Over the last several decades in America, our economic prosperity has not been shared equally and the impacts of globalization have taken a large portion of the blame.
Asked about this trend at the Berkshire Hathaway annual shareholders meeting on Saturday, Warren Buffett said that in America, “nobody should be roadkill.”
“You’ve got an enormously prosperous country,” Buffett said. “You’ve got $60,000 in GDP per capita. So we’ve got prosperity, and that prosperity is enhanced by trade.”
Following the election of President Donald Trump, who ran on an economic platform of bring back manufacturing jobs that had been sent from the U.S. to points overseas and pledged to “Make America Great Again,” more attention has been paid to the offshoring trends that have permeated the economy for a generation. Since taking office, President Trump has either pulled the U.S. from existing trade agreements or pledged to renegotiate existing ones.
Buffett, however, thinks the public needs to both understand better the benefits accrued from free trade and also be assured that we will take care of those left behind by these developments.
“We have to have policies that take care of the people who become roadkill [because of free trade],” Buffett said. “Because it doesn’t make any difference to me if my life is miserable because I’ve been put out of business by something that’s good for 320-some million people in some sort of infinitesimal way and it’s messed up my life.”
Buffett added that, “we’ve got a rich society that can do that and a society that will benefit from free trade, and I think we oughta try to hit both objectives of making sure that there is no roadkill and, at the same time, that 320 million people get the benefits of free trade.”
Charlie Munger, Berkshire Hathaway’s vice chairman, added that, “I’m afraid that a capitalist system is always going to hurt some people as it modifies and improves. There’s no way to avoid it.”
Buffett agreed that capitalism is brutal to capital, but said that, “a rich society can actually…take care of [those left behind by the economy].”
‘The luckiest crop in history’
In recent annual letters, Buffett has repeatedly emphasized his belief in the strength of the U.S. economy and his view that economic prosperity will continue to increase through the years.
“One word sums up our country’s achievements: miraculous,” Buffett wrote in his latest letter to shareholders published in February.
“From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers […]
“This economic creation will deliver increasing wealth to our progeny far into the future. Yes, the build-up of wealth will be interrupted for short periods from time to time. It will not, however, be stopped. I’ll repeat what I’ve both said in the past and expect to say in future years: Babies born in America today are the luckiest crop in history.”
It takes hard work and hard choices, however, for Buffett’s prophecy to eventually ring true.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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