Council on Foreign Relations
New York, New York
CHARLIE ROSE: If I could get your attention—most of you have been here before. I’m Charlie Rose, and we are pleased to have George Soros here this evening. You know the way we do this. There will be—I will remind you that this meeting is on the record. I’ll do about 20 minutes of one-on-one Q-and-A, and then I’ll turn it over to you, and we will take your questions. As you stand, wait for the microphone and speak directly into the microphone. State your name and your affiliation. And, as always—this applies to me as well—keep your questions concise, so that the answer will be as fulsome as it might be.
George Soros is known to most of you, I suspect, in this room. His story is known to you from [being] born in Hungary. When the Nazis came in, he escaped when he was a teenager to London. London School of Economics had a significant impact on him. [He] came to New York City and got into the investment business and became famous and very rich because of his running of hedge funds. [Laughter.]
He has written—and then decided to put his money where his ideas were, with the concept of the Open Society Institute—and in Central Europe and in the former Soviet Union, promoting the idea of an open society and the idea of democracy, and has given a lot of money to that effort.
He has written eight books. George has said to me that they were all about the same thing. We’ll explore that idea later. The latest is called “The Bubble of American Supremacy,” and we’ll talk about that.
I think the thing that has everybody watching what George Soros does in this particular year is that it is a campaign year and he has already committed 12.5 million [dollars] at last count, or the last count that I’ve seen a record of, to advocacy groups that are supporting—that are anti-Bush. If he wants to quarrel with anything I’m saying, we’ll give him a chance to—a whole range of different people. Whether it’s issue-oriented or whether it is more political-oriented, the effort is to put his money to defeat George Bush. I think it’s that simple in terms of his own philosophy.
The book is in part his criticism of the Bush administration and policies, and the second half of the book is about his own sense of where foreign policy, American foreign policy, ought to be. And I want to begin by talking about: just today we just experienced [the] Wisconsin [Democratic primary], and it looks like we have—first of all, welcome George Soros. [Applause.] Are you supporting [Democratic presidential candidate and Massachusetts Senator] John Kerry?
GEORGE SOROS: I’m supporting any candidate that is selected. I was keen on [former Democratic presidential candidate Dr. Howard] Dean. I liked [former Democratic presidential candidate General Wesley] Clark very much, whom I knew from the Balkans. And I am delighted to have Kerry as the candidate, partly because he has reunited the Democratic Party, and partly because his formative experience was the Vietnam War. That’s what brought him into politics. And to have a war hero who has experienced war and who is opposed to going to war unless it’s absolutely necessary confront a president who wants to be a war president, but has personally avoided the experience of war, I think the choice is quite clear.
ROSE: Is a referendum on the Iraqi war a winning issue in your judgment for the Democrats in 2004 if Kerry is the likely candidate?
SOROS: I think it would be a winning issue, if the election turns into a referendum on Iraq. It’s not at all a foregone conclusion that that will be the case, because I think that the Bush administration will do everything to make Iraq smaller as an issue as we approach the elections.
ROSE: They’re encouraging the U.N. [United Nations] to get in as fast as possible.
SOROS: Well, try to find a—well, number one, reduce the number of body bags, because that is still a very, very painful burden to have at the time of elections; and secondly, to begin to find an exit or have the vision of an exit. And that is what has really led the administration to review its position and bring in the U.N., because only the U.N. has legitimacy to establish a government that can represent Iraq. I mean, we are the occupying powers, and therefore any government that we appoint is appointed by the occupying power, and is not accepted—cannot be—will not be accepted as a legitimate government. So the Bush administration now, belatedly, is doing the right thing bringing in the U.N.
ROSE: And what are your feelings about direct elections in Iraq with the timetable [of a June 30 handover of sovereignty] the United States has suggested or the coalition powers have suggested?
SOROS: Well, I’m pretty sure that the timetable can not be met. But I think that there will be a need for—I mean, we’ll see what the United Nations comes up with. But I don’t think that you can deny the legitimate aspirations of the Shiites with appropriate protection of all other groups in the country. So I think that there will have to be direct elections. And I think if it can be achieved, and the opposition of the Sunnis can be overcome, the outcome actually will be quite benign. Because I don’t think the policies—because I don’t think that Iran, hardliners in Iran, could resist if Shiites—
ROSE: Because if there is a Shiite-controlled government in Iraq, it would have a positive influence on Iran?
SOROS: Right, I think so.
ROSE: That’s part of the reason the Bush administration says they went into Iraq.
SOROS: Well, of course we went in there on false pretenses, and—
ROSE: Which one? The weapons of mass destruction only, or—[laughter]—
SOROS: No. Weapons of mass destruction and the connection with al Qaeda. And then now we are claiming that we went in there to liberate the Iraqis.
