1 Personal Involvement
Before I present the framework, I must give a brief account of my own activities. I cannot guarantee the historical accuracy of every detail, especially when it comes to dates, because I deliberately did not make any notes or keep documents. I was more interested in the things I was doing than in watching myself doing it. I sensed a trap in observing my own activities that I was anxious to avoid. Perhaps for that reason, I have an atrocious memory. I seem to have trained myself to look forward rather than backward.
My involvement began about ten years ago. I was a successful manager of an international investment fund and I was making more money than I had use for. I began to think about what I should do with it. The idea of setting up a foundation appealed to me because I had always felt that one should do something for other people if one could afford it. I was a confirmed egoist but I considered the pursuit of self interest as too narrow a base for my rather inflated self? If truth be known, I carried some rather potent messianic fantasies with me from childhood which I felt I had to control, otherwise I might end up in the loony bin. But when I had made my way in the world I wanted to indulge myself in my fantasies to the extent that I could afford.
As I looked around me for a worthy cause. I ran into difficulties. I did not belong to any community. As a Hungarian Jew I had never quite become an American. I had left Hungary behind and my Jewishness did not express itself in a sense of tribal loyalty that would have led me to support Israel. On the contrary, I took pride in being in the minority, an outsider who was capable of seeing the other point of view. Only the ability to think critically and to rise above a particular point of view could make up for the dangers and indignities that being a Hungarian Jew in the Second World War had inflicted on me. I realized that I cared passionately about the concept of an open society in which people like me could live in freedom without being hounded to death. Accordingly, I called my foundation the Open Society Fund, with the objective of making open societies viable and helping to open up closed societies.
I had considerable reservations about charitable activities. I had had a formative experience as an impecunious student in London. I had gone to the Jewish Board of Guardians to ask for financial assistance but they turned me down, saying that they did not support students, only young men who took up a trade. One Christmas I was working on the railroad as a porter and I broke my leg. This was the occasion to get money out of those bastards, I decided. I went to them and I lied to them. I told them that I was working illegally when I broke my leg and I was therefore not eligible for National Assistance. They could not refuse me, but they gave me a hard time. They made me climb up three flights of stairs, on crutches, every week to collect my money. At the same time, a friend of mine was also receiving assistance from them. He was playing them along; he was willing to learn a trade but he kept on losing his job. After a while, they refused to help me any more. I wrote the chairman of the Board of Guardians a heart-rending letter. I shall not starve, I said; it only hurts me that this is how one Jew treats another in need. The chairman offered to send me the weekly allowance without my having to come to the office. I graciously accepted and, long after the plaster had come off my leg and I had taken a hitchhiking trip to the south of France I informed them that I was no longer in need of their assistance.
I learned a lot from this experience, which stood me in good stead when I had a foundation of my own. I learned that it is the task of the applicant to get money out of a foundation and it is the task of the foundation to protect itself. The Jewish Board of Guardians investigated me thoroughly, but failed to discover that I was also drawing National Assistance benefits. That is what enabled me to write with such moral indignation to the chairman although I was cheating. I also discovered that charity, like all other human endeavors, can have unintended consequences. The paradox of charity is that it turns the recipients, like my friend, into objects of charity. There are two ways to overcome these difficulties. One is to become very bureaucratic like the Ford Foundation, and the other is not to be visible at all - to make grants without inviting applications and to remain anonymous. I chose the latter alternative.
My first major undertaking was in South Africa in 1979 where I identified Capetown University as an institution devoted to the ideal of an open society. I established scholarships for black students on a scale large enough to make an impact on the university. The scheme did not work as well as I had hoped because the university was not quite as openminded as it claimed to be and my funds were used partly to support students already there and only partly to offer places to new students. But at least it did no harm.
I became moderately active in human rights as a member and supporter of Helsinki Watch and Americas Watch. My newly created Open society Fund also offered a number of scholarships in the United States to dissident intellectuals from Eastern Europe, and this was the program that led me to establish a foundation in Hungary. Selecting candidates became a problem after a while because we had to go by word of mouth and that did not seem to be the fairest arrangement. It occurred to me that it would be advantageous to set up a selection committee in Hungary and have a public competition. I approached the Hungarian Ambassador in Washington, who contacted his government and, to my great astonishment, I got a positive reply.
