Subject: Defend Open Society
From: "Ken Wollack" <[email-masked]>
To: <[email-masked]>
Date: Fri, 30 Dec 2016 12:01:11 -0500

Following is an interesting analysis on threats to democracy by George
Soros.

Best wishes for a healthy and happy new year.

Ken

Kenneth Wollack
President
National Democratic Institute
455 Massachusetts Ave., NW, 8th Floor
Washington, DC 20001
202-728-5500 (Tel)
888-875-2887 (Fax)
email: [email-masked]
website: www.ndi.org

---------- Forwarded message ----------
From: George Soros <[email-masked]>
Date: Fri, Dec 30, 2016 at 7:04 AM
Subject: Defend Open Society
To: [email-masked]

Dear Friends and Colleagues,

I wanted to share George's recent article
<http://georgesoros.us7.list-manage.com/track/click?u=f9c2bf7046c6622e5574643fa&id=8e45f826a6&e=1c92b8af53>
published
this week as part of Project Syndicate's *TheYear Ahead* series on the
urgent need to defend open society.

All best,
Michael Vachon

------------------------------

DEC 28, 2016 Open Society Needs Defending
<http://georgesoros.us7.list-manage1.com/track/click?u=f9c2bf7046c6622e5574643fa&id=3853782d20&e=1c92b8af53>
Project
Syndicate
By: George Soros

NEW YORK – Well before Donald Trump was elected President of the United
States, I sent a holiday greeting to my friends that read: “These times are
not business as usual. Wishing you the best in a troubled world.” Now I
feel the need to share this message with the rest of the world. But before
I do, I must tell you who I am and what I stand for.

I am an 86-year-old Hungarian Jew who became a US citizen after the end of
World War II. I learned at an early age how important it is what kind of
political regime prevails. The formative experience of my life was the
occupation of Hungary by Hitler’s Germany in 1944. I probably would have
perished had my father not understood the gravity of the situation. He
arranged false identities for his family and for many other Jews; with his
help, most survived.

In 1947, I escaped from Hungary, by then under Communist rule, to England.
As a student at the London School of Economics, I came under the influence
of the philosopher Karl Popper, and I developed my own philosophy, built on
the twin pillars of fallibility and reflexivity. I distinguished between
two kinds of political regimes: those in which people elected their
leaders, who were then supposed to look after the interests of the
electorate, and others where the rulers sought to manipulate their subjects
to serve the rulers’ interests. Under Popper’s influence, I called the
first kind of society open, the second, closed.

The classification is too simplistic. There are many degrees and variations
throughout history, from well-functioning models to failed states, and many
different levels of government in any particular situation. Even so, I find
the distinction between the two regime types useful. I became an active
promoter of the former and opponent of the latter.

I find the current moment in history very painful. Open societies are in
crisis, and various forms of closed societies – from fascist dictatorships
to mafia states – are on the rise. How could this happen? The only
explanation I can find is that elected leaders failed to meet voters’
legitimate expectations and aspirations and that this failure led
electorates to become disenchanted with the prevailing versions of
democracy and capitalism. Quite simply, many people felt that the elites
had stolen their democracy.

After the collapse of the Soviet Union, the US emerged as the sole
remaining superpower, equally committed to the principles of democracy and
free markets. The major development since then has been the globalization
of financial markets, spearheaded by advocates who argued that
globalization increases total wealth. After all, if the winners compensated
the losers, they would still have something left over.

The argument was misleading, because it ignored the fact that the winners
seldom, if ever, compensate the losers. But the potential winners spent
enough money promoting the argument that it prevailed. It was a victory for
believers in untrammeled free enterprise, or “market fundamentalists,” as I
call them. Because financial capital is an indispensable ingredient of
economic development, and few countries in the developing world could
generate enough capital on their own, globalization spread like wildfire.
Financial capital could move around freely and avoid taxation and
regulation.

Globalization has had far-reaching economic and political consequences. It
has brought about some economic convergence between poor and rich
countries; but it increased inequality within both poor and rich countries.
In the developed world, the benefits accrued mainly to large owners of
financial capital, who constitute less than 1% of the population. The lack
of redistributive policies is the main source of the dissatisfaction that
democracy’s opponents have exploited. But there were other contributing
factors as well, particularly in Europe.

I was an avid supporter of the European Union from its inception. I
regarded it as the embodiment of the idea of an open society: an
association of democratic states willing to sacrifice part of their
sovereignty for the common good. It started out at as a bold experiment in
what Popper called “piecemeal social engineering.” The leaders set an
attainable objective and a fixed timeline and mobilized the political will
needed to meet it, knowing full well that each step would necessitate a
further step forward. That is how the European Coal and Steel Community
developed into the EU.