ROSE: And promote democracy in the region.
SOROS: Right. And actually that is the claim that upsets me personally the most, because I’ve been engaged in the last 15 years in promoting the values of open society, promoting democratic regime change. And to—so I believe in introducing democracy wherever possible. Using military force as a means of doing it is to me an [inaudible] idea. I think it’s a strange way of doing it—
ROSE: But, I mean the history of the world is replete with ideas where people have used force to overthrow their own government—
ROSE: —and create democracy.
SOROS: Right. That is a way of doing it—
ROSE: [You are] talking about creating a democracy by force from outside.
SOROS: No, you have an example of the [second] world war where Germany and Japan were defeated and became democracies. But those countries started the war, were defeated in war, and then as a defeated country we introduced democracy, and very successfully. So that is a very different—we didn’t start the war to introduce democracy to Germany or Japan. So it’s a very different—it’s a false analogy. It’s the wrong way to go about it. And if you want to have a demonstration project, Iraq is the last country that I would use, because of the ethnic tensions which stopped the previous Bush [President George H. W. Bush] from going to Baghdad.
ROSE: Let me—when did you become so—you have taken a more public position, a larger commitment of your money in this domestic political race than ever before. When did you become so obsessed with denying George Bush re-election?
SOROS: Actually the previous book on globalization, which I wrote before September 11th, and then September 11th came and I sort of included some remarks on it—and then as we were going—we were clearly determined to go to war in Iraq, I went to SAIS [School for Advanced International Studies at Johns Hopkins University] in Washington [D.C.], where [Deputy Secretary of Defense Paul] Wolfowitz had been dean before, and where I had delivered a commencement address on open society at his invitation. And I went there to give a speech to explain where I part company with him, because we used to be colleagues agitating for a more muscular policy in the Balkans, back during the Clinton administration. So I parted company and I felt the need to explain why I parted company. So I delivered that speech about a week—it was in March, just about a week before the invasion actually occurred. And that actually was the origin of the book. And that’s what I then developed into a book.
ROSE: But 9/11 and the Bush reaction has what impact in terms of your own thinking about the administration, and in terms of formulating how you wanted to be a player in this election?
SOROS: Well, when I studied the situation I discovered that there was this Project on the New American Century which basically outlined a certain vision of American supremacy based on military power, more active views, projection of power, which had basically—the signatories were then the people who were very closely associated with the Bush administration—
ROSE: [U.S. Vice President Dick] Cheney, [U.S. Secretary of Defense Donald] Rumsfeld, and others.
SOROS: Yes, it wasn’t—it was Jeb Bush [governor of Florida] instead of George W. But it was basically the cast. And of course that group advocated the invasion of Iraq in ’98. So there was that ideology group in the government.
Then came September 11th, and that traumatic experience gave them the opportunity to implement their ideology. And that is what got me. I supported the invasion of Iraq—of Afghanistan—that was a very appropriate reaction, because when you want to fight—want to wage war on terrorism, you must have an address to find the terrorists. And in that case [Osama] bin Laden lived in Afghanistan, so that was appropriate to go after—
ROSE: So the Afghan war was an appropriate response—
SOROS: It was an appropriate response.
ROSE: —to 9/11 and the attack on Afghanistan.
SOROS: Yes. But then to use the war on terror as a way of implementing an invasion of Iraq, and to pursue it irrespective of how Saddam responded, how the rest of the world responded, was to me a demonstration of having gone off the rails. And since the United States is so powerful, to have it go off the rails is a real danger to the world and to us. I think it endangers open society in this country and throughout the world.
ROSE: How does it endanger open society?
SOROS: Because a critical process is absolutely essential to an open society. And when Bush declared war on terrorism it became impossible to criticize him without being unpatriotic. And when Bush said that those who are not with me are—or not supporting me are supporting the terrorists—I heard alarm bells. That is when I really became concerned. And in fact if the political process hadn’t been suspended, because it was an emergency and the war and so on, then I don’t think we would have ever gone to Iraq, because I don’t think that it would have been possible to carry it through by hook or crook, because that is what we did.
ROSE: Who failed in terms of making the case against Iraq in a timely manner that may have created a bigger debate in this country?
SOROS: Who failed?
SOROS: Well, you mean that the—
ROSE: In other words, should there have been a more vigorous debate, and was there not, and why not, and who’s responsible?
SOROS: Well, there should have been. There wasn’t because it was politically inexpedient to be seen to be opposing the president who was waging war at wartime.
