By questioning the basis of our understanding of economics, in his book, "The Crisis of Global Capitalism", George Soros, speculator, fund manager, philosopher and philanthropist brings out a point that it is not alright to treat human action as distinct from human thought. One is essentially the result of the other and in turn results in the other. Soros specifies his ideas on how this process, which he calls "reflexivity", works. Soros's objection to rooting economic thinking in physical or natural sciences, stems from his belief that the object of each differs. He says that physical matter, such as an atom will behave in a particular manner irrespective of what the scientist analysing it would think of it.

But this surmise is not true for economic activity. Substituting the analogy with financial markets which through their needs and in that process are already determining the future course of events as a result of that thought process are quite distinct from phenomena found in natural sciences. He says "Our expectations about future events do not wait for the events themselves; they may change at any time, altering the outcome. That is what happens in financial markets all the time." The essence of investment is to anticipate or discount the future. Similarly, he says he has discovered trends in the currency markets in which exchange rates and so called fundamentals that they are supposed to reflect are interconnected in a self-reinforcing fashion, creating trends that sustain themselves for prolonged periods until they are reversed. Thus changes in current expectations affect the future they discount. "Participants base their decisions on their expectations, and the future they are trying to anticipate is inturn dependent on the decisions they are taking today," he says. This phenomena underscores the concept of reflexivity.

He says that social sciences as opposed to natural sciences have thinking participants and so lend themselves to an element of indeterminancy. This threatens the very status of the subject matter of human action as a science and hence is unpopular. He says that unlike natural sciences market participants do not have the luxury of basing their decisions on knowledge. They make decisions about the future and the bias they bring influences the outcome.

But the book is surprising in its moderation coming from a man who has made himself famous as a speculator and one who could change a nations economic outlook by his mere pronouncements on its fiscal health or by eyeing its currency. He feels that with the demise of communism the capitalist world has begun to believe in the infallibility of what he calls "market fundamentalism". Soros predicts that financial markets as seen from the Asian crises are inherently unstable and to allow that fountain of instability to influence collective collective interest (social values) will only lead to more social instability. He feels that the answer to unbridled global capitalism is the creation of a system where sovereign nations are subject to the will of global law.

The radical ideas make the book a seminal work. Despite detailed ideating, short-comings if any, could be the non-rigourous treatment of these ideas (he insists on the futility of subjecting this work to rigourous treatment). He goes to the other extreme to say that economics is poorer by the absence of value judgements. This approach to existing thinking in economics will expose these ideas to future Newmanns and Morgernsterns to ridicule and debunk. While his perspective is certainly unique it will be more read and better remembered for his view of the intricate workings of the financial system rather than as the beginning of change in the world order or rather the global financial system. Nonetheless, the perspective and world view presented here would be of tremendous use to a trader or speculator looking for a bedrock philosophy.