The Future of Europe: An Interview with George Soros

http://www.nybooks.com/articles/archives/2014/apr/24/future-europe-interview-george-soros/?insrc=hpss

by ivancdg • 12 years ago

86 55 12 years ago

anigbrowl• 12 years ago

This is a bit off the beaten track for HN, but thanks for posting it. It's rare to see this sort of in-depth policy analysis in the click-driven daily news media. This is a very interesting time historically, but also a dangerous one. The Economist has also had some excellent coverage of these issues recently, not least a lengthy essay on democracy: http://www.economist.com/news/essays/21596796-democracy-was-... and this editorial: http://www.economist.com/news/leaders/21591853-century-there...

kzahel• 12 years ago

I would hardly call that an essay. I would call it propaganda straight out of a public high school civics/US History textbook.

k0mplex• 12 years ago

If you don't read the New York Review of Books already, and you like periodicals like the New Yorker and Economist, I recommend adding it to your list - and this article is a good example of why.

Also, this was such a great point by Soros from the interview: "According to Max Planck, among others, subatomic phenomena have a dual character: they can manifest themselves as particles or waves. Something similar applies to human beings: they are part freestanding individuals or particles and partly components of larger entities that behave like waves. The impact they make on reality depends on which alternative dominates their behavior. There are potential tipping points from one alternative to the other but it is uncertain when they will occur and the uncertainty can be resolved only in retrospect."

spikels2• 12 years ago

Soros is wrong here. Max Planck was actually strongly against the duality interpretation and his influence suppressed Einstein and others correct interpretation for several decades.

http://books.google.com/books?id=xsSv3kSDEd8C&lpg=PA8&ots=9L...

effdee2• 12 years ago

Gustave Le Bon would certainly agree to this observation since it is the essence of his 1896 book "The Crowd: A Study of the Popular Mind".

Staying with physics analogies, this book is like a photon. It is illuminating. Proper absorption leads to a higher state and the world will look a bit darker afterwards.

singold• 12 years ago

Really? Using physics that you[0] don't understand to justify some kind of pseudo-science?

[0] I refer to Soros, not to k0mplex

lispm2• 12 years ago

Soros has been manipulating markets for his financial advantage. What's new? He has speculated against the Euro and now he is unhappy with the outcome.

dharma12• 12 years ago

for someone who's 83, that's pretty clear thinking. thanks for posting.

lispm2• 12 years ago

his 'clear' thinking is based on three m-words:

money

spikels2• 12 years ago

Don't waste your time trying to understand the rantings of this lunatic. Like many of the uber rich he made his money from being lucky and political connections not from actually learning anything new. His incoherent theories (e.g. reflexivity) are simply cover for whatever scheme he is currently perusing to gain even more weath and power.

effdee2• 12 years ago

I think this a bad advice. Trying to ignore Soros is a bit like trying to ignore an earthquake.

alandarev• 12 years ago

And what if not? What if people get rich not due to being lucky?

Said that, I agree that there is little value in the article.

gwert• 12 years ago

He is one of the few people in the world who consistently make money off of forex trading, and the scale of his bets are huge. Saying he is just a rich person who got lucky completely underestimates how smart and powerful he is.

zeno334• 12 years ago

Do you have a source for that forex claim? I remember reading in one of his books that he was never able to consistently profit from fx trading.

cynicalkane• 12 years ago

This is a textbook ad hominem attack. It's trying to discredit someone using insults, and it is considered a logical fallacy. It's not the insult that makes an ad hominem, it's using with insults as an excuse to dismiss someone's arguments.

https://en.wikipedia.org/wiki/Ad_hominem

It doesn't help that the OP's insult premise, despite its frothing anger, is your garden-variety, vaguely conspiratorial hate of evil rich people. This sort of stuff should come with a big [CITATION NEEDED] for those of us who don't believe the rich are a big conspiracy of fortunate sons, out to get the common people.

But what's most ironic is that Soros being one of the world's top finance guys gives him more credibility, not less; unless you believe he has a nefarious plot to make billions by lying in magazine interviews or something.

yread• 12 years ago

I think it is correct not to trust what he says. He has a history of currency speculations, so stuff he says publicly might be just him trying to stir some shit. Is he short on euro again like with pound in 1992? If he discloses his positions, perhaps we can take what he says at face value.

dharma12• 12 years ago

I have read one of his books and somewhat agree with your assessment of his "reflexivity" ideas. However wonder why you think he is a lunatic, and if you have examples of how you think his success is attributable to connections rather than intellect?

gbog3• 12 years ago

It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity without external threat and blood spilled all over, criticised from inside and outside by the likes of Soros, who will never understand that finance is a tool and not an end. I hope Merkel and other Eurocrats will firmly continue to not listen to his "well-intentioned free advices".