ROSE: But there was a lead-up to the war and there was a debate about going to the U.N. and all of those kinds of things. But—
SOROS: There was not enough debate, and there was not enough time. And I think some of you might remember that [U.S. Democratic Senator Joseph] Biden [of Deleware] came here and was telling us here at the Council that he was working on a bipartisan resolution that would have put some constraints on the president’s ability to go to war, and he would need something like 48 hours to gather bipartisan support for it.
And the next day Bush supported—surrounded by [Senator Joseph] Lieberman and [Representative Richard] Gephardt—announced that the resolution was going forward. So clearly there was a division in the Democratic Party, which has actually made it very difficult even now to reach an appropriate opposition to the Bush policies. And I think the emergence of Kerry as the candidate shows that there is now—Kerry can reunite—has reunited the party, I think.
ROSE: All right, a couple of questions, and then I want to go to the future. What do you believe are the lessons of the Iraqi war, and what has it taught us about American foreign policy? I mean, the title of your book is “The Bubble of American Supremacy.”What are the lessons, and then let’s move to some consideration of where—what kind of policies you believe ought to be in America’s interests in the future.
SOROS: I think we have to reconsider our role in the world more profoundly, because having gone off the rails we have to learn some lessons from it.
ROSE: And they are?
SOROS: And they are that we have a unique responsibility, being the dominant force, the dominant country in the world, where we set the agenda and the rest of the world has to respond to the agenda that we set. The rest of the world doesn’t have a vote in Congress. Therefore, our leadership—we have to be concerned about the welfare of the world. In other words, we have to be concerned about the global political system, which has many shortcomings. There are many issues that require international cooperation to tackle them, because through globalization we have become increasingly interdependent. So what happens in other countries is of vital interest to us. Our security is at stake. What kind of government prevails in Afghanistan can be a direct danger to us. So we do need to be concerned about the global political arrangements. And we do need international cooperation to improve our international institutions. We have global markets, but our political arrangements remain based on the sovereignty of states, and we don’t have strong enough international institutions to deal with the problems of maintaining peace. I mean, of common interest. And only we are in a position to lead the world in improving those arrangements. And that is totally contrary to the direction of the Bush administration, which has demeaned and denounced international treaties and international institutions from the moment it came into office.
ROSE: How were your views on this instructed by your own life experience?
SOROS: Well, I mean the answer is obvious, because I lived through Nazi occupation, and I would have perished if my father hadn’t had enough foresight to secure false identities. Then I had the experience of a communist regime, and my life would have been wasted if I hadn’t emigrated. So I learned at a very early age how important what kind of social system prevails—freedom. And then of course I studied under—well, in the London School of Economics I came across [philosopher] Karl Popper, and so from there came this open society idea which when I had enough money to think about what I want to do with it became the objective of my—
ROSE: Creating open societies in Europe and other places that were emerging democracies?
SOROS: Right. And then I became quite involved in that. And in fact as the Soviet system collapsed it became a sort of overarching mission for me, because I think I had a fairly good understanding of the historic moment, and I had a pretty clear set of values and objectives, and I had the financial means to make an impact. So the combination of the three put me into a somewhat unique position. And I devoted five years of my life to setting up this foundation network. And so now I feel that these values need to be supported and reinforced in this country. And that I must say is a surprise. I mean, I didn’t quite expect that. You know, as I had this practical experience in the transition from the Soviet system, I had the surprise there, because I thought there was a division between open and closed societies and that a repressive strong state is a danger to liberty. And I discovered that the weak state, the collapsed state, can also be a danger. And so that was a discovery.
But then to find that—so I discovered that open society is sort of endangered from every side. But nevertheless, to come to feeling that open society is endangered in this country, which is after all sort of the ultimate in an open society, it came as a surprise to me.
ROSE: Your central criticism, it seems to me in reading a lot that you have said, is that you believe that the Bush administration wants to live by rules of power and not by rules of law.
SOROS: Yes, yes. There is this belief that it’s the survival of the fittest, and who is the fittest is determined by competition and not cooperation.
ROSE: And why is that detrimental to American interests?
SOROS: Because in fact that is not—the use of power and dominance was not what has made America great and dominant. And now that we are dominant it is a misuse of that power to try to impose our will on the world. As I said, with great power goes great responsibility. And our responsibility now is to help lead the world in improving the world order.
ROSE: I want to go to this audience. And you point out in the book that one model that you like is the European Community in a kind of—
SOROS: Well, of course, if I lived in Europe I would be pretty critical of the European Union—[laughter]—and even not living there I’m critical.
ROSE: But you talk about some kind of open society bargain.
