Charlie RoseFrom our studios in New York City, this is Charlie Rose.
OtherBill Gates and Warren Buffett are here.
Gates is the co-chair of the Bill and Melinda Gates Foundation.
The philanthropy focuses on education, poverty, and global health.
Warren Buffett is chairman and CEO of Berkshire Hathaway.
The company is one of the most successful companies of the last five decades.
The two have famously been friends for more than 25 years.
Together they started the Giving Pledge in 2010.
The initiative encourages the world's richest to donate the majority of their wealth tophilanthropic causes.
Buffett pledged the bulk of his wealth to the Gates Foundation in 2006, and has sincegiven more than $24 billion to charities.
I am pleased to have both of them back at this table.
Welcome.
And I have to say, in the interest of full disclosure, we just did something like thisat Columbia University with 1,000 students.
Charlie RoseYou do this before.
There is something special about the curiosity and the interest of young people, wantingto know how do they learn from you, wanting to know if you were starting over, what wouldyou do, wanting to know about values.
You do a lot of this.
WarrenWell, about the friendship, we met on July 5th, 1991, and hit it off immediately.
Bill was a little reluctant at first, but he got there.
Charlie RoseReluctant to come.
QuestionerYeah, definitely.
WarrenIf it wasn't for his mother, we probably wouldn't have known each other.
And we've had a good time ever since.
And we've cooperated on, particularly on the Giving Pledge, but other things as well.
And I have to say, everything about it has turned out well.
Charlie RoseHe sits on your board?
WarrenHe sits on the Berkshire board, and we have a lot of fun talking about a lot of things.
But the big thing that really came out of one of those discussions really was the GivingPledge.
That's worked out so much better than I ever anticipated, Charlie.
I mean, I thought if we got 30, 40 people, you know, how many have you?
QuestionerI think we're 156 or something like that.
WarrenAnd the people, and now we've gone beyond the borders of the United States, which Ididn't feel would originally happen.
And people are learning more, our members, about effective philanthropy, they're learningabout things that didn't work, they're learning about how people handle within their families,wealthy families.
And it's just, it's worked out so much better than I would have guessed six years ago orseven years ago.
Charlie RoseBoth of you have made the point that there are a lot, because of success in technology,
Otherthere are a lot of people with a lot of money who are much younger.
OtherYeah, it's a great thing that these companies are doing so well.And as a group, I'd say it's a particularly philanthropic group.I didn't give huge gifts until I was 45.Some of them, in their 30s, are already doing amazing things.
QuestionerWhy were you, if the word is reluctant, reluctant to give earlier than that?
OtherI hadn't taken the time to understand where the huge payoffs were.And I was pretty maniacal about Microsoft.And only in my late 30s, with some encouragement from my wife, Melinda, did I start to studyit, talk with her about it.We knew we would do it by the time I was 60.But as we were doing that learning, we decided we should accelerate it.And we found a lot of ways that we thought we could have high impact.And the principle, sort of mission call was that all lives are equal.
QuestionerThat's right.And a lot of that outside the United States has gone to save lives and have kids growup to be healthy.How did you decide that you'd rather give your money to the Gates Foundation than createsome foundation of your own and go out and find people to run it and do whatever youwanted to do?
OtherWell, my first wife, Susie, and I actually started a foundation over 50 years ago.And we'd talked about it since we were in our 20s.And I always thought I'd be rich.She didn't think I would be.And I said to her, if I compound money at the rate I hope to compound money, there willbe really large sums later on.And you're good at giving it away.I'm good at making.And so I'll make it first, and you give it away.And she thought that was sort of half a cop-out and half logical.And probably told you so.
QuestionerYeah, absolutely.
OtherAnd so we did something, like I say, it was started over 50 years ago.But I really thought that there would be large sums later on and that she was particularlygood at empathizing with people, understanding their need, putting the personal energy intoit, everything.She would be better at giving away money than I would be.And she died in 2004, as you know.So then I had to rethink what I was going to do.And so in 2006, I decided that essentially five foundations, the Bill and Melinda GatesFoundation being the largest, and I looking for people that had similar goals with philanthropythan what I had.And the idea that every life is of equal value is just fundamental to me, whether you'relucky, you can be lucky.And you knew Bill would run it well.
WarrenOh, of course.I mean, he was putting, he had his own money up, which is a big deal.But far more than that, I mean, he had two much younger people, very bright, very hardworking.They worked much harder than most people do in this country in their jobs.And they were on the same track I was on, proven quantity.I mean, everything about it made sense.And it's continued to make sense 10 years later.
QuestionerBill, talk about Melinda's influence.You have said to me about Susie, your late wife, I was a mess until I met Susie.I think that's understating.
WarrenNo, she changed my life.I mean, there's no question about that.
