On a recent visit to Budapest, sometime in the mid-1990s, George Soros stood across the street from the apartment building where he had lived until he was fourteen—before the Nazi occupation forced his family into false identities, before the hiding, before the deportation notices he sometimes watched being delivered, before the bodies falling into the Danube. He pointed to a large casement window high enough to clear the trees and the small square full of foliage, and told his twenty-three-year-old son, Jonathan, that he used to sit there for hours, watching the river flow by. A cameraman from a British television crew captured the tableau. It had become something of a ritual for Soros, accompanied by camera crews, to visit this site, or the cellar where he hid, or the apartment building where his father constructed another hideout. Just then, a tour bus rolled slowly by. Soros glanced at it and burst out laughing, exclaiming to his son, "I can just hear the tour director saying, 'And there is Soros, explaining his life.'"
The laughter is the key. Not the pathos of the scene—a billionaire revisiting the geography of his childhood terror—but the ironic distance from it. The self-awareness that he has become a character in his own mythology, and the evident pleasure he takes in observing himself from above, as if hovering near the ceiling. His mother, he would later recall, had done something similar under far graver circumstances: questioned by police during the occupation, she convinced her interrogators that she was indeed the person her false papers stated she was by an exercise of detachment so extreme that she felt herself to be floating near the ceiling, observing her own bravura performance from above. After she was released, she collapsed in something like a nervous breakdown. Her son was furious at her for showing such weakness.
This is the paradox at the center of George Soros's life: the man who built one of the greatest fortunes in financial history through a philosophical conviction that human perception is inherently flawed—that our understanding of reality is always imperfect, always lagging—has spent decades attempting to impose his own vision of reality on markets, governments, and entire nations with a certainty that borders on the messianic. The speculator who insists he recognizes his mistakes faster than anyone else. The philanthropist who gave away billions to promote "open society" while running his foundations like an autocratic czar. The refugee who escaped the particular horror of being a Jew in Nazi-occupied Hungary by embracing the universal—and who, decades later, would tell an interviewer, with a dry chuckle, "Of course, this whole interest in universal ideas is a typical means to escape from the particular."
Two George Soroses. He said it himself: "There can't be two George Soroses, right? There can only be one, right?"
The question of whether he ever managed to fuse them is the question of his life.
By the Numbers
The Soros Empire
~$32BEstimated personal fortune at peak
$18B+Given to Open Society Foundations
~$1BProfit from the 1992 pound sterling trade
$600MLost in a single day on yen bet, February 1994
40+Countries with Open Society foundation operations
1969Year Quantum Fund was founded with $4M
$11B+Quantum Fund and offshoots assets by mid-1990s
The Philosopher Who Couldn't Sit Still
The family name had been Schwartz. His mother, he would tell the journalist Connie Bruck in an extended series of interviews for The New Yorker in 1995, was "quite anti-Semitic, and ashamed of being Jewish." The assimilationist Jews of Hungary lived with what Soros described as "a deep sense of inferiority"—being Jewish was "a clear-cut stigma, a disadvantage, a handicap—and, therefore, there was always the desire to transcend it, to escape it." The name change was part of that escape. The war would complete it.
Soros was born on August 12, 1930, into a prosperous Jewish family in Budapest. His father, Tivadar—a lawyer, a Esperantist, a man who by his son's account was genuinely nonmaterialistic, charging those who could pay and working free for those who could not—had survived a Russian prisoner-of-war camp during World War I. That experience, George would later say, had fundamentally shaped Tivadar: it taught him that in times of catastrophe, the conventional rules of civilized life collapse, and survival belongs to those who can adapt fastest to the new reality. When the Nazis arrived in Hungary in March 1944, Tivadar was prepared. He obtained false identity papers for his family and for many others. The family split up. George, aged fourteen, posed as the godson of a Hungarian government official, sometimes accompanying the official as he delivered deportation notices to Jews or took possession of their property.
Self-control and detachment were the keys to survival. Decades later, when a British television interviewer suggested the experience had been traumatic, Soros rejected the characterization. It was, he insisted, "an adventure." His older brother, Paul—who had arrived in the United States several years before George and built a successful engineering firm—offered a less heroic account: they lived with the knowledge that if they were stopped on the street and their false identities exposed, they would at the very least face imprisonment, and might well be shot. They saw it happen to others, often at the very edge of the Danube, so the bodies would fall into the river.
