Can celebrity billionaires be guilty of impoverished thought? Berkshire Hathaway’s annual meeting has provided a media platform to see whether that’s true.
Warren Buffett, the “Oracle of Omaha,” whose wisdom everyone with the ambition to be one day worth $80 billion listens to attentively, made it clear at the Berkshire Hathaway annual meeting that he is a “card-carrying capitalist,” despite a reputation for embracing progressive causes. Buffett dismisses socialism as a chimera, but thinks something should be done for those unfortunate souls left behind in a competitive economy. Favorable to the idea that a prosperous, wealthy nation should temper its greed and find a way to provide some kind of safety net for vulnerable people less skilled than himself at gaming the stock market, he doesn’t appear to be ready to endorse any positive action by the state to build and operate that safety net.
Buffett’s associate and alter ego, Charlie Munger, clarifies the position the two men share: “What a lot of us don’t like is the vast stupidity with which parts of that social safety net are managed by the government.”
Here is today’s 3D definition:
Stupidity:
Ineptness and inefficiency in managing critical resources, a privilege that in capitalist regimes must be granted to private enterprises only — and not government — as the condition of their freedom
Contextual note
In the wake of the Berkshire Hathaway AGM, CNBC brought together three billionaires —Buffett and Munger joined by Bill Gates — to enlighten the public on the relative merits of capitalism and socialism. To call this interview embarrassing would be to flatter it. Any serious economist or political analyst would recognize a conversation that never rose above stating ancient platitudes and a few modern banalities. In short, CNBC offers us 10 minutes of billionaire stupidity, which may or may not outclass the “vast stupidity” that Munger associates with the government’s safety net.
Buffett starts things off by marveling that there are far more consumer objects available in 2019 than in 1776. “This country has done an incredible job in terms of the deployment of resources and human ingenuity and that is a product of the system.” By “system” he presumably means capitalism. Someone should inform him that capitalism is only a component of a system that also included unbridled expansion at the cost of entire populations, brutal European colonialism ultimately replaced by the equally brutal economic neocolonialism of US adventurers and capitalists, to say nothing of the permanent growth of an economy focused on military dominance. Therefore, Buffett is right to refer to “the product of the system.” He has simply failed to acknowledge what the system consists of.
Warren Buffett may have a supernatural talent for analyzing stocks. He clearly has no gift for or serious interest in analyzing societies and economic systems. All three billionaires agree that capitalism produces things and increases productivity. “It’s absolutely a miracle,” Buffett declares. Throughout the conversation, the idea of “production” and the sheer quantity of things produced justify the trio’s uncritical admiration of the system and its productivity.
But, as even they should be aware, capitalism also produces, and on an unparalleled scale, environmental destruction and social instability that compromise the future of humanity. It diminishes the material and even functional value of the generous, undemanding provider of all of capitalism’s manageable resources: the planet itself, but also humankind, which has no choice but to accept its primary status as a “human resource” to be exploited by corporations. Those concerns never find their way into the discussion, either through the (inexistent) probing of Becky Quick, or through the enlightened insight of the billionaires she smilingly and admiringly questions.
Buffett actually does hint at understanding one significant fact: that war and the preparation for war play a role in the system. But he sees that as a basic public service, like policing or industrial maintenance. As the conversation develops, the trio acknowledge the fact that all is not perfect in the world of capitalism. Buffett, for example, admits that “the market system is brutal and it leaves behind people who don’t have market-related talents.” He even seems to sympathize with the poorest, most desperate classes when he says, “In a rich society … if we have a war or something like that, we call on those people and pay them practically nothing to go fight for us.” He thinks we should “take care of people who get left behind.”
He does offer one “solution” to the social problems induced by capitalism, stating his belief that “both parties basically agree on that.” What could that radical solution be? “Income tax credit can make a huge jump in that direction,” he says. Gates appears committed to the “dream of equal opportunity.” He still believes — even while vaguely admitting his own failure — that it is all about educational reform, which means taking “the best teachers” and “spreading” their practices to produce better “statistics.” His discourse on education sounds suspiciously like the “vast stupidity” of the technocrats Munger vilifies.
Munger has his own solution. Abolishing hate, which he explains is essentially eliminating the extremists from the two major parties and getting Democrats and Republicans to agree on everything.
Historical note
In another CNBC interview related to the Berkshire annual meeting, Quick pushes Apple CEO Tim Cook to express his admiration for Buffett and Munger’s “wisdom,” “integrity” and “humility.” Sounding like the founder of a startup, Cook tells her that he felt flattered and surprised that the legendary Warren Buffett would consider investing in his lowly company, as if anyone that serious and wise would take the risk of investing in the world’s first $1-trillion company. Egged on by Quick, who wants to make this sound like a historic event, Cook makes the extraordinary statement: “It seemed like recognition, an honor and a privilege.” Finally, Apple has been recognized and honored. Steve Jobs would be proud.
Most people believe they know the stories of Buffett and Gates, both of whom realized the American dream, building massive fortunes with their own two hands. Each in his way has provided a model that has resonated with the recent evolution of the US economy. The two most dynamic growth sectors, sources of what are considered the best jobs, are finance and technology. Buffett exemplifies the wisdom of a power investor, which in reality also involves all kinds of backroom power moves, but the media prefers painting his portrait as a folksy genius who, like an owl, sits on his perch back in Omaha, wise and humble, a paragon of integrity.
Bill Gates’ story is more about mother-reliance than self-reliance. This author heard from two insiders how IBM foolishly gifted Gates — through the agency of his mother — the task of creating PC-DOS without realizing the implications of allowing him to market it as his own product, MS-DOS, guaranteeing his eventual rise to billionaire status. Gates did build the company from that point on. Like Buffett, he dedicated himself to managing, expanding and consolidating what he had, manipulating and bullying whenever necessary.
Neither Buffett nor Gates has had the time, talent or inclination to begin to understand, let alone address, the social problems they want people to think they are sensitive to. Munger even less so. And yet because of their success and wealth, the media look to them to provide answers
The two CNBC interviews reveal much about the capitalist culture and ideology of the US. It relies on perpetuating superficial ideas and stereotypes about both the economy and human society. These superrich, monopolistically-oriented financial celebrities — Quick herself being something of a star in her field of journalism — praise one another as they celebrate success, which will always be measured in terms of quantity of production, levels of income or profit and attainment of obscene degrees of personal wealth.
Could the expression of such banality also be a form of stupidity?
*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
