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00:00OPEN SOCIETY, SO THEY WILL BE BETTER ABLE TO WITHSTAND FUTURE -- OPEN SOCIETY WILL ALWAYS HAVE ITS ENEMIES AND EACH IN A RATION HAS TO REAFFIRM ITS COMMITMENT TO OPEN SOCIETY, FOR IT TO SURVIVE. THE BEST DEFENSE IS A PRINCIPLED COUNTERATTACK. THE ENEMIES OF OPEN SOCIETY FEEL VICTORIOUS, AND THIS INDUCES THEM TO PUSH REPRESSIVE EFFORTS TO FAR, AND THIS GENERATES A RESENTMENT AND OFFERS OPPORTUNITIES TO PUSH BACK. THAT IS WHAT IS HAPPENING IN PLACES LIKE HUNGARY TODAY. I USED TO DEFINE THE GOALS OF MY FOUNDATIONS AS DEFENDING SOCIETIES FROM THEIR ENEMIES, MAKING GOVERNMENTS ACCOUNTABLE AND FOSTERING A CRITICAL MODE OF THINKING. THE SITUATION HAS DETERIORATED. NOT ONLY THE SURVIVAL OF OPEN SOCIETY BUT THE SURVIVAL OF CIVILIZATION IS AT STAKE. THE RISE OF LEADERS SUCH AS KIM JONG-UN AND DONALD TRUMP IN THE UNITED STATES HAVE MUCH TO DO WITH THIS. BOTH SEEM TO BE WILLING TO RISK A NUCLEAR WAR IN ORDER TO KEEP THEMSELVES IN POWER. THE ROOT CAUSE GOES EVEN DEEPER. MANKIND'S ABILITY TO HARNESS FORCES OF NATURE FOR CONSTRUCTIVE AND INSTRUCTIVE PURPOSES CONTINUES TO GROW. OUR ABILITY TO GOVERN OURSELVES PROPERLY FLUCTUATES. IT IS NOW AT THE LOW END. THE THREAT OF NUCLEAR WAR IS SO REND US. WE ARE INCLINED TO LOWER IT. BUT IT IS REAL. THE UNITED STATES IS SET ON A COURSE TOWARDS NUCLEAR WAR BY REFUSING TO ACCEPT NORTH KOREA HAS BECOME A NUCLEAR POWER. THIS CREATES A STRONG INCENTIVE FOR NORTH KOREA TO DEVELOP ITS NUCLEAR CAPACITY WITH ALL POSSIBLE SPEED, WHICH IN TURN MAY INDUCE THE UNITED STATES TO USE ITS NUCLEAR SUPERIORITY PREEMPTIVELY, IN EFFECT TO START A NUCLEAR WAR IN ORDER TO PREVENT AND NUCLEAR WAR. OBVIOUSLY SELF-CONTRADICTORY. THE FACT IS, NORTH KOREA HAS BECOME A NUCLEAR POWER, AND THERE IS NO MILITARY ACTION THAT CAN PREVENT WHAT HAS ALREADY HAPPENED. THE ONLY SENSIBLE STRATEGY IS TO ACCEPT REALITY, HOWEVER UNPLEASANT IT IS, AND COME TO TERMS WITH NORTH KOREA AS A NUCLEAR POWER. THIS REQUIRES THE UNITED STATES TO COOPERATE WITH ALL INTERESTED PARTIES, CHINA FOREMOST AMONG THEM. BEIJING HOLDS MOST OF THE LEVERS OF POWER AGAINST NORTH KOREA BUT IS RELUCTANT TO USE THEM. IF IT CAME DOWN TO HARD ON THEM, THE REGIME COULD COLLAPSE AND CHINA WOULD BE FLOODED BY NORTH KOREAN REFUGEES. BEIJING IS RELUCTANT TO DO ANY FAVORS FOR THE UNITED STATES, SOUTH KOREA, OR JAPAN AGAINST EACH OF WHICH IT HARBORS A VARIETY OF GRUDGES. ACHIEVING COOPERATION WILL REQUIRE EXTENSIVE NEGOTIATIONS. ONCE IT IS OBTAINED, THE