Mr. George Soros, “the man who broke the British pound” in 1992 and forced Britain from the European exchange-rate mechanism, is going to wind down his aggressive investment funds. Citing market volatility and dwindling returns, he decided last week “to bring an epoch to an end.” He is abandoning the swashbuckling style that made him and his partners very, very rich and made Mr. Soros public enemy No. 1 for many central bankers and politicians.

In many ways, Mr. Soros is the victim of his own success. His $8.2 billion Quantum fund, the world’s biggest hedge fund, has returned an average of 32 percent per year since it was founded three decades ago. Its very size made it hard to move quickly through the markets, however. In addition, it has not been able to anticipate their swings. This year, Quantum is down 22 percent. Mr. Soros will stay open for business, but investors will have to be content with less impressive returns in the future.

Mr. Soros is the second high-profile investor to leave the business in recent weeks. In March, Mr. Julian Robertson, head of Tiger Management, the second-largest hedge-fund group, announced that he too was closing shop. He also complained that it was impossible to make sense of the new market psychology.

Many bankers and bureaucrats will not be sad to see the two men go. Hedge-fund traders have been blamed for the Asian economic currency crisis that began in 1997. Malaysian Prime Minister Mohamad Mahathir singled Mr. Soros out by name as the man who triggered the regional turmoil. While Mr. Soros’ bet against the British pound did push that country from the European exchange-rate mechanism in 1992, it is disingenuous to blame him for Asia’s woes.

Mr. Soros scaled back his activities over a decade ago to devote himself to his philanthropic activities. Those have done much good, and we wish him all the best in the future. Indeed, his most recent move may prove similarly beneficial: By retiring from the front lines, Mr. Soros deprives opponents of reform of a scapegoat for their own mistakes.

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