SOROS: Yes. But the way it has developed is very sort of quintessential of an open society, and actually just now the European Commission has developed the concept of a wider Europe—a wider Europe initiative. And that to me is an expression of the right national strategy. The European strategy paper I think is a much better one than the Bush—
ROSE: But the idea that is attractive to you is the notion that the European community in terms of a wider Europe will offer trade and other economic advantages if they, the developing democracies, commit to a democratic and open society?
SOROS: Yes, yes. And that I think is now very appropriate, because you know the wider Europe happens to coincide with the near abroad of Russia. And so there is now going to be a kind of rivalry for influence in countries like Ukraine, Moldova, and so on. And since Russia is very happy to offer membership to those countries in Russia, wants to re-establish the Russian empire, the European Union has to offer some—cannot offer membership—must offer some other advantages to attract those countries towards—
ROSE: Let me go to this audience. Raise your hand and I’ll—right here, please. If you’ll stand up, as I suggest, identify yourself, and they’ll bring a microphone to you and make your questions precise. And we’ll get as many involved as possible.
QUESTIONER: Thank you. I’m Ann Miller from Bank of America. George, there’s some people in the Bush administration who would contend that because of the strong reaction that America took to the Iraqi situation, the other trouble areas in the world, such as Libya, we have had a very strong message and [others] have reacted positively. Do you agree with that? And, if not, why do you think Libya is behaving the way that it is after the war?
SOROS: I think that Libya, or that [Libyan president Muammar el] Qaddafi has been trying to come in from the cold for some time, you know, with all the long protracted negotiations, [the 1988 bombing of Pan Am flight 103 over] Lockerbie [Scotland]. The influence of Qaddafi’s son was very important. And I think that the willingness of the United States and Britain to, let’s say, be more welcoming, because it was high time to produce some positive results, helped the negotiations. So that is in fact a success. Now, Libya is not a democracy by any means, but there has been a very definitive change in Qaddafi’s behavior and in Africa. A few years ago I talked to [Abdoulaye] Wade [president of Senegal], President Wade, who said that Libya was a big—Qaddafi was a big troublemaker. And even the conflict in Sierra Leone and Cote d’Ivoire had Qaddafi’s influence. He’s now sort of turned around, and he’s a reformed character. You know, to what extent he was influenced by Iraq I think it’s a—I think it’s very questionable.
ROSE: So you don’t think fear played a part that he thought he might be next?
SOROS: I don’t think so, because I think that effectively our ability to project power has been greatly diminished by our—by being bogged down as an occupying power in Iraq. I mean, I can’t imagine us spending another 160 billion [dollars] and putting soldiers at risk to remove another dictator. So I think we shot our whatever. [Laughter.]
ROSE: Yes, sir, right here.
QUESTIONER: Marty Gross from Sandalwood. What is your ability to spend 12.1 million [dollars] to unseat an existing president, current president, say about the need for campaign finance reform? [Laughter.]
SOROS: Well, I think actually I probably contributed more to Republican Party fundraising than the other side. But I am in favor of campaign reform. I supported it. And I abide both by the letter and the spirit of the law in what I’m doing, because I’m supporting what are called Section 527 organizations, which were left alone in the campaign finance reform, because the reform is primarily aimed at denying access to special interests by making political contributions. And if you make a contribution to these organizations you get no access whatsoever. And because of that, it’s extremely difficult to get people to contribute to it—to them—because you do it, you know, out of principle, and you don’t get any access or rewards.
ROSE: But MoveOn.org and [Clinton White House chief of staff John] Podesta’s organization are clearly progressive Democratic organizations.
SOROS: No question that they are designed, or their aim is to, let’s say—
SOROS: Anti-Bush, there’s no question. But it is legal and it was left—it was left untouched—they existed and they were left untouched by the campaign reform. And the Republican president of the Federal Election Commission has in his opinion endorsed these organizations. So it’s been, as I understand it, pretty well reaffirmed.
ROSE: Do you think it’s money well spent?
SOROS: I hope so. [Laughter.]
ROSE: All right. Yes, sir, right here. And then I’ll come—yes, right there—then I’ll come here.
QUESTIONER: Alberto Coll, Naval War College. Mr. Soros, even if we get a Democratic president in November, how can he do the very difficult job of carving politically both the Congress and public opinion to establish the kind of more benevolent, magnanimous foreign policy that you describe in your book, especially in terms of increasing development aid and changing the way that the American public views foreign policy? How can he do that?