ALLIANCE WOULD BE ABLE TO CONFRONT NORTH KOREA WITH BOTH STAKES. IT COULD BE USED TO ENTER NEGOTIATIONS AND THE CARROTS, TO REWARD IT FOR SUSPENDING FURTHER DEVELOPMENT OF NUCLEAR WEAPONS. THE SOONER A SO-CALLED FREEZE FOR FREEZE AGREEMENT CAN BE REACHED, THE MORE SUCCESSFUL THE POLICY WILL BE. SUCCESS CAN BE MEASURED BY THE AMOUNT OF TIME IT WOULD TAKE NORTH KOREA TO MAKE THE NUCLEAR ARSENAL FULLY OPERATIONAL. I WOULD LIKE TO DRAW YOUR ATTENTION TO TWO REPORTS JUST PUBLISHED UNDER PROSPECTS OF A NUCLEAR WORLD WAR IN NORTH KOREA. THE OF THEIR A MAJOR THREAT TO THE SURVIVAL OF OUR CIVILIZATION IS CLIMATE CHANGE. WHICH IS ALSO A GROWING CAUSE OF FORCED MIGRATION. I HAVE FELT -- I HAVE DOUBT WITH THE PROBLEMS OF MIGRATION AT GREAT LENGTH ELSEWHERE. I MUST EMPHASIZE HOW SEVERE AND INTRACTABLE THOSE PROBLEMS ARE. I DON'T WANT TO GO INTO DETAILS ON CLIMATE CHANGE EITHER. WE KNOW WHAT NEEDS TO BE DONE. WE HAVE THE SCIENTIFIC KNOWLEDGE. IT IS THE POLITICAL WILL THAT IS MISSING, PARTICULARLY IN THE TRUMP ADMINISTRATION. CLEARLY, I CONSIDER THE TRUMP ADMINISTRATION A DANGER TO THE WORLD, THAT I'VE REGARDED AS A TEMPORARY PHENOMENON THAT WILL DISAPPEAR IN 2020, OR EVEN SOONER. I GIVE PRESIDENT TRUMP CREDIT FOR MOTIVATING HIS CORE SUPPORTERS BRILLIANTLY. BUT FOR EVERY COURSE OF BORDER HE HAS TREATED -- CREATED A GREATER NUMBER OF CORE OPPONENTS, WHO ARE STRONGLY MOTIVATED. THAT IS WHY I EXPECT A DEMOCRATIC LANDSLIDE IN 2018. MY PERSONAL GOAL IN THE UNITED STATES IS TO HAVE A REESTABLISHMENT OF A FUNCTIONING TWO-PARTY SYSTEM. THIS WILL REQUIRE NOT ONLY A LANDSLIDE IN 2018, BUT ALSO A DEMOCRATIC PARTY THAT WILL AIM AT REDISTRICTING, THE APPOINTMENT OF QUALIFIED JUDGES , PROPERLY CONDUCTED SENSES, AND OTHER MEASURES THAT A FUNCTIONING TWO-PARTY SYSTEM REQUIRES. I WANT TO SPEND MY REMAINING TIME ON ANOTHER GLOBAL PROBLEM. THE RISE OF THE GIANT I.T. PLATFORM COMPANIES. THESE COMPANIES HAVE OFTEN PLAYED AN INNOVATIVE AND LIBERATING ROLE. AS FACEBOOK AND GOOGLE HAVE GROWN, EVERMORE POWERFUL MONOPOLIES. THEY HAVE BECOME OBSTACLES INNOVATION AND THEY HAVE CAUSED A VARIETY OF PROBLEMS OF WHICH WE ARE ONLY NOW BEGINNING TO BECOME AWARE OF. COMPANIES EARN PROFITS BY EXPLOITING THEIR ENVIRONMENT. MINING AND OIL COMPANIES EXPLOIT THE PHYSICAL ENVIRONMENT. SOCIAL MEDIA COMPANIES EXPLOIT THE SOCIAL ENVIRONMENT. THIS IS PARTICULARLY NEFARIOUS BECAUSE SOCIAL MEDIA COMPANIES INFLUENCE HOW PEOPLE THINK AND BEHAVE WITHOUT THEM BEING AWARE OF IT. THIS HAS FAR-REACHING ADVERSE CONSEQUENCES ON THE