Old Mr Buffett sat on a tuffet…

I was watching TV on Monday night, and I heard a man say, about Wall Street bankers and financiers, something like this (I’m paraphrasing from memory):

This idea that the class of people who move money around are somehow special, and deserve special treatment – well, it’s getting pretty far away from where we should be, I think.

And about the super-rich he said this (again, I’m paraphrasing from memory):

The super-rich aren’t as smart as they’d like to think they are.  They like to think they did it all themselves, they made all their money because of their own efforts, but they wouldn’t have made that much if they’d been in Bangladesh, or somewhere.  The society had a lot to do with it.  And that’s why I believe we need a taxation system, and a system of personal ethics, that says that most of that money has to go back to the society, to help the people who got a short straw in life.

Admirable sentiments, I think.  But who said it?  A trade-unionist?  A left-leaning academic?  Someone who’s just had their house repossessed?  Someone who can’t afford healthcare?  A successful businessman who’s just seen his business fold because the bank wouldn’t lend him the money to buy a new van?

In fact, those things were said by Warren Buffett, the most successful financier in the entire world history of finance capitalism, and currently the second richest man on the planet.  The thing I find truly extraordinary there isn’t that Mr Buffett is a great philanthropist (he recently donated $31billion of his personal fortune to help fund improvements in agriculture and healthcare in Africa), because, historically, many of the American super-rich have been philanthropists.  Also, Mr Buffett may have donated $31billion, but that still leaves him a multi-billionaire, so he’s not exactly on his uppers.  This kind of philanthropy is easily done, and it always seems morally dubious to me when businesspeople who have often made their money by ruthlessly exploiting their workforce and/or customers are suddenly hailed as wonderful human beings when they give away an amount of money that will have no impact on their comfort.

No, the thing I find truly extraordinary is that Mr Buffett says there should be a taxation system that takes most of the money earned by the super-rich and uses it to ease the plight of the poorest members of society.  That means that he’s calling for rich people to be compelled to help others, against their will if necessary, which is something that many of the wealthy object to.  How often have we heard in the course of this recession that we can’t regulate or tax the incomes of the super-rich, because they’ll up sticks and walk away?  How often have we heard over the last 30 years – the Thatcher/ Reagan era – that taxes for the rich must be cut and cut so that they have an ‘incentive’ to ‘create wealth’?  Against that backdrop, Mr Buffett is calling for a redistributive tax system, something that even most (supposedly) leftwing politicians seem scared to call for these days.

That’s the thing, you see – from our current political perspective, Mr Buffett’s ideas don’t just look leftwing, but radically so.  If Fox News were to discuss them, I’m pretty sure they’d label them as socialist, or at least they would if they were coming from the mouth of, say, President Obama.  Of course, Warren Buffett isn’t actually a socialist – at least I would be very surprised to find out that he is.  But he is, apparently, 79 years old, which makes him a product of the great depression, and the truth is that his ideas are just a window into what the consensus view used to be.  Before Reaganomics, before Thatcherism, before there was ‘no such thing as society’, it was taken for granted that members of a society had a responsibility for each other, and that the people with the most had a duty to the people with the least.  That wasn’t a left-wing view, it was just the concept of good-neighbourliness copied across into the public sphere.

It’s rather depressing to realise how completely we’ve lost that consensus.  It’s hard to imagine that we will ever get back to a more compassionate society.  But then again, until a few months ago, it would have been hard to imagine that the party Margaret Thatcher used to lead, the party which deregulated the City in the 1980s and so gave rise to the bonus culture, would be calling for government regulation of City bonuses.  The political consensus isn’t fixed, it varies through time, and very often economic crises are the stimulus for periods of rapid change.  Who knows, in 50 years time maybe people looking back will regard Tony Blair’s retirement in 2007 as the high-water mark of the Thatcherite ideology, and the period after as a golden age of social restructuring and progressive politics.

Well, it’s at least possible, and if we don’t dismiss the possibility in a wave of cynicism, it’s actually got more chance of coming true.  I always try to remind myself, once in a while, that the people who benefit from the current system are the ones who have a vested interest in spreading the idea that it will never change, so there’s no point even trying.

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3 Responses to Old Mr Buffett sat on a tuffet…

  1. Katherine says:

    “I always try to remind myself, once in a while, that the people who benefit from the current system are the ones who have a vested interest in spreading the idea that it will never change, so there’s no point even trying.”

    Damn straight.

  2. Adair says:

    Thanks for posting this.

  3. Warren Buffet is a pretty smart guy and has some good ideas.

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