I.O.U.S.A - Addison Wiggin [94]
It will decrease the rate of gain in the standard of living for the average American over time. In my opinion, it will not turn it negative under any circumstances I can foresee, but it does reduce the rate of gain in the standard of living that American workers will experience.
Q: If you can imagine you ’ re eight or ten years old, and you are hopping in your little boat that ’ s your life, what are the things that set you on the kind of choice that you ’ ve sailed?
Warren Buffett: I was extraordinarily lucky. The odds were almost 50 to 1 against me being born in the United States. In 1930, of c14.indd 190
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all the live births in the world, one out of 50, roughly, was in the United States. And then I was born to a couple of parents who cared a lot about me, who believed in education, who took good care of me, and I was wired to do well in a certain part of a market system that pays off enormously in a rich capitalist country. I ’ d been born a few hundred years ago, it wouldn ’ t have paid off the same way. If I ’ d been born in Bangladesh, it wouldn ’ t have been paid off the same way. I didn ’ t have anything to do with that wiring. I could have been wired to play chess, and there ’ s no money in chess. It would have required just as much brain power and hard work, but that ’ s not where the market system paid off.
I happen to be in something called capital allocation or asset allocation, and in a very rich capitalist system, asset allocation pays off in a disproportionate way to any real contribution to the society. I ’ ve been very lucky that way.
Q: Do you see money and capital assets strictly as a sort of a strategic tool that you can use to create more? How do you view money?
Warren Buffett: Well, money is a claim check on the output of others in the future. If I have a pile of dollar bills or if I have a pile of stock certifi cates or a pile of bonds, those represent claim checks which I or a charity or my descendants or my spouse or whoever can use to exchange for the goods and services produced by others. Somebody else will work for that. If I wanted to, I could hire thousands of people to sit everyday and paint my portrait, you know? And they would be employed, and I could use these claim checks and I could look for the perfect portrait of myself. I would never fi nd it, because I don ’ t look like Arnold Schwarzenegger, but I could keep looking for the guy that would try and make me look that way. And I could keep handing out these claim checks, and I would command that person ’ s services the rest of their life. They wouldn ’ t do anything else for society at all. Or I could build myself a wonderful pyramid.
I could say, “ Why should people have to go to Egypt to see one of these things? So, I ’ ll spend all of these claim checks I ’ ve got and we ’ ll have thousands of people in loincloths, like the original cast c14.indd 191
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in the Cecil B. DeMille production, and they ’ ll haul these blocks of granite and we ’ ll build a pyramid and make people forget all about Egypt. ” And that would command the services of other people. So you can exchange these little pieces of paper for other people ’ s goods and services in the future. And the wisdom with which you do that depends very much on the individual.
And some people build pyramids, and I hope other people engage in cancer research.
Q: Early in the Lowenstein book, which you didn ’ t cooperate with, he makes the statement that when you were 26, you were already trying to fi gure out what you were going to do with the money that you hadn ’ t made yet. I think that leads to, later in your life, an idea of progressive taxation.
I believe you just donated a large sum of money to the Gates Foundation. Could you just speak a little bit about your beliefs on making money, and your obligation to your family and society?
Warren Buffett: I didn ’ t cooperate with Lowenstein, but I didn ’ t block him either. There ’ s a woman writing a book now that I ’ m cooperating