FUNCTIONING OF DEMOCRACY, PARTICULARLY ON THE INTEGRITY OF ELECTIONS. THE DISTINGUISHING FEATURE OF INTERNET PLATFORMS IS THAT THEY ARE NETWORKS, AND THEY ENJOY RISING MARGINAL RETURNS, AND THAT ACCOUNTS FOR THE PHENOMENAL GROWTH. THE NETWORK OF FACT IS UNPRECEDENTED AND TRANSFORMATIVE BUT IT IS ALSO UNSUSTAINABLE. IT TOOK FACEBOOK EIGHT AND A HALF YEARS TO REACH THE FIRST BILLION USERS. HALF OF THAT TIME TO REACH THE SECOND BILLION. AT THIS RATE FACEBOOK WILL RUN OUT OF PEOPLE TO CONVERT IN LESS THAN THREE YEARS. FACEBOOK AND GOOGLE EFFECTIVELY CONTROL OVER HALF OF ALL INTERNET ADVERTISING. TO MAINTAIN THEIR DOMINANCE THEY MUST EXPAND THEIR NETWORKS AND INCREASE THEIR SHARE OF USERS ATTENTION. THEY DO THIS BY PROVIDING USERS WITH A CONVENIENT PLATFORM. THE MORE TIME USERS SPEND ON THE PLATFORM THE MORE VALUABLE THEY BECOME TO THE COMPANIES. A CONTENT PROVIDER ALSO CONTRIBUTE TO THE PROFITABILITY OF SOCIAL MEDIA COMPANIES BECAUSE THEY CAN'T AVOID USING THE PLATFORM, AND THEY HAVE TO ACCEPT WHATEVER TERMS THEY ARE OFFERED. THE PROFITABILITY OF THESE CONFIDENCE COMPANIES -- COMPANIES IS LARGELY A FUNCTION OF THEIR OF AVOIDING RESPONSIBILITY FOR THE CONTENT OF THEIR PLATFORMS. THEY CLAIM THEY ARE MERELY DISTRIBUTING INFORMATION. THE FACT THAT THEY ARE NEAR ONE OF THE DISTRIBUTORS MAKE THEM INTO PUBLIC UTILITIES. THAT SHOULD SUBJECT THEM TO MORE STRINGENT REGULATIONS AIMED AT PRESERVING COMPETITION, INNOVATION AND FAIR AND OPEN UNIVERSAL ACCESS. THE BUSINESS MODEL OF SOCIAL MEDIA COMPANIES IS BASED ON ADVERTISING. THEIR TRUE CUSTOMERS ARE THE ADVERTISERS. GRADUALLY, A NEW BUSINESS MODEL IS EMERGING BASED NOT ONLY ON ADVERTISING BUT SELLING PRODUCTS AND SERVICES DIRECTLY TO USERS. THEY EXPORT DATA THEY CONTROL, BUNDLED THE SERVICES THEY OFFER, AND USE DISCRIMINATORY PRICING TO KEEP FOR THEMSELVES MOST OF THE BENEFITS THAT OTHERWISE WOULD HAVE TO BE SHARED WITH CONSUMERS. THIS ENHANCES THEIR PROFITABILITY BUT EVEN FURTHER -- BUT THE BUNDLING OF SERVICES AND DISCRIMINATORY -- UNDERMINES THE EFFICIENCY OF THE MARKET ECONOMY. SOCIAL MEDIA COMPANIES DECEIVE USERS BY MANIPULATING THEIR ATTENTION AND DIRECTING IT TOWARDS THEIR OWN COMMERCIAL PURPOSES. THEY DELIBERATELY ENGINEER ADDICTION TO THE SERVICES THEY PROVIDE. THEY CAN BE HARMFUL, PARTICULARLY FOR ADOLESCENTS. THERE IS A SIMILARITY BETWEEN THE INTERNET AND GAMBLING COMPANIES. CASINOS HAVE DEVELOPED TECHNIQUES TO HOOK GAMBLERS TO THE POINT WHERE THEY GAMBLE AWAY ALL OF THEIR MONEY, EVEN MONEY THEY DON'T HAVE. SOMETHING