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. Last Updated: 07/27/2016

What Makes a Billionaire?

If one had to pick the ideal training ground for a great currency speculator, the black market in the Mienk Cafe in Budapest in 1945 might be a good place to look. It was there that the 14-year-old George Soros -- later one of the most successful of all 20th-century investors, the man who famously bet against the Bank of England and won in 1992 and was blamed by some Southeast Asian countries for their crises in 1997 -- continued his family's struggle to survive communism as it had Nazism. It was a dangerous and thrilling youth, providing crash courses in the horrors of totalitarianism and the fundamentals of macroeconomics. Hungary's currency, at one time printed in denominations of quintillions, regularly lost two-thirds of its value overnight. Soros had to learn fast.

Superficially, "Soros: The Life and Times of a Messianic Billionaire,'' by Michael T. Kaufman, might seem to make Soros' remarkable achievements as a speculator and as one of the world's more imaginative philanthropists almost predictable. He developed the steely detachment and cool that he needed for the world's currency markets as he hid from the Nazis. He learned his internationalism, and how to take risks quickly, from his father, an Esperantist and free spirit who bribed officials to get false papers for his family. Was it surprising that Soros, having experienced both fascism and communism, should become a disciple of Sir Karl Popper's "Open Society'' philosophy of anti-totalitarianism when he sat at Popper's feet at the London School of Economics in the early 1950s?

Of course, there are no such easy explanations. Not every money-changing street urchin makes it big, let alone that big. Not every Jew who survived the war in hiding emerged with a steady nerve, let alone one steady enough to make bets with $100 million chips. And not every pupil of Popper even agreed with the Popperian anti-Marxist philosophy, let alone made it the basis of a vast and effective philanthropic program.

Soros is keen to share his views of the world, in speeches and articles -- a long piece called "The Capitalist Threat'' in The Atlantic Monthly in 1997 is perhaps the most wide-ranging of his testaments. It argues, ironically for such a successful capitalist, that the untrammeled intensification of laissez-faire capitalism and the spread of a value system based on the primacy of a free market serve to undermine democracy.

The greatest contradiction of all in the life of George Soros is that he believes his financial success to be due to the successful application of his theories of economic behavior, which seem to be very far from the truth. Friends, family members and colleagues attest that gut instinct and intuition are what inform his decisions. His son Robert, who worked with him, once noted:

"My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking ... the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. ... If you're around him a long time, you realize that to a large extent he is driven by temperament.''

Reviewers and commentators have found little sense in his theories, which revolve around the unremarkable idea that in the financial sphere reality is affected by the beliefs of participants in the markets --a notion he calls "reflexivity." How he purports to translate this idea into concrete investment decisions remains obscure. Besides, he has made big mistakes in calling the behavior of markets: In 1998, in the wake of the Asian crisis and Russia's foreign-debt default, he predicted the imminent demise of global capitalism.

He has cheerfully described himself as a failed philosopher. His dearest wish, from his student days in London through much of his career, was to build on the work of Popper and construct a general theory of human knowledge that would hold the attention of other thinkers. But he left little impression on Popper and virtually none on anyone else. Not even his biographer makes much of an attempt to explain his general ideas, which is disappointing.

Soros' intellectual originality has made its mark, however, in a less conventional way: in his style of philanthropy. Instead of ladling money into traditional charities or the usual good causes of medical research and the arts, his foundations have operated in over 30 countries, supervising hundreds of programs that are carefully and often ingeniously aimed to have the maximum effect. (One of his hobbyhorses was to undermine censorship in Hungary by distributing photocopiers.) In the end, this anti-Marxist would-be philosopher may achieve what Marx himself wanted philosophers to do: change the world instead of merely interpreting it.

Anthony Gottlieb, executive editor of The Economist, contributed this review article to The New York Times.