George Soros on the barricades

[Henry C.K. Liu]

Soros has been sounding that same note for over two years.  Some suspect his
purpose as merely providing a theoretical basis for deflecting blame from hedge
funds, his cash machines.
He is trying to save a runaway global financial market system by making it
supposingly more even for all participants.  Th fact that institutional funds
(retirment savings) are invested by managers to cut the jobs held by the owners of
such funds, doesn't bother Soros.  He is only worrying about the system
overheating and short circuiting.
Soros has taken up the fallen banners of the liberal Republicans of the 60s - free
trade must be accompanied by government subsidy which in turn will be financed by
profits from free trade.  Like the liberal Republicans before him, Soros was not
against gambling philosophically but only worrying about the game ending
prematurely.
The problem with Soros' proposals is, as with those from liberal Republicans, the
poor do not buy it and the newly rich do not like it.
Maximization has always been the golden rule of capitalism, except maximization is
more dangerous now becuase of the speed of the technology and the fragility of
structured finance.
The Great Depression did not push America toward economic liberalism, World War II
and the Cold War did.  Fear of collapse alone is never enough to bring about
reform.  Witness Russia and Soros' hapless advice.
Someone once said: don't let monkeys guard bananas.

Henry C.K. Liu

Louis Proyect wrote:


> THE VANCOUVER SUN                        TUESDAY, NOVEMBER 10, 1998
>
> GLOBAL CRISIS NEEDS NEW SOLUTIONS, SOROS SAYS
>
> SOFIA, Bulgaria — International financier George Soros said Monday that new
> economic instruments are needed to fight financial turmoil gripping the
> globe in a summary of his book The Crisis of Global Capitalism soon to be
> issued.
>         Lecturing in the Balkan capital, he accused international
> institutions of
> failing to fend off the economic crisis which has spread across Asia and
> Russia, prompting huge investment withdrawal from emerging markets.
>         "International financial authorities are inadequate. They were not
> designed to deal with these tremendous and rapid flows of capital.
>         "The methods they used were inappropriate and unsuccessful in
> arresting
> the spread of the collapse ... I am not against the IMF [International
> Monetary Fund], but I think it should change its policies," Soros said.
>         He accused organizations of applying double standards in attempting to
> resolve the crisis. "There is an asymmetry in treatment of debtors and
> creditors in crisis situations."
>         The IMF urged Thailand and South Korea to hike interest rates and curb
> government spending to strengthen the currency and pay off debts. But when
> the crisis affected the United States, the Federal Reserve helped markets
> recover by boosting liquidity with lower interest rates, Soros said.
>         "Capital will not flow to the countries that need capital from
> countries
> which collect capital. This so far has been the case, but now there is a
> reverse flow, which is liable to continue.
>         "That is why I propose finding some mechanism to pump liquidity
> into the
> periphery. Society can be endangered by excessive reliance on market
> fundamentalism — the belief that markets can take care of everything. This
> is a false idea, which is a bigger threat today than any totalitarian
> ideology," Soros said.
>         His critique of global capitalism rests on assertions such as
> "financial
> markets are inherently unstable, which can cause tremendous damage to
> society," and "it is impossible to have a global economy without having a
> global society with common values and institutions to protect these
> values."
>
> Louis Proyect
> (http://www.panix.com/~lnp3/marxism.html)