An published this week by Business Insider informs us that there are now six members of an elite group of people whose personal fortunes are valued at more than $200 billion: Tesla CEO Elon Musk, Oracle cofounder Larry Ellison, Amazon founder Jeff Bezos, Meta cofounder Mark Zuckerberg, and Google founders Larry Page and Sergey Brin. They are all American and they all appear to align with the political logic and ideology of US President Donald Trump. It is widely believed that they have all shared phone numbers with the president.

As Devil’s Advocate, I would hardly expect — now or in the future — to receive a request for the canonization of any of this crew. Most of them were present at Trump’s inauguration and all have demonstrated an “interest” in politics. The word “interest” has at least three meanings in this sentence. Curiosity and empathetic concern is one of those meanings, but certainly not the dominant one. “Intent to influence” is closer to the mark.

Most ordinary, rational people, typically engaged in making a living, would reason that if they were in possession of a measly one billion dollars — or even a few million — they would focus on the myriad ways available to them of enjoying their good fortune, rather than spending their precious time and vast resources seeking new opportunities to exercise their skills at managing conflicts of interest.

Was there really a pre-conflict of interest world?

Although it appears to some as a novel trend, this culture built around a post conflict of interest mentality didn’t wait for Trump to be elected to become either the defining trait of the US politico-economic system or its official ideology. Michael Douglas’s character  Gordon Gekko in the 1987 film, Wall Street, famously, “Greed is good.” Moving from New York’s Wall Street to Washington, DC’s Pennsylvania Avenue, the direct translation of Gekko’s wise words would be “conflict of interest is good.”

How does the current system work? And are Republicans the exclusive practitioners? In a recent, political activist and writer Corbin Trent excoriated his fellow Democrats essentially for defending a supposed “moral order” that has long encouraged, to use his words, “selfish, narcissistic egoism” as the driving force of the economy. The difference is that what Democrats nourished passively and privately, Trump promotes brazenly and with his patented brio.

“Trump didn’t single-handedly infect our institutions. They were infected long ago. He’s just a selfish, narcissistic egotist who saw a weak government, weak institutions, a weak judiciary, and a weak opposition party, and took it over.

When Democrats focus all their energy on the exploiter rather than the rot that enabled him, they guarantee that nothing will change.”

So long as those who mastered DC decorum honored the prevailing system without advertising its flaws, they could count on the population’s resigned approval. The political custodians of the system, both Democrat and Republican, invested in defending it from criticism. Trent accuses the Democrats of identifying with an elite that wants to bring “us back to ‘normal,’” which he describes in the following terms: “Back to when people still struggled to afford the basics, when the USA was still a weakening nation, when all the broken and corrupted institutions that served their interests were humming along just fine. They just want to get rid of the madman who screwed up the good time they were having.” Trent even cites the deleterious role of “massive think tanks, policy shops, entire ecosystems dedicated to maintaining the status quo or getting us back to ‘normal.’”

In other words, any way you look — left (Democrat) or right (Republican) — candidates for sainthood among the political class will be few and far between. We are encouraged to think of think tanks as institutions that conduct high-powered research in the public interest. Many of them turn out to be exemplars of a special category: “conflict of intellectual interest.” Alas, the pattern even spills over into academia, which just as for the political class has its “.” Our intellectual establishment, private and public, finds itself at a far cry from the ideal expressed by English poet Geoffrey Chaucer seven centuries ago in the English of his time in his description of his “clerk of Oxenford” (Oxford cleric, a student and teacher):

Sownynge in moral vertu was his speche;

And gladly wolde he lerne and gladly teche.

(Resounding with moral vertu was his speech;

And gladly would he learn and gladly teach.)

I’m not claiming that conflicts of interest didn’t exist in the 14th century, but intellectuals of the time could, according to the author of The Canterbury Tales, be content to simply study and teach.

The case of Bill Gates

How bad is it, really? Are there no cases of billionaires who put virtue above interest? On the contrary, we know about one:. He died two years ago, but not before giving his entire fortune away. He apparently had the same taste for personal austerity as Chaucer’s clerk.

But wasn’t there another one, much more a household name than Feeney? Who doesn’t remember the glorious image the founder of Microsoft managed to achieve, not so many years ago, as a paragon of public virtue? Some deemed him a veritable industrial saint. This achievement was particularly notable given that in the late 1990s most people perceived him as an unflinching, monopolistic corporate bully.

