[0:07]
Otherin New York City. This is Charlie Rose. Bill 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 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 to philanthropic cause. Buffett pledged the bulk of his wealth to the Gates Foundation in 2006 and has since given 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 this at Columbia University with a thousand students. You do do this before. There is something special about the curiosity and the interest of young people, wanting to know how do they learn from you, wanting to know if you were starting over, what would you do? wanting to know about values. You do a lot of this.
WarrenWell, about the friendship. We met on July 5, 1991, and hit it off immediately. Bill was a little reluctant at first, but he got there.
OtherReluctant to come. Yeah, definitely. It wasn't for her mother, we probably wouldn't know each other.
WarrenAnd we've had a good time ever since. And we've cooperated on, particularly on the giving place, but other things as well.
Otherwell and I have to say it's everything about it turned out well he sits on your board he sits on the Berkshire board and then and we have a lot of fun talking about a lot of things and and but the big thing that really came out of one of those discussions that really was the giving pledge that that that's worked out so much better than I ever anticipated
WarrenCharlie I mean I thought if we got 30 40 people you know it we didn't how many have you I think we're an hundred and fifty six or something like that and and the people and now they've gone beyond the borders of the United States, which I didn't feel what originally happened, and people are learning more our members about effective plans, they're learning about 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 or seven years.
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QuestionerBoth of you have made the point that there are a lot because of success and technology there are a lot of people with a lot of money who much younger yeah 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 well why and did you were you if the word is reluctant reluctant to give early than that
OtherI'm taking the time to understand where the 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 study it, 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 I thought we could have high impact. And the principal 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 grow up to be healthy. How did you decide that you'd rather give your money to the Gates Foundation than create some foundation of your own and go out and find people to run it and do whatever you wanted 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 a red. She didn't think I would be. And I said, do her, if I compound money at the rate, I hope to compound money, there will be 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. Yeah, absolutely. And so we did something, like I say, it started over 50 years ago. But I really thought that there would be large sums later on and that she was particularly good at empathizing with people, understanding their need, putting the personal energy into it, everything. She would be better at giving away money than I would be. And she died in 2004, 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 Gates Foundation, being the largest. And I'm looking for people that had similar goals with philanthropy that what I had. And the idea that every life is a
[5:07]
Warrenequal value is just fundamental to me, you know, whether you're lucky, you can be lucky. And you knew Bill would run it well. Oh, of course, he was, I mean, he was putting, he had his own money up, which is a big deal, but far more than that. I mean, you had two much younger people, very bright, very hardworking. They worked much harder at this than most people do in this country and their jobs. And, and they were on the same track I was on, it, proven quantity. I mean, everything about it made sense. And, and it's continued to make sense.
Questionersense 10 years later they'll talk about melinda's influence uh you have said to me about susy your late wife i was a mess until i met susy i think that's understating it
Warrenyeah no she changed my life i mean there's no question how did she change your life well i was a very lopsided not well-adjusted person who happened to be very good at one thing and and 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 smells come up was it a coming together of opposites or no no i wouldn't say that we had we had very similar about we were in sync big in a very big way and and uh but i she was way more mature than i was she was 19 when got married i was 21 but i was i was about 12 emotionally and and she put me together and took it like i say it took time but that it changed my life i mean i would i would not have been had rough anything like the life i had and and what did charles munger well charlie munger is my partner of of 57 or 58 years and and he's extremely wise he's a wonderful friend we've been partners at 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 never had an argument i will lie that's absolutely true you must disagree on absolutely we disagree but so if you disagree how do you decide to well what he says at the end is when we disagree he says well warren you'll end up agreeing with me because you're smart and i'm right you know i'm like where do i attack that particular problem but but and often he is often he's right often he's right i have to say that no i i i listen i respect his opinion enormously whatever he gives it to me respect bill's opinion i mean it's but it's it's it's more fun doing things with partners and i mean the most fun is is is obviously a marriage partner uh and that's the
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Othermost important relationship but but having having a business partner if i'd done everything i'd done it wouldn't have worked out this way but let's say i got double the results it's been more fun doing it with charlie who says no to bill gates uh well melinda melinda's i've seen it happen now it's great when somebody knows you know when you might move too fast or be over optimistic and uh you know if a team comes in and i'm pointing out things we haven't done and uh you know maybe they're not as motivated after you so uh you know they can get me to correct that i i've matured a lot and i give melinda immense credit you know she still has work to do but uh i 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 balmer as microsoft going now both in my my family life and the foundation it's melinda
Questionerhow much time do you spend at microsoft
Otheri'm there about 15 percent of the time and i get to work just on the r and d part brainstorming with people uh 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 uh you know there's five companies that are you know in a really strong position microsoft is leading in some really cool stuff so like i look oh the the way that a business takes information about customers about communication with customers looking at data that mission of really using data and a i 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 you know it's a multi-hundred billion dollar niche that they're strong in and that they will be innovating along that line more in the next two years than than ever in our history
Questioneryou have a passion for artificial intelligence you do
Otheryeah it's the man 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 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 i you know 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