All proportions aside, it is a bit like those who criticize Wikipedia, which is one of the greatest production of human minds, just because some of their edits have been reverted.

andybak• 12 years ago

You speak as if Soros holds some enmity for the European project but everything I've read indicates that he thinks it's eventual success to be of critical importance and he has spent a lot of time and effort in trying to increase its chances of long-term success.

gbog3• 12 years ago

I do not read Soros' prose on a daily basis. From the interview it seems he dreams of some financial Europe fitting his dreams and needs. It is unlikely that a majority of Europeans would share his values. So he is no enemy, but his comments are aggressive and dismissive of Europeans.

rjzzleep• 12 years ago

It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity without external threat and blood spilled all over

you must have missed the news. because that is exactly the rhetoric the eu politicians keep using. [1] "if the euro fails there will be war". for the nitpickers amongst you with the choice of the mirror was the quickest google link. sarkozy has used the same rhetoric. i've watched merkel say that in the bundestag. if you know german watch that instead.

edit 2: can't find the whole speech, but here's parts of it [2]

a lot of greeks have seen the europe as the fourth german reich. so far any attempt at self determination of the population has had threats of economic sanctions in return. you may call that whatever you like, but if you risk starving your population, that's economic warfare.

criticised from inside and outside by the likes of Soros, who will never understand that finance is a tool and not an end. I hope Merkel and other Eurocrats will firmly continue to not listen to his "well-intentioned free advices".

don't worry. merkel and the other eurocrats have proven to be immune to any kind of criticism or facts. merkels favorite answer to any of that sort is:

"the euro is alternative less".

to me the whole euro is a smart backdoor from the us. everything that the european population has protested against in the past is now getting written into law through laws that you can't even read (yeah, there's actually some opinions that they share). well you can, but usually either after the fact or because someone leaked the draft to the public.

my prediction is that for another 10-20 maybe even more years, people will become more and more miserable, giving even more rise to the extreme right, and at some point the whole thing will just blow up. but boy i can tell you i don't want to be here when it does.

conflict is the natural law of things. if you keep suppressing it for too long, the backlash will get even bigger. yes, i do mean that. suppressing conflicts until they're too big is imho what caused the first world war, and countless other unfinished/ongoing civil wars that became way more bloody than they should have been.

it's also what causes this ongoing discomfort in bigger organization structures where people know exactly that there's something wrong, but the company structure does not allow for open conflict. it's also precisely what made so many open source projects, and their forks successful.

that said the euro is still way more stable than that fiat usd. and soros probably went on shorting right after his interview, why people up vote that douche talking is beyond me.

[1] http://www.mirror.co.uk/news/uk-news/europe-could-be-plunged...

[2] http://www.welt.de/finanzen/article10943242/Fuer-Merkel-best...

usethis• 12 years ago

Quoting the mirror is not helping your case.

From the article:

Ms Merkel had even warned European countries could end up warring with each other if the euro collapses.

What Merkel actually said:

She told the German parliament: “No one should think that a further half century of peace and prosperity is assured. If the euro fails, Europe will fail.”

Taking your news from the Mirror is a surefire hit to general cynicism and anti European rhetoric.

a lot of greeks have seen the europe as the fourth german reich.

This is just inflammatory hyperbole, firstly because it is not backed up with any data, but also, which may be as anecdotal as what you say, a lot of Greeks are actually happy with the outside pressure to force changes to their public sector and governmental system.

gbog3• 12 years ago

conflict is the natural law of things. if you keep suppressing it for too long, the backlash will get even bigger.

Yes, but we civilized humans, with the helps of centuries, went against nature, and decided we are no beasts. We instituted Justice, the Law, moral frameworks, and many other things that are human-made patches to Nature.

Do you think it is in vain?

If you had a disabled kid at arm's length today, would you propose we avoid supressing the law of nature for too long, and let natural selection do its work? (Which results in the quick death or starvation of the disabled and the weaks, FYI).

vixen99• 12 years ago

"....willingly tend towards a common political entity". Willingly ?

European Constitution (2005) France - 54.9% against (29 May 2005) Netherlands - 61.5% against (1 June 2005). No one else in Europe was offered a choice.

