Thespeculator,GeorgeSoros,whoseassaultonsterling1ejectedBritainfromtheEuropeanexchangeratemechanismthatSeptemberof10yearsagohasamission—tousehisestimated￡5billionfortuneandhisfametohelptacklewhatheseesasthefailuresofglobalisation.Theideathatamanwhomadebillionsbettingonthefinancialmarketssideswiththeanti-globalisationmovementmightstrikesomeasironic.Sorosisclearlygenuinelyappalledatthedamagewroughtonvulnerableeconomiesbythevastsumsofmoneywhichflowacrossnationalborderseveryday.
“TheUSgovernstheinternationalsystemtoprotectitsowneconomy.Itisnotinchargeofprotectingothereconomies,”hesays.“SowhenAmericagoesintorecession,youhaveantirecessionarypolicies.Whenothercountriesareinrecession,theydon'thavetheabilitytoengageinantirecessionarypoliciesbecausetheycan'thaveapermissivemonetarypolicy,becausemoneywouldflee.”Inperson,hehastheairofaphilosophyprofessorratherthanagimlet-eyedfinancier.InasoftvoicewhichbearsthetracesofhisnativeHungary,hearguesthatitistimetorewritetheso-calledWashingtonconsensus—thecocktailofliberalisation,privatisationandfiscalrectitudewhichtheIMF2hasbeenpreachingfor15years.Developingcountriesnolongerhavethefreedomtoruntheirowneconomies,heargues,evenwhentheyfollowperfectlysoundpolicies.HecitesBrazil,whichalthoughithasafloatingcurrencyandmanageablepublicdebtwaspayingtentimesovertheoddstoborrowfromcapitalmarkets.
Soros,whoatonestageafterthefalloftheBerlinWall3wasprovidingmoreassistancetoRussiathantheUSgovernment,believesinpractisingwhathepreaches.HisOpenSocietyInstitutehasbeenpivotalinhelpingeasternEuropeancountriesdevelopdemocraticsocietiesandmarketeconomies.Soroshastheadvantageofaninsider'sknowledgeoftheworkingsofglobalcapitalism,sohiscriticismisparticularlypointed.Lastyear,theSorosfoundation'snetworkspentnearlyhalfabilliondollarsonprojectsineducation,publichealthandpromotingdemocracy,makingitoneoftheworld'slargestprivatedonors.
Soroscreditstheanti-globalisationmovementforhavingmadecompaniesmoresensitivetotheirwiderresponsibilities.“Ithink[theprotesters]havemadeanimportantcontributionbymakingpeopleawareoftheflawsofthesystem,”hesays.“Peopleonthestreethadanimpactonpublicopinionandcorporationswhichselltothepublicrespondedtothat.”BecausetheIMFhasabandonedbilliondollarbailoutsfortroubledeconomies,hethinksarepeatoftheAsiancrisisisunlikely.Thefund'snew“toughlove”policy—forwhichArgentinaistheguineapig—hasotherconsequences.ThebailoutswereawelfaresystemforWallStreet,withwesterntaxpayersrescuingthebanksfromtheconsequencesofunwiselendingtoemergingeconomies.NowtheIMFhasdrawnalineinthesand,credittopoorcountriesisdryingup.“Ithascreatedanewproblem—theinadequacyoftheflowofcapitalfromcentretotheperiphery,”hesays.
TheoneeconomySorosisnotlosinganysleepaboutistheU.S.“IammuchmorepositiveabouttheunderlyingeconomythanIamaboutthemarket,becausewearewagingwarnotonlyterrorismbutalsoonrecession,”hesays.“Althoughwedon'tadmitit,weareactuallyapplyingKeynesian4remedies,andIamaconfirmedKeynesian.Ihavenotyetseenaneconomyinrecessionwhenyouaregearingupforwar.”Heworriesthattheworld'slargesteconomicpowerisnotlivinguptoitsresponsibilities.“IwouldliketheUnitedStatestoliveuptotheresponsibilitiesofitshegemonicpowerbecauseitisnotgoingtogiveupitshegemonicpower,”hesays.“TheonlythingthatisrealisticisfortheUnitedStatestobecomeawarethatitisinitsenlightenedself-interesttoensurethattherestoftheworldbenefitsfromtheirrole.”