The adventure ended. The family survived. In 1947, they moved to London. George enrolled at the London School of Economics, where he studied philosophy under Sir Karl Popper—the Austrian-born philosopher whose concept of the "open society," a society governed by rational critical discourse rather than tribal dogma, would become the animating idea of Soros's later philanthropy. But the young Hungarian had grander ambitions than philanthropy. He expected, he would later confess, to become another John Maynard Keynes or
Albert Einstein. He labored over drafts of a philosophical essay entitled "The Burden of Consciousness," which dealt with open and closed societies. The essay was never published. He abandoned his plans to become a philosopher.
Instead, he joined the London merchant bank Singer & Friedlander.
The Niche That Fit Like a Glove
He arrived in New York in 1956, and for the next decade moved from one Wall Street firm to another as a stockbroker, working as an analyst of European securities—a field so obscure at the time that he was essentially inventing it. "I was living in this other place," he told Bruck, referring to the philosophical work that consumed his evenings and weekends, "so those were kind of lost years, in a way, because very little happened that registered."
Byron Wien, an investment strategist who knew Soros since the 1960s—himself a figure of considerable intellectual range, a man who would become legendary at Morgan Stanley for his annual "Ten Surprises" list—described the young Soros with a telling observation: "George was an aggressive money manager, but he had a certain European elegance. He was very hungry and very aggressive—but he didn't seem it. He seemed classier than that."
Perhaps it was the ambivalence that prevented immediate success. But by the time he started the Quantum Fund in 1969—having raised four million dollars from wealthy private investors—he was fully engaged. And the vehicle he chose was perfectly calibrated to his psychology. Hedge funds in the 1970s were a rare breed. At a time when most of Wall Street focused on the domestic market, Soros invested globally.
Leverage was always his enhancer. He began using the exotic combinations of maneuvers—trading futures and options, derivatives—that would later be popularized as the "macro" approach to investing. Quantum was from the start an offshore fund, based in the Netherlands Antilles, open only to non-U.S. citizens and residents (Soros managed to make himself an exception), and investors' profits were not taxed until repatriated. These tax-free profits compounded year after year. As the fund manager, Soros claimed an annual fee of fifteen percent of profits. In the early years, he took much of his fee in shares in the fund. He and his family came to own roughly a third of it.
Peter Rona—a Hungarian refugee who knew no English when he arrived in America at fifteen, went on to take high academic honors at Oxford, and became the head of the First Hungary investment fund—offered perhaps the most precise assessment of Soros's cognitive architecture: "George has a very abstract mind—to the point that he is almost dehumanized. The higher the level of abstraction you're dealing with, the better George gets; the more you're dealing with something about which no scientific hypothesis can be formed, no general laws applied, the worse he gets."
This was more diagnosis than insult. The excellence of his judgments about markets, Rona said, "exceeds by a comfortable margin his judgments about people." Soros had never made money by discovering the company that became a great success. He made money by discovering markets—which are not personal.
I was always detached—and that enabled me to study the game as a game. I was particularly focusing on changes in the rules of the game, not in playing by one particular set of rules but understanding when new rules came into being—and learning that before others did.
Reflexivity, or the Sentence That Took a Lifetime
Soros's intellectual conceit was that he operated from a philosophical theory. He called it "reflexivity"—"It sounds like relativity," he once said—and he wrote an abstruse book about its relationship to his investing,
The Alchemy of Finance, published in 1987. He confessed to being "hung up" about the fact that reflexivity had not received a serious reception, and eventually concluded that he had failed to articulate it properly. "I wrote a book about it," he said, "and it was basically just one idea—I mean, one sentence: 'Our inherently imperfect understanding helps shape the reality in which we live.'"
One sentence. But what a sentence. It sounds almost banal—of course our perceptions shape reality. But Soros meant something more radical: that the error inherent in human perception doesn't just distort our picture of events but actually affects events, which in turn affect perception, establishing a circle of causation. In financial markets, this meant that the prevailing bias of investors could create self-reinforcing trends—boom-bust sequences—that carried prices far from any "fundamental" equilibrium. Markets were not, as the efficient-market hypothesis insisted, always right. They were reflexive systems where participant and observer were the same entity, and where the very act of observation changed the thing being observed.
The practical implication was that Soros subjected his own reasoning to relentless critical scrutiny. And he believed that his greatest strength—"what truly sets me apart from others"—"is that I recognize my mistakes more quickly." Others might cling to their convictions even as the market refuted them. Soros would turn on a dime.
Jack Moorman, a trader who worked for Soros for a couple of years, captured this quality: "No one can size up a situation as quickly as George. It's breathtaking. He has such certainty—not that he's right but that he knows what to look for to see if he's wrong."
