George Soros’s fascist economic thinking, part 1

Gerard Jackson

Soros once used the op-ed pages of Rupert Murdoch’s Australian to push the same fascistic anti-market line that Democrats are now regurgitating with gusto and which America’s phony media is falsely passing off as informed economic analysis. According to this billionaire currency speculator and profound political thinker it is not Islamic fanatics that threaten democracy but free markets.

His baseless anti-market accusations are the usual leftist ones that condemn capitalism for encouraging “excessive individualism” and ignoring the “common interest” in favour of personal gain. Like his unthinking supporters he is apparently unaware that this is exactly the same line that the Nazis and the Italian fascists pushed. And like them, he condemned market economics as mere ideology.

In fact, both fascists and Marxists detest the free market. They both understand that the market challenges the state by emphasising the individual. It was the Nazis, not Marxists, who coined the phrase “Gemeinnutz geht vor Eigennutz”, the common interest over private interest. This is now the very mantra that the ‘Democratic’ Party’s mephitic gallery of power hungry narcissists relentlessly chant.

Soros’s attack on capitalism is really two-pronged. First, the free market generates “excessive individualism” and “too much competition”. These charges are one of the mainstays of socialist thinking because socialists rightly see individualism as a threat to their authoritarian ambitions. For them, there is only the collective led by the right-thinking people, the sort of people that run the ‘Democratic’ Party and the neo-fascist Democracy Alliance.

But a genuinely independent-minded person would deliberate on what the term “excessive individualism” could possibly mean in the context of a free society. To a fascist or a communist it would be any behaviour the party censures. (In today’s America that means challenging Obama, as evidenced by the criminal activities of the IRS). To a classical liberal, however, the term has no meaning. If it refers to selfish or boorish behaviour then Soros should say so. Of course, he would then have to explain why free markets make people more selfish and boorish than totalitarian states. (Come to think of it, it would be very difficult to find a more boorish bunch than ‘Democratic’ Party activists, congressmen and their media enablers).

His second attack on capitalism consisted of the fascist charge—and it is fascistic—that “too much competition and too little cooperation” threaten democracy.” This statement alone makes it abundantly clear that he has not grasped the fact that free markets could not exist without voluntary cooperation. In other words, peaceful competition is simply another aspect of voluntary cooperation.

The function of competition is not destruction, as in war, but to ensure that production and the allocation of factors are carried out in the most rational way that is beneficial to consumers. This is where entrepreneurship enters the scene. Just one of the entrepreneur’s important tasks is to select from a range of alternative production techniques the one that will minimise the costs of production. Those who fail in these endeavours will be replaced by entrepreneurs with greater competence and foresight. (Forecasting is, I think, the most important and irreplaceable function of the entrepreneur).

That any genuinely informed person could suggest that such tasks could be achieved in the absence of social cooperation beggars belief. In other words, through social cooperation free markets continually select those best fitted to serve the wants of consumers. There is nothing Darwinian or war-like about this process. No one is killed or enslaved and neither cities nor towns are razed or plundered. All that really happens is that some people now have to find alternative occupations. Without voluntary cooperation states would have to rely on jackbooted goon squads, the secret police and the threat of the labour camp to maintain their existence. Not so with free societies.

The likes of Soros deny that free market cooperation is of the highest order: they deliberately ignore the fact that only through market processes can the actions and expectations of millions of people be continuously coordinated. People volunteer to work for Microsoft, Walmart, Costco, Apple, ‘big oil’, Dell, the local diner or a courier service. No one is coerced or visibly directed to these enterprises just as no one is forced to invest in them.

True, these enterprises compete, directly or indirectly, with one another but their competition is of a peaceful nature and takes place under the rule of law. This is the kind of competition that stimulates progress in all its forms, brings about superior methods of production and generates material abundance. Every country that substituted the power of the state for the workings of the market has, without exception, impoverished its citizens and robbed them of their liberty. If Soros was as widely read as he pretends to be he would know all of the above. (But then again, maybe he does but, like fanatical ‘Democrats’, favours edicts and intimidation over persuasion).

Soros claimed that the turn of the nineteenth century was the golden age of capitalism, much like our own but more stable. He is right about 1900 being more stable in some ways than the present. This, economically, can be attributed not to gunboats but to the workings of the gold standard*, the absence of which created international monetary disturbances that made the likes of Soros billionaires. Nevertheless, it is clear that by 1900 statist ideology had achieved ideological hegemony on the Continent, especially in Germany. Britain was also succumbing with America still some way behind. The golden age of ‘laissez faire’, if there was ever one, was in retreat.

However, this was simply a build up to his thesis that market economics is only an ideology with no scientific basis. Let us try and refine our terms with a rather rough and ready definition of an ideology. Ideology has come to mean not the study of ideas but a means of explaining the world by rationalising or distorting certain structures, events or facts so as fit them into a preconceived set of beliefs, regardless of any evidence to the contrary.