The wealthy have one distinct advantage over the rest of us: the capacity to hire people skilled in recrafting their image and spreading the new, improved version across the media. The basic requirement is to build the image around a noble cause. John D Rockefeller the precedent after the in 1914, demonstrating that no-holds-barred capitalism could become sanctified through philanthropy. Rockefeller’s clever ploy, as he harnessed the talents of publicist , effectively gave birth to the modern “science” of public relations. The rehabilitation narrative for the formerly reviled Gates had the added attraction of appearing as a classic tale of .

How did Gates do it? He simply applied his business acumen to philanthropy, promoting a model that became labeled as “.” He cleverly recruited the second-richest man in the world, Berkshire Hathaway Chair Warren Buffett, to accompany him and validate his claim. (The two often traded places as the uncontested world champion of wealth). This not only burnished Gates’s image, the media fawned over it for another self-interested reason: Gates’s conspicuous philanthropy appeared to justify predatory capitalism as an effective instrument of human welfare and collective prosperity.

Buffett was the perfect foil for Gates. Avoiding the spotlight, many saw him as a kind of innocent idiot savant who had mastered all the secrets of finance but, despite his visible wealth, maintained an austere, saintly lifestyle. This contrasted with Gates whose lifestyle was clearly flamboyant, despite the man’s singular lack of charisma. The media embraced the now thoroughly reformed “good billionaire,” who openly practiced enlightened self-governance alongside the genius investor from Omaha.

For several years, the public and the media perceived Gates as a problem-solving genius applying his purportedly exceptional intellect and efficiency-focused business models to the world’s most complex problems, including what is perhaps the most complex of them all: education. In that particular field, his formulas failed to work, but his wealth permitted him to persist.

Gradually Gates’s sanctified image began fading, at first imperceptibly, but it steadily eroded, notably when people discovered that the Gates Foundation — theoretically dedicated to noble causes such as health and education — was investing its wealth in companies known for gleaning profits from ignoble practices that compromised the health of both the planet and human society.

Bill’s candidacy for canonization finally imploded spectacularly when the media revealed his close relationship with human trafficker Jeffrey Epstein. That relationship was close enough in any case to incite Melinda, his wife and philanthropic alter ego, to sue for .

During the Obama years in particular, Gates was one of the billionaires who more or less discreetly exercised disproportionate and unelected power over global policy. This became scandalously clear during the Covid-19 pandemic. His case suggests that great wealth may easily convert into an irresistible structural power that is at odds with democratic ideals, even when used for supposedly “good” ends.

The deeper roots of the post conflict of interest culture

The Trump administration has done nothing to disguise the omnipresence of conflict of interest within the political, financial and industrial world. But is it new, as Kafka and Robertson, cited above, suggest? Was it different in previous administrations? Six decades ago, President Lyndon B. Johnson had personal investment in both the defense industry and media and used his political clout to a disastrous war in Vietnam. He wasn’t being influenced by billionaires, but he was his own source of influence.

Without examining similar cases — and there are many —  we should perhaps ask ourselves a more general question. We know that the US is a nation that maintains a quasi-religious belief in the idea of a natural affinity between democracy and capitalism. Hasn’t it now become obvious, in part thanks to Trump, that conflict of interest is a feature of the system rather than a vice to be avoided?

I discussed this very question with a colleague who made the following point. While conflicts of interest have always existed, the recent apparent disavowal of traditional ethical restraints and the unprecedented scope of private financial ties at the highest levels of government have led many to conclude that the system has transitioned from attempting to manage an undesirable vice to merely accepting and working within a de facto feature.

Looking for an illustration? Just this week, the most recent Democratic presidential candidate, Kamala Harris, upon learning of former Vice President Dick Cheney’s death,:

To what was Dick Cheney “devoted” as a “public servant” under President George W. Bush? One thing is uncontestable, he had no lack of devotion to the good fortune of the company he had previously managed as chief executive: Halliburton. Cheney to receive annual payments of deferred compensation from his former energy company throughout his time as vice president. He retained a large number of unexercised Halliburton stock options upon taking office. And of course, Halliburton’s good fortune mirrored — and contributed to —   the ill fortune of millions of civilians in the Middle East.

And how did Halliburton do during his vice presidency? Halliburton’s subsidiary, Kellogg Brown & Root, billions of dollars in no-bid or limited-competition government contracts for logistics and rebuilding work related to the wars in Afghanistan and Iraq.

Thankfully, no one has yet submitted a dossier of canonization for Mr. Cheney.

