GeneralTheoryofReflexivityInthecourseofmylife,Ihavedevelopedaconceptualframeworkwhichhashelpedmebothtomakemoneyasahedgefundmanagerandtospendmoneyasapolicyorientedphilanthropist.Buttheframeworkitselfisnotaboutmoney,itisabouttherelationshipbetweenthinkingandreality,asubjectthathasbeenextensivelystudiedbyphilosophersfromearlyon.IstarteddevelopingmyphilosophyasastudentattheLondonSchoolofEconomicsinthelate1950s.ItookmyfinalexamsoneyearearlyandIhadayeartofillbeforeIwasqualifiedtoreceivemydegree.IcouldchoosemytutorandIchoseKarlPopper,theViennese-bornphilosopherwhosebookTheOpenSocietyandItsEnemieshadmadeaprofoundimpressiononme.InhisbooksPopperarguedthattheempiricaltruthcannotbeknownwithabsolutecertainty.Evenscientificlawscan'tbeverifiedbeyondashadowofadoubt:theycanonlybefalsifiedbytesting.Onefailedtestisenoughtofalsify,butnoamountofconforminginstancesissufficienttoverify.Scientificlawsarehypotheticalincharacterandtheirtruthremainssubjecttotesting.Ideologieswhichclaimtobeinpossessionoftheultimatetrutharemakingafalseclaim;therefore,theycanbeimposedonsocietyonlybyforce.ThisappliestoCommunism,FascismandNationalSocialismalike.Alltheseideologiesleadtorepression.Popperproposedamoreattractiveformofsocialorganization:anopensocietyinwhichpeoplearefreetoholddivergentopinionsandtheruleoflawallowspeoplewithdifferentviewsandintereststolivetogetherinpeace.HavinglivedthroughbothNaziandCommunistoccupationhereinHungary,Ifoundtheideaofanopensocietyimmenselyattractive.WhileIwasreadingPopperIwasalsostudyingeconomictheoryandIwasstruckbythecontradictionbetweenPopper'semphasisonimperfectunderstandingandthetheoryofperfectcompetitionineconomicswhichpostulatedperfectknowledge.Thisledmetostartquestioningtheassumptionsofeconomictheory.Thesewerethetwomajortheoreticalinspirationsofmyphilosophy.Itisalsodeeplyrootedinmypersonalhistory.TheformativeexperienceofmylifewastheGermanoccupationofHungaryin1944.Iwasnotyetfourteenyearsoldatthetime,comingfromareasonablywell-to-domiddleclassbackground,suddenlyconfrontedwiththeprospectofbeingdeportedandkilledjustbecauseIwasJewish.Fortunatelymyfatherwaswellpreparedforthisfar-from-equilibriumexperience.HehadlivedthroughtheRussianRevolutionandthatwastheformativeexperienceofhislife.Untilthenhehadbeenanambitiousyoungman.WhentheFirstWorldWarbrokeout,hevolunteeredtoserveintheAustro-Hungarianarmy.HewascapturedbytheRussiansandtakenasaprisonerofwartoSiberia.Beingambitious,hebecametheeditorofanewspaperproducedbytheprisoners.ItwashandwrittenanddisplayedonaplankanditwascalledThePlank.Thismadehimsopopularthathewaselectedtheprisoners'representative.Thensomesoldiersescapedfromaneighboringcamp,andtheirprisoners'representativewasshotinretaliation.Myfather,insteadofwaitingforthesamethingtohappeninhiscamp,organizedagroupandledabreakout.Hisplanwastobuildaraftandsaildowntotheocean,buthisknowledgeofgeographywasdeficient;hedidnotknowthatalltheriversinSiberiaflowintotheArcticSea.TheydriftedforseveralweeksbeforetheyrealizedthattheywereheadingfortheArctic,andittookthemseveralmoremonthstomaketheirwaybacktocivilizationacrossthetaiga.Inthemeantime,theRussianRevolutionbrokeout,andtheybecamecaughtupinit.OnlyafteravarietyofadventuresdidmyfathermanagetofindhiswaybacktoHungary;hadheremainedinthecamp,hewouldhavearrivedhomemuchsooner.Myfathercamehomeachangedman.HisexperiencesduringtheRussianRevolutionprofoundlyaffectedhim.Helosthisambitionandwantednothingmorefromlifethantoenjoyit.Heimpartedtohischildrenvaluesthatwereverydifferentfromthoseofthemilieuinwhichwelived.Hehadnodesiretoamasswealthorbecomesociallyprominent.Onthecontrary,heworkedonlyasmuchaswasnecessarytomakeendsmeet.Irememberbeingsenttohismainclienttoborrowsomemoneybeforewewentonaskivacation;myfatherwasgrouchyforweeksafterwardsbecausehehadtoworktopayitback.Althoughwewerereasonablyprosperous,wewerenotthetypicalbourgeoisfamily,andwewereproudofbeingdifferent.In1944,whentheGermansoccupiedHungary,myfatherimmediatelyrealizedthatthesewerenotnormaltimesandthenormalrulesdidn'tapply.Hearrangedfalseidentitiesforhisfamilyandanumberofotherpeople.Thosewhocould,paid;othershehelpedforfree.Mostofthemsurvived.Thatwashisfinesthour.*Livingwithfalseidentityturnedouttobeanexhilaratingexperienceformetoo.Wewereinmortaldanger.Peopleperishedallaroundus,butwemanagednotonlytosurvivebuttohelpotherpeople.Wewereonthesideoftheangels,andwetriumphedagainstoverwhelmingodds.Thismademefeelveryspecial.Itwashighadventure.Ihadareliableguideinmyfatherandcamethroughunscathed.Whatmorecouldafourteen-year-oldaskfor?AftertheeuphoricexperienceofescapingtheNazis,lifeinHungarystartedtoloseitslusterduringtheSovietoccupation.Iwaslookingfornewchallengesandwithmyfather'shelpIfoundmywayoutofHungary.WhenIwasseventeenIbecameastudentinLondon.Inmystudies,myprimaryinterestwastogainabetterunderstandingofthestrangeworldintowhichIhadbeenborn,butIhavetoconfess,Ialsoharboredsomefantasiesofbecominganimportantphilosopher.IbelievedthatIhadgainedinsightsthatsetmeapartfromotherpeople.LivinginLondonwasabigletdown.Iwaswithoutmoney,alone,andpeoplewerenotintere