There is a paradox lurking here that Soros's associates noticed but rarely pressed. A man whose entire philosophy rests on the imperfection of human understanding nonetheless operated with a conviction so fierce that colleagues described it as "almost preternatural." One person who worked for him put it directly: "He does have this idea that we are all part of this imperfect circle. But he thinks he can take himself outside—that he can come closer to that perfect condition."
The philosopher-king of fallibility believed himself exempt from it. Or at least more exempt than everyone else. This was not hypocrisy. It was something stranger and more interesting. It was the engine.
The Man Who Broke the Bank of England
In mid-September 1992, there was a massive speculators' raid on the British pound sterling. The British government sought to defend the pound's level in the European Exchange Rate Mechanism but ultimately surrendered and allowed the currency to be devalued. The defense had cost the government—and thus British taxpayers—some six billion dollars. Among the biggest winners were commercial banks, investment banks, pension funds, and hedge funds that had bet large amounts against the pound.
The hedge-fund investors were very quiet, very private winners who saw no advantage in being identified. All except one.
Several weeks after the crisis, Soros called an old friend, Anatole Kaletsky, a financial journalist for the London Times, and arranged an interview. In the article, Soros stated that his fund, Quantum, and several of its offshoots had bet roughly ten billion dollars against the pound—about nine billion of which was borrowed, in his customary leveraging. He said the combined speculation, mainly against the pound, had garnered a profit of about two billion dollars. Then he became even more expansive: in the days before the pound's collapse, "we must have been the biggest single factor in the market."
His colleagues in the financial community—including some of Quantum's directors and shareholders—were stunned. One person in the hedge-fund community said: "Why bring light to this subject? Why bring attention to yourself?"
Edgar Astaire—who had been friendly with Soros for close to thirty years, and who served for many years as a Quantum director before eventually joining the operation—offered the explanation: "George never wanted publicity, but he feels he's past that—he feels he's impregnable now."
What Soros wanted was to be heard. He was gambling that he could translate celebrity status from one field—finance—into another: public policy. That celebrityhood was, essentially, generic. And the gamble was entirely strategic. "People like the dictator in Romania, Iliescu, suddenly became very interested in meeting me," he said. "Before, he considered me beyond the pale. So in Eastern Europe my influence increased." He added: "In America, I'm taken more seriously. Also in Europe. So I was able to speak out on issues like Bosnia, for instance, which is what I wanted to do."
The sterling trade made Soros a household name. It also earned him a nickname—"the man who broke the Bank of England"—that he would carry for the rest of his public life. Gerard Steeghs at the World Bank noted that whenever one of Soros's co-investments with the International Finance Corporation came up, "someone on the board will say, 'Should this multilateral institution be doing business with Soros?' There is a feeling, among some people, that he did something indecent with the pound."
Three months after the killing, Soros announced in London that he would donate fifty million dollars in humanitarian aid to Bosnia. The timing was not coincidental.
The Benevolent Autocrat
He had harbored messianic illusions—what he described as a sense of himself as superhuman—since childhood. He was not reticent about this. "It was a bit of a guilty secret until I became successful," he told Bruck, "because it was incongruous—this little schnook in New York!"
The role he crafted for himself in Central and Eastern Europe provided ample outlet. "God in the Old Testament has a number of attributes, you know," Soros said. "Like invisible—I was pretty invisible. Benevolent—I was pretty benevolent. All-seeing—I tried to be all-seeing!" Then, laughing: "So I was playing it out."
His first foundation, established in 1984, was in his native Hungary—the setting for halcyon childhood memories violently truncated. Paul Soros recalled their conversations about this new endeavor: "Up until that point, George wanted to be financially successful. But then it was 'O.K., you have made a hundred million dollars in one year, now what do you do?' And instead of donating five million dollars to a hospital, five million dollars to a university—the conventional way—he felt you could get much more bang for the buck by trying to do things to foster an open society in these countries."
The logic was pure Soros—leverage and vacuum. Five or ten million dollars in Hungary under the Communists meant a lifeline for many people. In the United States, the same amount would have been a rounding error. Soros wanted to get in early, before everyone else, just as he did in the markets.
In Hungary, the foundation provided photocopy machines to public libraries, established scholarships and travel grants, funded theatres, filmmaking, sociological research, newspapers, and magazines. György Jaksity, an analyst at Concorde Securities in Budapest, described the phenomenon: "The first book on business that I read that was written not from a Marxist but from a free-market standpoint said, 'Sponsored by the Soros Foundation.' . . . People like me know that the book they are reading, the teacher who teaches them, were sponsored by Soros. It's a very cultured way of influencing people. You can say, 'I'm
Napoleon Bonaparte—I will kill thousands of people unless you give me Moscow.' Or there's the other way: the Soros way."