*[The Devil’s Advocate pursues the tradition 51łÔšĎ began in 2017 with the launch of our “Devil’s Dictionary.” It does so with a slight change of focus, moving from language itself — political and journalistic rhetoric — to the substantial issues in the news. Read more of the 51łÔšĎ Devil’s Dictionary. The news we consume deserves to be seen from an outsider’s point of view. And who could be more outside official discourse than Old Nick himself?]

[ edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

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QE was very simply a way of gifting unlimited quantities of money to the wealthy. Money is profitable in ways that labor and capital can never rival. They both require considerable effort to invent, produce and sell. Money produces more money just by being there. Warren Buffett has never failed to express the metaphysical awe he feels when pondering the greatest mystery in the universe: the power of compound interest.

Over the past 15 years, the world has witnessed an unprecedented growth in the class of billionaires and multimillionaires. These are people who don’t have to work very hard, but they do have to think strategically. Having accumulated the kind of wealth that keeps producing more wealth, they discover two precious opportunities no one concerned with survival will ever have the leisure to think about.

The first derives from their awareness that that the rest of humanity doesn’t have it quite so easy. The logic of the capitalist system tells them that to help the struggling masses they can spend some of their money on activities that create jobs. But that can’t meet all of humanity’s needs and it certainly can’t take precedence over playing with money itself.

The second less talked about opportunity relates to responding to a far more significant problem in our Age of Information: that being too ostentatiously wealthy can look bad from a public relations (PR) point of view. When you have cash to play with, there can be no better investment than PR.

Image management has become a top priority for the hyper-rich. Wealth turns individuals into brands. Brands must be managed, ideally with a sense of military discipline. Any respectable wealthy person will constitute a general staff consisting of a group of advisers dedicated to defending the brand. This will include an asset manager, one or more very expensive lawyers and the various people whose job it is to manage the brand.

A century ago the greatest PR geniuses provided the goose that lays literally golden eggs. Its name is philanthropy. In today’s age of virtue signalling, philanthropy appears to signal the two most admired virtues in theory, if not in practice: empathy and generosity. The corporate media will unhesitatingly lap it up because it sends the message that even if, contrary to Gordon Gekko’s credo, greed is not good, the outcome of greed will always be deemed good. The heroic generosity of the most active and public philanthropists will always provide the kind of feel-good story people want to hear.

But some who work in the philanthropy business itself – though not the billionaires themselves – have stopped feeling so good about their own activity.  The Guardian that one philanthropic organization has decided to “abolish itself” because it now realizes that philanthropy has become “a function of colonial capitalism.” It has announced its intention to close its doors and distribute its wealth estimated at ÂŁ130 million.

“Lankelly Chase, which gives out about £13m a year in grants to hundreds of charities operating in areas such as social, racial and climate justice, said it wanted to find bold new alternatives to what it called philanthropy’s ‘cult of benevolence.’”

°Ő´Çťĺ˛š˛â’s Weekly Devil’s Dictionary definition:

Benevolence:

Literally, according to its Latin origin, wishing well or good will (bene = well, volo = wish). In current usage, a strategic attitude adopted by the wealthy to both excuse the illicit origins of their wealth and gain control of sectors of the economy.

Contextual note

Given its focus on “social, racial and climate justice,” this decision makes sense for the agents of philanthropy at Lankelly Chase. It reflects a recent annoying trend, the growing awareness of historical context. History might, after all, tell us a little about who we are and what our decisions are worth. This penchant for taking history into account represtents a trend that many are actively resisting. The propaganda around the Ukraine war illustrates this. Numerous politicians and pundits deem that even thinking about events that took place before February 2022 is an affront.

The reigning orthodoxy in the culture of industrial capitalism traditionally dismisses the facts of history as irrelevant. This ideology has consistently promoted the idea not just that the past is dead, but that pondering it is unproductive. Dwelling on history merely distracts us from the business of ensuring our future prosperity. We live for progress. No one, according to this mindset, has time for William Faulkner’s remark that “the past is never dead. It’s not even past.”

But Faulkner was right. As a society, we are structured by our past. It is always with us, even when we deny it. In the political economy, the same politicians and pundits who insist on the importance of maintaining a “rules-based order” are committed to keeping the momentum of the past alive. We must protect what the past has created, but we must not think about how it was created.

We can see another example of this phenomenon in the current debate concerning the global food security crisis. To explain it, the experts cite the damage done to supply chains by the pandemic and subsequently by the war in Ukraine. An attention to history, if anyone cared to pursue it, would reveal the deeper causes.

