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George Soros’ “New Paradigm”: The Relevance of Reflexivity

My critique of Soros’s ideas on reflexivity in my two previous blogs on this subject, and my distinction between sequential and simultaneous reflexivity, was in no way a criticism of his application of the notion of reflexivity to various public issues in his Open Society, The Age of Fallibility, and The Crash of 2008. In those works, he uses the sequential reflexivity idea to explain patterns we see in economics and politics that were unexpected when they occurred, and to predict the Crash of 2008 before it occurred. I think Soros’s work, even if it has not supported the idea of simultaneous reflexivity, has shown that sequential reflexivity, whether a new idea of not, is a tool for thinking about economics and politics that cannot be neglected. There is a very dynamic relationship between our beliefs and what we do, and we often try to change reality, in order to confirm what we believe, and even want to believe. And that’s why I think his applications of sequential reflexivity to various social phenomena are valuable, despite his conceptual problems with “reflexivity.” His pleas in book after book to get us to attend to “reflexivity,” and his examples emphasizing sequential reflexivity, heighten our awareness that our commitments to certain views of the way world is, will affect the way the world is, and require us to think through very carefully what claims about the world we ought to be making.

One sphere, where people are aware of “reflexivity” and its great importance, is the area of pronouncements by important Government officials describing the current state and likely future of the economy. We’re all aware of how the News Media hangs on every word spoken by the Federal Reserve Chairman, and of the importance of how that sort of economic message is crafted to reflect just the right amount of optimism and pessimism, appropriate to a situation to have the desired effect. To be really good at such pronouncements, a Federal Reserve Chairperson has to think through likely reactions to her/his pronouncements and also the ripple effect of those reactions throughout the economy and the political system. Presidents must and do do the same thing, with varying degrees of effectiveness as well, depending on the President, as well.

President Obama is currently walking a fine line of speaking favorably about the end of panic on Wall Street and the appearance of some more hopeful values of key economic indicators, while at the same time speaking with a measure of pessimism about the immediate future of the employment picture, while expressing sympathy for those suffering on Main Street, confidence that employment too will recover, and also confidence in the idea that a new economic stimulus may not be necessary. While the President hopes that expressions like this will continue the Wall Street recovery and calm the financial markets, he also hopes and evidently believes that the political cost he pays by not doing very much to help Main Street is not so great that it ruins his presidency. So, the President clearly is very sensitive to reflexivity in the area of the economy, and with it to the likely effect of his expressions on Main Street. But whether his calculations of likelihood are in error or not, is another matter.

President Obama mobilized very intense support from a vocal progressive minority looking for substantial changes in both economics and politics during the election campaign, and he took office in the midst of a very hopeful revivalist sentiment about the future course of American Democracy. A lot of people thought that the President’s mailing list of 13 million souls, coupled with his communications ability and movement organizations outside the government would be a valuable resource for him in mobilizing public opinion in back of his major legislative initiatives. However, the President apparently decided to de-activate the popular movement for change and to try to effect change by working with Washington and Wall Street insiders. On issue after issue the President has refused to mobilize progressives to back progressive solutions to problems, and has, instead preferred to work out “compromise legislation,” or proceeded with non-representative institutions like the Federal Reserve to try to re-inflate the old financial system, while talking about the need for regulation and reform.

In thinking through the way he’s defined reality in issue area after issue area, the President has either not calculated the progressive reaction to his version of reality and his actions, or has underestimated the effects on the progressives of his choices. The expression is often heard that “progressives have nowhere to go except to support Obama.” But the very statement of this view may have unfortunate reflexive consequences, since the effects overall of his public views, have been to loosen the bonds between he and the progressives that were forged during the campaign. This raises the question of whether the progressives will be there when he think he needs them and wants to call, again, on the movement.

In the past, progressives were not there for Administrations that frustrated them. Specifically, they were not there for Jimmy Carter in 1980; and they were not there for Hubert Humphrey in 1968. Also, in reflexive movement situations we’re not always talking about black and white reactions to Administration changes in direction. All it takes to lose a movement is to destroy its trust and kill its enthusiasm. Once you do that it’s very difficult to get movement support back with promises, and vague and up-lifting words. Once trust is lost and enthusiasm for the leader of a movement has waned, the leader must then do something concrete to persuade people that he/she again deserves that trust and support. Until that happens the movement, which is not, after all, a machine, won’t work for the leader again.

