Every person has both angelic and demonic sides to them, and George Soros is no exception. On the one hand, Soros is a famous philanthropist. Forbes called him the most generous giver, in terms of percentage of net worth. On the other hand, he is known as the “man who broke the Bank of England” and is also called “an enemy of the state” by Hungarian Prime Minister Viktor Orban. Soros has also found himself buried in an unnecessary controversy by launching a defamation campaign against China. Obsessed with an oversimplified dogma that the world is arbitrarily divided into open and closed societies, he has been trapped in the fallacy that a defeated China would be better for the “open society”, aka the US-led West.
Since the late 1970s, Soros has succeeded in establishing his reputation as a philanthropist. But the shadow of an alleged hidden agenda surrounding his philanthropic work remains the elephant in the room. It is difficult for Soros to convince us that the funds for democratization campaigns in former communist states in Central and Eastern Europe have not sown the seeds of revolution in their soils. For example, his funding of pro-democratic programs in Georgia was considered to be crucial to the success of the Rose Revolution in Georgia.
While we are unsure whether Soros has any revolutionary plans behind the facade of his charitable work, we are sure that he is every inch an unscrupulous speculator who was unjustly enriched at the expense of an under regulated foreign exchange market in the UK in 1992. In the late 1980s, Britain was confronted with a burgeoning deficit in its current account. But the government did not pay much attention to this problem (Tim Lee, Why the Markets Went Crazy (Houndmills: Palgrave Macmillan, 2004), p.140).
Another economic problem was that the exchange rate at which Britain was brought into the European Exchange Rate mechanism was too high. To make matters worse, inflation and interest rates were also high in Britain. All these weak economic fundamentals made the pound sterling an ideal punch bag for Soros and other speculators. Soros had been building a huge short position in British pounds for months leading up to Black Wednesday.
On Black Wednesday (Sept 16, 1992), Soros’ fund sold short more than $10 billion in pounds. The UK government, on the other hand, took strong steps to bolster the pound, including raising interest rates. Other currency speculators also followed the trend and shifted betting against the pound (Will Kenton, Black Wednesday: Definition, Causes, Role of George Soros, in Investopedia, Aug 15,2022). Within a few days, the pound had depreciated by 26 percent against the US dollar. Soros gained $1 billion from his attack on the pound.
From the perspective of British taxpayers, Soros’ attack on the pound was a morally reprehensible act because of the enormous harm that had been inflicted on the British economy. Though Soros’ acts did not attract criminal sanction, Lord Devlin reminds us that society may use criminal law to preserve morality in the same way that it uses it to preserve anything else that is essential to its existence (J.C. Smith (ed), Smith & Hogan Criminal Law (London: Butterworths, 1999), p.17).Obviously, financial security is essential to the existence and well-being of common people in the UK.
In July 1997, the Thai baht went into freefall, triggering a currency crisis in Asia. According to Xin Ping, Soros began to short the baht in early 1997 (Xin Ping, Dollar Hegemony the Sword of Damocles Hanging above the World, in Global Times, July 28, 2022). Later, the Asian financial crisis led to the outbreak of a full-fledged economic meltdown in Southeast Asia. Soros also shorted the Hong Kong dollar during the Asian financial crisis. But his bets failed because the Hong Kong Monetary Authority was backed by the central government and the former injected massive capital into the financial markets to stabilize local stocks and the Hong Kong dollar.
Taking a broader perspective, Soros was merely an opportunist who captured and maximized the opportunities offered by the liberalized international capital markets dominated by the US. Before the outbreak of the Asian financial crisis, the US pressed many Asian countries to dismantle capital controls, and such forced liberalization created opportunities and access for the giants of the American financial services sector. As Jonathan Kirshner has correctly pointed out, the above crisis planted the seeds that would grow to delegitimize the second US postwar order (Jonathan Kirshner, American Power After the Financial Crisis (Ithaca: Cornell University Press, 2014), p.61).
Soros’ speculative activities, “pro-democracy” programs and other controversial acts have attracted harsh criticism from different people around the world. Hardest of all for Chinese people to accept is his defamation campaign against China. In his speech at the World Economic Forum in January 2019, Soros defamed President Xi Jinping and China, including its Belt and Road Initiative and the social credit system.
It is difficult for us to respond to these bare allegations. Before placing harsh criticism on President Xi, Soros argued that former US President Donald Trump was a main threat to open society. He even worried that Trump would form alliances with Putin, Orban and other authoritarian leaders (Daniel Bessner, The George Soros Philosophy – and its Fatal Flaw, in The Guardian, July 6, 2018). Soros’ assessment of the threat to open society seems to be elusive to the best trained eye or ear. Concerning the social credit system, we must clarify that the system is mainly focused on businesses and not on individuals. Nor is it a centralized system.
It is also worth noting that Soros exaggerated the negative effects brought about by the Chinese regulatory policies on big tech companies. In 2021, he called Blackrock’s decision to introduce mutual funds in China “a tragic mistake”, suggesting that the move would damage the national security interests of the US and other democracies. According to the Global Times, none of Soros’ doomsday predictions about the Chinese financial market have turned out to be accurate (George Soros Faces Biggest Blunder Yet in Chinese Market, Sept 8, 2021). Instead of defaming China, Soros should focus on his charitable work.
This article is contributed to China Daily by Chinese Dream Think Tank, a non-profit Hong Kong-based organization working with skilled volunteers, experts and professionals who are passionate about telling the China story well.
The views do not necessarily reflect those of China Daily.