2020: How would Buffett respond to capitalism's critics?

BECKY QUICK: Gentlemen, I’ll make this the last question. It comes from Phil King. He says, “Many people in the press and politics are questioning the validity of capitalism. What can you say to them that might prompt them to take a look at capitalism more favorably?”

WARREN BUFFETT: Well, the market system works wonders. And it’s also brutal, if left entirely to itself.

And we wouldn’t be the country we are, if the market system hadn’t been allowed to function. And to some extent, you can say that other countries around the world that have improved their way of life dramatically, to some extent, have copied us.

So, the market system is marvelous in many respects, but it needs government and it — you know — it is creative destruction, but for the ones who are destroyed It can be a very brutal game, and for the people who work in the industries and all of that sort of thing, so I —

I do not want to come up with anything different than capitalism, but I certainly do not want unfettered capitalism. And it’s — I don’t think we’ll move away from it, but I think we capitalists — and I’m one of them — you know, I think there’s a lot of thought that should be given to what would happen if we all drew straws — again — for particular market-based skills. You know, it’s —

Somewhere way back, somebody invented television. I don’t know who it was. And then they invented cable. Then they invented pay systems and all of that. And so, the fellow that could bat .406 in 1941 was worth $20,000 a year, and now a marginal big leaguer, you know, will make vastly greater sums because, in effect, the stadium size was increased from 30 or 40 or 50,000 people to the country, and the market system — capitalism — took over.

And it’s very uneven. And incidentally, I think that Ted Williams — (laughs) — was worth a whole lot more money than I ever should make.

But the market system can work toward a winner takes all-type situation, and we don’t want to discourage people from working hard and thinking hard, but that alone doesn’t do it. There’s a lot of randomness in the capitalist system — including inherited wealth — and I think we can — I think we can keep the best parts of a market system and capitalism, and we can do a better job of making sure that everybody participates in the prosperity that that produces. Greg?

GREG ABEL: Yeah. No, I think it’s always keeping the best parts of it. And I even think if we look at the current environment we’re in, i.e., in the pandemic, and we have to do it only when we can do it properly and reemerge, but in some ways the best opportunity for people is when we’re back working, clearly, and that the systems function again, but that — that’s the obvious and then there’s, as Warren, you’ve highlighted, there’s, you know, there’s a lot of imperfections but it’s still — it’s definitely the best model out there, that just needs some fine tuning.