I think we may be seeing that phenomenon now in the area of health insurance reform. For years progressives have favored and worked toward a Medicare for All, single payer solution to the insurance problem. The President, in his wisdom, decided to take Medicare for All off the table. He did this because he made a political calculation that single payer could not be passed, and that a public option plan would be more palatable in the Congressional context. He made this judgment without real consultation with movement progressives, and evidently on the advice of a few of his high-level advisors who told him that if progressives didn’t like it “they have nowhere else to go.”

Now we are well into a great political struggle. The public option idea hasn’t been received too well. Among the people, it’s not clearly understood and seems to be distrusted, even though in theory 76% support a robust public option. In Congress, it hasn’t really gained any additional support over what could have been expected for Medicare for All. Among the vested interests, whether or not they’d rather have a public option than single payer, they’ve scarcely fought the prospect any less hard, than they would have had Medicare for All been the proposal on the table.

Among the progressives, themselves, the reaction to the public option has been split. Those who buy the idea that Medicare for All could never pass are supporting public option plans in the best way they can; but those who think that it was possible to pass single payer, if only everyone had lined up behind it, feel betrayed by the President, and believe their views were ignored in making the decision to take single payer “off the table.” In assessing this feeling of betrayal, supporters of the public option tend to rail at Medicare for All supporters for being irrational and for not moving on to advocate a public option along with themselves. But Medicare for All supporters believe, in their turn, that public option supporters are the irrational ones to rely on a policy alternative that is new, untried, weak in its economic theory, difficult to explain to people, has no successful precedents to point to, allows so many variants with so many varying impacts that it’s subject to easy manipulation during the legislative process by opponents who want to render it ineffective, and is so much more expensive than Medicare for All, on a per person basis.

Whichever side of this is right in its complaints, or whether neither are right, the effect of the disagreement between public option and Medicare for All progressives about what is or is not feasible, has resulted in a split in the movement, which would not have been there if both public option and single payer plans were still on the table. If both were being considered seriously in the Congress, no progressives would be disillusioned with the legislative process, and all would be strongly involved in the battle for health insurance reform, because if it did turn out that Medicare for All, was, in the event, not feasible, single payer progressives would be able to recognize that a reality they had tested for themselves had rejected single payer, and that they must, reluctantly, move on to the public option.

The bottom line is that failure to adequately consider reflexivity, in asserting without proof, that Medicare for All is not feasible, and then taking it off the table, has caused a split in the movement, and a big reason why, when the President now turns to the progressive movement for the kind of support he received in the campaign from its members, he will probably get far less than the enthusiastic response he is hoping for.

The other reason why he will probably receive less support than he expects, is the larger context in which he is calling on the movement for support. That context, once again, is made up of the views he’s expressed, and the policies he’s adopted in many other areas since his inauguration. It’s not just health insurance reform that’s at issue when the President asks for support. It’s whether he can be trusted to back a progressive solution, even a good public option solution, if progressives do mobilize for him now.

Given his record of supporting relatively ineffective middle of the road solutions in so many areas, and his record on transparency, torture, and insistence on the primacy of state secrets, why should progressives believe that he will insist on a solution that solves the problems created by the health insurance industry, rather than just use our support to get a bad bill that he can spin to get re-elected? And why should we support the passage of a bad bill that hurts the very core of the progressive message, the gold coin of progressivism; namely that when the American people act together through their Government, that Government, functioning as the embodiment of the people, can be effective in helping us to solve our problems?

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Joseph M. Firestone, Ph.D. is Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director and co-Instructor of KMCI’s CKIM Certificate program, as well as Director of KMCI’s synchronous, real-time Distance Learning Program. He is also CKO of Executive Information Systems, Inc. a Knowledge and Information Management Consultancy.

Joe is author or co-author of more than 150 articles, white papers, and reports, as well as the following book-length publications: Knowledge Management and Risk Management; A Business Fable, UK: Ark Group, 2008, Risk Intelligence Metrics: An Adaptive Metrics Center Industry Report, Wilmington, DE: KMCI Online Press, 2006, “Has Knowledge management been Done,” Special Issue of The Learning Organization: An International Journal, 12, no. 2, April, 2005, Enterprise Information Portals and Knowledge Management, Burlington, MA: KMCI Press/Butterworth-Heinemann, 2003; Key Issues in The New Knowledge Management, Burlington, MA: KMCI Press/Butterworth-Heinemann, 2003, and Excerpt # 1 from The Open Enterprise, Wilmington, DE: KMCI Online Press, 2003.

Joe is also developer of the web sites,,, and the blog “All Life is Problem Solving” at, and He has taught Political Science at the Graduate and Undergraduate Levels, and has a BA from Cornell University in Government, and MA and Ph.D. degrees in Comparative Politics and International Relations from Michigan State University.