Lisbon Treaty (2008): Only Ireland asked people to ratify it. No one else was offered a choice. Initially Ireland voted - 53.2% against but then when told to vote again and get it right - 60.3% in favour.

Several member states used or intended to use referendums to ratify the Treaty establishing a Constitution for Europe (TCE).

The results were as follows:

     Spain - 76.7% in favour (20 February 2005)
     France - 54.9% against (29 May 2005)
     Netherlands - 61.5% against (1 June 2005)
     Luxembourg - 56.5% in favour (10 July 2005)

Referendums were planned, but not held, in:

    Czech European Constitution referendum
    Danish European Constitution referendum
    Irish European Constitution referendum
    Polish European Constitution referendum
    Portuguese European Constitution referendum
    United Kingdom European Constitution referendum

see https://en.wikipedia.org/wiki/Referendums_related_to_the_Eur...

ama7292• 12 years ago

  > European Constitution (2005) France - 54.9% against (29 May 2005)
  > Netherlands - 61.5% against (1 June 2005). No one else in Europe was
  > offered a choice.

That's because not all countries have a referendum culture/law, for example, you can't have a referendum in Belgium, there is simply no legal mean to do it.

And arguably, you can say democracy is working, since the European Constitution was not enacted.

  > Lisbon Treaty (2008): Only Ireland asked people to ratify it. No one
  > else was offered a choice. Initially Ireland voted - 53.2% against but
  > then when told to vote again and get it right - 60.3% in favour.

Unless the vote was rigged, then what's the problem?

pcrh• 12 years ago

The article is principally about the Euro as a currency, not the EU as a political entity.

The EU currently covers more than 12 separate currency zones, to which there are a further 21 European currencies. So, a total of approx 34 currencies (depending on how some are counted).

The undeniable success of the EU is based on its ability to have never-ending negotiations between it's constituent parts. With regards to countries such as Greece, I feel that the long-term outcome of the recent financial crises will be sounder fiscal policies within those countries, since they have found to their undoubted regret that poor fiscal policies leads to a lot of pain, even if you have a "rich uncle" such as Germany. It will also hopefully deter the economically weaker countries from joining the Euro before they are ready.

gutnor2• 12 years ago

they have found to their undoubted regret that poor fiscal policies leads to a lot of pain, even if you have a "rich uncle" such as Germany

Talk about blaming the victim ...

The shitty fiscal policies in Greece or similar problem in Spain, Italy has caused major distress in the population, especially the youth who have had no time to know about and much less profit for their various countries peculiarities. The handling of the crisis has been financial with no concern for the population.

To go back to your family analogy. It is like you convincing your neighbor to rob a bank. When all goes south, your rich uncle bail you out and refund the bank, letting you keep what you stole. Your neighbor is not so lucky, he is jailed, and so are his wife and kids just make the lesson more painful.

I'm a true European, married to an European of another country, living in a third one with friends all around. Teaching fiscal policies to corrupt politicians by destroying the future of people they only indirectly care about is not my idea of an "Union of the People".

Atropos2• 12 years ago

I really don't get the amount of hate and derision the European Union is always getting from US commentators. Culturally and geographically, for example Finland and Greece do not have much in common - yet Finland is willing to help them out, despite the "NO BAILOUT" clause explicitly implemented in the construction of the eurozone.

Meanwhile the USA has neighboring countries like Mexico or Cuba with huge problems like drug wars or lack of democratic elections (Cuba only) and which are poorer GDP/capita wise than countries like Poland, which were practically communist colonies of Russia until 1990! Sorry but it seems to me that the European Union is much more beneficial to the European continent than the USA for the American continent.

exit• 12 years ago

you may have answered your own question.

dageshi2• 12 years ago

The rest of europe bailed out Greece due to forced self interest, they shared the same currency and effectively the same banking system, had they not bailed out Greece the repercussions would have found their way back to all the other countries inside the eurozone in short order.

If you share the same currency and banking system you end up being responsible for each others debts whether you liked it or agreed to it in the first place, the "NO BAILOUT" clause was effectively worthless and irrelevant.

zurn• 12 years ago

Actually Finland has done a lot to trip Greece over (demanding collateral in exchange for loan guarantees, just making their liquidity situation worse).