Hungary was followed by China in 1986, the Soviet Union in 1987, Poland in 1988. Between 1984 and the fall of the Berlin Wall, Soros spent less than thirty million dollars—modest by the standards he would soon set—but his foundations helped drive wedges into closed societies. And in this early period, Soros was heavily involved: reviewing hundreds of grant applications, sitting around kitchen tables with local dissidents, discussing politics far into the night. He was a benevolent autocrat, and he stuck to his resolution to maintain a low profile.
He had to. The foundations were subversive, and their real motivation had to be "under wraps." An article in the late 1980s referred to him as an "anti-Communist." Soros recalled: "It was highly embarrassing and damaging to me, because I had a foundation in China, where I said I was a supporter of the Open Door policy. 'I'm not an anti-Communist,' I said to them. So you would have to say different things in different countries." All communications had to be private—"I would talk to the government officials, and say one thing in one country, and another thing in another country!" He laughed heartily.
Far from [Equilibrium](/mental-models/equilibrium)
With the collapse of Communism, everything changed. In his theory of reflexivity, Soros borrowed a term from chaos theory for moments of crisis: "far from equilibrium conditions." In his life as a speculator, such moments had always afforded his greatest opportunities. He believed that his early experience under the Nazis—the original "far from equilibrium" of his life—had given him an edge in times of chaos.
Now, applying his theoretical perspective to the upheavals in Central and Eastern Europe and the former Soviet Union, he saw another such crisis unfolding. He was convinced he had a superior grasp of what needed to be done. He would assume the role of deus ex machina. He would be the market leader, as he had been so many times in the financial markets. The West would follow.
Between 1990 and 1992, he established sixteen new foundations in formerly Communist countries at a furious pace. In some places, the regimes were still blatantly repressive, and the foundations' role was not very different from the earlier, pre-1989 ones. But in other places, the difference was night and day. Whereas in the past his strategy had been to nurture the weak and subvert the powerful, now everything was up for grabs. Soros could, in some instances, help decide who would be the powerful—and he could shape these emerging societies not from the bottom but from the top.
People in government used to sort of dismiss George—this crazy guy interested in Hungary. He's now become a player—but it's very recent, a new phenomenon. He's untrained, idiosyncratic—he gets in there and does it, and he has no patience with government. As I frequently say about George, he's the only man in the U.S. who has his own foreign policy—and can implement it.
When Connie Bruck relayed this observation to Strobe Talbott, the Deputy Secretary of State, Talbott's response was remarkable: "I would say that it is not identical to the foreign policy of the U.S. government—but it's compatible with it. It's like working with a friendly, allied, independent entity, if not a government. We try to synchronize our approach to the former Communist countries with Germany, France, Great Britain—and with George Soros." He even went so far as to call Soros "a national resource—indeed, a national treasure."
The committed two hundred and thirty million dollars to the Central European University, an English-language graduate school headquartered in Budapest that he had established in 1990. A hundred million to a grant-giving program for scientists in the former Soviet Union. A two-hundred-and-fifty-million-dollar pledge for humanities education in Russia. The scale was staggering. And the ambitions grew with it.
The Ukraine Script
Nowhere did Soros put more energy and money into bolstering a government than in Ukraine—and nowhere did his interventions more nakedly resemble market operations translated into geopolitics.
It began in the fall of 1991, when Ukraine declared independence and Soros had what he called a "seminal meeting" with Dr. Bohdan Hawrylyshyn, an internationally known Ukrainian economist who had returned to Ukraine in 1988 and in 1990 became chairman of the new Soros foundation there. The foundation started with the usual mandate: fostering civil society through education and culture. But with independence, Soros and Hawrylyshyn decided on a far more ambitious role. The foundation would build the institutions that would enable Ukraine to function as an independent democratic state. Because of its years as part of the U.S.S.R., Ukraine had none of those institutions in place.
"It was a vacuum," Soros told Bruck. "There was a great willingness to accept this kind of support, which would in normal times be rather intrusive." He added, laughing: "I mean, I can't try to do that in America. They would tell me where to get off!"
Bohdan Krawchenko, a Ukrainian-Canadian historian recruited by Hawrylyshyn and Soros, recalled Soros's assessment on one early visit: "This is a banana republic without the bananas!"
