Warren Buffett: Here’s What America’s Economy Needs
Warren Buffett, chairman and CEO of Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), has become a perennial source of wisdom and advice for investors and business people from all walks. Buffett has been hailed as one of the most influential people in the world, as well as one of the best investors — and for good reason. He is one of the wealthiest people on the planet, and he made his own billions by working honestly and smartly. To round it all out, he is an eager teacher, and people are all too willing to learn.
On Thursday, Fortune magazine published an essay written by Buffett in which he outlined a very simple premise that he has always stood behind: America has a great future, and women will play a critical role in it.
At a glance, this idea seems nearly tautological. Aside from some obvious biological truths about why both sexes are a necessary part of any vision of the future, there are an infinite number of operational concerns involved in a future without real and effective gender equality.
What is perhaps most interesting about Buffett’s position is how he frames the need for true gender equality in light of the success of the American experiment. “Start with the fact that our country’s progress since 1776 has been mind-blowing, like nothing the world has ever seen,” he wrote. “Our secret sauce has been a political and economic system that unleashes human potential to an extraordinary degree.”
What America has done — as both a political and economic machine — is unprecedented in the history of the world. As a nation, the United States has generated more wealth faster than any other nation on the planet, and it did so on the back of just a few basic principles. This is no place to wax philosophically about the rules of law, capitalism, and democracy, but invoking the specter of those three things should do well enough to set the stage for America’s success.
“But that’s not the half of it — or, rather, it’s just about the half of it,” Buffett continued. “America has forged this success while utilizing, in large part, only half of the country’s talent. For most of our history, women — whatever their abilities — have been relegated to the sidelines. Only in recent years have we begun to correct that problem.”
This behavior — the historic relegation of women to the sidelines — flies in the face of what rational actors in a capitalistic economy should do. There are any number of selfish reasons why those at the top of the food chain would wish to reduce competition for those few, cherished top spots. But at the end of the day, opening up the competitive field to all participants will yield the best results.
Gender inequality is a problem particularly at the top levels of business and finance, and as the global economic engine gets hopelessly more complex, it becomes increasingly important that the absolute best talent rise to the occasion. In aggregate, the American economic engine will do best when maintained and led by the best. So, as Buffett concludes his essay: “Fellow males, get onboard. The closer that America comes to fully employing the talents of all its citizens, the greater its output of goods and services will be. We’ve seen what can be accomplished when we use 50% of our human capacity. If you visualize what 100% can do, you’ll join me as an unbridled optimist about America’s future.”
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