QuestionerHow did she change your life?
WarrenWell, I was a very lopsided, not well-adjusted person who happened to be very good at onething.And, and she put me together.I mean, and it wasn't, it wasn't overnight either.I mean, but she just had that little sprinkling can, you know, and finally she saw a few sproutscome up.
QuestionerWas it coming together of opposites or?
WarrenNo, no, I wouldn't say that.We had, we had very similar value.We were in sync in a very big way and, and, uh, uh, but I, she was way more mature thanI was.She was 19 when we got married.I was 21, but I was, I was about 12 emotionally and, and she put me together and like I say,it took time, but that it changed my life.I mean, I would not have been had rough anything like the life I had.And what did Charlie Munger add?Well, Charlie Munger, my partner of, of 57 or 58 years and, and he's extremely wise.He's a wonderful friend.We've been partners that time and he's strong minded.I'm strong minded.We disagree.Sometimes we have never had an argument in that whole time and we never will and neverhad an argument.I will.That's absolutely true.You must disagree.Absolutely.We disagree.So if you disagree, how do you decide to, well, what he says at the end is, when wedisagree, he says, well, Warren, you'll end up agreeing with me because you're smart andI'm right.You know, where do I attack that particular problem?But often, often he's right, I have to say that.No, I, I respect his opinion enormously, whatever he gives it to me, I respect Bill's opinion.I mean, it's, but it's, it's more fun doing things with partners.And I mean, the most fun is, is, is obviously a marriage partner and that's the most importantrelationship.But having, having a business partner, if I'd done everything I'd done, it wouldn'thave worked out this way.But let's say I got double the results.
Bill GatesIt's been more fun doing it with Charlie.
OtherWho says no to Bill Gates?
Bill GatesWell, Melinda.
OtherMelinda's the one.
Bill GatesI've seen it happen. Now, it's great when somebody knows, you know, when you might move too fast or be over optimistic and you know, if a team comes in and I'm pointing out things we haven't done and you know, maybe they're not as motivated afterwards. So you know, they get me to correct that. I've matured a lot and I give Melinda immense credit. You know, she still has work to do, but I think I'm getting there and complementary strengths where you share the same goal is a great thing. I had that with Paul Allen in the early days of Microsoft. I had that with Steve Ballmer as Microsoft. Going now, both in my family life and the foundation, it's Melinda.
QuestionerHow much time do you spend at Microsoft?
Bill GatesI'm there about 15% of the time and I get to work just on the R&D part, brainstorming with people, thinking, okay, how we're going to take this artificial intelligence and make it understand, help you use your time better. It's a very exciting time in software and there's five companies that are in a really strong position. Microsoft is leading in some really cool stuff. So I look, oh, the way that a business takes information about customers, about communication with customers, looking at data. That mission of really using data and AI and getting the productivity of all those workers up because they see more information, Microsoft is the leader in that and it's a wonderful niche. It's a multi-hundred billion dollar niche that they're strong in and they will be innovating along that line more in the next few years than ever in our history.
QuestionerYou have a passion for artificial intelligence.
Bill GatesYou do.
QuestionerYeah, it's the ultimate dream when you start working on software is the kind of deep understanding intelligence that humans have. So it's been the holy grail of when can the computer learn to play games? When can the computer learn to read? When can it understand speech? And things like speech and vision have made such progress in recent years. I mean, you've been tracking this and exposing your viewers to some of it because I can't overstate that even for people in the field, it's a pretty magical time. And its potential is to do what?
OtherChange everything?
Bill GatesWell, in the first instance, to be the best assistant ever, to look at all your information and help you know in the few minutes between meetings what you should look at or when you're
Questionertrying to plan a trip, organize things, to be a much, much, much better assistant thanit is today.And then eventually certain mechanical tasks like warehouse work or driving, that it wouldtake that over.But for intellectual work, it will just magnify the creativity and make your time more valuable.Are you interested in technology?
WarrenI don't have enough.I don't think I have a natural bent that way to start with.And I'd be so far behind.I never would catch up with people that have been working on it and it would not be a gameI would be winning.It is a principal criteria for you understanding the business.Yeah, I have to understand the business.And there are lots of businesses that I don't understand.Some of them may be almost un-understandable and others are just outside my sphere of confidence.But you do have people now that do have that kind of expertise.I have two people who themselves have different circles of competence.But they aren't chosen because they have a different circle.There's a lot of overlap.There's overlap between them.And the important thing, you know, it's nice to have a huge circle of competence.It's much more important to know where the limits are of it.You can do very well if you only understand 5% of the businesses in the country.And find plenty of opportunity.And you know the 5% that you've got.The 5% are in that circle.