The economist Michael Hudson has consistently pointed out that the World Bank, one of the pillars of the vaunted rules-based order, sought from the very beginning “to make other countries dependent on American agriculture.” This policy was cleverly and rationally designed to prevent the nations of the developing world from feeding themselves. Instead, the World Bank funded the development of plantation crops for export. This served the interests of the West’s consumer society while export generated cash (dollars, of course) for the Third World, allowing those nations to purchase more expensive goods and services from the West.

The framers of the post-World War II world order believed this was the most rational way of decolonizing the formerly dependent nations of the Global South. It did the opposite. It refashioned and perpetuated the logic of extraction inherent in every European colonial program. But this time, instead of doing it through colonial control, it did so with the benediction of newly designed international institutions.

The majority of the world’s nations are only now beginning to articulate, with regard to the rules of the global economy, the same message Lankelly Chase’s has expressed concerning philanthropy.

Historical note

During the Gilded Age in the late 19^th and early 20^th century, industrial capitalism fostered obscene levels of wealth for the families of successful capitalists. Critics contemporaneously referred to them as “Robber Barons,” a new aristocracy not of birth or of taste, but of wealth alone.

Aware of the risk, the robber barons initially sought to earn aristocratic credentials by buying up traditional Old World art and even architecture to put on display, at least to show that they too adhered to civilized values. But such displays of wealth failed to convince the average working citizen that these upstarts were capable of embodying the kind of public virtues aristocrats were formerly expected to embody as Europe’s ruling class. On the contrary, because this class of nouveaux riches grew their wealth by extracting maximum profit from the labor of the new working class, they projected an image of personal greed coupled with a cold indifference to the conditions in which their wealth was produced.

One dramatic incident in 1914 brought about a definitive change in strategy. Faced with the disastrous fallout from the Ludlow Massacre of striking miners in 1914 in which 20 people were killed, Standard Oil tycoon John D Rockefeller called in publicist Ivy Lee specifically to improve the public image of the Rockefeller family. The magical solution consisted of getting the media to celebrate John D’s philanthropic activities.

Rockefeller quickly earned the of “the world’s greatest philanthropist” (NY Times). PathĂŠ News him as “deeply interested in his fellow men,” a “public benefactor devoting millions to science, education and  philanthropy.” The shameless, bullying monopolist thus provided the template for future “rehabilitations” of people capable of turning careers that began as greedy bastards –  the modern translation of “robber barons” – into heroes of do-gooding.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of 51łÔšĎ Devil’s Dictionary.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

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In the US, people are more easily impressed by wealth itself than by the serious problem that wealth inequality has created. ProPublica’s article may help to change the public’s focus.

They Are Coming for Us

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ProPublica exposes the brutal fact that, contrary to the tenets of conservative Republican orthodoxy, the wealthy are the “takers” and people who work for a living, the “makers.” Worse, the taking they do no longer requires much effort. The tax system delivers everything they take away from others directly to their doorstep. Between 2014 and 2018, the 25 richest Americans “paid a total of $13.6 billion in federal income taxes.” The article calls it “a staggering sum, but it amounts to a true tax rate of only 3.4%.”

Among the many details, ProPublica highlights the case of Warren Buffett, signaling “his public stance as an advocate of higher taxes for the rich.” Between 2014 and 2018, “Buffett reported paying $23.7 million in taxes.” But given the increase in his wealth over that period, that impressive sum “works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.” Who wouldn’t be happy paying taxes at that rate? And for Buffett, it isn’t even on earnings, which for most people permit survival, but on the absolute growth of his net worth.

The article also cites the case of George Soros, the man who single-handedly the Bank of England. “Between 2016 and 2018,” according to a spokesman for the billionaire, “George Soros lost money on his investments, therefore he did not owe federal income taxes in those years.” The same spokesman, ProPublica reports, is quoted as affirming that “Mr. Soros has long supported higher taxes for wealthy ´Ąłžąđ°ůžąłŚ˛š˛Ô˛ő.”

°Ő´Çťĺ˛š˛â’s Daily Devil’s Dictionary definition:

Support:

To sit on the sidelines and verbally encourage other people to do things one is disinclined to do or incapable of doing on one’s own

Contextual Note

ProPublica has provided the world with a truly enlightening trove of information that sends a clear message. And this is only the beginning. The publication in the coming months to “explore how the nation’s wealthiest people — roughly the .001% — exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens.” Its reporting will certainly serve to clarify a debate that, for many, may have seemed too abstract and too polemical to try to take on board.

The numbers demonstrate the extreme, hyperreal nature of wealth distribution today. When the public learns that, in 2011, Jeff Bezos — who is, on and off, the richest man in the world — “claimed and received a $4,000 tax credit for his children” and that his true tax rate over time is less than 1%, they may begin to take the measure of how the tax system works and to whose benefit.

