Philosophical Speculator

What motivated George Soros?

Money? Few of his friends and associates thought so. "If he made another billion dollars," suggested his close friend Byron Wien, "that wouldn't make him happy. Making the ffrst billion didn't make him all that happy."

Well, it must have brought him some joy.

But not much. George Soros was far too complex. He had more than just that one dimension. No matter how much money flowed into his bank account, he would never be satisfied as simply a man of leisure. In that sense, he was like many other wealthy people in the 1990s.

In previous generations, the very wealthy valued their spare time. They spent as much time as they could doing as little as possible. But as the British writer Anthony Sampson has pointed out, "The rich no longer aspire to a life of leisure, and work has become an essential part of their status "

As for favored status symbols, the luxury hotel suite, the yacht, and the private jet had replaced the fancy house, garden, and park. But what most distinguished the newly rich from earlier generations of the wealthy was mobility. Aspiring to something beyond a life of leisure, Soros has felt far more comfortable in jet planes than yachts, far more useful in hotel suites than in huge mansions, far more productive globe-trotting than sitting by a pool.

Yet Soros is different from many of the contemporary rich in one significant way: the degree to which he has engaged in intellectual life. Apart from Karl Popper's writings, the two books that influenced Soros most were, predictably, a pair of esoteric mind-benders called Godel, Escher, Bach, by Douglas Hofstadter and Step to an Ecology of

Mind by Gregory Bateson. He has viewed himself not just as a speculator but as a philosopher. Or, perhaps more accurately, a failed philosopher who happened to be a speculator. When he was admitted to the Chancellor's Court of Benefactors at Oxford University in England in the autumn of 1992, he asked to be listed as "a financial and philosophical speculator." "I would really like to be recognized as a practical philosopher," Soros has said, "but I am quite happy to be recognized as a philosopher manqué."

By the 1990s, however, he had become a billionaire-and no matter what he did outside of the world of finance, he was frequently described as "the Hungarian entrepreneur," "the master money manager," "billionaire speculator," and even once as "the bad boy of global finance" (The Wall Street Journal, June 1, 1994). He tried to escape such labels. The press release issued by the Soros Foundations in New York described him as an "international philanthropist." It was his way of saying: If I can't be called a philosopher, at least don't describe me as a financier.

More than anything else, though, he sought respect-for his mind, for his ideas, for his contributions to society through his philanthropic efforts. Had he called himself a philosopher, and nothing else, he might not have been taken seriously. He said more than once that being a success on Wall Street had at least afforded him the chance to be listened to, and that was the beginning of being taken seriously.

For he saw himself as an intellectual in the European tradition. Wall Street was a decent enough place to make money, but beyond that its inner precincts and the people who inhabited its offices were of little interest to Soros. "I don't spend much time with the people in the stock market," he confided to journalist Dan Dorfman. "I find them boring." He felt more comfortable with intellectuals, he said, than with busi-nesspeople.

He might have yearned to cease his investment activities in favor of philosophizing as a full-time vocation. It was never to be. He had done far too well on Wall Street for that. If moneymaking was hardly an end unto itself, it did present opportunities that few philosophers sitting in their ivory towers would ever experience.

Though making money came easily to him, Soros could not, at first, admit to himself that he had chosen a profession other than an academic or intellectual one. Gradually, though, he got used to the idea. "For many years I refused to identify with my performance. It was a means to an end. Now I'm much more willing to accept it that this is, in fact, my life's work." When he was asked in the early 1980s how it felt to be the world's most successful money manager, he admitted, "It's a pretty good feeling."

However satisfied he had become with doing well on Wall Street, Soros was not, by any means, pleased with the anguish that went into the day-to-day decision making of investing: "My ego was really put on the line, and this turned out to be a very painful experience. For one thing, my ego suffered an incredible battering whenever I made the wrong move in the market. For another, I did not really want to identify myself with moneymaking to the extent that was necessary in order to be successful. I had to deny my own success in order to maintain the discipline that was responsible for that success."

The problem with investing, what made it so painful, he explained on another occasion, was losing money. And, as he liked to point out, it wasn't possible to make money without the threat of losing it. His "identity crisis" in the early 1980s was the result of his feeling that making so much money was not enough in life.

He worried, as men of ideas often worry, that the accumulation of money could have a corrupting influence on him and that people paid attention to him only because he had made so much money. "I have to accept my success with its power and influence. . . . My biggest risk lies in the process of acknowledging that I am becoming powerful and influential because I have a lot of money." The identity crisis came almost as a relief.

He enjoyed the good life. He has four residences, in Manhattan; Southampton, Long Island; Bedford, New York; and London. Yet he was far more modest than other people of great wealth. He neither smoked nor drank, and did not seem to enjoy huge amounts of food.

Edgar Astaire, his London partner, often saw Soros outside the office. Soros's tastes were not pretentious, he asserted: "He likes the theater, music. He doesn't collect things. He doesn't collect paintings. He has had a bit of Hungarian art. He likes his clothes. He's always been well turned out."

"I used to collect but actually I don't have great material needs,"

Soros told a reporter in 1993. "I like my comfort. But, really, I am a very abstract person."

When traveling abroad to visit his philanthropic foundations, especially in the 1980s and early 1990s, Soros eschewed a chauffeur or bodyguard. He sometimes stayed in student quarters when visiting a university campus. He sometimes hailed his own taxicabs, or walked from one part of town to another, or even took public transportation.