QuestionerThe 5% are in that circle.The 5% are in that circle.You made a huge purchase in 2016.Precision was bought in 2016.Yeah, we bought in 2016.$37 billion.Including that $33 or $4 billion of cash and an assumption of about $4 billion of debt.Is it harder and harder to find an acquisition candidate because...Sure.
WarrenI mean, we've got to move a needle on $400 billion of market value.And you know, if we make a billion dollars, you know, we're talking a quarter of 1%.And that's after tax.I mean, that's more than a billion and a half pre-tax.So it's hard to find things.I would do better percentage-wise if I was working with a much smaller amount of capital.How do you find them?It's interesting.I get a call.I'll be sitting thinking.I mean, different things.In terms of buying private businesses, it's because I get a call from a private seller.But occasionally, I just decide to act.And we never do anything unfriendly.But in terms of buying whole businesses...But are the people who know you and are close to you on the lookout for you?Not much.It's unlikely.Charlie, we've net-bought $12 billion of common stocks since the election.
WarrenIt's in my mind which ones I pick. Now, the guys that work with me, the two fellows, they've probably bought a little bit or sold a little bit too. But those are ideas that I've either come at from a different slant in some way or whatever it may be.
QuestionerIs airlines one of those?
WarrenWell, it was shown... I won't tell you anything. You're selling out. It was shown on September 30th that we own some airlines, some stocks. And so why did you do that?
QuestionerWell, that I won't get into. But it was in large part my decision. The old joke is, as you know, how do you become a millionaire? Start as a billionaire and buy an airline. There's no question that it's been a graveyard for a lot of money. But transportation has been something.
QuestionerYeah, but they're not related. The railroads and the airlines are not related at all. They're different kinds of businesses. You can't move the track. You can move planes around. And you can't go into... I mean, airlines attract people. There's a certain romance to it like Hollywood does or something. And so you can actually go into the business. And more than 100 airlines have gone broke in the last 20 or 25 years or something like that. So it's a different sort of business.
QuestionerHow has knowing Bill changed or influenced or enhanced your sense of the way the world works?
WarrenWell, I learned from him. I like to learn from all friends, and Bill happens to be a particularly good source. But, listen, that's the fun of having friends, Charlie. I don't think I would. It would be hard for me to be a friend with anyone that I don't learn something from. They'd probably get kind of bored with me. Who's that guy talking about stocks?
QuestionerAnd Bill, what have you learned from him being associated with him?
OtherWell, an immense amount. He wrote an article for Fortune magazine that I read before I met him about that it's not necessarily a good idea to leave large sums to your children. So that was pretty fundamental. And I remember reading that, and I was convinced that that was right. And it meant, wow, now you have to think of how to give it away. I also remember Warren showing me his calendar.
CharlieOh, I love this. I had every minute packed, and I thought that was the only way you could do things. The fact that he is so careful about his time.
QuestionerCan I show this to the audience?
CharlieHe has days. That there's nothing on it. That there's nothing on it. Absolutely. Show me the best one. It's very high-tech. Be careful. I'm going to hold it. I'm not going to show the thing.
QuestionerBut this is the week of April, of which there are only three entries for a week.And there will be four maybe by April.File tax returns.So that taught you what?
WarrenNot to crowd yourself too much and give yourself time to read and think.
QuestionerRight.That you control your time.And that sitting and thinking may be a much higher priority than a normal CEO who, you know, there's all this demand,and you feel like you need to go and see all these people.It's not a proxy of your seriousness that you've filled every minute in your schedule.And people are going to want your time.And it's the only thing you can't buy.I mean, I can buy anything I want, basically, but I can't buy time.And so to have time is the most precious thing you can have.I better be careful with the demand.There's no way I will be able to buy more time.And living in Omaha makes that easier.That makes it a lot easier.For 50, whatever it is.
WarrenWell, then for 54 years, I've spent five minutes going each way.Now, just imagine that was a half an hour each way.I know the words to a lot more songs, and that's about it.It adds up, doesn't it?
QuestionerYeah, it really adds up.No, if you're talking an hour a day difference coming and going,and, you know, that's two and a half percent of the person's work week.That means 40 years, you're talking about a year.Do you agree politically?
WarrenOn almost everything.You know, a general sense that you've got to keep the economy turning up greater outputand that you have to allocate it in a fair way.
QuestionerYeah, that basic framework we see very much the same.Do both of you believe we can achieve a 4% growth rate?
CharlieThat's pretty high.
WarrenPretty high, yeah.But if we just, like 2016, I think the last quarter was like 1.6 or something.If we had a 2% growth rate, if we have a little less than 1% population growth, which we probably will,in one generation, 25 years now, people have kids a little later,we'll add 19,000 per capita, family of four, 76,000 to real GDP.So there will be 70, family of four on average, there would be 76,000 more stuffper family of four in one generation.I mean, we are going to have more and the goose is going to keep laying more golden eggs.I mean, we've got a wonderful system.
