George Soros's theory of reflexivity: a comparison with the theories of Giddens and Beck and a consideration of its practical value

Abstract

George Soros has won recognition as one of the most successful financial speculators of all time and one of the most munificent philanthropists in the world today. He claims that his success is connected with his fallibilist philosophy and his heterodox economics. Economists have dismissed his ideas as variously bizarre or banal but for sociologists they should strike a chord as at their heart is a theory of reflexivity. The one sociologist to have recognized this is Anthony Giddens, but he has not attempted to assess whether Soros's theory of reflexivity deserves the academic credit he craves. This paper examines the origins and development of Soros's theory,and compares its elements with the main components of the theories of reflexivity of Giddens and of Ulrich Beck. There turns out to be little that is new to sociology in Soros's theory but some of it is strikingly formulated and it is far from banal - indeed it anticipates some recent research agendas in economics which challenge the rational expectations-efficient markets model. Soros has also treated it as a working hypothesis and subjected it to extraordinary tests in the interventions he has made in the money and stock markets. Perhaps Soros's best claims to academic credit pertain to his rejection of the self-separation of economics from the rest of the social sciences and his characterization of his epistemology as a reflexive theory of truth. In the end, however, it is the practical use Soros has made of his ideas that is most remarkable.