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Questionerand its potential is to do what change everything well to in the first instance to be the best assistant ever to look at all your information and you know help you know in a few minutes between meetings what you should look at or when you're trying to you know plan a trip organize things with things to be a much much much much better assistant than it is today and then eventually certain mechanical tasks like warehouse work or driving that it would take that over but for intellectual work it it will just magnify the creativity and and make your time more valuable in technology i i i 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 with that have been working on it and and it would not be a game i would be winning is a principal criteria for you understanding the business
Warrenyeah i have to understand the business and there are lots of businesses that i don't understand some of them may be almost under ununder understandable and others are just outside my sphere of confidence but you do have have people now that that do have that kind of expertise where there you have brought in i have two people who themselves have different circles of competence but they aren't chosen because they have a different circle i think there's a lot of overlap there's overlap between them and the important thing you know is not how it's nice to have a huge circle of competence it's much more important though where the where the 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 which five you know the that you've got the 5% are in that circle i mean you made a huge purchase in 2016 precision was bought in 2016
Questioneryeah it was bought 37 billion dollars including debt 33 or 4 billion of cash and assumption about 4 billion of debt is it harder and harder to find an acquisition candidate because
Warrensure i mean we got to move a needle on 400 billion of market value and you know if we're we make a billion dollars you know we're talking a quarter of one percent and that's after tax i mean that's more than a billion and a half uh pre-tax so it it 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 uh it's it's interesting i've got a call i'll be sitting thinking and i mean different different different
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Warrendifferent different things in terms of buying private private businesses is because i get a call from a private seller but uh occasionally i just uh decide to act and and and we never do anything unfriendly but in terms of buying whole businesses and but are there people who who who know you and are close to you on the lookout for you or not much it's it's unlikely that
Questioneryeah no charlie we've net bought we've net bought 12 billion of common stocks since the election now that's that's that's in that's it's in my mind which ones i pick now the guys that work with me the two fellows they probably bought a little bit or sold a little bit too but but those are just those are ideas that i've either come at it 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 we're buying or selling out it was it was shown on september 30th that we own some airlines right some stocks and so why did you do that well that i won't get into it but it was it was in large part my decision the old joke is as you know absolutely how do you become a millionaire start as a billionaire buying airlines there's no there's no there's no question that that it's been a graveyard for a lot of a lot of money but transportation has been something both but they're not related the railroads and airlines are not related at all they're different kinds of businesses you can't move the track you can't move planes around and and you can't go into i mean airlines attract people just just by there's a certain romance to it like hollywood does or something and and so you can actually go into the business and more than a hundred uh airlines have gone broke you know in the last 20 or 25 years or something like that so it it's a different sort of business
Questionerhow is knowing bill changed or influenced or enhanced your sense of of um 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 but that's listen that's the fun of having friends you know i i i don't think i would be hard for me to be a friend with anyone that i don't learn something from and they probably get kind of bored with me and i get bored with me who's that guy talking about stock you know and bill what have you learned from him being associated with him well and immense amount uh you know i he wrote an article for fortune magazine that i read
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Questionerbefore i met him about uh that it's not necessarily a good idea to leave large sums to your your children so that was pretty fundamental and i remember reading that and i i was convinced uh that that was right and i meant wow now you have to think of how to how to give it away i also remember warren showing me his calendar and you know i had every minute packed and i thought that was the only way you could do things and you know the fact that he uh is so careful about his time can i show this to the audience
Otheryeah this is he has days that there's nothing on that there's nothing on absolutely
Questioneryeah i'm trying to show the best one and it's very high tech be careful you might not understand i'm going to hold i'm not going to show the thing but this is the week of uh april of which there are only three entries for a week
Otheryeah there'll be four maybe by april file tax
Questionerso that taught you what to not to crowd yourself too much and give yourself time to read and think and right 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 filled every minute in your schedule and people are going to want to want your time it's the only thing you can't buy i mean i buy anything i want i want basically but i can't buy time and so to have time is the most precious thing you can have it i better be careful with it 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 i i for 50 whatever it is
Otheryeah 50 is it well then for 54 years i've spent five minutes going each way now just imagine that was a half an hour each way you know i i know the words to a lot more songs and that's about it 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 on almost everything uh you know a general sense that you've got to uh keep the economy turning up uh greater output and that you have to allocate it in a fair way
Otheryeah that that that that'd basic framework we see uh very much the same do both you believe we can achieve a four percent growth rate that's pretty high pretty high but but it a two we just like 2016 i think the last
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Warrenquarter was like one point six or something charlie a two percent growth rate yeah if we have a little less than one percent population growth which we probably will in one generation 25 years now people have kids a little later uh will add 19 000 per capita family of force 76 000 to real GDP so there will be 70 family of four on average there would be 76,000 more stuff per family of four in one generation i mean we are going to have more and the golden go the goose is going to keep laying more golden eggs i mean and we've got a wonderful system
Charliewell but but there's certain things it could could get in the way of that two percent i think we'll do well you do two percent yeah and two percent we'll produce miracles yeah but three percent's probably possible isn't it
Warrenthat it's not it may have it could it could be but that's but that would be fabulous right and but two percent will produce 19 000 per capita that that's greater than exists in you know 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 well they've done a great job on some things they're not a democracy and so it hangs in the balance how their political system will evolve but in terms of raising incomes getting rid of a poverty improving health it 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 of the two biggest economic powers in the world right and they're really and we're strong and we're going to stay very strong
Questioneryeah what could make us not stay strong