QuestionerWell, but there are certain things that could get in the way of that.2%?
CharlieI think we'll do 2%.
QuestionerOh, you'll do 2%.Yeah, and 2% will produce miracles.Yeah, but 3% is probably possible, isn't it?
CharlieIt could be, but that would be fabulous.
QuestionerRight.But 2% will produce 19,000 per capita.That's greater than exists in a whole lot of countries.That will be added.The question is what we do with it.How do you see the future of China?
OtherWell, they've done a great job on some things.They're not a democracy, so it hangs in the balance how their political system will evolve.But in terms of raising incomes, getting rid of poverty, improving health,it's an unbelievable miracle that they're embraced in their own special way of the market.Since really just 1990, they've done very well.And so they're the second biggest economy in the world.They're serious about trade.They're serious about clean energy.They are super important.The most important relationship in the world is the U.S.-China relationship.Clearly, because they're the two biggest economic powers in the world.Right, and they're rising, and we're strong, and we're going to stay very strong.Yeah.What could make us not stay strong?There's a lot of strength that we've built up over decades.The way we do research, our universities, the way that people take risks,and that's why our technology companies are still so strong.Our biotech companies are still so strong.So the education system is one that we need to go back and look at,and that is one huge source of inequity,because if you get a great education, actually, the outcomes are pretty good.Your experience has told you that it's much harder than even you imagined.Improving the U.S. education system, yes.The dropout rate has gone down a bit.So that's great, but the overall reading scores, math scores,and the inequality hasn't budged much in the last ten years,and one of the goals of our foundation is to, working with partners, change that.And so far, it's proven to be one of the tougher ones,but we still believe that it's super important,and they're promising if we look at individual schools, we see great things.So we still believe it's achievable.Of the talk about immigration, I want to talk about it a little bit,but of the talk about immigration, are we still looking at a situationwhere some of the best and brightest from overseas come here, get an education,and then go back to India or China or wherever, rather than staying here?Well, a lot do stay, and the most important import the U.S. has ever had,by far, is human talent.It's been to our benefit that a lot of the hardest-working, best and brightestfrom almost every country in the world have wanted to come to the U.S.,
Otherand so if you look at university departments or doctors, engineers,people starting up companies, building jobs, it's been a huge strength of ours.We haven't always made it super easy for that to work,but it has worked very, very well.So the number going back, it's meaningful,but net we are still a huge beneficiary of human talent.But it used to be said, and Tom Friedman, I think, first wrote this,we ought to staple a green card to every diploma.Yeah, I believe that.Now, is that a bias because I'm from the tech industrywhere we can create multiple jobs around the engineerinstead of having to do that outside the United States?Yes, I believe that keeping talent in the country is a great thing.Tell us the story, because you told me the story and I didn't have had it before.You think the second most important document in America's historyafter the Declaration of Independence, or perhaps the U.S. Constitution, or both,is this letter by two immigrants.Yeah, it was a letter written by two Jewish immigrants.That doesn't sound like much, so I'll tell you one of the names.But in August of 1939, just before Germany moved into Poland,Leo Szilard, whose name is not well known, who was born in Hungary,but he went to Germany and he worked in Germany with Albert Einstein.And in 1933, I believe both of them left Germany.And where do they come? They come to the United States.And they become United States citizens.And they co-sign a letter to President Roosevelt.Szilard got Einstein to sign it because his name carried more weight.And that letter, which you can see on the Internet, not even a full page,says Germany is going to get an atom bomb, and it may work.It didn't say for sure it would.And that we better get to work on one.And the Manhattan Project came out of that.And who knows what would have happened in World War II.A, if Hitler hadn't been so anti-Semitic, you know, basically.I mean, he drove out these great scientists and everything.And secondly, if those two hadn't chose to emigrate to the United States.I mean, the United States was, you know, it welcomed them.And they may have saved this country.They may have saved this country.So Germany did not get it and we did.You know those V-1s and V-2s that were lobbed over there in England and everything.They didn't have the right warhead from the standpoint of the Germans.And if we charted three years later, who knows what would have happened.
QuestionerRemarkable men. And they were both immigrants.You sent me a note maybe a month ago.And you basically said, I'm not worried about the American economy.That's right.What I worry about is that somehow, in some way, we'll make a mistakein terms of the employment of nuclear weapons.Or some bad character will buy them or steal them.Weapons of mass destruction are out there.And the knowledge.Maybe it's a computer clip or whatever it might be.It's a tiny, tiny probability any given day.But there are people who wish us ill.There are people who would like to kill millions of Americans.And there's some psychotics.There's religious fanatics.There's, you know, megalomaniacs.I mean the world has a certain number of them.And if they get in the wrong position and they have the knowledge and they have the ability,there are people who would like to kill millions of Americans.And the weapons are there to do it.Einstein said shortly after the launch of what was then called the atomic bomb,he said, I know not with what weapons World War III will be fought,but World War IV will be fought with sticks and stones.And that probability exists.And it's the number one job in the President of the United States,which every president acknowledges,is to the extent possible protect us from weapons of mass destruction.And they can exist with individuals, but you don't worry too much about that, the intent.But with organizations and maybe even with a couple of nations.And it's the only real cloud on America over time.We'll solve the economic problems, but that's number one.You agree?