When I went to Hungary to negotiate, I had a secret weapon at my disposal: the recipients of Open Society scholarships were ready and eager to help. On the government side, my negotiating partner was Ferenc Barta1, who was concerned with foreign economic relations and looked on me as an expatriate businessman whom he was anxious to accommodate. He introduced me to the Hungarian Academy of Sciences and we concluded an agreement between the academy and the newly established Soros Foundation in New York (Open Society Fund was considered too controversial a name). We established a joint committee with an official of the academy and myself as co-chairmen. The rest of the members were independent-minded Hungarian intellectuals, approved by both parties. Both parties had the right of veto over the decisions of the committee. There was also to be an independent secretariat operating under the aegis of the academy.
I was very lucky in the selection of my associates. I took as my personal representative Miklos Vasarhelyi, who had been the press representative of the Imre Nagy government of 1956 and had been tried and sentenced together with Imre Nagy. He was currently working as a researcher in an academic institute and, although he could not be an official member of the committee, he was accepted as my personal representative. He was an elder statesman of the unofficial opposition but, at the same time, he also enjoyed the respect of the officials. I also had a very good lawyer, Lajos Dornbach, who was completely devoted to the cause, as well as a number of other people who understood the purpose of the foundation better than I did.
We had some very hard negotiations both before and after the signing of the agreement. The officials thought that they were dealing with a well-meaning expatriate, the proverbial American uncle, whom they could humor and take advantage of. Having an independent secretariat became a particular sticking point. The officials' idea was that the committee would make its decisions, the secretariat would take notes, and then pass on the decisions to the relevant authorities for execution. The relevant authorities were, of course, an integral part of the internal security system. Matters came to a breaking point. I went to see Gyorgy Aczel, the unofficial cultural czar of Hungary and General Secretary Kadar's close advisor. I told him, `We can't agree; I am packing up.' He said, `I hope you are not leaving with bad feelings.' I replied that I could not help being disappointed, having put so many months into the negotiations. We were at the door when he asked, `What is it you really need to make the foundation work?' `An independent secretariat.' `Let me see what I can do.' We arrived at a compromise: we could have our independent secretariat, but the Academy also had to be represented and communications had to be signed both by the academy's representative and our secretary.
When I interviewed the candidate for the position of executive secretary put forward by the academy, I said to him, `You will have a tough job serving two masters.' `Only two?' he replied, which I understood to imply that he also had to report to the security agencies. After that, we had a good working relationship. One of the members of the secretariat chosen by me had lost his job because of his political activities. The official side protested against employing him, saying he had a `spot' on his character. But they allowed him to remain on a temporary basis. After a year, he was made co-equal with the official member of the Secretariat and they have worked together amicably ever since.
The foundation announced a number of grant opportunities, including an open invitation for projects that were independent and innovative in character. We looked for ways to convert dollars into Hungarian currency. Perhaps our most successful program was providing Xerox machines to public libraries and academic institutes against payment in forints. We then used the forints to give grants locally. We established scholarships for writers and social scientists but, ironically, we were not allowed to give out grants for foreign travel because that was the monopoly of an official scholarship committee, tightly controlled by the security agencies. I continued to give out scholarships through the Open Society Fund, alongside the activities of the Soros Foundation, and I made no secret of it. Eventually, the Ministry of Education which controlled official scholarships capitulated. We agreed that applications would have to be submitted in duplicate and the grants awarded by our independent scholarship committee would be approved automatically by the official one.
We were lucky that the propaganda apparatus of the Communist party put a ban on publicity concerning the activities of the Soros foundation. We were allowed to advertise in newspapers and publish an annual report in accordance with our agreement, but that was all. As a result, the public became aware of our existence only gradually, and then only in connection with some activity that we were supporting. We made a policy of supporting practically any initiative that was spontaneous and non-governmental. We gave grants to experimental schools, libraries, amateur theatrical companies, the zither players' association, voluntary social organizations, artists and art exhibitions, as well as cultural and research projects. The name of the foundation kept on cropping up in the most unexpected places. The foundation attained a mythical quality exactly because it received so little publicity. For those who were politically conscious, it became an instrument of civil society; for the public at large, it was manna from heaven.
We carefully arranged our activities so that the programs that would be considered constructive by the government outweighed those that would be regarded with suspicion by the authorities in charge of ideology. The attitude of the authorities was divided. Those concerned with economic matters were generally in favor; those with culture, against. Only rarely did we run into serious objections. When we did, it merely spurred us on. Doing good may be noble, but fighting evil can be fun.