Warrenthere's a lot of strength that we've built up over decades the way we do research our universities the way that people take risk uh 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 you know we need to go back and look at uh you know and that is one huge source of inequity because if you get a great education actually the outcomes are are pretty good different the mobility has told you your experience has told you your experience has told you there's much harder than even you imagined improving the u.s education system yes the dropout
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Questionerrate has gone down a bit so that that that's great but the overall reading scores math scores and the inequality hasn't budged much in the last 10 years and one of the goals our foundation is to working with partners change that uh and and and so far it's proven to be one of the tougher ones but we still believe that it's super important and there are promising if we look at individual schools we see great things so we still believe it's it's achievable all the talk about immigration i want to talk about it a little bit but all the talk about immigration uh are we still looking at a situation where some of the best and brightest from overseas come here get an education and then go back to india or china or wherever it rather than staying here
Otherwell a lot do stay and the most important import the u.s has ever had by far as human talent uh it's been to our benefit that a lot of the hardest working best and brightest from almost every country in the world have wanted to come to the u.s and so if you look at university departments or you know doctors engineers uh people starting up companies building jobs it's been a huge strength of ours we've not we haven't always made it super easy for that to work but it has worked very very well so the number going back uh it's meaningful but net we are still a huge beneficiary of of human talent but it used to be said and tom preman i think first wrote this we ought to staple a green card to every diploma yeah i believe that uh now is that you know a bias because i'm from the tech industry where uh we can create multiple jobs around the engineer instead of having to do that outside the united states yes i believe that uh keeping talent in the country is a great thing tell us the story because you told me the story and and i didn't have it before you think the second most important document in america's history after the declaration of independence or perhaps the u.s constitution or both you know is this letter yeah it was a letter written by two immigrants there's a letter written by two jewish immigrants and and and that doesn't sound like much i tell you one of the names but but in august of 1939 just before germany moved into poland leo zalard whose name is not well-known uh who was born in hungary but he 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
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Warrenunited states citizens and they co-sign a letter to president roosevelt zalard got ein 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 i'm really very very well paraphrasing in here but germany's going to get an atom bomb and it may work didn't say for sure it would and and and we better get to work on one and the manhattan project came out of that and i don't who knows what would have happened in world war two a if hitler hadn't been so anti-semitic you know basically i mean go out great scientists and everything and secondly if those two hadn't chose to come to emigrate to the united states i mean the united states was you know it welcomed them and and they they may have saved this country they may have saved this country so that the germany did not get it and we did we did we know those v1s and v2s that were lobbed over there and england everything isn't have the right warhead from the standpoint of the germans and and uh if if we'd charted three years later you know who knows what would happen the remarkable men and they were both immigrants uh 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 will make a mistake in terms of the employment of nuclear weapons or some bad character will buy them or steal them and weapons of mass destruction are out there and that's the knowledge accident 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 wishes ill there are people who would like to kill millions of americans and and there's 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 i mean when we Einstein said shortly after after the uh launch of what was then called the atomic bomb he said this is uh i know not with what weapons world war three will be fought but world war four will be fought with sticks and stones and that probability exists and it's the number number one job in the president of the united states which every president acknowledges
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Warrenis 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 of nations and it's the only real cloud on america over time we'll we'll solve the economic problems but that's that's number one you agree
Questioneri agree and uh it's not just nuclear weapons no uh the uh bioterrorism piece is also quite daunting um and what's the bioterrorism piece
Warrenwell in an extreme case somebody would reconstruct say a smallpox virus and have that spread and uh 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 last about two years i checked with bill because i don't understand this stuff well enough and he said yeah it makes sense that in terms of being feasible and it it was basically about reconstituting smallpox i mean there are people in the world there may be organizations probably are organizations that would love the idea of creating a small box epidemic and how you prevent them from doing that uh well you you want to have uh surveillance to catch it as soon as you can you want to have uh tools where you can create a vaccine and protect people uh science is working on the defense part of this at the same time it's it's making the offense uh slightly easier so 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 of a nuclear weapon
Questionersome who argue that the next war will not be a nuclear war or it may perhaps not even bioterrorism it will be a cyber war that's a a third area uh and i you know i personally there's only the three but that's not much comfort uh yes the
Warrenit 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 you know including how a hospital organized itself or how food gets moved around financial institutions you know or yeah an airline decides what what to do yeah or bank accounts uh you know what was that bank account supposed to be and so a lot of experts in government and and companies now are spending time thinking about okay how do you minimize that how do you have duplicates back up a lot of sophistication going into that can the
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QuestionerUnited States risk a trade war with China or with Mexico or would it have a significant good idea it's not a good idea trade benefits
Warrenyeah the problem of trade is that the benefits are diffused and invisible so you don't walk in and buy a pair of shoes or some underwear or anything and it says you just saved 12% because this was purchased somebody so 320 million people are buying things the bananas come from they're buying things cheaper than they would otherwise but the the the harmful effects taking somebody out of a job they've had for 25 years when they it's too late to retrain everything 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 that really are the you know they they're the roadkill basically in this and there will be roadkill i mean there's no sense kidding yourself i mean we have a text we started with a textile mill at berkshire half our workers only spoke portuguese you know 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 of trade and the benefits you know somebody buys whatever tech sales 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 as 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 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 but but it isn't feasible when you only speak Portuguese and you're a 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 conventional we can do it as a society and we don't want it 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 benefit you know to hell with this guy and we're rich we can afford that and and we should do it and that's 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 uh so i was no better at seeing those trends than than other people or with