SOROS: Well, I think it will require leadership. But there is a genuine clamor for that kind of policy, because President Bush himself has supported for instance a lot more money for fighting AIDS—even to the point of making a contribution to the Global Fund [to Fight AIDS, Tuberculosis, and Malaria], which is an international organization—and also the [U.S.] Millennium Challenge Account—which I think both are very positive moves by this administration and I am a strong supporter of those moves. So it’s possible even—I mean, there’s a public demand for this to which Bush responded by doing these things.
ROSE: Yes, sir?
QUESTIONER: Mr. Soros, my name is Roland Paul. You kind of addressed this in some of your remarks earlier, but this might help to focus it a little bit. You know if the Western democracies had engaged in something like pre-emptive war against Hitler in the late ’30s, many millions of people’s lives would have been saved—20 million Russians, six million Jews, untold numbers of Germans. By the same token, isn’t there some justification for the war in Iraq, regardless of the motives? And I agree with you there probably were other than this—but some justification in light of the fact that we freed 25 million people from the boot of a diabolical and delusional tyrant, who by all odds was responsible for the deaths of 300,000 Iraqis?
SOROS: Absolutely there is a justification, and for instance in the case of Bosnia more recently we could have saved lives had we moved earlier and more aggressively. And I was also a supporter of Kosovo. And I think that the great unsolved problem of our global world order is how to get rid of the likes of Saddam—what to do with tyrants and dictators. And my concern is that by doing what we did, we actually set back that effort to make it more difficult in the future, because first of all we weren’t doing it for that. There was an ulterior motive which was never disclosed, and we still don’t know what it is—I mean, we can conjecture why we went into Iraq. If we had been concerned with—to be liberators, we would have gone about it another way. We would have protected not only the ministry of oil, but all the other ministries and hospitals and museums. We would have needed more troops to do it, but that would have been—then we would have been liberators, and probably we would then be regarded as liberators. We would have probably not given huge contracts to [the] Halliburton [company], which then imports labor from Bangladesh, but actually given those reconstruction contracts to employ people in Iraq. So this is a, unfortunately to me, is a deception that we went there. It’s a—and it upsets me the most because it is a very legitimate objective to remove tyrants. And we must find ways of doing it. And by doing it this way we lose the confidence of the world for cooperating in the future, and we—it just makes it more difficult.
ROSE: Wait a minute, are you saying that there might have been a legitimate argument that would have been acceptable to you for George Bush to go into Iraq?
ROSE: What would that argument be?
SOROS: Well, we would have had to develop a set of rules about intervening in countries like Iraq. We would have had to carry the Congress, we would have had to explain to Congress that that’s—
ROSE: As well as the U.N.?
SOROS: And he would have had to get a consensus—sufficient consensus that would have not necessarily been the U.N., because in the case of Kosovo I think our intervention was legitimate, and it was not through the U.N.
ROSE: Through NATO.
SOROS: Now, of course in Kosovo [former Yugoslav president Slobodan] Milosevic was actually committing genocide that prompted us to intervene. Saddam had also committed genocide—killed—gassed the Kurds. But that was in 1985, and [Secretary of Defense Donald] Rumsfeld went to Saddam and said, “Don’t take our criticism too seriously. We still want to help you in your fight against Iran.” So the same person now 20 years later claims that he has gone in there to remove Saddam. It’s deceptive, and it undermines our credibility.
ROSE: You know their answer would be that it’s all post-9/11. Let me—there was a lady here—there was a lady—somebody. Yes, ma’am?
QUESTIONER: Michaela Walsh—
ROSE: I promise you I’ll get to the back too. I’m not focusing just on the front.
QUESTIONER: Michaela Walsh. I just would like to take this a slightly different direction. Given the situation that we’re living in now and concerns about this campaign that you’re involved in, if you were asked to define or give your definition of leadership to the younger generation today, how would you address that?
SOROS: Well, I’m doing it actually. Yesterday I was at Duke University, and I’m going around universities, because I think it is the future of the students. And I’m basically saying what I’m saying to you: that being the strong power, we have a special responsibility that goes with that, and we have to live up to it. That’s basically—
ROSE: Defining on an international basis. Here and then the lady here. And then we’ll go to the back. Here—microphone?
QUESTIONER: My name is Alexander Cooley. I teach at Barnard College. I have a question about two of your areas of expertise—currency markets and international politics. The recent fall of the dollar—how do you view the medium and long-term impact or a possible erosion of American power?
SOROS: I think that the decline of the dollar has short-term beneficial effects for the American economy and that is why it has been tacitly encouraged by the administration. It’s a very dangerous game to play, because once you let the genie out of the bottle it’s very difficult to put it back again. And the global financial system is not functioning properly. The adjustment is not functioning properly, because more than half—all of Asia basically is tied either directly or indirectly to the dollar. And therefore the adjustment falls on the rest of the world. It’s like a respiratory system with one lung collapsed. And therefore the adjustment takes longer, and goes too far. And it has the makings of an eventual crisis. We are on the road to a currency crisis of some kind.
