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Sorosian Fallibilism

Sorosian Fallibilism

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Published by davidwalters
From SOROSOROS. If the losers do not want to get so badly hurt by the game, then let them change the rules, advised George Soros,
From SOROSOROS. If the losers do not want to get so badly hurt by the game, then let them change the rules, advised George Soros,

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Published by: davidwalters on Jun 05, 2013
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BY DAVID ARTHUR WALTERSPain must always run ahead of pleasure to keep the world rolling. If there were nosuffering, there would be no success. People are bound to get hurt if the human raceis to progress. But perhaps the suffering can be ameliorated although it cannot bedone away with altogether. A better wheel might be invented to advance civilizationon its illustrious career, or at least the system we have might be tinkered with by piecemeal engineers, greased by the mechanics, and set upon new rails. In any event we might take comfort in believing that life is just a game, life being the grubstake onehas to play with.If the losers do not want to get so badly hurt by the game, then let them change therules, advised George Soros, the man who broke the Bank of England and who ranthe Malaysian and Thai currencies into the ground among other things that reportedly 
hurt so many people. If he had not won the money games, someone else would have.If someone else would make a killing, anyway, then why not him? Mr. Soros playedhis hand, but he insisted he was not entirely to blame for bringing down the cardhouses, for no individual investor can move a currency:
“Markets move currencies,” he said, “so what happened with the British pound would
have happened whether I was born
or not, so therefore I take no responsibility.”
  We may or may not give him the benefit of the doubt disrespecting responsibility, but we definitely disagree with the proposition that the chips could have fallen tosomeone else, for he was the one man born to do what he had done. He was destinedto play without regard to the social consequences, and consequently he happened to win, wherefore we can hardly blame him for his handiwork, which was the work of anonymous, invisible hands.
“If I had tried to ta
ke the social consequences into account, it would have thrown off 
my risk/reward calculations…. Fortunately I did not need to bother about the socialconsequences because they would have occurred anyway.” The anonymity of themarkets, he admitted, “allowed
me to dirty my hands.”
  Wherefore he is filthy rich. And we do not envy him his filthy lucre, for so many people have dirty hands today that a true friend other than Diogenes would be hardfor a billionaire to find.
Man makes the money but the money does not make the man. “There is more to my existence than making money,” Mr. Soros averred. “I focused on it in my career
because I recognized that there is a tendency in our society to exaggerate theimportance of making 
money, to define values in terms of money…. Having 
recognized the importance of making money, I may yet come to be recognized as agreat philosopher
which would give more satisfaction than the fortune I have
made…. The prevailing bias in favor of money 
and wealth is a good example of what
I mean about fallibility.”
 If Soros wanted to entirely exculpate himself instead of displaying his dirty hands, hemight better argue that his financial manipulations did the deluded crowd a favor inthe long run in this best of all possible worlds, where pre-established harmony presumably rules despite the market deviations he takes advantage of and pessimistsare wont to rue. Fortunately for him, he does not believe in general equilibrium, theintuitive notion that due to opposing forces prices naturally fluctuate around a centralprice, the equilibrium price. The equilibrium quantity is the quantity bought and sold
at that price. The mathematical proof of the theory of general equilibrium is anattempt to scientifically prove the existence of the invisible hand of God.Nor does he believe in the efficient market hypothesis of the market fundamentalistreligion, that all the information one can know about oil, for example, is already reflected in its current price; therefore it is not under or overvalued at any given time,and buying or selling it with the expectation of outperforming the market amounts togambling. There may be market inefficiencies in efficient markets from time to time,but they will cancel each other out one way or another.Mr. Soros exploits the inefficiencies; but the swings he makes his big killings on aremore than slight, chance deviations. They are bubbles inflated by speculative crazes, which has little to do with supply-and-demand rationing; therefore the bubbles are theeffect of irrational behavior, not efficient markets. In effect, the markets do notefficiently distribute the surpluses according to his notion of social justice. The losers,he says, are not adequately compensated by the winners. He stated on June 3, 2008,
that the price of oil was being inflated into a “super
bubble” by a flood of money 
from university endowment funds, pension funds, commodity pools and commodity index funds. Although the market fundaments, the buttocks on which an allegedly 
free market sits, namely supply and demand, warrants an uptrend; a “bubble has beensuperimposed” on same, he said.
 Despite his reservation about government intervention, that it introducesinefficiencies, which would seem to imply that markets are in fact efficient in somerespects but not in all as market fundamentalists would have us believe, he hedgedand urged Congress to intervene in the oil market to curb speculation in this case.Margin requirements, the amount of cash one must put up to place a bet for a largeramount, should be increased for futures contracts, he said, which would make themless attractive to speculators. Furthermore, pension funds should be prohibited fromspeculating on commodities altogether if they cannot otherwise be discouraged frombehaving like a herd.Economic professors Dwight R. Sanders and Scott H. Irwin begged to disagree in aNew York Times editorial dated July 20, 2008, claiming that there is no historicalevidence that political interventions lower prices, nor is there more than slightevidence that speculative buying has increased prices of commodities; significantanecdotal evidence exists to the contrary in some markets, they noted. Speculators aresimply convenient scapegoats, they said, for the likes of such politicians as President
Harry Truman, who once said that “the cost of living in this country must not be afootball to be kicked about by gamblers.”

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