One of these conflicts occurred in the fall of 1987. Apparently, General Secretary Kadar himself became angry when he read about one of our grants in the weekly newspaper that took it on itself to publish our awards regularly. It was for a historical study that might have showed him in an unfavorable light. The weekly was forbidden to continue reporting our activities. At the same time, the Minister of Culture sent out a circular forbidding educational institutions from applying to the foundation directly without checking with the ministry first. I protested both these actions and, when I received no satisfaction, I announced that I would not visit Hungary and the foundation would make no new awards until the matter was settled. Then came the stock-market crash of October 1987 and a reporter from the Hungarian radio interviewed me by telephone and asked me whether I was closing the foundation because I had lost my fortune. I explained to him the reasons why I refused to go to Hungary. It was a misunderstanding, I said, which was sure to be cleared up soon. The interview was broadcast and the authorities were embarrassed. I gained my points and paid a visit to Hungary; but, while I was meeting with the Prime Minister, the head of the propaganda department, Mr Berec, personally imposed a ban on any interviews with me. The ban was broken within the week when Moscow TV reported my visit to President Gromyko in the Kremlin and, according to communist etiquette, Hungarian TV replayed it in Budapest. I was amused.
With the passage of time we developed a keener sense of priorities. Miklos Vasarhelyi laid particular stress on youth programs. We supported a number of self governing student colleges (faculty dormitories where students instituted their own educational programs). They later became the home bases for the Association of Young Democrats, which played a major role in the transition to democracy.
It is not for me to evaluate the social and political significance of the foundation. I can only give a subjective judgement. We succeeded beyond my wildest expectations. It became an efficient, smooth-working organization full of spirit. After the initial start-up period, I did not have to spend much time on it at all; it ran all by itself. It was a real pleasure to make decisions in the knowledge that they would be carried out. It was an even greater pleasure to encounter the foundation at work in ways that I was not even aware of. Once, on a flight from Budapest to Moscow, I sat next to a gypsy who was unusually well-educated. He was an ethnographer collecting gypsy folkdances. When I mentioned my name, he told me he was travelling on a foundation scholarship. At the airport in Moscow I ran into some eighteen Hungarian economists who were on the way to China on a foundation-sponsored study tour. It made my day.
Encouraged by the success of the Hungarian foundation, I put out feelers to find out whether China might be ready for a similar one. I met Liang Heng, author of Liang Heng, author of The Son of the Revolution2, in the spring of 1986, just before he returned to China for a visit. He established good contacts among the reformers and, as a result, the Hungarian foundation invited eighteen Chinese economists to come and study the reform process in Hungary and Yugoslavia. The visit was very successful because the real contacts were arranged outside official channels and the Chinese economists gained very good insights. I met them in Hungary and discussed the concept of a foundation with Chen Yizi, head of the Institute for Economic Reform. Subsequently, I went to China with Liang Heng, who became my personal representative, and set up a foundation on the Hungarian model with Chen Yizi's institute as my partner. Boo Tung, Communist party General Secretary Zhao Ziyang's principal secretary, cut through the red tape and approved the foundation on the spot.
Both he and the foundation got into a lot of trouble as a consequence because his political enemies tried to use the foundation as a vehicle for attacking him. They prepared an elaborate dossier which claimed that I was a CIA agent and anti-Communist conspirator. Boo Tung counter-attacked and presented voluminous information about my other foundations to prove my good faith. That was not too difficult because I had always been very open about my intentions and by 1987 I had also established a foundation in Moscow. Gromyko himself had put the seal of approval on it by officially receiving me in the Kremlin. Nevertheless, some high party council decided to liquidate the foundation and refund the money. It took the personal intervention of Zhao Ziyang to rescind the decision. He arranged for Chen Yizi to resign as cochairman and for the International Cultural Exchange Center, whose chairman turned out to be a high official in the security service, to take over as our host organization.
I was not fully aware of these behind-the-scenes maneuvers, but I was not satisfied with the way the foundation was operating. I gave poor Chen Yizi a hard time for keeping too much of the money for his own institute and I was naive enough to be pleased when he relinquished control. But the foundation did not function any better under the new regime.
I was appalled when I was taken to visit one of our projects: a mobile library unit operated by the Young Pioneers. It was a formal affair, the children in uniform, the instructors stiff, meaningless speeches, the children forming a tableau vivant to demonstrate the use of the library. What was worst, the secretary of the foundation was so pleased that she had tears in her eyes.
I began to hear some adverse comments from people who had dealings with the foundation. Finally, a Chinese grant recipient told me that the foundation was being run by the security agency. Soon thereafter, Zhao Ziyang was removed from power and I used that excuse to suspend operations in China.