ROSE: Does that mean that you’re betting on the decline of the dollar? [Laughter.]
SOROS: I wouldn’t like to say.
ROSE: Yes, here, and then we’ll go here, and then I promise you we’re coming right to the back.
QUESTIONER: Hello, Mr. Soros, Nazee Moinian. I’m an Iranian American, and I read your book thoroughly. You dedicate a whole chapter about the merits of open democratic society. Do you think the Middle East is ready for open democratic society? And if yes, why are we having insurgents in Iraq fighting against us?
SOROS: What is ready for—
QUESTIONER: Do you think the Middle East is ready for the open democratic society, as you detailed in your book?
ROSE: Is the Middle East ready for democracy?
SOROS: It probably is more ready than we are willing to give it credit. And actually I think that for instance people in Palestine are quite ready for something more like democracy. And it’s interesting that there was a spontaneous move to impose some restrictions on [head of the Palestinian Authority Yasir] Arafat when they brought in a finance minister back from the World Bank. So I think that there is probably more possibility for democracy than we give them credit for.
ROSE: Yes, ma’am? Here, then here, then there and then to the back. [Laughter.]
QUESTIONER: Kathleen McCarthy. I’m the director of the Center on Philanthropy and Civil Society at the Graduate Center of the City University of New York. I was very interested in your comment that you felt that the institutions of open society in this country were imperiled. We all know that you made a tremendous impact in helping to strengthen these sorts of institutions in other parts of the world. What role can private philanthropy play in helping to maintain these institutions in this country aside from subsidizing individual social advocacy groups?
SOROS: Well, first of all I would like to make it clear that I don’t think the institutions are necessarily imperiled, although the tendency of Bush to nominate quite extremist judges for the Supreme Court, or for the various courts, is in a way endangering the judicial branch of the government. But it’s not the institutions but it’s the suspension of the critical process that I think has been a danger which has led to the success that manifested in the attack on Iraq.
But we do have elections, and I think that they are having a very beneficial effect, because actually the bubble is being deflated by the Bush administration itself in order to pass the goalpost of being reelected. And so that’s how we have to turn to the United Nations in Iraq. And so it’s very useful to have those elections.
ROSE: Yeah, here and then there, and then back here.
QUESTIONER: L.G. Flake with the Marie and Mike Mansfield Foundation. Mr. Soros, through your open society work you gained a reputation as an advocate for human rights. And yet in the situation of North Korea, strangely, the question of human rights and refugees have really been the purview of the far right—even Mr. Wolfowitz, as you mentioned. I’m curious, what should the role of the left or the role of U.S. policy be in regards to the situation in North Korea?
SOROS: Well, we all know that North Korea is one of the most repressive regimes in the world. The question is what can you do about it. And in fact our ability to project power in North Korea is very limited. We have actually gone full circle, because Clinton, recognizing that you actually can’t use military power, because that would be 500,000 people killed before you could actually overrun the country, made a deal which Bush renounced, whereupon the North Koreans went one better and renounced the membership in the Non-Proliferation [Treaty], et cetera. And we are now back to trying to make a deal, using the good offices of the Chinese. So there are limitations to power, but actually I think that the sunshine policy followed by [South Korean President] Kim Dae Jung held promise. I mean, his idea was that through sunshine you take off your overcoat. And in fact the regime is so unviable that internal changes have to come. And the less I think you have an opportunity to bring about change internally.
ROSE: Here, sir, and then we’re back—this gentleman here and then back to the back—right where the hand is raised there.
QUESTIONER: Thank you, Mr. Soros. Henry Hirschberg, McGraw-Hill. I was wondering what you think of the possibilities of civil war in Iraq and the breakup of the country into three different countries because of al the ethnic issues—not much different than Yugoslavia.
SOROS: Well, I think in the case of Iraq you are sort of on the knife’s edge and you may actually have a positive resolution brokered by the United Nations, or you may have civil war because all the sides have militias, and we are withdrawing our troops—the main job of our troops now is to protect ourselves, and not to necessarily protect the Iraqis. And therefore there is a possibility of civil war, unless there is an arrangement brokered by the United Nations. And it’s up in the air.
ROSE: We’ll know in a couple of weeks. Yes, sir, in the back. Yeah, you. Yes, sir? And then we’ll take another.
QUESTIONER: Hi, Jeff Kaplan, Clark & Weinstock. I wanted to ask you a question about the democratizing power or potential of economic liberalization. Do you think that opening economies inevitably lead to open societies?