Many of his friends have their favorite story about how George Soros rejected the life of a billionaire. Tibor Vamos, one of the Hungarian intellectuals attached to Soros's philanthropic foundation in Budapest, recalled the time he and Soros were sitting in the building that housed the Hungarian Academy of Sciences.

"How can I reach the university?" Soros asked.

"You can take a taxi," Vamos told him.

"Why not a streetcar?" Soros asked in all seriousness.

Soros was not trying to save money, Vamos explained. It was simply that he was practical. If a streetcar was the fastest way to get from one place to another at that moment, why not take it?

The house in Southampton is a whitewashed Spanish-tiled villa with a swimming pool and tennis court. Soros celebrated his 60th birthday at a party there in 1990. On the lawn was a large white marquee for the supper dance. Among the 500 guests were important business figures, plus, according to one guest, "millions of Hungarians."

Though he sought to give the impression of living a modest life, it was sometimes a bit misleading. There were the seaplane rides from Southampton to Manhattan and the four houses. But there was no yacht, no Rolls Royce. When Soros traveled, it was more often on commercial airliners (business class), than in private jets. Soros once had a yen for buying a plane to take him back and forth between New York and Europe. He asked Byron Wien what he thought. It was a bad idea, Wien told him: "If you have a plane, you will find yourself using it just because the pilots want to use the plane." Wien suggested he could charter a plane whenever necessary. Soros took his advice.

To some Soros seemed exceptionally shy. Yet he loved having people around. Wien observed that "he likes to live in a nice place comfortably. George doesn't take you around his house and say, "Look at this clock. Or look at this statue, or painting.' He appreciates material things. He likes to live well. He likes to have people to his house, to serve them nice dinners, to have enough help to make it go smoothly."

He often gave parties. Sometimes he would phone Susan at the last minute. He'd invited some friends over for dinner. How many? Susan was bound to ask. Oh, maybe 50 or 75, Soros would respond. Susan then found herself preparing a meal for 70 Russian dissidents and their partners.

On New Year's Eve each year he hosted a party in his New York City apartment. Every Saturday night during the summer at Southampton, the Soroses entertained, and for George the evenings were as much business meetings as social events. Wien, who attended some of those parties, observed that Soros was "good in crowds. He says hello to everyone. He remembers their names. The people who go to these parties are from the arts, they are people he plays tennis with, businesspeople, government people. There are always more people there than he can interact with. He gets something from these experiences, but more importantly they interact with one another."

As a natural extension of his gregariousness, Soros had no interest in living a sedentary life. He wanted to be on the move, to see other parts of the world, to keep his mind active, to interact with people who were doing important things. In short, he wanted, indeed he aggressively sought, adventure in his life. It was no wonder that he found businesspeople and dealing rooms boring.

He kept up a frenetic pace out of a conviction that he was someone special, someone endowed with a special purpose in life. This was a man, let us remember, who believed as a child he was God.

As an adult, he seemed to understand that such thoughts could get him into trouble; they could, for instance, turn him into an egomaniac. "The only thing that could hurt me," he wrote in 1987, "is if my success encouraged me to return to my childhood fantasies of omnipotence-but that is not likely to happen as long as I remain engaged in the financial markets, because they constantly remind me of my limitations."

They also reminded him that he seemed to have the Midas touch-that, while he was hardly infallible, he was literally in a league of his own. When he enjoyed his most spectacular year in investing in

1985, journalist Dan Dorfman asked him what he planned to do for an encore. "It's basically a nonrecurring event," he said, "which in my case just happens to recur." The point was, for George Soros, even nonrecurring events recur.

If he could make nonrecurring events recur, what was to stop him from using his intellectual powers in the same way? What was to stop him from making some great contribution to human knowledge? At one stage in his life, back in the 1950s, he had run into a stumbling block and abandoned plans for an academic life, for a life as a philosopher. Yet the more money he made, the more convinced he became that he might be able to return to the intellectual realm.

From such thoughts, he spun theories-about knowledge, about history, about the financial markets-and he came to believe that his ideas had merit. He proclaimed that his "discovery" regarding the role that participants' bias plays in the quest for human knowledge was a key to understanding all historical processes that have thinking participants, "just as genetic mutation is the key to biological evolution."

Thinking himself extraordinary, Soros had a hard time abiding people he thought less gifted. After all, he believed that he had insight into things that others did not share. Of his ability to understand financial markets, for example, he noted: "I think that I really understand the process that is occurring, this revolutionary process, better than most people because I have a theory, an intellectual framework, in which I deal with it. It's my specialty, really, because I deal with similar processes in financial markets."

As for others who tried to plumb the markets: "I had a very low regard for the sagacity of professional investors, and the more influential their position the less I considered them capable of making the right decisions."

Jim Marquez saw this up close when he and Soros worked together in the mid-1980s: "He was imbued with the feeling that he could understand things better than you can, and it was always a struggle, not because he was converting his mind from Hungarian to English, but because he was trying to bring you along.

"It was clear to him that he couldn't bring you along fast enough. He had the feeling that when he understood something, it was as if he were talking to God. That he was so sure what would happen, and he was the most surprised person in the world when it didn't happen that way. And if it did, well that was just the way it should be."

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