After the crackdown in Tiananmen Square, the foundation figured prominently in the accusations against Zhao Ziyang and Bao Tung. There were three charges against Zhao. One was `bourgeois deviationism,' for being too soft on the students; another was betraying state secrets, for telling Gorbachev that Deng Xiaoping still wielded the ultimate power; and, finally treason, for allowing the foundation to operate. Treason is always a capital charge. When I heard about this from Chen Yizi, who had escaped3, I wrote Deng Xiaoping a letter offering to clear my name by going to China or providing them with any information they might need. My letter was printed in the widely circulated Digest of Party Documents, which indicated that the charge was dropped. It was all a very unpleasant experience.
It became clear to me in retrospect that I had made a mistake in setting up a foundation in China. China was not ready for it because there was no independent or dissident intelligentsia. The people on whom I based the foundation were members of a party faction. They could not be totally open and honest with me because their primary obligation was to their faction. The foundation could not become an institution of civil society because civil society did not really exist. It would have been much better to make an outright grant to Chen Yizi's institute, which deserved support.
Conditions will change after the revolt of 1989. Prior to the Tiananmen Square massacre, anybody who wanted to change society had to operate within the party. There was little room for a dissident, independent intelligentsia because society was totally subservient to the party and would not have tolerated them. But after the massacre the party lost the confidence of the people. Those who are expelled from the party or lose their jobs will be able to survive because society will support them. That will be the beginning of an independent dissident intelligentsia.
Seen from this perspective, the Chinese revolution of 1989 was the equivalent of the Hungarian revolution of 1956. I hope it will not take as long in China for the revolution to bear fruit as it did in Hungary. Hungary was closed to the outside world, but China remains open. With fax machines and foreigners around, it will not be possible to re-establish the rigid thought control that prevailed previously. China has become too dependent on foreign trade and foreign investment to return to a closed society. The hard-liners cannot last very long.
Not long after China, I also established a foundation in Poland. The Open Society Fund had been operating a very successful Polish scholarship and visiting fellowship scheme at Oxford University under the direction of Dr. Zbigniew Pelczynski, and it was also supporting other Polish causes. Pelczynski, who visited Hungary regularly, persuaded me to try my hand in Poland.
I thought it would be easy: Pelczynski was ready to negotiate with the government and I had my own contacts with civil society. It did not work out that way. The Polish participants insisted that the foundation should be totally independent of the government and I respected their wish. The foundation was established, but it could not function; it could not even find office space. The members of the board attended meetings but very little was accomplished. There was also a deep disagreement amongst the board about the direction the foundation ought to be taking. Some members wanted to concentrate on academic activities; others envisaged a broader role. Without clear direction, the foundation failed to establish itself as an instrument of civil society.
I was aware of the problem, but I did not have the time or energy to deal with it. When Solidarity came to power, I asked the Board to resign and put the foundation into the hands of a new team headed by Zbigniew Bujak, erstwhile leader of Solidarity in Warsaw, who will, I hope, make it work.
I visited Warsaw only occasionally, for a day or two at a time. Even so, I established close personal contact with Walesa's chief adviser Bronislaw Geremek almost instantaneously. I was also received by General Jaruszelski, the Prime Minister, to obtain his blessing for the foundation. We had a very interesting conversation. I suggested that he should sit down and negotiate with Solidarity. He said he was willing to talk with practically anybody and was, in fact, trying to arrange a dialogue through the Church; but the leaders of Solidarity were traitors who got the Western powers to impose economic sanctions on Poland and he would have nothing to do with them. I told him that I had met Geremek and he had a very positive attitude towards reaching some kind of compromise exactly because the economy was in such a bad shape and people were becoming disaffected. He knew a great deal more about Geremek than I did. `He changed his religion when he was a mature man; he could not have done that out of conviction,' he said. 'I had changed my views too, but I did it when I was a youth.' I said that it was a great pity that he had such strong personal feelings because it would prevent him from reaching a compromise. In a democracy, you can govern with less than 50 percent of the vote but when you have no democracy you must have the entire population with you. And without Solidarity that was not possible. I told him that Solidarity would be taking a tremendous risk if it entered into negotiations because any economic program would involve severe cut-backs in heavy industry and it would hurt the workers who provided Solidarity's muscle. Nevertheless, they were willing to take the chance because they were concerned with the future of Poland as a country. The argument about the political risks that Solidarity would be running made a deep impression on him because, as I found out later, he repeated it at the Politburo meeting the next day.
My foundation was named after Stefan Batory, a Hungarian nobleman who became King of Poland and beat the Russians at war. On the way out, the interpreter told me about a famous saying of Stefan Batory's: `You can do much for the Poles, but you cannot do much with the Poles.' I felt the foundation was aptly named.