SOROS: Not inevitably, but it can be helpful. And generally economic prosperity tends to lead to the development of a middle class, and then the middle class demands more freedom. So let’s say if you take South Korea, which was a dictatorship, because a democracy after considerable economic progress. But it is not at all automatic, and rulers don’t usually give up power willingly. So usually there is sort of a revolutionary moment necessary.
ROSE: Yes, sir. Back in the back too—take your pick. [Laughter.]
QUESTIONER: I’m from Project Renewal. I wonder if we could turn to East Asia again. Trade with China and within the region—Japan, Korea—is surpassing that in trade with the U.S. now. I wonder if you might talk about the threat of China to American supremacy in the East Asian region, specifically if you were in China how would you play your hand going forward? And if you were in Washington, how would you react to that and how would you engage China to guard against a threat of a growing China in the region?
ROSE: Did you get it?
SOROS: Not fully.
ROSE: Okay, basically if you were in China, what would you do in terms of maximizing China’s strategic interests, and if you were in the United States what would you do to counteract that or to compete with it or to coexist with it?
SOROS: I think China is the main beneficiary of globalization, and it’s right now in a very dynamic phase of development, and it actually has a reform-minded leadership, which is aiming at political as well as economic reform. Whether it gets there remains to be seen, but China is doing about as well as it possibly can, and certainly is benefiting from our need for their intercession in North Korea.
As far as the U.S. is concerned, I think that there is a problem with the currency. There has to be some ways of adjusting the currency. Right now we are in a weak position to push the issue, because of our dependence on China in this intractable problem of North Korea.
ROSE: When do you think China will have the strongest economy in the world?
SOROS: If you calculate linearly, it’s 2025—but it never happens that way. [Laughter.]
ROSE: All right, yes, sir?
QUESTIONER: My name is Eugene Staples. Are we not greatly handicapped, considering all the issues that you’ve put before us, by the use of the term the war on terrorism, which seems to me an unending war that probably never will end? And should we not really be seeking some other term to change the semantics of this debate?
SOROS: The answer is yes.
ROSE: So what’s the term?
SOROS: Well, I, in the book—I said the terrorist attack was a crime against humanity basically and it ought to be treated as a crime, and you need to—you can’t wage war against terrorists because, in order to wage war, you must have an address where you know where they live so you can bomb them. Since the terrorists are invisible, when you engage in military action you are liable to have innocent victims. And in fact the war on terror has already had more innocent victims than were killed in the World Trade Center, except that they are somewhere else, and so we don’t draw that comparison. But it is a very counterproductive way to go because, of course, we have to take precautions—we have to increase various security arrangements. But to win the war on terror you need to get—you need to win the hearts and minds of the populations where the terrorists live. And that is where we have failed.
ROSE: We’re losing that battle?
QUESTIONER: Mr. Soros, if I could go back to the issue of the climate in the United States leading up to the war, do you think that the media abdicated its critical and questioning responsibility during that period? And, if so, why in your opinion?
SOROS: Well, the media caters to the market, and any kind of critical expression at the time was unacceptable. The brilliant comedian Maher who took exception to the terrorist act being described as cowardly. He said that, you know, it was heinous, terrible—but it wasn’t cowardly, because people sacrificed their lives in order to—he lost his job.
ROSE: Bill Maher.
SOROS: Bill Maher. So it was not a rewarding experience. [Laughter.]
ROSE: But there was a lot of debate about it, a lot of—I had a lot of people like you on my program who were fiercely opposed to the war—I mean, everybody from you over to [Massachusetts Institute of Technology Professor] Noam Chomsky.
SOROS: Yeah, but when you followed the war reporting in Iraq on Fox Television and Sky News in England—
ROSE: Both owned by the same person.
SOROS: —and how different their coverage was—it really quite remarkable. So actually this—I mean, there is an Orwellian truth machine operating now, and I find it perplexing that when [George] Orwell in “1984” described the Ministry of Truth, the Ministry of Truth controlled all the media, and this was based on the experience in Nazi Germany and communist Soviet Union. So it’s not the same situation. It’s not comparable. But there is still this ability to manufacture truth. And I find it puzzling, and don’t have the answer to it.
ROSE: That’s in fact how you got in trouble, because some people said that you were trying to compare the Bush administration to Hitler when you made that point.
SOROS: That’s correct, yes. But of course that’s exactly the differences that we do have, that democracy and pluralistic media. And yet it’s possible to manufacture truth.
ROSE: Right. Yes, ma’am. Back here. I promise you we’ll come right back to the person in the back row there who was holding their hand up right there.
