5 Europe as an Open System

My analysis, based on the principles of reflexive change, led to a profoundly pessimistic conclusion. It appears as if the Soviet Union, left to its own devices, would be unable to convert itself into an open society. I have reached this conclusion despite my postulate that Gorbachev regards the transformation of the Soviet Union into an open society as his primary goal, one that takes precedence over all other objectives including his own survival, let alone the survival of the Soviet empire. The conclusion seems to be at loggerheads with my static framework in which open and closed societies were presented as if they were alternatives, with each system offering what the other one lacks:

An intriguing thought strikes me. Perhaps Gorbachev has used as his frame of reference the same static framework that I presented in this book. It would explain why he devoted all his energies to dismantling the constraints of the existing system and seemed to have a blind faith that everything would be all right if only he could liberate people's creative energies.

The thought is not as far-fetched as it seems. I constructed the static framework in the 1950s, when Gorbachev was in a similarly formative period, and I derived it from my experience of the same system in which he lived. The framework served as the basis of the Soros Foundation - Hungary and the people in Hungary understood the purpose of the foundation even better than I did. Moreover, my conclusion that an open society cannot be brought into existence merely by removing the constraints of a closed society is ex post facto; it is based on seeing the results of Gorbachev's actions. With the benefit of hindsight, it is clear where Gorbachev's perception was flawed: he believed that breaking the hegemony of dogma would be sufficient to convert the Soviet Union into an open society; he failed to take into account the long, painstaking learning process that would be needed to turn open society into reality. Had I been in his place, I would not have known any better. After all, I relied on a theoretical framework which treats open and closed societies as alternatives when I decided to set up my foundations.

Although he never speculated in financial markets, Gorbachev seems to have a fine understanding of the principles of reflexive change. It is part of those principles that a participant cannot fully anticipate the consequences of his actions: that is why he must take risks. I believe that Gorbachev would have taken the risks even if he could have anticipated the results. After all, some people living in an oppressive society are willing to go to almost any length to change it.

The question remains, how can the divergence between the static and the dynamic analysis be reconciled? I have already stated, in general terms, that the static models are distorted because they pretend to be timelessly valid even though history is an irreversible process. Here we have a practical demonstration of that distortion. Obviously, there is no easy transition from closed to open society. It is not enough to remove the constraints of a closed society; it is necessary to construct the institutions, laws, habits of thought, yes, even traditions of an open society. Open Society is a complex system, more complex than a closed society, exactly because its structures are not rigid but so flexible that they are hardly perceived. The construction of such a complex system requires time and energy and the process that Gorbachev has unleashed affords neither.

Revolutions are destructive in nature. They may serve to bring about a transition from an open society to a closed one that is what happened in Russia after 1917 - but they cannot, by themselves, accomplish the opposite. It usually requires a long period of gestation before the positive results of a revolution bear fruit. In Hungary, the Revolution of 1848 was followed by the Reconciliation of 1867, and the Revolution of 1956 by the first, tentative reforms in 1968 and perhaps the establishment of a fully democratic government in 1990.

What Gorbachev and I both lack is a proper theory of the growth of self-organizing complex systems. The concept of reflexivity provides the rudiments of such a theory but it lacks some vital ingredients, most notably a theory of learning (and forgetting). Without it, the transition from a closed to an open society cannot be understood, let alone master-minded. I cannot supply the missing theory in this instance; I can only note its absence.

Learning is not the simple amassing of information in the manner of a botanist collecting butterflies. It involves the organization of information, the creation of mental structures (`frames' in the terminology of computing science). These mental structures interact reflexively with the subjects to which they relate to produce a complex system which we call society. An open society is a much more complex system than a closed one. Closed society requires only one complete frame (the 'mainframe' in computer language) and individuals who develop their own frame are a source of complications, which is why they need to be suppressed. In an open society each autonomous unit needs its own frame - that is what makes them autonomous. Such units cannot be bought in shops - that is where the analogy with computers breaks down. How do such units evolve? - that is where my own framework is deficient. One thing is certain: their evolution takes time, and the lack of time creates chaos (`smutnoye vremya' or troubled times is the expression Russians use).

Revolutions are times of chaos. Chaos theory in its present stage of development is not much use in understanding revolutions, but revolutions may be useful in developing chaos theory. I believe that systems with thinking participants ought to be treated differently from non-thinking systems (unless intelligence is more widespread than we recognize). Revolutions are guided by different principles than the weather, even if the patterns are similar. [See Appendix]

I have begun to grapple with the problem of self-organizing and learning in practice. My foundations started out with the objective of destroying the monopoly of dogma but have turned into an attempt to promote self organization in closed societies. The network of foundations which is emerging is itself a prototype of an open system with each unit operating more or less autonomously. Unfortunately, the prototype is not designed to be self-sustaining - it needs constant injections of money on my part - although the institutions it seeks to support are supposed to be self-sustaining. The practice I engage in does not have a properly formulated theory behind it.