WarrenI agree.And it's not just nuclear weapons.No.The bioterrorism piece is also quite daunting.
QuestionerWhat's the bioterrorism piece?
WarrenWell, in an extreme case, somebody would reconstruct, say, a smallpox virus and have that spread.And it would not only kill millions, it could potentially kill billions.There was on the op-ed piece in the New York Times within the last about two years.I checked with Bill because I don't understand this stuff well enough.And he said, yeah, it makes sense in terms of being feasible.And it was basically about reconstituting smallpox.I mean, there are people in the world or maybe organizations,probably our organizations that would love the idea of creating a smallpox epidemic.How do you prevent them from doing that?Well, you want to have surveillance to catch it as soon as you can.You want to have medical tools where you can create a vaccine and protect people.
WarrenScience is working on the defense part of this. At the same time, it's making the offense slightly easier. If we're vigilant, there's a lot of steps we can take to make the risk lower, just like minimizing access to fissile materials meaningfully reduces the chance of a nuclear weapon. There are some who argue that the next war will not be a nuclear war or perhaps not even bioterrorism. It will be a cyber war. That's a third area. And I personally think there's only the three, but that's not much comfort. Yes, a modern society depends on electricity and communications and information flow. And if you can for a substantial period of time disrupt that, then a lot of systems, including how a hospital organizes itself or how food gets moved around or an airline decides what to do, or bank accounts, what was that bank account supposed to be? And so a lot of experts in government and companies now are spending time thinking about, okay, how do you minimize that? How do you have duplicates, backup? A lot of sophistication going into that. Can the United States risk a trade war with China or with Mexico? Would it have a significant impact? Not a good idea. Not a good idea. Trade benefits. The problem of trade is that the benefits are diffused and invisible. You don't walk in and buy a pair of shoes or some underwear or anything, and it says you just saved 12 percent because this was purchased some place. So 320 million people are buying things. The bananas come from the hospital. They're buying things cheaper than they would otherwise. But the harmful effects, taking somebody out of a job they've had for 25 years when it's too late to retrain them or anything, they're very specific and terrible. Now, what you want to figure out a way is to keep the societal benefits and take care of the people that really are the roadkill, basically, in this. And there will be roadkill. I mean, there's no sense kidding yourself. I mean, we started with a textile mill at Berkshire. Half our workers only spoke Portuguese. They worked in hot conditions, loud conditions, and they spent 20 or 25 years on looms. When textiles moved elsewhere, their lives, economic lives, were ruined. And that is going to happen. That is part of trade. And the benefits, you know, somebody buys whatever textiles we were turning out, you know, handkerchiefs or anything. They may buy them a little cheaper. And we've got to keep the trade benefits, everybody, us and them.
WarrenAs a society, it penalizes certain people terribly. And we've got to take care of the people that are getting hurt because we've got the resources to do it. And take care means what? It means that somehow you have to have some kind of—you've got to have retraining and all that when that's feasible. But it isn't feasible when you only speak Portuguese and you're in New Bedford and you're 55 years old and you spent your whole life on a loom. You've got to make sure that person has an income that's commercial. We can do it as a society. And we don't want to let the individual case prejudice against trade and benefits everybody. But we also don't want to say because everybody's benefited, you know, to hell with this guy. We can afford that and we should do it. And that's how we'll get a good trade policy.
QuestionerDid you appreciate, Bill, the economic insecurity that was out there that Donald Trump was able to tap into politically?
WarrenNo, I'm not an expert on political sentiment. So I was no better at seeing those trends than other people.
QuestionerOr with Brexit and Britain.
WarrenAgain, I was surprised by the Brexit vote. And the notion of the populist uprisings that are taking place in a sense of feeding off of that. Well, there's no doubt that younger people and urban people in terms of their social mores and, you know, being seen to benefit relatively more from the new technology and things that are out there, there is somewhat of a divide there. The fact that that would lead to these political results is a bit of a wake-up call to say, OK, what is in terms of economic and social issues or, you know, can we by improving medicine, improving the education system, can we take what the negative views are there and engage and uplift their views of the future? To me, the greatest surprise of all isn't how people voted because I didn't think of myself as having expertise on that. It's this general question when you say, will your children be better off than you? I believe their children will be better off, but the fact they don't feel that way, that the improvements in health and the new products that will be available to them. And what technology enables them to do and all of that. Right. That is a concern because if people don't see the arrow of time pointing towards greater things, the idea of doubling down on more research and, you know, taking the best education and getting that spread around, it creates a sense of malice where you don't have the guidance to, hey, some things are working.