The Soros foundation placed its own people in key government positions. The deputy minister of finance, Olech Havrylyshyn—a nephew of Bohdan—was on the foundation payroll. So was the deputy governor of the National Bank, George Yurchyshyn, a Ukrainian-American who had previously been a vice-president at the Bank of Boston. When Leonid Kuchma, a presidential candidate rated as an outsider, visited Soros in New York in May 1994, Soros was so excited by their conversation that he called Hawrylyshyn in Bucharest and put Kuchma on the phone. Kuchma won an upset victory in early July.
Soros says he had nothing to do with it. But the April 1994 bulletin of the Soros foundation listed twelve grants—eleven of them ranging from five thousand to thirty-one thousand eight hundred dollars. The twelfth, to support independent television stations' coverage of the Ukrainian elections, was for $363,100—an extraordinary infusion of capital in Ukraine, spent in a three-month period.
What Soros undoubtedly did do was enable the successful Kuchma to win a crucial I.M.F.-administered loan program of nearly four billion dollars. When a U.S. economic observer returned with a negative report, Soros was galvanized. He brought Anders Åslund of the Carnegie Institute to Ukraine, directed him to organize a team to work with the Ukrainians on their I.M.F. negotiations, and fired off a memo to the White House, Treasury, State Department, I.M.F., and World Bank arguing that this was the moment and this was the group.
On September 24, 1994, about six weeks after Soros mobilized his forces, Ukraine and the I.M.F. reached agreement. Thomas Simons, the New Independent States coördinator, said the agreement would not have been reached if Soros had not intervened. The Åslund team was "absolutely indispensable." He added: "They were not World Bank, not I.M.F., not these financial institutions. They were from George Soros, and they were working for him"—that is, for Kuchma.
Soros made no bones about it. "If this isn't meddling in the affairs of a foreign nation," he remarked jocularly, "I don't know what is!" And he told Bruck that he saw an exact parallel between the "self-fulfilling prophecies" of his financial life and those of this political realm. Describing an episode in the 1970s when he wrote a report predicting the rise and fall of real-estate-investment trusts and then fueled both that rise and fall with his aggressive buying and selling, Soros said: "I look at Ukraine with the same frame of mind as I look at REITs. . . . By my intervention, I make it happen!"
Dr. Viktor Pynzenyk, the Deputy Prime Minister, confirmed the dynamic from the other side: "We know very well what needs to be done. But Kuchma respects Soros, and Kuchma needs to be convinced by memos prepared by Soros."
The Transactional Soul
Byron Wien, who had known Soros for decades, described his relational style with clinical precision: "George has transactional relationships. People get something from him, he from them." He added that Soros "tends to think of himself in the third person" and "wants to achieve certain objectives—he gets his satisfaction from that, not from human relationships."
The legions of traders who passed through Quantum's revolving door—some lasting a day, others a week—could attest to this. Soros was expert at targeting people's weaknesses, scathing in his sarcasm, eager to stir internecine rivalries as a means of augmenting his control. One story, possibly apocryphal but widely believed: having just hired a group of six money managers, he summoned them all into his office and announced, "Gentlemen, in one year there will be five of you. Now leave."
A former employee told Bruck that Soros had "a horror of intimacy." He said: "George spends most of his energy with other people pushing them away, including insultingly. . . . You'd put your heart into something and George, in front of everybody, would say, 'I'm shorting it.' It was rude, brutal—he was in your face all the time."
Even those who considered themselves friends understood the limitations. Rona emphasized that Soros had always treated him as a friend, and yet "it is hard to consider myself a 'friend.' If you're with him, you're under considerable pressure to perform. You have to come up with great ideas, have to say interesting things, have to be functioning at such a high level, in a way not congenial to ninety-nine per cent of humanity. He is racing along, he knows what your next sentence is, and he doesn't want to hear it."
In these fast-paced information-gathering exercises, Soros missed more than just ordinary human pleasure. "He is not a person of balanced skepticism, who wants to hear all points of view and wants to ponder what is being said," Rona continued. "He wants to get to a point: relevant or not relevant. You're O.K. or you're not."
Soros himself was remarkably candid about all this. "There was always a considerable distance between me and my being a fund manager," he said. "I just didn't mix my personal life with my business life. Even people that I would have liked as people, I did not enjoy in private life, because I had a business relationship, and because interests would then come in. I would have to watch what I say, I would have to censor myself, so it interfered with my freedom."
He realized this was "very different from how most people do business," because "they build it on relationships. I had relationships which were correct—but not invested with emotion."