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Greg Abelbrexit and britain again uh i i was surprised by the the brexit vote and the notion of the populist uprising that are taking place in a sense of of feeding off of that well there's no doubt that 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 that would lead to these political results is a bit of a wake-up call to say okay what is in terms economic and social issues are you know can we by improving medicine improving the education system can we take what the negative views are there and engage in a uplift their views of the future to me the greatest surprise of all isn't how people voted because i i didn't think of myself as having expertise on that but 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 uh improvements in health and the uh you know the new products that will be available to them uh and what technology enables them to do and all right that is a a concern because if people don't see the arrow of time uh pointing towards greater things the idea of doubling down on more research and you know taking the best education and getting the best education and getting the that that spread around it it creates a sense of the lies where you don't have the guidance to hey some things are working let'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 uh and we have the best spirit of innovation and creativity could we lose that i don't think we will no i think the odds of that of losing that or very this is what you call the special sauce it we've got the special sauce and and we've still we've still got a special sauce if the rest of the world is learns from that special sauce and you know it's not a zero-sum game i go that's terrific that is terrific but it doesn't 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 an aggregate our children will live better the real question is is will it continue to leave lots of people behind and a specialized market
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Warrensystem will leave people behind there there is if somebody is however i want to measure it 10 percent below average there there are opportunities in this in this world today have not improved at all you know from 30 or 40 years ago or and well the classic situation is you take the Forbes 400 in 1982 number one guy was Dan love you know your viewers have never heard of they had two billion dollars now i mean you know now that it'd be 30 or 40 times that i'm 30 or 40 times and and and this a high 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 the the average person or slightly below average person in terms of particularly market talents is not going to do very well unless 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 pardon me policies from it has to be government government government is all always i mean the market system is this traffic cop it directs resources it directs brains and it doesn't and it does a great job of it but but if it defect 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 uh the winning 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 things at all we want and more and more stuff but there will be more and more people falling further relatively behind and that's not that's not a good result i mean we we can afford we can do better and somebody i'm sure you saw this i mean there was a report i think last week and suggested they took eight billionaires and basically said they have more wealth than the bottom of half of the population in the world yeah yeah and 50 percent of people in this country if you took the four and four hundred they had 93 billion dollars in 1982 and they have 2.4 trillion now 25 times as much not exactly the same people but you take the 400 25 times as much as 35 years ago and believe me that that that does not strike somebody that's working 40 hours a week and trying to support a couple
[37:06]
Warrenkids on it and finding you know that and that their income has remained the same or be less they they just aren't participating or they're threatened by forces they can't comprehend they they they can't the market system just pays more and more just think say you're a middle wave boxer you know i mean in the 30s you were limited you know you wouldn't even get on the undercard at madison square guard and 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 middle weight in the country it's pretty much the same as it used to be in the 30 so the spread gets wider if you're frank sinatra you're a lot better off if you've got television and if you can just play at some theater in in new york like where you started you know it's magnified but 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 it it's just tougher whereas you know you go back to 1800 and if you were if you were reasonably strong and willing to work hard you were worth 90 percent as much on a farm as the very best guy you know it just the differential and it'll keep widening the market system will push it in that direction and but its government is there to what would you change if you could well i would change the earned income tax credit big time yeah i just you know i i am where i am not by myself at all i mean there's 320 million americans out there and there's a lot of crosses over at normandy and everything else you know and uh it just i benefit enormously by having come along when i came along and where i came along and 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 they want to get enormously rewarded but you've got to take care of the people that just don't fit well into that particular initiative i mean if this country paid off based on athletic ability you know i mean i could i could study eight hours a day and you know and have all these and you know i'm still going to you know i'll get in the ring or something like that and 10 seconds later i'm on my back you know so it it the talents to get rewarded in the market system are important because they bring us more of the goods and services that the country wants and they make all kinds of
[39:22]
Questionerimprovements in how we live just incredible but they leave 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
Warrensure does sure does that's what government just let's go ahead bill but the government you know also has to keep you know business in shape that it has the incentive to do things right and striking that balance uh you know should should be at the heart of political dialogue you need more golden eggs i mean nothing's going to work you have the fairest island in the world and two guys who are ethicists living on it and 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
Questionerso so beyond national security issues uh when you when you what do we have to be fearful of in the future when we've talked about some people believe their artificial intelligence offers certain kinds of risk and you've spoken to that uh that it could be get out of control and somehow you've spoken to that and other people and other people have what's around the corner that 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 what of that kind of when you think about these things