The figures, nevertheless, show that between 2006 and 2018, Bezos paid out $1.4 billion, a staggering amount for any ordinary wage-earner to even try to comprehend. But his personal fortune over that time ballooned to reach close to $200 billion today. Has he earned it through his hard work? No, it earns itself. That’s what money does. And thanks to his ability to hire tax advisers and clever accountants, all but crumbs of his wealth stay in his hands, never to pollute (or contribute to improving) the public sphere.

Historical Note

ProPublica went to great lengths to gather, verify and publish these carefully guarded tax secrets. Its editors were not surprised when, as Forbes , IRS Commissioner Charles Rettig “told lawmakers that internal and external investigators are working to determine whether the data ProPublica used was illegally obtained.” In the land that enshrined free speech as a right (First Amendment) apparently even more fundamental than the right to own an AR-15 (Second Amendment), all speech is legitimate except when it is blown through a whistle.

This simply means that the act of reporting certain types of scandalous abuse in the public interest is now deemed to violate the republic’s interest. We can expect the US government to spare no expense in its pursuit of the anonymous whistleblower who provided ProPublica with the tax returns it has put on display, whose secrecy is protected by the law.

This is not a great time for whistleblowers. The cases of Edward Snowden, Julian Assange and Chelsea Manning have made headlines over the past decade. They all did something that could be interpreted as technically illegal, especially when laws such as the Espionage Act happen to be on the books. But they clearly exposed essential information about how a democracy functions that purports to be “of the people, by the people and for the people.”, and and are among others who were prosecuted by the Obama and Trump administrations for making significant contributions to our understanding of how government manages and sometimes mismanages people’s lives, fortunes and deaths.

Last week, Natalie Mayflower Sours Edwards, who worked as a senior adviser at the US Treasury Department’s Financial Crimes Enforcement Network, was sentenced to six months in prison for revealing to BuzzFeed News what the International Consortium of Investigative Journalists as “financial corruption on a global scale.” She was arrested in 2018. Her crime consisted of sharing confidential bank documents with a journalist, an act that sparked “a global investigation into illicit money flows,” which, had she not acted, the public would never have known about.

BuzzFeed’s spokesman, Matt Mittenthal, helpfully explained that the resulting “investigation has helped to inspire major reform and legal action in the United States, the E.U., and countries around the world.” In other words, sometimes it is necessary to break the law to make it stronger and more equitable.

Ben Smith, a New York Times columnist, summed up Edwards’ plight in a : “This woman is going to prison for six months for her role in revealing systemic global financial corruption, and inspiring legal changes all over the world.” The law did not go after BuzzFeed in this case. Nor did it end up going after ProPublica in a 2012 case concerning tax filings for Karl Rove’s nonprofit, Crossroads GPS, in which the IRS initially told BuzzFeed “that it would consider [the] publication of them to be criminal.”

In the eyes of the IRS, ProPublica has once again committed the crime of letting the truth out of the bag. It may well escape any punishment. The pattern is always to prosecute the whistleblower, but that requires identifying that person. If, as in the case of Edwards, the government does succeed in prosecuting and sentencing the whistleblower, that will not serve to put the truth back in the bag. That is why the government will be relentless in seeking the whistleblower and why the public should be grateful both to that person and to ProPublica.

The government’s aim is not to repair the damage already done, but to instill fear in any other courageous individual in the position to reveal the inner workings of a system designed for the financial elite and managed by the political elite. In Edwards’ case, US District Judge Gregory H. Woods made this clear when he “said that it was necessary to impose a ’substantial meaningful sentence’ in order to discourage others from committing similar crimes.”

Publishing substantial meaningful truth will always provoke the call for a substantial meaningful sentence.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on 51łÔšĎ.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post ProPublica Reveals the US Is a Tax Haven appeared first on 51łÔšĎ.

Andersen’s book reveals in significant detail who was involved, how it played out, its ideological underpinnings and where it is likely to take a society that seems incapable of preventing it from tearing to shreds the social fabric. Interview by Yahoo šóžą˛Ô˛š˛ÔłŚąđ’s , Andersen makes the shocking revelation that Warren Buffett is the one prominent billionaire who has admitted to understanding his role as a soldier in a class war.

