Personal Statement of Beliefs by Ge

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Subject: Re: Personal Statement of Beliefs by George Soros

For those interested, the following was posted on the futurework list
server, and we pass it on, metta, dawn star
> 
>      Open Society Reconsidered
> 
>      By George Soros
> 
>      "Building Open Societies: Soros Foundations Network 1995 Report
>      on Activities"
> 
>      The term "open society," as defined by Karl Popper, refers to a form
> of social organization which recognizes that
>      nobody has a monopoly on the truth, that different people have
> different views and different interests, and that there
>      is a need for institutions to protect the rights of all people and
> allow them to live together in peace. In contrast,
>      closed societies such as communism claim to be in possession of the
> ultimate truth and, therefore, feel justified in
>      imposing their will on society, persecuting those who disagree and
> dispossessing or even eliminating segments of
>      the population.
> 
>      With the collapse of communism, the old distinction between open and
> closed societies has become largely
>      irrelevant. People living in formerly communist countries might have
> aspired to an open society when they suffered
>      the repression of a closed society, but now they are far too
> preoccupied with simply surviving to bother with such
>      abstract ideas. Even people living in the open societies of the West
> take the idea for granted. The great majority do
>      not see open society as a desirable form of social organization for
> which they are willing to make sacrifices. They
>      proved as much in refusing to lend a helping hand to Eastern Europe
> when their assistance could have assured that
>      repressive nationalist ideologies did not take root.
> 
>      To reestablish open society as an ideal worth striving for, we cannot
> continue to define it in black and white terms
>      as the opposite of communism. It must be given a more positive
> definition as a middle ground between extremes.
>      Under the old formulation, open society was juxtaposed to closed
> society, and only doctrines which strengthened
>      the authority of the state against the individual qualified as
> enemies of open society. I contend that open society is
>      also threatened by the absence of government and excessive
> instability. The laissez-faire doctrine holds that the
>      common good is best served by the uninhibited pursuit of
> self-interest. But unless the laissez-faire doctrine is
>      tempered by the recognition of a common good that takes precedence
> over particular interests, it is bound to lead
>      to a breakdown of the present system, which, imperfect as it is, can
> be characterized as a universal open society.
> 
>      It may sound shocking that I am putting the laissez-faire doctrine in
> the same category as Marxism-Leninism, but
>      they do have an important feature in common: both try to justify
> their claim to the ultimate truth by an appeal to
>      science, and both fail to do so.
> 
>      The Bogus Science of Laissez-faire
>      The main scientific underpinning of the laissez-faire ideology is the
> theory that free and competitive markets tend
>      toward equilibrium. Perfect competition, as originally formulated,
> assumed perfect knowledge, homogeneous and
>      easily divisible products, and a large enough number of participants
> so that no single participant could influence the
>      market price. The assumption of perfect knowledge, proving
> unsustainable, was replaced by the assumption of
>      perfect information and later by the ingenious methodological
> requirement of independently given supply and
>      demand projections. None of these assumptions can be reconciled with
> reality, at least as far as the financial
>      markets are concerned. The shape of the supply and demand curves
> cannot be taken as given, because both of
>      them incorporate the buyers' and sellers' expectations about events
> that change as soon as they act upon their
>      expectations.
> 
>      If the supply and demand curves are not independently given, how are
> market prices determined? The answer is,
>      they are not determined at all. Instead of tending toward
> equilibrium, they continue to fluctuate. In the absence of
>      an equilibrium, the contention that free markets lead to the optimum
> allocation of resources loses its justification.
>      The scientific theory turns out to be an axiomatic structure whose
> conclusions are contained in its assumptions and
>      not necessarily supported by the empirical evidence.
> 
>      What allows economic theory to be converted into an ideology hostile
> to open society is the assumption of perfect
>      knowledge, first openly stated, then disguised as a methodological
> device. The assertion of perfect knowledge is in
>      contradiction to the concept of open society (which is based on the
> recognition that our understanding of our own
>      situation is inherently imperfect). I will give three examples of how
> laissez-faire ideas pose a threat to open society.
> 
>      Instability
>      Economic theory has created an artificial world where the
> participants' preferences and their opportunities are
>      independent of each other and prices tend toward an equilibrium that
> brings these two factors into balance. But in
>      real-world financial markets prices play an active role in shaping
> the preferences and opportunities of participants.
>      This reflexive interaction renders financial markets inherently
> unstable. Laissez- faire ideology denies the essential
>      instability of financial markets and opposes any form of government
> intervention.
> 
>      Instability extends well beyond financial markets: it affects the
> values that guide people in their actions. At the time
>      economic theory was born, people were guided by a set of moral
> principles which found expression in behavior
>      that was outside the scope of the market mechanism. These principles
> were deeply rooted in tradition, religion, and
>      culture. Market values, however, tend to undermine traditional
> values, arousing antagonisms and conflicts.
>      Advertising, marketing, even packaging aims at shaping people's
> preferences rather than gratifying them. As the
>      market mechanism has extended its sway, it has become increasingly
> difficult to maintain the fiction that people act
>      on the basis of a given set of values.
> 
>      Our open society suffers from a deficiency of fundamental values. The
> situation is aggravated by increased mobility
>      and the global scope of our open society. When people are firmly
> rooted in their community, they must pay
>      attention to what the community thinks of them; but when they can
> easily pull up stakes, they only need to look out
>      for themselves. And in a global open society with so many different
> cultures, religions, and traditions, it is difficult to
>      find common ground. Laissez-faire ideology, by accepting
> self-interest as the guiding principle, ignores the malaise
>      and instability inherent in a pervasive market orientation.