The Crisis of 1981 and the Turn Toward Immortality
In the early 1980s, Soros paused. His junior partner at Quantum, Jim Rogers—a legendarily iconoclastic investor from Demopolis, Alabama, who would later ride a motorcycle around the world twice and write bestselling books about his travels—left amid fierce acrimony. Soros's marriage to Annaliese Witschak broke up. He was having problems with his three children. And his fund was down 22.9 percent for 1981—the only year so far in which Quantum had posted a negative return.
The British gilt market episode had been traumatic. Soros had cornered the market for long-term government bonds, betting on their rise, buying bigger at each step up. Then it turned. "I took a big breath and went into the market and bought really big," he told a friend. It didn't work. He had a huge loss. He told Bruck he felt "very exposed"—"There was a particular moment when I was under tremendous pressure, and I thought I would have a heart attack—and I thought, This isn't worth it!"
Two friends said this was the only period when they had ever seen Soros not in control. Many of his longtime investors were considering withdrawing their funds. In a move that would become legendary for its seeming irrationality, Soros went to several of them and told them he might not be in a condition to be managing their money, and perhaps they should withdraw. Some did, which caused the situation to deteriorate further. His brother Paul was baffled: "You are really stupid! Why are you doing this?"
"Well, partly, of course, I think it's my self-involvement, because I do find myself rather fascinating," Soros explained. "So there is a certain wanton element, and it is an indulgence. And the other thing is that in my previous lives I always had to keep things secret, starting with having to live with a false identity. So to me it's the reward for success—that I don't need to hide."
He recovered. He hired new traders. He began seeing Susan Weber, an art historian twenty-five years his junior, whom he subsequently married. And he decided to do something that would add a new dimension to his life—and, several associates said, perhaps attain the immortality he had long desired.
The foundations were that something. The money had been made. What followed was the effort to spend it in a way that would change the world.
The Monster He Created
The paradox of Soros's philanthropy was that the man who so abhorred institutions—who saw traditional foundations as too bureaucratic, too slow, inherently corrupting—created the most sprawling, ungovernable philanthropic network in the world and then found he couldn't control it.
His original design was shrewd. Foundations would be short-lived, deprived of the chance to spawn bureaucracy. They would be operated with minimal overhead. While the Ford Foundation might devote three to five years to spadework before opening a local office, Soros foundations would open virtually overnight. And while Ford would send its own people, Soros foundations would be run only by local people, who would feel it was their foundation and be disinclined to exploit it. "They go against human nature," Soros said of traditional foundations, "which is to take and not to give."
For many years, the system worked. The boards of directors had a great deal of latitude, and Soros maintained his low profile. But ultimate control always resided with him. For many years, the board of the Open Society Fund—an umbrella organization—consisted only of Soros, his wife, and his personal attorney, William Zabel. (Soros is said to have presented Susan with a prenuptial agreement. At their wedding, when the minister recited the traditional vow "For better or worse, I do endow thee with all my worldly goods," Soros turned to Zabel and asked, wryly, whether he could state this without being bound, and, upon being told that he could, nonetheless muttered in Hungarian, "Subject to any prior agreements with my heirs.")
With the proliferation of foundations and the huge sums being funneled through them—roughly three hundred million dollars a year by the mid-1990s—Soros came to feel he had created a monster. "I made all the decisions, and nobody knew what the decisions were," he told Bruck. "People turned up and claimed that I'd authorized this or that, and for all I knew, I did!"
The Moscow foundation was plagued by corruption: employees had lent foundation monies to a car dealership in exchange for more than sixty cars, several of which they took for their own; computers meant for distribution had been stockpiled in a warehouse; roughly fourteen million dollars, supposed to have been spent on programs, had been deposited in banks of such poor reputation that the deposits raised the question of kickbacks.
Soros was characteristically frank about his role in the debacle: "Our stupidity in sending them five million dollars a month for a program without looking at how they were spending it." He had wanted to make a successful transformation program bigger. "I threw a lot of money at it—and, in doing that, I destroyed it, effectively. Because it was too much money."
Black and White in a Region That Has Neither
The case of Macedonia crystallized the dangers of applying a market mind-set to geopolitics. Soros arrived in Skopje, the Macedonian capital, in September 1992 during a whirlwind tour through his foundation network. He had come directly from Bulgaria, where a board member of his Sofia foundation had given him the prevailing Bulgarian view: that there was no such thing as an ethnic Macedonian, and that Macedonia's attempts to establish this identity cloaked irredentist aspirations bequeathed by Tito.
