George Soros, billionaire and founder of Soros Fund Management LLC, poses for a photograph. (Photographer: Jasper Juinen/Bloomberg)

The Fight in Hungary Is Over George Soros’s Legacy

(Bloomberg View) -- Hungarian Prime Minister Viktor Orban has long avoided effective censure by the European Union, even though he has long since stopped adhering to the bloc's common values, denouncing liberalism and adopting an authoritarian style of government. But his attempt to close down the Central European University in Budapest, funded by George Soros, seems to be the last straw; the EU intends to sue Hungary over it, and sanctions may follow unless Orban leaves the CEU alone.

It's remarkable that the controversy over the Soros project is what has brought European unhappiness with Orban to a boil. But then, the stakes are especially high for the octogenarian philanthropist: This may be his final stand in a region where he has accomplished so much -- and yet seen at least as much failure.

In the final paragraph of her 2015 book, "Buying a Better World: George Soros and Billionaire Philanthropy," Anna Porter wrote:

It would be ironic if the Soros legacy -- as viewed through the lens of the next century -- is the Central European University in Budapest. Ironic, because the one thing that Soros never wanted was an edifice, a building to house his ideas. But it is also fitting because CEU may yet turn out to be the incubator of future leaders and, with a bit of luck, they will lead to a better world.

That's not a generous summary of Soros's legacy. And yet, after spending more than $13 billion over 33 years, Soros's Open Society Foundations and their predecessor organizations haven't been able to foster open, non-authoritarian societies in many of the countries where much of that money was spent. Russia, one of the biggest arenas for Soros philanthropy (and a country to which he once casually lent $700 million from his private account to cover a pension shortfall), kicked out all the Soros organizations in 2015, declaring them a threat to state security. In Macedonia, one of the former Yugoslav countries that have been a focus of Soros activities, Nikola Gruevski, the former prime minister who heads the ruling national party, accuses him of destabilizing the country with his "ideological" investments. In Poland, another eastern European country where nationalists have won power, a big recipient of Soros funding is under threat

In Hungary, Soros's country of origin, his contributions were initially welcomed, including by student activist Viktor Orban, who went to Oxford on a Soros-funded scholarship. But lately, Orban has lost patience with the philanthropist. In a speech to the European Parliament this week, he said,

We have a dispute partly with you and partly with an American financial speculator. I know that the power, size and weight of Hungary is much smaller than that of the financial speculator, George Soros, who is now attacking Hungary and who – despite ruining the lives of millions of European people with his financial speculations, and being penalized in Hungary for speculations, and who is an openly admitted enemy of the euro – is so highly praised that he is received by the EU’s top leaders.

Soros's wealth and the alleged generosity of his political investments is a leitmotif for his many critics. That argument is spurious, however. In 2015, the year his organization was forced to leave Russia, his total expenditure in the former Soviet Union (excluding the Baltic states) reached $58.2 million, less than 10 percent of it in Russia itself. The Open Society Foundations' budget for all of Europe in 2017 is $78.1 million. The Russian government is spending more than $320 million on a single foreign-language propaganda channel, RT. 

The Central European University spent $59.7 million euros ($65.2 million) in the 2015-2016 academic year -- some 9 percent of the Hungarian government's higher education budget. If a dollar spent by Soros and Orban buys an equal share of voice, the prime minister has nothing to worry about.

The paradox of Soros's money is that it achieves both too much and too little per dollar spent. 

In the 1990s, when Soros's attempted post-Communist clean-up job was just starting, the organization was often ad hoc and not particularly accountable. In every country where he wanted to operate, Soros found people who agreed with his view of an ideal country: Democratic, with an active civil society, open to the rest of the world, free of nationalist hang-ups. He gave them money and lots of operational freedom. They found -- or, in fact, already knew -- more like-minded people. The Soros-funded charities turned into clubs and support networks for a certain kind of pro-Western intellectual -- people who, during post-Communist transitions, turned into eastern European "flexians," flitting between academia, think tanks and government to shape modernization policies. 

These people were smart and vocal, and they attracted more attention than warranted by their numbers or the funding they received. Paul Stubbs of the Institute of Economics in Zagreb, Croatia, wrote in a 2013 paper on the role of the Soros foundations in former Yugoslavia:

It is impossible to know what a post-Yugoslav space without the Open Society Foundations in the 1990s would have been like. There would certainly have been support for new NGOs and the supposed building of civil societies and there was massive humanitarian assistance often far exceeding the sums Soros provided. At the same time, alternative media and culture would probably have struggled to secure levels of funding coming close to that which they received from the Foundations. 

But funding the westernizing intellectual elites had its downside. As Stubbs pointed out, "in its claims to intellectual superiority, cosmopolitan sentiment and profound anti-nationalism" this circle "may have served to both define the contours of political opposition and reduce their broader social impact and resonance." The Soros money insulated the modernizers from the need to seek local funding. The emergence of an international community for such people -- a lecture circuit, a system of grants, schools such as the Central European University -- created a pleasant alternative to local struggles. In part because of this, little public support emerged for the intellectuals' ideas. Soros wanted to build open societies, but instead -- at least in eastern Europe -- he succeeded in building a system of ivory towers.

It is a tribute to the power of ideas that eastern Europe's authoritarians fear Soros far more than can be justified by his spending on causes hostile to them. It's a testament to the weakness of ideas alone that the backlash against Soros's understanding of a good society is stronger than his charity's institutional effect. Soros's ideas won't win out if the EU forces Orban to leave the CEU alone; they would only win if Hungarians voted Orban out for a pro-EU liberal. But, as Porter pointed out, if the university endures and its alumni integrate into political life, things may gradually change in that direction.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website

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