WarrenLet's do more of those things.But the question I ask also is, could America lose?I mean, if you look at today, we have the best military, we have the best economy, we have the best universities,we have the best talent, and we have the best spirit of innovation and creativity.Could we lose that?I don't think we would.No.I think the odds of losing that are very.This is what you call the special sauce.We've got the special sauce, and we've still got a special sauce.If the rest of the world learns from that special sauce, you know, it's not a zero-sum game.That's terrific.That is terrific.But it won't deprive us.So overall, in aggregate, our society will be far richer 10, 20, 30 years ago.And if you just take in aggregate, our children will live better.The real question is, will it continue to leave lots of people behind?And a specialized market system will leave people behind.If somebody is, however you want to measure it, 10 percent below average,their opportunities in this world today have not improved at all from 30 or 40 years ago.Well, the classic situation is you take the Forbes 400 in 1982.The number one guy was Dan Ludwig.Your viewers never heard of him.And he had $2 billion.Yeah.I mean, you know, now it would be 30 or 40 times that.30 or 40 times.And this more highly specialized economy year after year,different from that agrarian economy of 200 years ago,it's going to be more and more people at the very top winning big, big, big time.And it really won't do, absent certain types of programs,it won't do much for the person that really doesn't have any special skills for the market.The average person, or slightly below average person in terms of particularly market talents,is not going to do very well unless we have policies to make sure that they participate in some way.And the guys at the top are going to keep doing better.Policies from government.It has to be government.Government is always, I mean, the market system is this traffic cop.It directs resources, it directs brains, and it does a great job of it.But it also directs all the winnings.It will continually favor more people at the top.Government's always in.I mean, government came in with Social Security, and government, you know, redirects the winnings.So it isn't totally the market system that delivers the winnings.But I don't want to kill the market system in terms of producing at all.We want more and more stuff.
WarrenBut there will be more and more people falling further relatively behind.And that's not a good result.I mean, we can afford it.We can do better.I'm sure you saw this.I mean, there was a report, I think, last week.It suggested they took eight billionaires and basically said they have more wealth than the bottom half of the population in the world.50% of the people in the world.Well, in this country, if you took the Ford 400, they had $93 billion in 1982, and they have $2.4 trillion now.25 times as much.Not exactly the same people, but take the 400.25 times as much as 35 years ago.And believe me, that does not strike somebody that's working 40 hours a week and trying to support a couple of kids on it and finding, you know.And that their income has remained the same or be less.They just aren't participating.Or they're threatened by forces they can't comprehend.They can't.The market system just pays more and more.Just think.Say you're a middleweight boxer.I mean, in the 30s, you were limited.You wouldn't even get on the undercard at Madison Square Garden.It was limited.But then television comes along and cable comes along and pay-per-view.And tens and tens of millions of dollars.So, at the top, it's terrific.But if you're the 45th best middleweight in the country, it's pretty much the same as it used to be in the 30s.So, the spread gets wider.If you're Frank Sinatra, you're a lot better off if you've got television than if you just play in some theater in New York like where he started.It's magnified throughout.I mean, if you've got a good business idea, you can get it capitalized and become worth billions just on the idea.So, it's just tougher.Whereas, you go back to 1800, and if you were reasonably strong and willing to work hard, you were worth 90% as much on a farm as the very best guy.It's just the differential.And it will keep widening.The market system will push it in that direction.What would you change if you could?Well, I would change the earned income tax credit big time.I am where I am, not by myself at all.I mean, there are 320 million Americans out there, and there's a lot of crosses over at Normandy and everything else.And I benefit enormously by having come along when I came along and where I came along.And some people did, and some people didn't.And there's nothing wrong with a market system that rewards anybody that makes life better for millions of people.
OtherThey ought to get enormously rewarded.But you've got to take care of the people that just don't fit well into that particular niche.I mean, if this country paid off based on athletic ability, I mean, I could study eight hours a day and have all these courses.I'm still going to get in the ring or something like that, and 10 seconds later, I'm on my back.So the talents that get rewarded in a market system are important because they bring us more of the goods and services that the country wants,and they make all kinds of improvements in how we live.It's just incredible.But they leave people behind, and it won't be solved simply by education.You want everybody to –And is it the responsibility of government to do something about this?Sure it is.Sure it is.That's what government –
OtherGo ahead, Bill.