"Soros knew nothing about Macedonia," said Ljubica Acevska, the Macedonian representative in Washington. "When he arrived, his head was filled with propaganda from Bulgaria—he was probably sorry that he was here. Then he had a meeting with the Prime Minister, whom Soros really likes, and the President had a lunch for him—and he changed his mind."
That afternoon, Soros held a press conference announcing an additional million dollars for his Macedonian foundation and—carrying as much weight—changing its name from the Open Society Foundation of Skopje to the Open Society Foundation of Macedonia.
A former colleague from the financial markets identified the pattern instantly: "As a fund manager, you're looking at life and then simplifying it in order to find predictive qualities. So he gets the 'broker's recommendation'—that is, the consensus view—from Bulgaria. Then he gets to Macedonia, and, instead of getting corroboration, he decides that the reality is totally different. And he thinks, If I hit the reality hard, the illusion will give way. It's his perfect market position!"
But this person also noted the crucial difference: "In the market, you see if you're right or wrong; the market tells you. Now George is in an area where there is no real right or wrong, where it's more nuanced. He says, 'If I spend enough, I will make it right.'"
In the good-guy, bad-guy formulation to which Soros was so partial, the Greeks became the bad guys. He did not go to Greece to get the Greek view. He lobbied aggressively for U.S. recognition of Macedonia, wrote sharp letters to President Clinton raising parallels with 1938 and appeasement, and funded an advocacy organization—the Action Council for Peace in the Balkans—that produced reports supportive of Macedonia's position. The letterhead listed fifty people. It did not list Soros. Nor did it list John Fox, the head of Soros's Washington office, who, according to the Action Council's own executive director, was the behind-the-scenes director of the policy group.
The problem, one person with considerable diplomatic experience observed, was "the extremity of his views—his tendency to beatify one side and demonize the other." A more moderate course might conceivably have produced a settlement. Instead: "Soros sees this situation in black-and-white. But in my view, no. In this region, there is no black-and-white, and it is a mistake to view it that way."
The Tax-[Free](/mental-models/free) Ride and the Giving That Followed
Among the more stunning revelations Soros offered Bruck—in that compulsive, almost wanton self-exposure that so baffled his associates—was a casual disclosure about his taxes.
"My lawyer, for instance, who set up the tax structure which effectively protected me from taxation for many years—until the loophole was finally plugged, and I became a fully taxpaying citizen—just couldn't understand why I should ever allow myself to be seen!"
Gary Gladstein, the chief administrator of Soros Fund Management, confirmed the arrangement. Before the Tax Reform Act of 1986 created the "passive foreign-investment company" regime, taxes on Soros's Quantum profits had been deferred until he sold his shares in the fund, which he rarely did. "So he had no taxes—he had a free ride."
The law required that to avoid taxation, Soros could not have a controlling interest—more than fifty percent—in the fund. This was why the 1982 shareholder redemptions, which pushed his ownership toward the fifty-percent mark, had been so perilous, and why his urging investors to consider withdrawing was all the more remarkable. The fact that he was not even a director of Quantum—which he obviously controlled in every meaningful sense—would have helped his claim to the I.R.S.
From 1969 through 1986, Soros's profits compounded tax-free. In those years, the fund—of which he owned roughly a third—grew from four million dollars to more than a billion and a half. Without the arrangement, he would probably have owed the I.R.S. at least a couple of hundred million dollars.
The first years he had to pay taxes—1987 and 1988—were not very good years at Quantum. Returns of 14.1 percent and 10.1 percent. "It was in '89"—when the fund achieved a return of 31.6 percent—"that his taxable income went up so much," Gladstein said. And it was also then that Soros's massive giving began. He now aimed to give away fifty percent of his income each year—the maximum deductible amount.
The timing was not lost on observers. The sums he managed not to pay the I.R.S. for many years put his present giving in a slightly different light.
Accepting the Human Condition
In late November of the mid-1990s, Soros delivered a speech at Columbia University's College of Physicians & Surgeons to inaugurate his newest project: Death in America, which aimed to promote a better understanding of the experiences of dying and grief. He had committed five million dollars a year for three years. "In America, the land of the perpetually young," he told the audience, "growing older is an embarrassment, and dying is a failure."