Thoughts On Colonial History for Columbus Day

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Reviewing the for The New York Times, Anand Giridharadas, a gadfly who has been jabbing at billionaires in the media and in his own books for several years now, intriguingly describes “Evil Geniuses” as a “saxophonely written new book.” This may mean he’s comparing it to exciting musical creations such as Charlie Parker’s delicious “Scrapple from the Apple” or John Coltrane’s powerful and contemplative “A Love Supreme.” Unless he happens to be thinking of Kenny G. In his review, Giridharadas cites many non-musical reasons for admiring Andersen’s book.

Summarizing its scoop, Yahoo posts this headline above its interview with Andersen: “Warren Buffett is ‘extraordinary’ for acknowledging class warfare by the rich: Kurt Andersen.”

Here is today’s 3D definition:

Class warfare:

A Marxist myth that could never exist in a real meritocratic, democratic capitalist society since individuals are free to decide whether to be a maker or a taker and will only have themselves to blame if they accept to become takers

Contextual Note

Yahoo may be giving Buffett more credit than he deserves by calling this an acknowledgment of “class warfare.” In the interview, Andersen refrains from using the term “warfare,” which refers to the methods and means of battle. He simply describes Buffett’s awareness of a situation that objectively resembles class war.

In his book, on the other hand, Andersen describes in great detail not only the history of that war but also the nuts and bolts of the weapons and military machinery deployed. He traces 50 years of active and highly-effective class warmongering that began with initial skirmishes around 1970. Thanks to the complicity of every sector of society capable of influencing the operations and the resounding success of its battle plans, it may, according to Andersen, be presaging the decline of an entire civilization.

Yahoo plays up as a major scoop Andersen’s assertion that Buffett, sometime in 2005 or 2006, explicitly endorsed the idea that class war is real. The very idea of class struggle, along with everything else that smacked of Marxist thought, was long ago banished from public discourse in politics, the media and finance. In more recent times, the idea has been revived by progressives and populists, but the media simply deny its relevance by characterizing it as “extremist.” The fact that an archetypal icon of capitalism acknowledges its reality should be an eye-opener. But will Yahoo’s timid scoop shake the world and wake up the rest of the media?

Andersen presents his evidence. He quotes Buffett’s words: “There’s been a class war and it’s my side, it’s the rich people and we’re winning and we shouldn’t be.” For many, this won’t sound surprising since prominent people often say things in private that they will never admit in public. The questions we are left asking ourselves are these: Does this represent Buffett’s deepest feelings? Does Buffett have an idea of how war can give way to peace? And if so, why has he never made a public issue of it?

Anyone familiar with Buffett’s character knows that he lacks the personality traits we attribute to political, social or economic crusaders who might feel impelled to reform a system they deem unjust, even when the same system allows them to profit from it at will. Andersen calls Buffett “a decent rich guy,” which doesn’t sound like a glowing compliment until, elsewhere in his book, he presents evidence that shows how utterly indecent so many of the rich guys are who have been actively waging the class war Buffett acknowledges as real. Buffett is decent because he thinks about consequences even if he makes no serious moves to act on them.

A friend of this author who personally knows Buffett once casually asked him about the potential for cognitive dissonance in supporting or at least praising progressive political causes while investing in companies exploiting fossil fuel. Buffett reportedly replied, “Philanthropy’s one thing, investment another.” Most people would put that one up to Buffett’s ability to focus. Some would say that it is consistent with the autistic trait that has always been apparent in Buffett’s character.

Andersen believes Buffett’s loyalty to “old school investing” — where the investor puts the money in for the long haul and takes an active interest in the company’s development — remains a refreshing contrast with the more recent “take the money and run” philosophy of private capital and hedge funds. For Andersen, it even constitutes a model for good capitalism or what he thinks capitalism should be. His attitude sometimes resembles a nostalgia for times past that could be described as the wish to “make capitalism great again.”

Historical Note

Anand Giridharadas highlights a key point that emerges from Kurt Andersen’s analysis. It is one that most media are unlikely to admit and will never broadcast. That includes MSNBC, the cable news outlet for which Giridharadas is a regular contributor. He notes that “one place Andersen does break some new ground is in the portrayal of the shameful liberal complicity that was essential to the long plutocratic hijacking.” He adds, “it is head-spinning to be reminded how much of the nation’s turn to the right and to the rich the Democrats enabled.”

MSNBC would never allow its contributor to develop these ideas on its airwaves. The network is too dedicated to denying “liberal complicity” in anything, whether it’s in finance, military expansion or the increasingly powerful security state. It is too focused on attacking the only evil genius it acknowledges: Donald Trump. On the other hand, Fox News might be tempted to seize an occasion in which someone on the left accuses the Democrats of complicity in the sins Andersen identifies. But, of course, Fox News doesn’t consider them sins, so the exercise is never likely to take place.