OtherAlso has to keep business in shape that it has the incentive to do things right.And striking that balance should be at the heart of political dialogue.You need more golden eggs.I mean, nothing's going to work.You can have the fairest island in the world and two guys who are ethicists living on it,and they're deciding exactly how they should divide up the palm tree.That's the only thing on the island, but it won't make any difference.So beyond national security issues, when you – what do we have to be fearful of in the future?We've talked about it.Some people believe that artificial intelligence offers certain kinds of risk, and you've spoken to that,that it could get out of control somehow.You've spoken to that, and other people have.What's around the corner that will both benefit us – artificial intelligence is clearly one of those things too –but also offers a scary world, whether it is gene editing or that kind of – you think about these things.
OtherYeah, gene editing is a good one where the promise of helping with disease, making plants that are more productive.Gene editing is playing with the software of life, sort of the ultimate software work,and yet deciding exactly how it should be used.If you could make sure your child was thin or attractive or had certain other characteristics,is that an appropriate use of the technology?We should answer that question.I'll vote for the beta testing on that one.I'm serious, Bill. How do you decide that?It's the whole thing about if there's some balance between freedom and security.It came up even in terms of getting inside of a phone in which a terrorist might have left future possible terrorist acts.
QuestionerWell, that's another one where making sure the government isn't completely bind to what goes on in financial transactions,communications, because you trust the appropriate policies for when and how government's ability to see information is used.That's another one where there'll be a big debate about – some extremists might say government really shouldn't see anything.Others would say government should see everything, but I think there's the potential for a best of both worlds approach.If, in fact, there's some appropriate procedure to get –
QuestionerRight, and we have had procedures.
QuestionerRight.Some people feel that even so, some things went on.There are voices out there that would tend towards the, hey, let's not let government see things.That's another political question.How much do we do gene editing?How much the government has disability?We need politicians who really draw in great opinions.Running a health care system and deciding when people are inventing super expensive treatments should health care demand so much of the economythat investing in education and social services and those things, that'll be another huge problem that will be debated in the political arena.Who has health care right?Who's got health care right in your judgment?
WarrenThe European countries.Scandinavian or?
WarrenWell, the UK spends about half as much as a percentage of GDP as the United States.Now, their system has waiting and things like that, but it's hard to express what a mammoth difference that is.I mean, you're talking about almost 9% of GDP difference.That is one out of 11 people who go to work every day are the extra health care activity here in the United States.So I'm not saying we should just wholesale adopt their system, which is a single payer system.There are other really good systems that are not single payer systems.Germany, Switzerland, France, they do quite well.It's one of the few things access to medical care is one of the few things that we actually do quite a bit worse than other rich countries.There's some like education that a lot of rich countries don't do a very good job on.This one is where we're sort of uniquely bad.
QuestionerHealthcare and education.We don't do as well as other people, other industrialized nations.Most rich countries don't do that well on education.And there are pieces like top universities where we are absolutely the best in the world by a lot.So that one, we're more middle of the pack in terms of our achievement.
OtherIt's health care access where you'd have to say we look particularly bad.
OtherIs there a ticking clock on global warming?
OtherYes.
Fortunately, it's not overnight.
The really big negative impacts are in the 30 to 70-year time frame, although it has already increased the chance of drought and storms.
And we're seeing that.
We can see a direct causation there.
Yes.
The heating effect is already there.
Now, overlaid with that is the Pacific oscillation and normal weather things.
So exactly how much of it is the heating signal versus those other things, you can get reasonable disagreement.
But there's no doubt that that's there.
The global average temperature is rising.
And the droughts, particularly in places like the Middle East or parts of Africa, we're already seeing some of that.
And as you go out in time, it gets a lot worse.
So changing the energy system, which has a long lead time of invention and deployment, I feel this is one of the most urgent problems.
And is the urgent answer finding alternative sources of energy?
Finding that magic three characteristics, reliable, clean, and low cost.
And there's many paths to get there.
And so we have to encourage lots of innovators trying different things.
If you could take sun and turn it directly into gasoline, that would be an approach because that can be stored 24 hours a day and even moved around very well.
There's approaches that involve taking nuclear to a new level of safety and a lower level of cost so that that would be a key part of the system.
And we need to fund a lot of innovative ideas, both governments and private sector.
OtherIs your life today more intellectually challenging than when you were running Microsoft?
OtherThat's hard to compare.
I'm on a steep learning curve in both cases.
I love the fact that I get to meet great people.
I get to see things work, see things that fail.
For this stage of my life, I'm in a perfect position.
I couldn't be happier.
Because you have an influence on Microsoft, I mean not just being a stockholder.
I enjoy going over and sharing my thoughts.
But you like the idea of dealing with it.
And I get to keep up to date a little bit because of that.
And we're using some of those digital enablement things like to get cheap financial services to poor people all over the world or to look at medical data.