My timeless model of open society is deficient because it disregards the process of its evolution. It is a mistake to believe that a complex system can spontaneously spring into existence, even though it is the distinguishing feature of the system that it both allows and requires spontaneous, self-generated activity from its participants. There is an important lesson here about the nature of open societies: they represent a more advanced form of social organisation than closed societies and Gorbachev is not the only one who has to learn it: Western political thought is also deficient on this point.

When I first formulated my theoretical framework, in the 1950s, I could not insist on the innate superiority of open society, because it would have been too much like special pleading. The Soviet system seemed invincible and the Western alliance appeared relatively weak. The only basis for my contention would have been the assumption of imperfect understanding and assumptions cannot substitute for proof. Now, there is convincing historical evidence. But we are also discovering that the superiority of open society also has a negative aspect: it is not as easy to pass from closed to open society as the other way round. Here is the flaw in my theoretical framework: it draws a distinction between open society as ideal and as fact but it fails to recognise the difficulty of turning the ideal into fact. It is a strange oversight but I have not been alone in committing it. I believe it applies to practically all dissidents and reformers, Gorbachev included, not to mention Western thinking on the subject. I have corrected the error in practice during the evolution of my foundations but it required this book to identify it in theory.

The point needs to be emphasised because it has far-reaching implications for policy. It is a widely held view that the transformation from a totalitarian to a pluralistic society must be accomplished by the people concerned and any outside interference is not only inappropriate but probably counterproductive. This view is false. People who have been living in a totalitarian system all their lives may have the desire for an open society but they lack the knowledge and experience necessary to bring it about. They need outside assistance to turn their aspirations into reality.

The idea of assistance runs counter to the principle of laissez-faire which is so widely accepted in the English speaking world today. It goes to show that there is something wrong with the principle of laissez-faire. Free competition does not lead to the optimum allocation of resources unless the appropriate conditions have been created. That is so even though the absence of free competition leads to a woeful misallocation of resources. Markets are institutions: they need to be established. Moreover, as human constructs, they are bound to be flawed.

I have argued the point, in a different context, in The Alchemy of Finance. I demonstrated there that financial markets are inherently unstable and stability must be recognized as an objective of public policy if a breakdown is to be avoided. Here I claim that the pursuit of self-interest, by itself, will not produce a viable system. Only an unselfish dedication to the principles of open society can bring it into existence and outside assistance must also be at least partially motivated by a genuine desire to make the system work; otherwise it will not be effective. When we look at history we find that such unselfish energies are, in fact, generated at critical moments. The American Revolution is as good an example as any.

I have stressed this point in my static framework when I spoke of the deficiency of purpose as a flaw in open society. Now we can see that flaw from the other side of the fence. There is the Soviet Union, seeking to become an open society but lacking the time and energy needed to construct the necessary infrastructure; are the open societies of the West willing and able to help it over the fence? The response to this challenge will determine the fate not only of the Soviet Union but also of the open societies of the West.

We are indeed at a critical decision point. We have seen what lies ahead if the line of least resistance is allowed to prevail. Let us consider what could be accomplished if the required energies could be mobilized. I must restrain myself from getting carried away because I am dealing with hallelujah material: practically all the political aspirations of mankind are within grasp. Not only could the cold war between two opposing systems of social organization be brought to an end, but the nagging flaw of open society, its deficiency of purpose, could be overcome at least for our generation. The concept of Europe as an open society in which a multiplicity of connections prevail and frontiers lose their previous significance would provide Western society with what it lacks: an ideal which can fire people's imagination and engage their creative energies. It would fill in what is missing above the bottom line of self-interest. It would also allow mankind to address the ecological issues which are beginning to threaten its survival in a spirit of cooperation.

All this may sound like sentimental mush but that is only because we have been too often disappointed to allow ourselves to hope. People who have seen the United Nations fail cannot be roused by Gorbachev's vision, especially when the failure of the UN is due to his predecessor, Stalin. Even so, they cannot fail to respond to the breaching of the Berlin Wall, to the idealism of the gentle revolution in Prague, or the heroism of the bloody uprising in Romania. There is a new spirit abroad in the continent and it could be harnessed for constructive purposes. Even if it fails, the effort is well worth making.