Huh? He gained billions of dollars (pounds, Deutschmarks, whatever), the UK government lost billions. That clearly hurt their economy.
Letting the currency float was better in the long term, and his actions made that happen, but I'd like to think there were other ways. And I doubt helping the UK was his goal; I can think of billions of other more likely reasons. Many people would say he stole this money from the government. It was legal, clever, and successful. He did some good things with some of the money afterward. Still, I'm not going to like him for it. (That sums up my feelings on much of the finance industry, in fact.)
The point is that the money lost by UK government was lost because they stupidly gambled away that money by betting against reality - they asserted that the rate of pound "should" be at an unrealistic, unsustainable position, and they bet a lot of money on that. It turned out that they were wrong - making these large bets did prolong that fiction for a while longer, but it was unsustainable.
Thus everyone in the market who was right about the "proper" position of GBP (Soros was just one of them, the largest but not the majority) won a bunch of money, and everyone who was wrong but still chose to bet more and more billions instead of accepting the reality - namely, UK government - lost billions. They could have chosen not to attempt to artificially prop up the exchange rate with these major transactions, and float the currency earlier, when it had to be floated. Heck, floating the currency a single day earlier wouldn't have any meaningful drawbacks but would have avoided much of the losses.
It's not that the money was taken from the government, but rather the government wasted a huge amount of taxpayer's money betting on the false assumption (wishful thinking for domestic political reasons) that the pound doesn't have to be floated. Such bluffs are punished by the market, with the people calling the bluff getting the money (and people falsely calling a bluff losing their money if they turn out to be wrong).
> Such bluffs are punished by the market, with the people calling the bluff getting the money (and people falsely calling a bluff losing their money if they turn out to be wrong).
I think this kind of wording (the market does this, not the individual actors) can be misleading. Look at this quote from the article:
> "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont [the British finance minister] said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."
They weren't just placing bets on events outside their control. They deliberately created the situation where the UK couldn't borrow sufficient money to maintain the rate. The fall was arguably inevitable, but they caused it to happen at a time of their choosing, in a way that enriched themselves at the UK's enormous expense. Sure, the BoE folks should have yielded sooner, but they didn't, and the people paid for it while Soros profited. This isn't something I would be proud of.
Letting the currency float was better in the long term, and his actions made that happen, but I'd like to think there were other ways. And I doubt helping the UK was his goal; I can think of billions of other more likely reasons. Many people would say he stole this money from the government. It was legal, clever, and successful. He did some good things with some of the money afterward. Still, I'm not going to like him for it. (That sums up my feelings on much of the finance industry, in fact.)