrium rather than equilibrium in the economy, and that the conventional economic theory of the market (the 'efficient market hypothesis') does not apply in these situations. Whether Soros is theoretically right or wrong on this issue, Soros certainly has the market credentials and proven track record to effectively maintain that his theory of reflexivity is practically relevant in the marketplace - at least for him. Soros has popularized the concepts of dynamic disequilibrium, static disequilibrium, and near-equilibrium conditions.

Soros's view of potential problems in the capitalist free market system

Despite working as an investor and currency speculator (his fortune in 2004 was estimated at US$ 7 billion), he argues that the current system of financial speculation undermines healthy economic development in many underdeveloped countries. Soros blames many of the world's problems on the failures inherent in what he characterizes as market fundamentalism. His opposition to many aspects of globalization has made him a controversial figure.

From Victor Niederhoffer (under "external links"): "Most of all, George believed even then in a mixed economy, one with a strong central international government to correct for the excesses of self-interest."

Soros draws a distinction between being a participant in the market and working to change the rules that market participants must follow. He appears to have no problem working to further his own self interest economically, while at the same time lobbying for a drastic overhaul of the global financial system. Responding to accusations of being personally responsible for many financial collapses, including those in England, Eastern Europe, and Thailand, he stated, "As a market participant, I don't need to be concerned with the consequences of my [financial] actions."

Political views

Opposition to the Soviet Union

According to Neil Clark (writing in the New Statesman): "(t)he conventional view, shared by many on the left, is that socialism collapsed in eastern Europe because of its systemic weaknesses and the political elite's failure to build popular support. That may be partly true, but Soros's role was crucial. From 1979, he distributed $3m a year to dissidents including Poland's Solidarity movement, Charter 77 in Czechoslovakia and Andrei Sakharov in the Soviet Union. In 1984, he founded his first Open Society Institute in Hungary and pumped millions of dollars into opposition movements and independent media."

Since the fall of the Soviet Union, Soros' funding of progressive, anti-imperialist causes has continued to play an important role in the former Soviet sphere. His funding and organization of Georgia's Rose Revolution was considered crucial to its success by Russian and Western observers, although Soros has said that his role has been "greatly exaggerated."

Soros vs. Bush

Soros was not a large donor to US political causes until the U.S. presidential election, 2004. In an interview with The Washington Post on November 11, 2003, Soros said that removing George W. Bush from office was the "central focus of my life" and "a matter of life and death." He joked that he would sacrifice his entire fortune to defeat Bush, and many continue to state this as Soros' position even after Soros clarified the humorous nature of the statement in a Q&A session at the end of his March 3, 2004 address to California's Commonwealth Club.

Soros gave $3 million to the Center for American Progress, committed $5 million to MoveOn.org, while he and his friend Peter Lewis each gave America Coming Together $10 million. (All were groups that worked to support Democrats in the 2004 election.) On September 28, 2004 he dedicated more money to the campaign and kicked off his own multi-state tour with a speech: Why We Must Not Re-elect President Bush delivered at the National Press Club in Washington, DC. The online transcript to this speech received many hits after Dick Cheney accidentally referred to FactCheck.org as "factcheck.com" in the Vice Presidential debate, causing the owner of that domain to redirect all traffic to Soros's site.

According to the Center for Responsive Politics, during the 2003-2004 election cycle, Soros donated $23,581,000 to various 527 Groups dedicated to defeating President George Bush. Despite Soros' efforts, Bush was reelected to a second term as president on November 2, 2004.

Soros has been criticized for his large donations, as he also pushed for the Bipartisan Campaign Reform Act of 2002 which was intended to ban "soft money" contributions to federal election campaigns. Soros has responded that his donations to unaffiliated organizations do not raise the same corruption issues as donations directly to the candidates or political parties.

Incidentally, Harken Energy, a firm partly owned by Soros, did business with George W. Bush in 1986 by buying his oil company, Spectrum 7.

His most recent book, The Bubble of American Supremacy, was published in January 2004 ([5]).

Critics

Criticism of financial activities

Critics claim that Soros has an undue influence on currency markets through Quantum Fund, his privately-owned investment fund. Like many large hedge funds, it is registered in an offshore tax haven, specifically Curaçao, Netherlands Antilles.

In an August 2004 appearance on Chris Wallace's FOX News Sunday, Speaker of the U.S. House of Representatives Dennis Hastert, stated, "We don't know where George Soros's money comes from. We don't know where it comes from, from the left, and you don't know where it comes in the right. You know, Soros's money, some of that is coming from overseas. It could be drug money. We don't know where it comes from." Soros responded to Hastert by saying, "by smearing me with false charges and mischaracterizations you are attempting to stifle critical debate and intimidate those who believe this administration is leading the country in a ruinous direction. Now that I have called you on your false accusation, you are using additional smear tactics." [6] Soros filed an official complaint with the House Committee on Standards of Official Conduct. Soros claimed that Hastert's comments "strongly suggests a deliberate effort to use smear tactics, intimidation and falsehoods to silence criticism."