The whole thing was just about the debtor bloc trying to save their own ass while imposing harsh austerity on Greece.

krrrh• 12 years ago

There are so many automatic stabilizers built into the US economy which move wealth from some states to others when economic disruption occurs (stuff like unemployment insurance, military spending, federal minimum wage laws, social security, Medicare, DOE transfers, etc) that you rarely see explicit bailouts of failed states in the USA because they're mostly unnecessary. The EU simply has nowhere near the fiscal integration of the US, so member states can really go off in their own direction despite all the supposed safeguards such as Maastricht.

I get that you're pointing out that culturally Finland has less in common with Greece than Oregon has with Louisiana, but that was not always the case. The US just has had the benefit of a couple of hundred years of deep integration since the Louisiana purchase. Cuba is not part of any political association with the US, so naturally it can't be compared.

Also... The US did bail out the Mexican government and save it from default in the 1990s, quite quickly and decisively. The fact that most people don't even remember that, and yet so much ink has been spilled and so many teeth gnashed over whether, or how, or whether to break up the union instead says a lot about the fragility of the EU (to be expected of course, it's still such a young institution). The integration and benefit to the states in the US has been enormously successful. Many would like to see the EU get there but it is still more correctly analogous to NAFTA which even though it was only a few years old and much less ambitious, played a big part in justifying the Mexican bailouts.

http://en.m.wikipedia.org/wiki/1994_economic_crisis_in_Mexic...

jalayir• 12 years ago

"It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity" - how about India?

fbnt• 12 years ago

I agree, except for the 'common political entity' bit. EU, till now, has been mostly a financial institution, rather than a political one. We will be a political union only when all of us will speak a common language, and all of us will be allowed to vote on the same set of politicians/leaders. Obviously, there's no well-intentioned advice from Soros, and we all know it.

Kurtz79• 12 years ago

Agreed... I think it's depressing that many people believes that "things were better before the Union"...

Before the Union there was War. There has been war almost continuously in Europe since we have written records.

The EU is far from perfect, but is a product of WW2, when people was aware that another war in the nuclear age probably would have meant the annihilation of entire populations.

Relinquishing part of one's country independence and autonomy was considered a fair trade for peace and security.

My grandfather was made prisoner by the English in WW2, and not 60 years later I was able to take a plane and start living and working in England with just my ID card.

This freedom (and security) for me is worth every wrinkle and obstacle the EU can and will have.

pessimizer4• 12 years ago

The problem is in having a common currency without a central bank of last resort or a common financial framework. It allows Germany to loan countries on the periphery money which will be used to buy products from Germany. Those countries cannot adjust their currencies to adapt to the threat, so they're left in a constant state of penury and dependance on Germany.

It's not about kumbaya and peace in Europe. The Euro does absolutely nothing to maintain that, and conflating Europe as a political entity and the common currency is a deception.

I hope Merkel will change course before Germany is surrounded by failed states headed by populist right-wing nationalists running on anti-German platforms.

wisty• 12 years ago

It's the gold standard debate all over. The Euro prevents the Greeks from printing their way out of a crisis. They can regulate their banks, but not control their currency.

I think Soros would rather be speculating on fiat currencies, rather than less flexible ones. So you are probably right that he has an agenda. It doesn't mean he's wrong, though. There would be other predators who would rather try short bonds written by gold (or Euro) standard countries ... just because they'd rather have the Euro doesn't mean they are wrong simply because they would be pushing an agenda.

The gold standard debate is just so annoying though. There's rarely any data, just lots of arguments, and bickering at cross purposes. (X is good because it's more stable ... no wait it's good because it's less stable ... no it's good / bad because it punishes evil investors / lazy non-investors ... wait, what do you mean the banks effectively print money, shouldn't it be illegal to lend out money they don't have in a safe?).

Bpal• 12 years ago

Soros juggles the facts in his favour -that's for sure, but the general geopolitical picture is given about right. Like Germany being the dominant player in Europe and Russia helping out with Middle East chemical weapon. These are well-known facts, what would be really great to find out is what bonus the leader of the country brings to the table of his own nation and at what cost. Not sure, we'll ever find out.

pessimizer4• 12 years ago

Soros: "The incestuous relationship between national authorities and bank managements [is what's wrong with European banking.] France in particular is famous for its inspecteurs de finance, who end up running its major banks. Germany has its Landesbanken and Spain its caixas, which have unhealthy connections with provincial politicians. These relationships were a major source of weakness in the European banking system and played an important part in the banking crisis that is still weighing on the eurozone. The proposed banking union should have eliminated them, but they were largely preserved, mainly at German insistence."

The Future of Europe: An Interview with George Soros

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