> 
>      Social Justice
>      By taking the conditions of supply and demand as given and declaring
> government intervention as the ultimate evil,
>      laissez-faire ideology has effectively banished income
> redistribution. I can agree that all attempts at wealth
>      redistribution are deficient, but it does not follow that no attempt
> should be made. Wealth does accumulate in the
>      hands of its owners, and, if there is no mechanism for
> redistribution, the inequities can become intolerable. The
>      claim that the accumulation of wealth is in accordance with the
> survival of the fittest is negated by the fact that
>      wealth is passed on by inheritance.
> 
>      In any case, there is something wrong with making the survival of the
> fittest the guiding principle of a civilized
>      society. This social Darwinism is based on an outmoded theory of
> evolution just as the equilibrium theory in
>      economics is based on Newtonian physics. The principle which guides
> the evolution of the species is mutation, and
>      mutation works in a much more sophisticated way. The species and
> their environment are interactive, and one
>      species serves as part of the environment for the other species.
> There is a two-way feedback mechanism, similar to
>      reflexivity in history, only in history the mechanism is driven not
> by mutation but by misconceptions.
> 
>      International Relations
>      Laissez-faire ideology also accepts the survival of the fittest as a
> suitable guiding principle for international relations.
>      International | institutions and other forms of cooperation are just
> as much frowned upon as governmental
>      intervention in economic activities. There is irony in banishing the
> state from the economy but enshrining it as the
>      ultimate source of authority in international relations.
> Laissez-faire ideology is closely allied with another spurious
>      science, geopolitics: States have no principles, only interests, and
> those interests are determined by fundamentals
>      such as geographical location. This deterministic approach is another
> relic of the nineteenth century view of
>      scientific method.
> 
>      Formidable Obstacles to Open Society
>      Open society is based on the recognition that our understanding of
> the world is inherently imperfect. What is
>      imperfect can be improved. Open society opens the vista for limitless
> progress: advances in science and
>      technology, social and political arrangements, culture and quality of
> life. There are, however, formidable difficulties
>      in the way of establishing open society as an organizing principle.
> 
>      First, the concept of open society has the appearance of a paradox:
> if the ultimate truth is not attainable, how can
>      we accept as an article of faith that our fallibility is the ultimate
> truth? The need for articles of faith arises exactly
>      because our understanding is imperfect. If we enjoyed perfect
> knowledge, there would be no need for beliefs.
> 
>      Beliefs ought to serve to shape our lives, not to make us abide by a
> given set of rules. If we recognize that our
>      beliefs are expressions of our choices, not of the ultimate truth, we
> are more likely to tolerate other beliefs and to
>      revise our own in the light of our experiences. Most people tend to
> identify their beliefs with the ultimate truth.
>      Indeed, that identification often serves to define their own
> identity. A belief in our fallibility is a poor substitute. It is
>      a highly sophisticated concept, much more difficult to work with than
> mere primitive beliefs, such as my country (or
>      my family or my self-interest) right or wrong.
> 
>      If the idea of our fallibility is so hard to take, what makes it
> appealing? Only the results it produces. It is best
>      justified by success, and, indeed, open societies tend to be more
> prosperous, more innovative, more stimulating
>      than closed ones. But success is an inadequate basis for holding a
> belief because being successful is not identical
>      with being right. The cult of success can become a source of
> instability in open society, because it can undermine
>      our sense of right and wrong. That is happening in our society today.
> Our sense of right and wrong is endangered
>      by our preoccupation with success, as measured by money. Anything
> goes, as long as you can get away with it.
>      Moreover, success tends to be self-reinforcing in both directions.
> The concept of open society needs to be more
>      firmly grounded. We need a commitment to fundamental values, even if
> we know full well that all fundamental
>      values are fallible.
> 
>      But that is not all. Even if the concept of open society were
> universally accepted, that would not be sufficient to
>      ensure that it will prevail. Open society merely provides a framework
> within which different views about social and
>      political issues can be reconciled, it does not offer a firm view on
> those issues. If it did, it would not be an open
>      society. This means that people must hold other beliefs in addition
> to their belief in open society. Only in a closed
>      society does the concept of open society provide a sufficient basis
> for political action.
> 
>      Yet another difficulty in adopting open society as a goal is that it
> is usually best approached by indirection. That is
>      what my foundations are doing: they are fostering education, culture,
> pluralistic media, civil society, economic
>      reform, and so on; they are not propagating open society as such.
> Society is more likely to become open as the
>      unintended consequences of conflicting views and interests than as
> the outcome of a conscious design. Conflicting
>      views and interests will produce an open society only if there are
> institutions dedicated to the common good,
>      allowing people with different views and interests to live together
> in peace. In mature democracies, such institutions
>      are firmly established, but in our global open society, they are very
> rudimentary and inadequate.
> 
>      At present, we enjoy the benefits of a global open society, but we
> lack the institutional framework necessary for its
>      preservation. The international community has demonstrated its
> inability to cope with the new types of conflict
>      emerging from the collapse of the Soviet Union. In the region where
> the majority of my foundations are active, I
>      can sense a tendency to closure. As the conflicts escalate, the
> European Union may turn itself into a fortress and
>      the United States may retreat into isolationism.
> 
>      I do not have a ready-made solution to the crisis at hand. All I am
> trying to show is that there is a problem. I blame
>      the prevailing laissez-faire attitude which believes that the
> unhampered pursuit of self-interest will take care of the
>      common good. I believe the concept of an open society, which needs to
> be deliberately fostered in order to
>      prevail, provides a better guide to action. If we agree on that
> point, we are ready to confront the problem. We may
>      legitimately disagree on the course of action, but at least we shall
> not stand idly by as the free world disintegrates in
>      the same way as the communist world did.
> 
>      George Soros
>      July 1996
> 
>