And so staying up to date on the digital piece helps me do my foundation work.
I mean you said something akin to this.
The average person today lives better than John D. Rockefeller did when he was alive.
OtherThat is true.The richest man in the world at the time.He lives better.You live better in terms of your entertainment choices, your travel choices.John couldn't buy them.And that's in one lifetime.It's amazing.What brings you the most satisfaction beyond family?
WarrenWell, my greatest satisfaction is just staying in good health.When you're 86, you look at this a little differently.
OtherSo you're in good health?
WarrenOh, yeah.I mean I enjoy every day.I enjoy.
OtherWhat is it that you enjoy?
WarrenWell, I enjoy running Berkshire.I mean if you get right down into my psyche.And that's what I want to do.Yeah.No, it's been my painting for 50 some years.I get to paint what I want.I don't have to do, you know, follow what Wall Street is telling me to do next quarter or something like that.So I own the brush.I own the canvas.And the canvas is unlimited.And that's a pretty nice game.And I get to do it every day with people I like.I don't have to associate with anyone that causes my stomach to churn.You know, if I were in politics, I'd have to smile at a lot of people that I want to hit.You just don't talk to them.It's really I've got a good deal.I'm hanging on to it.I often repeat this.Brooke Asher once said to me, I spent too much of my life worrying about what people thought of me.And then I only care about what I think of them now.I love Brooke Asher.She was good.I only want to see people that I like.Yeah, and my business is I'm lucky that way.I mean business is so much easier than philanthropy.Philanthropy may be a whole lot more important.But in business, you're looking for kind of easy choices.You're looking for people that you like to associate with.And, I mean, to an extent, I can create the world around me.
OtherYou're saying to me that if somebody walked in your door and they offered they want you to buy their company and you saw it as a golden.A golden goose run by with a farmer I didn't like.
WarrenI would say no.
OtherYou'd say no.Even though you knew it would.
WarrenCharlie, marrying for money is probably a bad idea under any circumstances.But if you're already rich, it does not make any sense at all.But the satisfaction, I mean, what's the metric of satisfaction?It's really doing a decent job of running a place that gets harder to do because of size over time.But it's working with a whole lot of people on interesting.It's like Gene McCarthy said, I think, about being a football coach.I mean it's just difficult enough to make it interesting but it really isn't that hard.
OtherWell, he had a way of getting people a little irritated sometimes.
QuestionerWhat brings you the greatest satisfaction, Bill?
WarrenWell, I think learning things and making breakthroughs after all the great family stuff. That is a lot of fun. Every once in a while, if something really makes sense and you can teach people about it, share an insight, I think that's also very satisfying. When I sit down with Melinda to write the annual letter, the idea of, okay, I've had a chance to see things. What could I share that is really succinct that might be helpful to people? That is fun. It's hard. It doesn't happen all the time. But between my learning and being able to share where I see, oh, this is really simpler than I thought it was, that gives me great satisfaction.
WarrenI would say this too, Charlie. Now at 86, I mean I've seen a lot of people that have gotten older and I've never seen anybody that is 70 or pick an age who felt good about their children that felt bad about their life. In all my experience. You've never seen anybody who felt good about their children that also felt bad about their life.
CharlieYeah, and I've seen plenty of people with lots of money where it hasn't worked out well in the family. They didn't feel good about their children. Well, the children didn't feel good about them. But whichever way. I mean but they failed at the most important teaching job they had in personal relationship. And sometimes it happens for extraneous reasons. But I really have never met anybody regardless of their economic circumstances who felt their life was a failure. If their children had become. If they love their children. And the children were doing.
WarrenYeah, absolutely. They felt good about what they brought them into the world. And they felt like they had equipped themselves for the future. I knew one fellow who was extraordinarily rich. He put a lot of money in his kid's name. He didn't want them to have any control over it. Once a year he would have dinner with them and try and get them to sign their income tax return in blank. Now just imagine that with in this case four kids. None of them wanted to have enough confidence in them. It's just crazy. I mean he would woo them during this dinner and they knew exactly what was going on. And once a year. And then he'd bribe them sort of to sign their income tax return in blank. So he could file and they wouldn't know what they had. I mean when you have adults. I've seen just time after time when people have been successful.
OtherI've seen plenty of the other two.But success is a business of failure.And I don't think they feel that good about life.Thank you for coming.Great to see you.Bill, thank you very much.
Charlie RoseBill Gates and Warren Buffett for the hour.Thank you for joining us.I should mention on HBO on January 30th there is a film called Becoming Warren Buffett.In which you will see a remarkable sense of the evolution of a human being and surrounded by family.But also the lessons and the experiences that 86 years have given him.See you next time.For more about this program and early episodes visit us online at pbs.org and charlierose.com.Thank you..