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Monday, December 7, 1998 Published at 17:26 GMT


Mr Soros comes to London

George Soros: A man whose reputation goes before him

BBC Economics Correspondent Evan Davis assesses the power and charisma of George Soros as he visits the UK.

It is perhaps a sign of the modest sense of self-worth Britain now has of itself that quite so much excitement is being generated by the visit of George Soros to the UK this week.

He talks at a debate at the London School of Economics on Monday, runs through a hectic pace of media interviews, and sits before a House of Commons Select Committee on Wednesday.

His new book has just been serialised in The Times, and is getting one of the best promotional tours a publisher could imagine. Somehow, the fact that he "beat the Bank of England" in 1992, "forced the pound out of the ERM", has made us feel as though he is as powerful as the rest of us combined.

[ image: Evan Davis:
Evan Davis: "Mr Soros knows he is not so powerful"
There has been a degree of myth involved in the elevation of the man. But given the way financial markets work, it has to some extent become self-fulfilling.

When he moves his money somewhere, others tend to follow - so his investments inevitably turn out to be prescient.

His letter to the Financial Times urging Russia to devalue sparked the whole emerging crisis of this summer.

Other, equally impressive investment personalities, such as Warren Buffet, have remained relatively unknown in the front sections of the broadsheet newspapers.

Call for reform

What Mr Soros has, however, is charisma, charm and a social conscience, manifesting itself in the fact that he has written a book about global capitalism at all.

The message of the book has been summarised as "stop me before I speculate again". It is a call for reform in the global capitalist system, a plea that it does have to be regulated.

And this is the great Soros irony. We think he is as powerful as the rest of us combined. We hear cliches about the weakness of government in the face of people like him. But in fact, his message is one that says governments are actually important players in the global economic system.

Regulation is a necessary part of the scene; to abandon it in the face of a perception of powerlessness would be a major error.

Symbol of power

He knows, better than we do, that actually he is not such a powerful player. He is one of many powerful players.

He is really a symbol of a powerful class of people. None of those hedge fund investors taken on their own is as powerful as any major western government.

Our tendency to personify in him all the power of financial markets has a material consequence. It gives the misleading impression that there is someone in control of financial markets.

His correct point is that modern markets operate in such a way that actually no-one is in control. That's why government has a regulatory role to play!

In my view, Soros has a better understanding of the markets than the rest of us. It is because he understands his own powerlessness that we should listen to him, not because he has the power that we think he does.

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