🔒 BRK 2019 AGM Highlight: Buffett addresses debate on Capitalism v Socialism

JOHANNESBURG — Warren Buffett describes himself as “a card carrying capitalist” primarily because of a belief the system which underpins its economy is responsible for the abundance of his homeland, the United States. In this highlight, he is quizzed about his other very public loyalty, as a supporter of the Democratic Party, where a number of leading 2020 Presidential candidates are running on a socialist ticket. The Oracle of Omaha’s comprehensively settles that argument. – Alec Hogg

*This is one of the highlights from the five hours of Q&A at the 2019 Berkshire Hathaway AGM in Omaha where chairman Warren Buffett and his deputy Charlie Munger field queries from shareholders.

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Warren, you have been a long-time outspoken democrat. With all the talk about Socialism vs Capitalism taking among the Democratic Presidential Candidates, do you anticipate an impact on Berkshire in the form of more regulations, higher corporate taxes, or even calls for breakups among the many companies we own if they were to win and how do you think about your own politics as a fiduciary of our company and at the same time, as someone who has simply said ‘that simply being a business leader doesn’t mean you’ve put  your citizenship in blind trust’?

Yeah. I have said that you do not put your citizenship in a blind trust but you also don’t speak on behalf of your company. You do speak as a citizen and therefore, you have to be careful about when you do speak because it’s going to be assumed you’re speaking on behalf of your company. Berkshire Hathaway certainly (in 54 years) has never and will never make a contribution to a presidential candidate. I don’t think we’ve made a contribution to any political candidate (I don’t want to say ‘for 54 years). We don’t do it now. We operate against several regulated industries and our railroad and our utility is a practical matter. They have to have a presence in Washington or in the State Legislatures, in which they operate. We have a few  (I don’t know how many) political action committees, which existed when we bought the companies as subsidiaries and I’m quite sure they make some contribution, simply to achieve the same access as their competitors.

I mean, if the trucking industry is going to lobby, I’m sure the railroad industry is going to lobby but the rule is that people do not pursue their own political interests with your money here. We’ve had one or two managers over the years e.g. who would do some fundraising where they were fundraising from people who were suppliers [inaudible 0:02:40.6] or something of the sort and if I ever find out about it, that ends promptly. But my position at Berkshire is not to be used to further my own political beliefs but my own political beliefs can be expressed as a person – not as a representative of Berkshire. When a campaign is important, I try to minimise it but it’s no secret that in the last election e.g., I raised money. I won’t give money to packs. I accidentally did it one time. I didn’t know it was a pack. I don’t do it. I’ve raised substantial sums.

I don’t like the way money is used in power. Things are written – bad pieces for the New York Times in the past on the influence of my politics. I spent some time with John McCain many years ago, before McCain finagled ways to try to limit it but the world was developed in a different way. On your question about the… I would just say I’m a card-carrying capitalist but I believe we wouldn’t be sitting here except for the market system and the rule of law, and some things that are embodied in this country. So, you don’t have to worry about me in that manner but I also think that capitalism does involve regulation and involves taking care of people who are left behind, particularly when the country gets enormously prosperous. Beyond that, I have no Berkshire podium for pushing anything. Charlie?

Well, I think we’re all in favour of some kind of government social safety that in a country as prosperous as ours, what a lot of us don’t like is the mass stupidity with which parts of those social safety are managed by the government. It would be much better if we  could do it but more wisely. I think it also might be better if we did it more liberally.

One of the reasons that we’re involved in this effort along with JP Morgan and Amazon (Jamie Dimon and Jeff Bezos) on the medical question, is that we do have as much money going – $3.3trn/$3.4trn. We have as much money going to medical care as we have funding the federal government and its gone from five to 17/18% while actually, the amount going to federal government has stayed about the same at 17%. We hope there’s some major improvements from the private sector because I genuinely the private sector does a better job than the public sector in most things. But I also think the private sector doesn’t do something… You’ll get a different sort of answer and I’d like to think that the private sector can come up with a better answer than the public sector in that respect. I voted for Republicans over the years. I even ran for delegate at the national convention in 1960 but I don’t think the country will go into socialism in 2020/2040 or 2060.