But then something went woefully wrong. After the Crash of 2008, a
voluntary association of equals was transformed into a relationship between
creditors and debtors, where the debtors had difficulties in meeting their
obligations and the creditors set the conditions the debtors had to obey.
That relationship has been neither voluntary nor equal.

Germany emerged as the hegemonic power in Europe, but it failed to live up
to the obligations that successful hegemons must fulfill, namely looking
beyond their narrow self-interest to the interests of the people who depend
on them. Compare the behavior of the US after WWII with Germany’s behavior
after the Crash of 2008: the US launched the Marshall Plan, which led to
the development of the EU; Germany imposed an austerity program that served
its narrow self-interest.

Before its reunification, Germany was the main force driving European
integration: it was always willing to contribute a little bit extra to
accommodate those putting up resistance. Remember Germany’s contribution to
meeting Margaret Thatcher’s demands regarding the EU budget?

But reuniting Germany on a 1:1 basis turned out to be very expensive. When
Lehman Brothers collapsed, Germany did not feel rich enough to take on any
additional obligations. When European finance ministers declared that no
other systemically important financial institution would be allowed to
fail, German Chancellor Angela Merkel, correctly reading the wishes of her
electorate, declared that each member state should look after its own
institutions. That was the start of a process of disintegration.

After the Crash of 2008, the EU and the eurozone became increasingly
dysfunctional. Prevailing conditions became far removed from those
prescribed by the Maastricht Treaty, but treaty change became progressively
more difficult, and eventually impossible, because it couldn’t be ratified.
The eurozone became the victim of antiquated laws; much-needed reforms
could be enacted only by finding loopholes in them. That is how
institutions became increasingly complicated, and electorates became
alienated.

The rise of anti-EU movements further impeded the functioning of
institutions. And these forces of disintegration received a powerful boost
in 2016, first from Brexit
<http://georgesoros.us7.list-manage1.com/track/click?u=f9c2bf7046c6622e5574643fa&id=1b909e4268&e=1c92b8af53>,
then from the election of Trump
<http://georgesoros.us7.list-manage.com/track/click?u=f9c2bf7046c6622e5574643fa&id=ca804e0728&e=1c92b8af53>
in
the US, and on December 4 from Italian voters’ rejection, by a wide margin,
of constitutional reforms
<http://georgesoros.us7.list-manage2.com/track/click?u=f9c2bf7046c6622e5574643fa&id=36d6e6774f&e=1c92b8af53>
.

Democracy is now in crisis. Even the US, the world’s leading democracy,
elected a con artist and would-be dictator as its president. Although Trump
has toned down his rhetoric since he was elected, he has changed neither
his behavior nor his advisers. His cabinet comprises incompetent extremists
and retired generals.

What lies ahead?

I am confident that democracy will prove resilient in the US. Its
Constitution and institutions, including the fourth estate, are strong
enough to resist the excesses of the executive branch, thus preventing a
would-be dictator from becoming an actual one.

But the US will be preoccupied with internal struggles in the near future,
and targeted minorities will suffer. The US will be unable to protect and
promote democracy in the rest of the world. On the contrary, Trump will
have greater affinity with dictators. That will allow some of them to reach
an accommodation with the US, and others to carry on without interference.
Trump will prefer making deals to defending principles. Unfortunately, that
will be popular with his core constituency.

I am particularly worried about the fate of the EU, which is in danger of
coming under the influence of Russian President Vladimir Putin, whose
concept of government is irreconcilable with that of open society. Putin is
not a passive beneficiary of recent developments; he worked hard to bring
them about. He recognized his regime’s weakness: it can exploit natural
resources but cannot generate economic growth. He felt threatened by “color
revolutions” in Georgia, Ukraine, and elsewhere. At first, he tried to
control social media. Then, in a brilliant move, he exploited social media
companies’ business model to spread misinformation and fake news,
disorienting electorates and destabilizing democracies. That is how he
helped Trump get elected.

The same is likely to happen in the European election season in 2017 in the
Netherlands, Germany, and Italy. In France, the two leading contenders are
close to Putin and eager to appease him. If either wins, Putin’s dominance
of Europe will become a *fait accompli*.

I hope that Europe’s leaders and citizens alike will realize that this
endangers their way of life and the values on which the EU was founded. The
trouble is that the method Putin has used to destabilize democracy cannot
be used to restore respect for facts and a balanced view of reality.

With economic growth lagging and the refugee crisis out of control, the EU
is on the verge of breakdown and is set to undergo an experience similar to
that of the Soviet Union in the early 1990s. Those who believe that the EU
needs to be saved in order to be reinvented must do whatever they can to
bring about a better outcome.

http://prosyn.org/DQaoUUM

© 1995-2016 Project Syndicate

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