Warrenyeah gene editing is a good one where the promise of helping with disease making plants that are more productive gene editing is you know playing with the software of life sort of the ultimate software uh work and yet deciding exactly how it should be used you know if you could make sure your your child was thin or you know attractive or uh had certain other characteristics is that an appropriate use of the technology and so society will have some question i'll answer that question i'm sorry for the beta testing on that one i'm serious do you decide that those are government is it government is the whole thing about there some if there's some balance between freedom and security and we came up in terms of you know even in terms of getting inside of a phone in which a terrorist might have left future possible terrorist acts you know well that's another one where uh you know making sure the government isn't completely to what goes on and financial transactions communications because you trust that the appropriate policies for when and how government's ability to see information to use that's
[42:07]
Warrenanother one where they'll there'll be a big debate about you know some extremists might say you know government really shouldn't see anything others would say government should see everything but i think there there's the potential for her best of both world approach in fact there's some appropriate procedure to get right and we have had procedures uh and you know some people feel those the that even so some things went on so they you know there are voices out there that would tend towards the hey let's not let government see things and uh that's another political question how much do we do gene editing how much the government has disability uh you know we need uh politicians who really draw in uh great opinions and running a health care system and deciding when people are inventing super expensive treatments should health care demands so much of the economy that investing in education and social services and those things that'll be another huge problem that will be debated in uh in the political arena who has health care right who's got health care right in your judgment the european countries uh Scandinavian or well the the 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 different that is i mean you're talking about uh almost nine percent of gdp difference you know that is one out of eleven 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 uh germany switzerland france they do quite well it's one of the few things access to medical care uh 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 uh is is is where we're sort of uniquely bad health care and education we don't do it as well as other people other industrialized nations right 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 uh you know so that one we're more middle of the pack in in terms our achievement it's health care access where you'd have to say we we look particularly bad
[44:53]
QuestionerIs there a ticking clock on global warming?
OtherYes. Fortunately, it's not, you know, overnight. The really big negative impacts are in the, you know, 30 to 70 year timeframe, although it has already increased the chance of drought and storms and, you know, we're seeing that. You can see a direct causation there? Yes, the heating effect is already there. Now, over later, with that are, 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 seen 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, you know, 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. You know, if you could take sun and turn it directly into gasoline, you know, 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.
QuestionerIs 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. You know, 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.
QuestionerBecause you have an influence on Microsoft. I mean, not just being a stockholder.
OtherI enjoy going to be a stockholder. going over and you like the idea of dealing with it. Yeah. And they, you know, 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 pour people 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.
[47:46]
QuestionerI mean, you've said something akin to this. You know, the average person today lives better than John D. Rockville did when he was alive. That is true. The richest man in the world. time. Yeah, you live better. Yeah, you live better in terms of your entertainment choices, your travel choices. John, he couldn't buy them, you know. I mean, and that's in one lifetime that it's amazing. What brings you the most satisfaction beyond family?
WarrenWell, my most greatest satisfaction is just staying in good health. When you're 86, I mean, you look at this a little liver. So you're in good health? Oh, yeah. I mean, I enjoy every day. I enjoy. But what is it that you enjoy? Well, I enjoy running Berkshire. I mean, if you get right down into my psyche. And that's what I want to be. Yeah. No, it's been my painting for 50-some years. I get to paint what I want. I don't have to, 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. Now that's a pretty nice game and I get to do it every day. day with people I like. I don't have to, 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 a lot of people that I want to hit, you know. You just don't talk to them. It's really, I've got a good deal. I'm hanging on to it. I often repeated the story. 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. She was good. I only want to see people that I love. I 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, it 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 can, that you like to associate with. And I mean, you're, to an extent, I can create the world around me. You're saying to me, if somebody walked in your door and they wanted you to buy their company, and you saw it as a golden. A golden goose run by it with a farmer I didn't like. I would say no. You'd say no. Even though you knew it would. Charlie, 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.
[50:06]
QuestionerBut the satisfaction, I mean, what's the metric of satisfaction?
WarrenIt's really doing a decent job of running a place that it gets harder to do because of size, but over time. It's working with a whole lot of people on interesting. It's like Gene McCarthy said, I think about being a football coach. It's just difficult enough to make it interesting, but really isn't that hard. When you get all right. Well, he had a way of getting people a little irritated sometimes. What brings you the greatest satisfaction? Well, I think learning things and making breakthroughs, you know, 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. You know, 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. You know, it doesn't happen all the time. But between you. 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. I 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 picking an age who felt good about their children that felt bad about their life. And all my experience. You've never seen anybody who felt good about the children that also felt bad about their life. Yeah. You've seen plenty of people with lots of money that, where it hasn't worked out well in the family. They didn't feel good about their children. Well, or the children didn't feel good about them. But whichever way, I mean, but in there was, they failed at the most important teaching job they had and 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 family. failure the felt they'd been if their children had become they love their children and the children were doing yeah absolutely they felt good about what they you know that they brought them into the world when they yeah and they felt like they had equipped themselves for the future I I know I knew one fellow was extraordinarily rich he put a lot of money in his kids name he didn't 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 you know with
[52:50]
Warrenin this case four kids none of them he wanted to have enough confidence in them or to have it's just crazy I mean they he would woo them during this dinner and they knew exactly what was going on once a year and the you know 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 that when you have adults I've seen just time after time when people have been success I've seen plenty of the other two but but successes at business of failure and I I don't think they feel like good about life.
