Buffett: Capitalism Works
Here’s a recent interview with Warren Buffett in which he discusses a broad array of topics. It’s worth 15 minutes if you have the time, but here’s the bullet points:
- The US economy is still growing and “will continue” to grow into 2014.
- Confidence creeps into a system while fear overwhelms it quickly. It takes time to get the confidence back.
- The American system has always persevered. We’ve questioned capitalism time and time again, but the system works.
- We’re 6 TIMES better off now than when Buffett was born.
- The recovery is being driven by the “natural juices of capitalism and not the government”.
- Advice for entrepreneurs: listen to your customers.
- The capitalist system works because it unleashes human potential.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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24 Comments
Thank you Buffet!
People talk about “Peak GDP” or productivity and we are nowhere near the levels of human efficiency and technology that are possible.
ATTENTION! ATTENTION! ATTENTION!
Cullen Roche doesn’t understand basic economics. Capitalists don’t need working class for consumption. They don’t need workers to sell them goods. Capitalists can consume everything themselves. Only structure of production will change. It is possible to have fully automated economy without anyone working. The only thing that matters is distribution of wealth/income.
Peter Schiff was right. The ultimate goal of an economy is to eliminate all jobs.
Try reading some of his work you idiot. Cullen is actually very balanced on the view of consumption and production:
“Importantly, we must understand that consumption and production are two sides of the same coin. We often hear economists arguing about supply side policies and demand side policies. The reality is, BOTH are important. ”
http://pragcap.com/understanding-modern-monetary-system
Read about technological singularity. You know nothing about how economy actually works.
It’s ironic that you bring up technological singularity since the entire concept is flawed based on your initial criticism. Without wage earning customers there will be no consumers to buy all those robot created goods. The lack of customers will automatically reduce the singularity that can occur within the economy because if it’s too efficient it will be self defeating.
Maybe try thinking about both sides of the coin rather than obsessing over the latest end of the world fad that’s spreading through the economics profession.
“Without wage earning customers there will be no consumers to buy all those robot created goods.”
Capitalists will generate all necessary income and sell automatically produced goods to each other. Workers won’t be needed after technological singularity. Luddites were right, machines destroy jobs. In present system banks are used to create demand for excessive human supply. Living standards of middle class are on artificial support.
hey troll – shortly after your prediction comes true the machines will take over and kill off the capitalists too. viola, no people at all. the perfect economy in your opinion, I’m sure.
It’s important to differentiate Buffet’s views of the economy from the slow moving underlying fundamentals. Buffet has a very clearly described viewpoint that what matters is value of a property over intermediate term, which has undeniably stood the test of time vs short term momentum or related measures. This is what drives his business performance and the record is extremely good.
But it really says nothing about the long term, real macro, aspects of our economy. At the most basic level, macro economics is only about the product of the number of people who are working times their real productivity. So his view, like most of the financial community, is based upon capturing a larger share of the total productivity, with no direct connection to the actual change in level of total productivity.
Warren Buffett, the crony capitalist, has lost a lot of his credibility in the recent years and this interview confirms that notion.
Is this the same Warren Buffett whose company would have gone to zero if 2008 had played out without government intervention?
Yeah, capitalism is awesome if you have lots of capital like Warren; for labor not so much. Hate to say it, but Lenin was right.
I don’t care much to defend Buffett, but please oh wise one. Tell what financial company (if any) would have survived 08 without government intervention.
I thought the “Oracle” was suppose to be better than the rest? lol
The new big trick of neoliberal bankdebtocracy:
http://failedevolution.blogspot.gr/2013/03/the-new-big-trick-of-neoliberal.html
Wow. For a while I thought I was reading zerohedge comments. Had to check the header . Lol
Here’s a fun write up on ZeroHedge:
http://rationalwiki.org/wiki/Zero_Hedge
After reading this I didn’t feel so bad about not being able to decipher some of their articles, such as this one:
http://www.zerohedge.com/news/2012-12-26/record-2-trillion-deposits-over-loans-feds-indirect-market-propping-pathway-exposed
Cullen nicely explained the chart, but I kept trying to follow the logic of the article… perhaps that was foolish of me (from the rationalwiki article):
“The site posts nearly indecipherable analyses of multiple seemingly unrelated subjects to point towards a consistent theme of economic collapse any day now. … Tyler moves away from the format of long lists to write insanely dense volumes[3][4] filled with often contradicting jargon that makes one wonder if the writers even know what the words actually mean.” (from the article in the top link)
I really appreciate these summary kinds of posts Cullen. Great format.
They help me decide whether I want to invest the time to watch an entire video.
Thanks again for all you do!
Then why is he selling left and right.
Buffett is not selling. Just bought HNZ, and is looking for more big deals. You should read his annual reports.
Yes he is. Do your research.
Well, this is just another (and longer) version of
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
(Warren Buffet)
What form of Capitalism is Buffet referring to?
Buffett saying capitalism works is like Lenin saying communism works–it works for them. . .
there are a lot of interesting stuff about the efficiency of capitalism, if it is just a system that worked in a certain context that is now fading or on the contrary is self adapting. There are also other interesting stuff about if we’re or we’re not close to the peak etc… but definitely Mr. Buffet has nothing serious to say. He is an octuagerian multi billionaire that is just saying “capitalism works”, something like the pope saying “God exists”. Very usefull.