During the Democratic presidential primaries, Giridharadas appeared as the only regular voice on MSNBC to explicitly support Senator Bernie Sanders. In late August, he wrote a piece for , urging people to vote for the Democratic candidate Joe Biden on November 3. He began the article with these words: “Joe Biden was not my ideal nominee.” He went on to explain in detail his hesitations and doubts about both Biden’s past career and his character as well as what Biden, once elected, is likely to deliver. This is consistent with his critique of the Democratic Party as a whole that he expressed in his review of Andersen’s book.

Giridharadas nevertheless pleads the case for voting for Biden in the US presidential election, expressing his hope that once elected, Biden will understand the historical situation that requires committing to fundamental change if there is any hope for healing after four years of President Trump. He hopes that Biden, the man who lauds “possibilities,” may possibly live up to the challenge. “I will say, as an erstwhile skeptic of a Biden presidency,” he writes, “that I believe Biden could, if he chooses, pull it off.”

Many Americans, at least on the left half of the spectrum, feel the same way. The parallel with another aging man, Warren Buffett, is worth keeping in mind. It’s still easy for lucid people who made their way into the upper echelons of the financial, political or social elite to see and acknowledge what is required, but to fall back on a different line of reasoning. Reform for Biden is like philanthropy for Buffett — well worth talking about, so long as it doesn’t get in the way of business as usual.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on 51łÔšĎ.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post Warren Buffett’s Struggle With Class Struggle appeared first on 51łÔšĎ.

Jeffrey Epstein only had half a billion dollars. He could have aimed for a billion. But he proved very resourceful in spending it rather than nourishing it to expand into 1 billion or more. Epstein had other things to do, several times a day. His frenetic activity meant that he had to pay Ghislaine Maxwell for her services as well as cater to numerous other people’s needs. Epstein was no Warren Buffett, but he was apparently friends with Buffett’s best friend, Bill Gates. Buffett and Gates used to take turns at being the richest man in the world, until Jeff Bezos definitively unthroned them.

The Mother of All War Crimes

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Still, Epstein, even with his modest fortune, managed to play the philanthropist, distributing cash to supposedly worthy , such as Harvard and MIT. His selflessness served to ingratiate him with their leaders and the intellectual elite. All of which proves that, if you know what you’re doing, you don’t need a billion dollars to buy your way into the nation’s and the world’s elite. It also offers some perspective on the power and influence that multiple billions of dollars can bring. If Epstein could do so much with so little, what might real billionaires do?

Philanthropy turns out to be a wonderfully satisfying way of at least appearing to spend large amounts of money you could never spend on yourself. This is especially true, if like Buffett you have every day at McDonald’s rather than, say, the Ritz Carlton.

This week, Business Insider a by the Institute for Policy Studies (IPS) on the practice of multi-billionaires who signed the famous “Giving Pledge.” The results are surprising. The journal highlighted this fact: “Over 75% of the original 65 billionaires who promised to give away the majority of their fortunes in 2010 are richer now than they were then.” And it wasn’t because they kept putting in a hard day’s work over the past decade.

This may sound paradoxical, but we now know that, when it comes to billionaires, there will always be a “method in their madness.” The challenge is to unveil the method.

Here is today’s 3D definition:

Give away:

1) Transfer something to another person

2) In the language of billionaires, secure for oneself and one’s family while appearing to transfer to others

Contextual Note

If the average person gives away any significant amount of money, they nevertheless realize that the cushion they had been sitting on ends up a little flatter and less fluffy than it was before. That doesn’t seem to be the case with billionaires.

The Institute for Policy Studies wastes no time drawing its most significant conclusion: “Private philanthropy is on a collision course with democracy. Without intervention, billionaire philanthropists will soon be shaping public policy in competition with local and state governments, which will be facing austerity conditions in the wake of a resurgent Covid-19 pandemic.”

This should be doubly worrying. What private philanthropy does happens on another level than ordinary, everyday corruption in the political sphere due principally to corporate funding of political campaigns. In the current culture of US capitalism, tend to believe that philanthropy can solve the problems that government is too bureaucratic to deal with. 

Much of the political class, especially Republicans and libertarians in the US, insist on reducing the role of government in addressing social needs. In their idealism, they expect philanthropy to be the beating heart of a trickle-down system that will generously spread the excess wealth now in the hands of the billionaires to respond to society’s needs. 