OtherThank you for coming. Thank you to see you. Bill, thank you very much. Bill 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 in early episodes, visit us online at pbs.org and charlie rose.com.
OtherCan for a substantial period of time disrupt that, then a lot of systems, you know, including how a hospital organized itself or how food gets moved around. Financialist decisions. You know, an airline decides what to do. Yeah, or bank accounts. You know, what was that bank account supposed to be? And so a lot of everything. 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 or, would it have a significant...
OtherIt's not a good idea. Trade benefits. The problem of trade, is the problem of trade is that the benefits are diffused and invisible. So you don't walk in and buy a pair of shoes or some underwear or anything, and it says you just saved 12% because this was purchased somebody. So 320 million people are buying things. The bananas come from now. 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 they, it's too late to retrain them for 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, you know, they're the roadkill, basically,
[56:42]
Warrenand there will be roadkill. I mean, there's no sense kidding yourself. I mean, we have a text, we started with a textile mill at Berkshire. Half our workers only spoke Portuguese. You know, they worked in hot conditions, loud conditions, and they spent 20 or 25 years on looms. When textiles moved elsewhere, their lives, economic lies, 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, as 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 take care means what? 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 a 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 conventional. We can do it as a society. And we don't want to, 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 benefit, you know, to help with this guy. And we're rich, we can afford that and we should. That was right and it meant, wow, now you have to think of how to, how to give it away. I also remember Warren showing me his calendar and, you know, I had every minute packed and I thought that was the only way you could do things. And, you know, the fact that he is so careful about his time.
CharlieCan I show this to the only? Yeah. This, you know, he has days. That there's nothing on. That there's nothing on it. Absolutely. Yeah, I'm trying to show. Some are the best. Let's see. And it's very high tech. Be careful. You might not understand that. I'm going to hold that. I'm not going to show the thing. But this is the week of April, of which there are only three entries for a week. Yeah, there'll be four maybe by April. File tax. So that taught you what? Not to crowd yourself too much and give yourself time to read and think and. Right. That you control your time. And that sitting and thinking. I 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.
[59:08]
WarrenIt's not a proxy of your seriousness that you filled every minute in your schedule. And people are going to want to want your time. It's the only thing you can't buy. I mean, I'd buy anything I want, basically, but I can't buy time. And so to have time is the most. It's, I better be careful with it. 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, yeah, 50, well, then for 54 years, I've spent five minutes going each way. Now just imagine that was a half an hour each way, you know. I know the words to a lot more songs, and that's about it. It adds up, doesn't it? It really adds up. No, if you're talking an hour a day, difference coming and going, And, you know, that's 2.5% of the person's work week. That means 40 years, you're talking about a year.
QuestionerDo you agree politically? On almost everything, you know, a general sense that you've got to keep the economy turning up greater output and that you have to allocate it in a fair way.
WarrenYeah, that basic framework we see very much the same.
QuestionerDo both you believe we can achieve a 4% growth rate?
WarrenThat's pretty high. Pretty high, yeah. But a two...
QuestionerDid we just, like 2016, I think the last quarter was like 1.6 or something?
WarrenCharlie, 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, will add 19,000 per capita, family of force, 76,000 to real GDP. So there will be 70. Family of 4, on average, there would be 76,000 more stuff per family of 4.
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. Or with Brexit and Britain. Again. I was surprised by the Brexit vote. Yeah. And the notion of the populist uprising that are taking place in a sense of feeding off of that.
QuestionerWell, there's no doubt that younger people and urban people in terms of their social mores and 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 that would lead to these political. results is a bit of a wake-up call to say, okay, 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 in a uplift their views of the future?
[1:02:20]
Greg AbelTo me, the greatest surprise of all, isn't how people voted, because I didn't think of myself as having expertise on that. But 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, you know, the new products that will be available to them. And what technology enables them to do and all of them? 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 the lies where you don't have the guidance to, hey, some things are working, let'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 that, 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, and, 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, our sustainability, society will be far richer 10, 20, 30 years ago. And if you just take an aggregate, our children will live better. The real question. I mean, 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 of the two biggest economic powers in the world. Right, and they're rising. We're strong and we're going to stay very strong. 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 risk, 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, you know, we need to go back and look at. You know, and that is one huge source of an end. equity. Because if you get a great education, actually, the outcomes are pretty good.
[1:05:00]
OtherDifferent. Your mobility. Your experience has told you, your experience has told you that'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 10 years. And one of the goals, 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 there are promising, if we look at individual schools, we see great things. So we still believe it's achievable. All the talk about immigration, I want to talk about it a little bit, but all of the talk about immigration, are we still looking at a situation where some of the best and brightest is from overseas, come here, get an education, and that go back to India or China, or where I'm rather than staying here. Well, a lot do stay. And the most important import the U.S. has ever had by far as human talent. It's been to our benefit that a lot of the hardest working best and brightest from almost every country in the world have wanted to come to the U.S. And so if you look at university departments or, you know, 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 Preben, I think, first wrote this. We ought to staple a green card to every diploma. Yeah, I believe that. Now, is that, you know, a bias because I'm from the tech industry where we can create multiple jobs around the engineer, instead of having to do 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, you know, 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 two years than that. than ever in our history. You have a passion for artificial intelligence, you do. Yeah, 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.