VERY HARMFUL AND MAY BE IRREVERSIBLE IS HAPPENING TO HUMAN ATTENTION IN OUR DIGITAL AGE. NOT JUST A DISTRACTION AND ADDICTION, SOCIAL MEDIA COMPANIES ARE INDUCING PEOPLE TO GIVE UP AUTONOMY. THE POWER TO SHAPE PEOPLE'S ATTENTION IS INCREASINGLY CONCENTRATED IN THE HANDS OF A FEW COMPANIES. IT TAKES A REAL EFFORT TO ASSERT AND DEFEND WHAT JOHN STUART MILL CALLED THE FREEDOM OF MIND. THERE IS A POSSIBILITY ONCE LOST, PEOPLE WILL GROW UP IN THE DIGITAL AGE AND WILL HAVE DIFFICULTY RETAINING IT. THIS MAY HAVE FAR-REACHING POLITICAL CONSEQUENCES. PEOPLE WITHOUT THE FREEDOM OF MIND CAN BE EASILY MANIPULATED. THIS DANGER DOESN'T LOOM ONLY IN THE FUTURE. IT HAS ALREADY PLAYED A ROLE IN THE 2018 PRESIDENTIAL ELECTIONS. BUT THERE IS AN EVEN MORE ALARMING PROSPECT. THERE COULD BE AN ALLIANCE BETWEEN AUTHORITARIANS AND LARGE DATA RICH I.T. MONOPOLIES THAT WOULD BRING TOGETHER SYSTEMS OF CORPORATE SURVEILLANCE WITH AN ALREADY DEVELOPED SYSTEM OF STATE SPONSORED SURVEY ANTS. THEY MAY EVEN RESULT IN A WEB OF TOTALITARIAN CONTROL, THE LIKES OF WHICH NOT EVEN ALDUS HUXLEY OR GEORGE ORWELL COULD HAVE IMAGINED. THE COUNTRIES IN WHICH SUCH UNHOLY MARRIAGES ARE LIKELY TO OCCUR FIRST, RUSSIA AND CHINA. THE CHINESE I.T. COMPANIES IN PARTICULAR ARE FULLY EQUAL TO THE AMERICAN ONES. THEY ALSO ENJOY THE FULL SUPPORT AND PROTECTION OF THE XI JINPING REGIME. THE GOVERNMENT OF CHINA IS STRONG ENOUGH TO PROTECT ITS NATIONAL CHAMPIONS AT LEAST WITHIN ITS BORDERS. U.S. BASED MONOPOLIES ARE ALREADY TEMPTED TO COMPROMISE THEMSELVES IN ORDER TO GAIN ENTRANCE TO THIS VAST MARKET. DICTATORIAL LEADERS IN THESE COUNTRIES MAY BE ONLY TOO HAPPY TO COLLABORATE WITH THEM, SINCE THEY WANT TO HAVE THEIR OWN METHODS OF CONTROL OVER THEIR OWN POPULATION, AND EXPAND POWER AND INFLUENCE IN THE UNITED STATES. SCARLET: YOU HAVE BEEN WATCHING GEORGE SOROS DELIVER REMARKS ARE YOU CAN WATCH FULL REMARKS AT LIFE GO, -- LIVE GO. WE HAVE MUCH MORE WITH LLOYD BLANKFEIN. WHAT HE TOLD US ABOUT TAX REFORM . THIS IS BLOOMBERG. ♪ SCARLET: -- JULIE: ITS 3:00 P.M. IN NEW YORK. I'M JULIE HYMAN. SCARLET: I'M SCARLET FU. WELCOME TO"BLOOMBERG MARKETS."

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George Soros on Trump, Social Media and Cryptocurrencies

Billionaire investor George Soros comments on the Trump administration, social media and cryptocurrencies during a speech at the World Economic Forum's annual meeting in Davos, Switzerland. (Source: Bloomberg)

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