QUESTIONER: Susan Purcell, Council of the Americas. Mr. Soros, if thinking, just imagining we had found weapons of mass destruction in Iraq after we had gone in pre-emptively, would you now think that it was a good idea for us to go to war with Iraq, even though the U.N. hadn’t approved it?
SOROS: No, I would not think so because effectively when we had the inspectors there we had the situation under control. There was no way in which those weapons could have been activated, and we could have kept the inspectors there indefinitely. So that was not a justification, as long as the inspectors could do their work. And actually they did a much better work than our intelligence picked up, because effectively there were no weapons left because of their work. [Laughter.] So when Bush said that containment doesn’t work, that is not so. Containment actually worked.
ROSE: Yes, sir.
QUESTIONER: But on the other hand when we look at how people are now finding out how the progress that was being made in Iran and even in Libya buying things on the open market or with the help of Pakistan. It wasn’t working there.
SOROS: I say in the book—no, weapons of mass destruction in the hands of governments is a bigger danger than we give credit to. We, you know, the bogey of terrorists gaining controlling—
ROSE: Why is that a bogey? I mean, with the open market being the way it is, why—
SOROS: You are right, I withdraw—it’s not a bogey, it’s a real danger, because the same way that they were selling it to Libya they could have sold it to somebody else.
ROSE: Yes, sir?
QUESTIONER: Thank you. Mahesh Kotecha, SCIC [Structured Credit International Corporation]. Sir, Mr. Soros, Pakistan has been a state that has helped the government, the U.S. government, a lot. Yet it has now also found a scientist who has confessed to being a proliferator. How does—how should the U.S. view the Pakistan government and its relationship with that government?
SOROS: That’s a very tricky situation, because Pakistan is a potentially very dangerous enemy, if it were—if [President Pervez] Musharraf fell and the country fell into the hands of, let’s say, the Islamic fundamentalist government. So we are extremely dependent on Musharraf. And it’s a very precarious situation. And so probably we did the right thing in allowing him to sort of keep that scandal under wraps, and just confine it to one scientist who—Dr. [Abdul Qadeer] Khan [Pakistani scientist who admitted supplying nuclear technology to other countries]—who confessed and was forgiven. Clearly the military was implicated. But I don’t think we are in any position to punish Musharraf.
ROSE: He’s the only bet we have.
ROSE: He’s the only bet we have right now.
ROSE: Ted Sorensen. We’ve got to close this down. I’m sorry to the people I haven’t gotten to, but I’ve—am I right about that, or are we—[laughter]—oh, let’s just go.
QUESTIONER: First, I’m Ted Sorensen from Paul, Weiss. Mr. Chairman, if I may just correct one statement that you made. John Podesta’s organization, which I think George may have contributed to, is not an arm of the Democratic Party.
ROSE: I didn’t say it was an arm of the Democratic Party, Ted. I said that basically that it’s a progressive institution that probably knowing where John Podesta comes from—
QUESTIONER: All right.
ROSE: —he was chief of staff for [former U.S. president] Bill Clinton—he’s more likely to be a Democrat than a Republican. [Laughter.]
QUESTIONER: Well, for legal purposes—[laughter]—members of the board of directors of the progressive had its first conference on alternative national security, for example. Republican Senator [Chuck] Hagel [of Nebraska], Republican Congressman [Jim] Leach [of Iowa], who also want an alternative national security policy—
ROSE: Proud members of the moderate wing of the Republican Party.
QUESTIONER: It’s an endangered species—don’t embarrass them. [Laughter.] So, George, since you are the expert on open society, could you explain how it is that the United States of America, which has called for an open society in Iraq, has been engaged in opposing of all people the grand ayatollah [Ali al-Sistani] who wants direct elections for the next government of Iraq in favor of some caucus system where the United States will select the next government of Iraq?
SOROS: Well, I think I trust that actually the United Nations will recommend direct elections. But it’s very clear why it’s a very tricky thing to do, because of opposition from the Sunnis who are engaged in not just voicing their opposition, but in actually killing our soldiers and killing Iraqis. So it’s a very dangerous situation, because the Sunnis are so opposed to it.
ROSE: Yeah, I’m not sure that [U.N. envoy] Mr. [Lakhdar] Brahimi is going to recommend that direct elections be held by the timetable in July.
SOROS: I think the timetable cannot be met.
ROSE: Right. Let me thank—lots of people here are committed to the idea of getting out of here on time, and I’m five minutes over. Peter would want me to mention that George’s book is titled “The Bubble of American Supremacy.” Please thank George Soros. [Applause.]
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