Thinking he was employing the Popperian criterion of falsifiability Soros defined free market economics as an ideology thereby putting it on the same footing as Marxism. He argued that ideologies hold in common the view that they alone possess the “ultimate truth”. Be that as it may, no market economist ever made such a ridiculous statement about economics.

Popper correctly pointed out that anything that explains everything cannot be scientific because it cannot be falsified. Although he rightly made this charge against Marxism he never made it against economics. On the contrary, he had a basic understanding of the nature of economic laws. This is why he had the insight to see that economics can tell us “what we cannot do”. For example “You cannot, without increasing productivity, raise the real income of the working population” (Conjectures and Refutations, Routledge & Kegan Paul, 1972, p. 342), “You cannot introduce agricultural tariffs and at the same reduce the cost of living” (Poverty of Historicism, Routledge & Kegan Paul, 1972, p.62), “You cannot have a centrally planned society with a price system that fulfils the main functions of competitive prices” (ibid 62). Popper also supported “equilibrium economics” (ibid 116) but in a form that Austrian economists would approve of.

(Soros’s views on economics, which the ‘Democratic’ Party has adopted wholesale, echo those of the Soviet economist S. G. Strumilin who stated that “[o]ur task is not to study economics but to change it. We are bound by no laws. Robert Conquest, The Harvest of Sorrow, Pimlico, 1986, p. 112).

Soros’ opinion that economics is axiomatic is probably the only correct statement he ever made about the discipline. However, we have to look at what this means for his falsifiability criterion. Axioms are self-evident propositions that not only do not need proving but are sometimes beyond proof. For example, the axiom that all men are mortal cannot be falsified statistically. But this fact must, according to the thinking of Soros and other like-minded critics of economics, make the axiom ideological.

Popper could never be accused of such sloppy thinking. In the same way, if I seriously argued that Aristotle is alive and well and hiding in the US I would be justifiably ridiculed, not because the assertion can be falsified, it cannot, but because it is self-evidently false. It violates the well-known axiom that all men are mortal.

The same goes for the law of supply and demand which says that if the price goes up, sales go down. The fact that prices and sales can both rise for the same product does not invalidate the law to those who fully understand it. (This is something even Soros should know). Thus, asserting that economics is an ideology because he believes that the criterion of falsifiability cannot be applied to it in the same way that it is applied, for instance, to physics reveals not only an ignorance of the nature of the natural sciences as well as the social sciences but also an ignorance of what Popper actually wrote.

*Strictly speaking, the classical gold standard was really a quasi-gold standard. Under a 100 per cent gold standard the total amount of demand deposits and notes would be fully backed by gold. Although Peel’s 1844 banking Act was based on the currency principle of only issuing notes against gold (with the exception of a 14 million pound fiduciary issue) no such restraint was placed on demand deposits. This lack of foresight led to a number of financial crises.

12 thoughts on “George Soros’s fascist economic thinking, part 1”

  1. I see we’re beating Sarah to the punch today. I agree with Arnold on this. That George Soros is a nasty piece of work.

  2. I was slow of the mark today

    I do not remember Soros writing for the Australian but I am willing to bet that no one on the right made any attempt to refute his attack on capitalism. And that includes the Institute of Public Affairs.

  3. You are dead right, Nick. I always felt that the IPA’s reports were on the shallow side. Reading Gerry’s blog made me realise just how shallow they are. Davidson and kates refusal to discuss issues as serious as the great depression and the trade cycle is proof enough to me that they do not care about historical accuracy. No offence to Gerry but I think it is disgraceful that I have to come to this site to find out what really happened in Australia during the great depression and what the real classical theory of the trade cycle is.

  4. I thought the post stretched a very long bow on the fascist angle. but the more I thought about it the more sense it mad. If government makes most of the economic decisions how can it be a free enterprise system?

  5. Sarah’s gotta good point, Nick. I spent a fair bit of time searching the net to see what Sinclair Davidson had to say about the Great Depression. I couldn’t find anything except that bit about spending cuts and Gerry handled that better than Davidson did. If Gerry is right and Sinclair Davidson did tell people not to trust anything Gerry wrote then he has a bloody cheek criticising anybody.

  6. Cant we could get away from Sinclair Davidson and Steve Kates. I’m fed up hearing about them and catallaxy.

  7. I understand what you are saying, Eddy. Unfortunately Davidson, Kates and their friends are intent on marginalising anybody who presents an alternative view. Gerry has thoroughly refuted them but they keep on lying about it. I am sorry, Eddy, but so long as that lot continue their shocking behaviour their names will keep popping up.

  8. This is a slanderous, hateful and vicious attack on George soros. Mr. Soros is entitled to his views and calling him a fascist for it is lowclass. You should be ashamed, A fascist would not have set up the open society.

  9. conservativehate, what a telling moniker. Gerry didn’t say Soros did not have the right to his fascist economics. Gerry was just pointing out that what Soros believes in is fascist and if you are a fascist you cannot be a democrat. No doubt we will be told a lot more in part 2.

Leave a Reply