[1:07:41]
QuestionerWhen 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 know, you've been 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? Change everything?
QuestionerWell, in the first instance, to be the best assistant ever, to look at all your information and help you know in a few minutes between meetings what you should look at or when you're trying to, you know, plan a trip, organize things with things, to be a much, much, much better assistant than it is to today and then eventually certain mechanical tasks like warehouse work or driving that it would take that over. But for intellectual work, it will just magnify the creativity and make your time more valuable.
QuestionerAre 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 game. It is a principal criteria for you understanding the business.
QuestionerYeah, I have to understand the business. And there are lots of businesses that I don't understand. Some of them may be almost un-under-understandable, and others are just outside my sphere of confidence.
WarrenBut you do have people now that do have that kind of expertise where there, you have brought in. I have two people who themselves have different circles of competence, but they aren't chosen because they have a different circle or anything. There's a lot of overall. there's overlap between them. And the important thing, you know, is not how, it's nice to have a huge circle of competence. It's much more important though where the, 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 which 5, you know the rest that you've got, the 5% are in that circle.
QuestionerI mean, you made a huge purchase in 2016. Precision was bought in 2016. Yeah, we bought. $37 billion. Including debt, $33 or $4 billion of cash and assumption about $4 billion of debt.
QuestionerIs it harder and harder to know, in all my experience? I mean...
WarrenYou've never seen anybody who felt good about their children that also felt bad about their life. Yeah. And I've seen plenty of people with lots of money that, where it hasn't worked out well in the family.
[1:10:12]
WarrenThey didn't feel good about their children. Well, or the children didn't feel good about them. I mean, but whichever way, I mean, but in there was, they failed. at the most important teaching job they had in personal relationship and and sometimes it happens for extraneous reasons but but I would I really have never met anybody regardless of their economic circumstances who felt their life was a failure the felt they'd been if if their children had become they love their children and the children were doing yeah absolutely they felt good about what they you know that they brought them into the world when they yeah and they felt like they equipped themselves for the future I knew one fellow was extraordinarily rich. He put a lot of money in his kids and 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, you know, with this case four kids, none of them, he wanted to have enough confidence in them or to have, 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. You know, and then he'd bribe them sort of to sign their income tax return in blind so he could file and they wouldn't know what they had. I mean, that when you have adults, I've seen just time after time when people have been success, I've seen plenty of the other two, but, but successes of business of failure, and I don't think they feel that good about life.
OtherThank you for coming. Thank you to see you. Bill, thank you very much. Bill Gates and Warren Buffett for the hour. Thank you for joining us. I should mention on HBO on January 30th, there is a film. call 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.b.s.org and charlierose.com.
WarrenSo I was no better at seeing those trends than other people. Brexit and Britain again I was surprised by the the Brexit vote and and the notion of the populist uprising that are taking place in a sense of feeding off of that well there's no doubt that that that younger people and urban people in terms of their social mores and you know being seen to benefit relatively more
[1:13:34]
Questionerfrom the new technology and things that are out there there is some 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, okay, 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 in 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. But 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, you know, the new products that will be available to them. And what technology enables them to do and all of them? Right. That is a concern because if people don't see the arrow of time, point 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 the lies where you don't have the guidance to, hey, some things are working, let'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, we have the best talent, and 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 that, 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, and, 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 an aggregate, our children will live better. The real question is, is will it continue to leave lots of people behind? And a specialized market system will leave people behind. There is, if somebody is, however I want to measure it, underwear or anything, and it says you just saved 12% because this was purchased somebody. So 3. 120 million people are buying things, the bananas come from, 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
[1:16:23]
Warrenwhen they, it's too late to retrain everything, 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, you know, they're the roadkill, basically, in this. in this and there will be roadkill. I mean, there's no sense kidding yourself. I mean, we have a text, we started with a textile mill at Berkshire. Half our workers only spoke Portuguese. You know, they worked in hot conditions, loud conditions, and they spent 20 or 25 years on looms. When textiles moved elsewhere, their lives, economic lies, were ruined, and that is going to happen. That is part of trade. And the benefits, you know, somebody buys whatever textiles we were to 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, as 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. 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. you spent your whole life on a loom, you've got to make sure that person has an income that's conventional. We can do it as a society. And we don't want to, we don't want to let the individual case prejudice against trade benefits everybody, but we also don't want to say because everybody's benefits, you know, to help with this guy. We can afford that and we should do it, and that's how we'll get a good trade policy. Did you appreciate, Bill, the economic insecurity that was out there that Donald Trump was able to tap into politically? politically?
QuestionerNo, I'm not an expert on political sentiment, so I was no better at seeing those trends than other people. Or with Brexit and Britain. Again, I was surprised by the Brexit vote. Yeah. And the notion of the populist uprising that are taking place in a sense of feeding off of that?