Then he described the death of his father. Tivadar, terminally ill, had agreed to an operation but did not want to live if his personal integrity was invaded. It was, and then he wanted to live. Speaking haltingly, Soros said: "I was kind of disappointed in him. I wrote him off." A few weeks later, his father died. "I was there when he died, yet I let him die alone. I saw him, but I didn't touch him. The next day, I went to the office, but I didn't tell people he had died. I was, in a way, denying his dying." Later, reading Kübler-Ross, he realized it might have made a difference if he had held his father's hand. "But I have since forgiven myself, because I did not know any better."
The confession was stunning in its nakedness—a multibillionaire standing before a roomful of physicians and admitting that he had failed his dying father, that his pathological detachment had cost him one of the most fundamental human acts, and that he had forgiven himself for it only after reading a popular book about death. One friend marveled at what seemed, at times, "exhibitionism," and conjectured that Soros—an extremely undemonstrative person who appeared cold, detached, and insular—was, through these personal displays, attempting to forge some human connection, not with any one person but with many people. As, of course, his philanthropy also did.
By the end of the 1990s, Soros had begun charting new directions. He announced that he was renouncing his policy of not investing in countries where he had foundations—a reversal that dismayed many in his organization who had used that principle as a rebuttal when critics charged that his philanthropy was a smoke screen for empire-building. He acquired a joint venture with Radio Free Europe to create what would become a vast information network. He continued to accumulate foundations: South Africa, Haiti, Burma, programs across the United States.
In 2003, he provided start-up funding for the Center for American Progress. He pledged millions to groups opposing the reelection of President George W. Bush. He became a prominent supporter of Barack Obama in 2008 and 2012, donated to Hillary Clinton in 2016, and to Joe Biden in 2020. By 2017, he had given some eighteen billion dollars to the Open Society Foundations, making it one of the world's largest philanthropic organizations. With his support of Democrats and liberal causes, he drew relentless criticism from Republicans and conservatives and became the focus of conspiracy theories so widespread and so untethered from fact that they constituted, as one documentary noted, a phenomenon unto themselves.
In December 2002, a French court convicted him of insider trading for a 1988 stock deal involving Société Générale and fined him €2.2 million. He appealed; the conviction was upheld by France's highest court in 2006.
In July 2011, facing new federal regulations, Soros announced that the Quantum Endowment Fund would no longer manage the money of outside investors. It would handle only the assets of Soros and his family.
Gilbert de Botton, the chairman of Global Asset Management in London and one of Soros's earliest investors, had been asked years earlier what he thought of Soros's public metamorphosis. De Botton replied: "If he were a chum, I'd have twenty-six opinions. But he's too precious a financial asset—so I deliberately avert my gaze." Pressed, he said: "There is a subtext here—the unspoken word in the room. Is this an incipient megalomania? And is it affecting his ability to make business decisions? And my answer to the second part of that question is no."
As for the political role Soros had created for himself, de Botton continued: "There is such a vacuum, isn't there? And in a time of crisis someone can emerge. As when a family is in crisis, and suddenly the chauffeur takes charge! But then the crisis passes, things go back to normal. I would expect that in some of these countries they will eventually say, 'We don't care how many billions this guy has, we don't want him telling us what to do.'"
The Final Coming to Terms
"I know I'm not what I'm cracked up to be," Soros told Bruck. "I'm not really as much of a philanthropist as the amount of money would suggest." He added: "It's only because I don't care about money that I give it away!"
He complained that he would not be able to give it all away before he died, although he would like to—trusting no one else, naturally, to spend it as well as he would.
A person who had known him for many years offered a diagnosis that doubles as an epitaph for the contradiction at the center of his life: "Messianic zeal often works as concealment for what one really craves—and it strikes me that the more George covets control the more hysterical he becomes about open society. But I don't think he recognizes this in himself. He is not a knowing charlatan. He is sincere."
In one of her final conversations with Bruck, Soros was asked about his decision to invest in countries he had previously avoided. He was frank: "People who moved in six months ago have actually made ten times on their money." But he also proposed a personal motivation. "By having these foundations, I was sort of able to play God, right? I was something above it, outside it, benevolent, farsighted, godlike—O.K.? If I become an investor, I come down to earth, you know? I'm just a player."
He paused.
"So in some ways it may be the final coming to terms with being a human being, after all. In that way, I feel it's a little bit painful, quite tricky—but, in a way, it's the ultimate challenge: to accept the human condition."
On a shelf somewhere in Southampton, or Budapest, or the offices at Columbus Circle—as far from Wall Street as he could get—sits a photograph of a stately building overlooking a small square, full of foliage, and the Danube, just beyond. A large casement window, high enough to clear the trees. A boy who used to sit there for hours, watching the river flow by.
