The fourth lecture in this series is George Soros Lecture Series: Capitalism vs. Open Society.

Open Society Foundations chairman and founder George Soros shares his latest thinking on economics and politics in a five-part lecture series recorded at Central European University, October 26-30, 2009. The lectures are the culmination of a lifetime of practical and philosophical reflection.

Soros discusses his general theory of reflexivity and its application to financial markets, providing insights into the recent financial crisis. The third and fourth lectures examine the concept of open society, which has guided Soros’s global philanthropy, as well as the potential for conflict between capitalism and open society. The closing lecture focuses on the way ahead, examining the increasingly important economic and political role that China will play in the future.

This lecture identifies another issue that interferes with the best functioning of society, and that is the agency problem. Again, another astute analysis of yet another issue. This covers a lot of issues in our societal problems that had been missing in the previous lectures, but my hopes for a feasible proposal for a cure for the problem are fading.

One of the things that George Soros fails to address explicitly is that a lot of the thinking that went into the creation of the USA Constitution had to do with ethical considerations. Our Supreme Court of late has taken a decided turn to dismissing ethical issues, even to the point of pretending that there are no ethical issues involved. For example, in the Citizens United Case, some Supreme Court Justices opined that they couln’t imagine that money in politics could be a corrupting influence.

Here is a quote from the article Money in Politics After Citizens United: Troubling Trends & Possible Solutions.

The Court, in holding that corporations have the same right to engage in independent spending as natural persons, naively stated that political spending can only corrupt if it is directly coordinated with a candidate’s campaign.

The trouble with this interpretation is that you know that the Supreme Court Justices cannot possibly be that naive. Another interpretation for what they said is that the Supreme Court Justices are just as corrupt as other elements in our government. Another piece of evidence for seeing the agency problem as a corrupting influence.

If you want to go back to the beginning of this lecture series, see my previous post Soros: General Theory of Reflexivity

George Soros Lecture Series: Capitalism vs. Open Society Q&A.

I have to disagree a little with the idea that the inflation of the 1970s discredited Keynesian Theory because of flaws in the theory. If there was any discrediting of Keynes, it was because of the absence of thoughtful or courageous enough people to apply what Keynes taught (or at least what I had been taught about Keynesian theory). In fact, I believe that Ronald Reagan helped put a stop to the inflation by applying Keynesian theory. Ronald Reagan had the courage (or insensitivity) to drive us into such a deep recession that excess consumer demand was stopped in its tracks. It was the likes of Lyndon Johnson who thought we could blow up our resources in fighting the war in Viet Nam, and at the same time use those resources to fight poverty in the USA. There were not enough real resources to do both at the same time. Nixon could not control inflation either because he continued the over stimulation of the economy in the same way Johnson had done it. Carter was politically undone, because some of the damage was being done to the consumers. Reagan was fortunate to be able to do the damage and get it somewhat over with in the early part of his administration before he confronted a re-election.

You will find the fifth and final lecture in this series in my subsequent post George Soros Lectures: The Way Ahead