WarrenWell, there's no doubt that younger people and urban people in terms of their social mores and 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, okay, what is in terms of economic and social issues are, you know, meaningfully reduces the chance of, of a...
[1:19:04]
Warrena nuclear weapon. There are some who argue that the next war will not be a nuclear war, or it may perhaps not even bioterrorism. It will be a cyber war. That's a third area. And I, you know, I personally, there's only the three, but that's not much comfort. Yes, the, it... A modern society depends on electricity and communications and information flow. And if you can't... for a substantial period of time disrupt that, then a lot of systems, you know, including how a hospital organized itself or how food gets moved around. Financial institutions. You know, yeah, an airline decides what to do. Yeah, or bank accounts, you know, 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? minimize that? How do you have duplicates back up? A lot of sophistication going into that. Can the United States risk a trade war with China or with Mexico or... Will it have a significant... It's not a good idea. Trade benefits. The problem of trade is that the benefits is that the benefits are diffused and invisible. So you don't walk. you don't walk in and buy a pair of shoes or some underwear or anything and it says you just saved 12% because this was purchased somebody. So 320 million people are buying things, the bananas come from. 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 they... It's too late to retrain everything. They're very specific and terrible. 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, you know, they're the roadkill, basically, and there will be roadkill. I mean, there's no sense kidding yourself. I mean, we have a text, we started with a textile mill at Berkshire. Half our workers only spoke Portuguese. You know, they worked in hot conditions, loud conditions, and they spent 20 or 25 years on looms. When textiles moved elsewhere, their lives... their lives, economic lies, were ruined. And that is going to happen. That is part of trade. And the benefits, you know, somebody buys whatever tech sales 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, as a society. It penalizes certain people in the world.
[1:22:02]
OtherThere may be organizations, probably our organizations, that would love the idea of creating a small box. 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. Science is working on the defense part of this. At the same time, it's making the offense slightly easier. So if we're vigilant, there's a lot of steps we can take to make. the risk lord, 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 it may perhaps not even bioterrorism. It will be a cyber war. That's a third area. And I, you know, 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 organized itself, or how food gets moved around. Financial institutions. You know, an airline decides what to do. Yeah, or bank accounts. You know, 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 or... Will it have a significant... It's not a good idea. Trade benefits. Yeah. trade is that the benefits are diffused and invisible. So you don't walk in and buy a pair of shoes or some underwear or anything and it says you just saved 12% because this was purchased somebody. So 320 million people are buying things. The bananas come from now. They're buying things cheaper than they would otherwise. But the harm full effects, taking somebody out of a job they've had for 25 years when they, it's too late to retrain it for 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, that really are the, you know, they, and they co-sign a letter to President Roosevelt. Zalard 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, I'm really
[1:25:15]
Warrenparaphrasing in here, but Germany is going to get an atom bomb and it may work. 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 I don't, who knows what would have happened in World War II. A, if Hitler hadn't been so anti-Semitic, you know, basically, I mean, grow out these great scientists and everything. And secondly, if those two hadn't chose to come to, emigrate to the United States. I mean, the United States, was you know it welcomed them and and they they may have saved this country they may have saved this country so that the germany did not get it and we did we did we know those V-1s and V2s that were lobbed over there and England everything is that the right warhead from the standpoint of the Germans and and if we'd charted three years later you know who knows what would have happened the remarkable 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, will make a mistake in terms of the employment of nuclear weapons or some bad character will buy them or steal them. And weapons of mass destruction are out there. And the knowledge... That's some tragic accident, 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 wishes 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 that would like to kill millions of Americans. And the weapons are there to do it. I mean, when we, Einstein said shortly after the launch of what was then called the atomic bomb, he said, this is, I know not with what weapons World War III will be fought, but World War Four 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.
[1:27:33]
WarrenAnd it's the only real cloud on America over time. We'll solve the economic problems, but that's number one. You agree. I agree. it's not just nuclear weapons. No. The bioterrorism piece is also quite daunting. What's the bioterrorism piece? Well, in an extreme, you know, an airline decides what to do. Yeah, or bank accounts, you know, what was that bank account supposed to be? And so a lot of experts in government and companies, companies now are spending time thinking about, okay, how do you minimize that? How do you have duplicates back up? A lot of sophistication going into that. Can the United States risk a trade war with China or with Mexico or... Would it have a significant... It's not a good idea. Trade benefits. The problem of trade is that the benefits is that the benefits are diffused. diffused and invisible. So you don't walk in and buy a pair of shoes or some underwear or anything, and it says you just saved 12% because this was purchased somebody. So 320 million people are buying things, the bananas come from, 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 they, it's too late to retreat. training, 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, you know, they're the roadkill basically in this, and there will be roadkill. I mean, there's no sense kidding yourself. I mean, we have a text, we started with a textile mill at Berkshire. Half our workers only spoke Portuguese. You know, they worked in hot conditions, loud conditions, and they spent 20 or 25 years on looms. When textiles moved elsewhere, where their lives, economic lies, 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, as 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 conventional. We can do it as a society and we don't want to, 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 benefits, 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?