If we push the  biological metaphor from the preceding sentence a little further, it reveals exactly how the system works in real life. The “hands” that hold the money feed the beast with the “beating heart,” who ingests, for its own diverse needs, the excess wealth. This then allows the wealth to trickle down exactly the way our bodies expel the liquid we pour into it. Some of it may be sweat, but the bulk of it is directed toward the porcelain.

In reality, as the IPS report reveals, philanthropy in the hands of the mega-rich works simply as a way of holding onto wealth rather than giving it away. We learn that “although these mega-donors received tax deductions commensurate with the amounts of their donations, the lion’s share of the money they donated may not actually get into the hands of active public charities for years.”

Most of the money “given away,” earning plaudits from the media impressed by the of the donors, is channeled into “wealth-warehousing vehicles such as private foundations and donor-advised funds.” These become tools of personal power that serve the three-pronged purpose of bolstering the personal image of the donors, consolidating the standing of their family (as well as often providing roles for family members to play), and finally giving the donors disproportionate influence over public policy in the fields they choose to focus on.

Historical Note

Some may remember the US Democratic presidential primary campaign that prematurely ended in March as an exceptional period of history. For nearly a year, alternative ideas about policy and even the nature of society were occasionally invoked and brought before the public by the candidates vying for the presidency. Thanks to Bernie Sanders, Elizabeth Warren, Andrew Young and even Tom Steyer, political debate could touch on and encourage discussion of actual issues rather than just the obsessive question of how to defeat President Donald Trump in the November election.

One of the major themes to emerge was income and wealth inequality, encapsulated in Sanders’ shocking that billionaires “should not exist.” The message took on special meaning when the Democratic mainstream appeared to push mega-billionaire Michael Bloomberg as an example of what they deemed a voice of reason to oppose the grating populism of both Sanders and Warren. Bloomberg managed to spend a record amount of money in the shortest possible time, but his campaign withered on a vine that hadn’t even begun to sprout. Democrats weren’t ready for a billionaire savior to rescue them from a Republican billionaire false prophet.

When challenged, Sanders was clear about what he meant. He understood voters’ perception of the question as a moral rather than a simple economic issue. An economy that not only tolerates but encourages the acquisition required to become a billionaire inevitably provokes in the mind of the average citizen struggling to survive “a moral and economic outrage.” Sanders sensed that psychologically as a society, “we cannot afford to continue this level of income and wealth inequality.” Things have obviously become more exaggerated since the reign of economic chaos that has accompanied the uncontrollable COVID-19 outbreak.

Earlier this week, this author pointed to a case of apparently virtuous billionaires, the Indian Poonawallas, father and son, who are ready to compromise their own hard-earned but clearly excessive fortune in a gamble that might provide an answer, especially for India and the developing world, to the COVID-19 pandemic in the form of a vaccine distributed at cost. Sanders may feel some indulgence for people like the Poonawallas, who are nevertheless exceptional enough and unrepresentative of their class for The New York Times to highlight their billionaire virtue.

The IPS report describes another rare case that stands out: “There are meaningful exceptions to this such as Chuck Feeney, who gave away $8 billion over 22 years in an effective and focused manner through The Atlantic Philanthropies. Feeney is no longer a billionaire and lives in a modest apartment in San Francisco.” What a radical idea, deciding to no longer be a billionaire!

As in other human groupings — such as the police, the military or politicians — where among the good there will always be one or two bad apples, it appears to be equally true that among the billionaires there are even the occasional good apples.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on 51łÔšĎ.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post How Billionaires Take Seriously the Proverb “Charity Begins at Home” appeared first on 51łÔšĎ.

Who better than the Oracle of Omaha, the Pope of Wall Street, Warren Buffett, can we count on to guide the faithful in the dogmas they need to believe about the economy? The financial website Insider Monkey offers us an on the credo of Buffett’s religion: “Warren Buffett is a true believer in America. He trusts that productive assets in the country are just going to increase their value. He reassured CNBC’s famous reporter, Becky Quick, that her children are going to have a better life, and her grandchildren even better, firmly believing in the constant progress of the US.”

Here is today’s 3D definition:

Progress:

The increase in value of existing assets, always judged to be positive, even when everything that contributes to that change produces negative consequences in the surrounding environment

Contextual noteĚý

At a moment in history when are living from paycheck to paycheck, Buffett intends to the US public that all is for the best in this best of all possible worlds. Voltaire would tend to disagree, of course, but the French philosopher never played the stock market to become a multi-billionaire, which significantly reduces his impact on the readers of today’s financial press.

Buffett’s optimism concerns the performance of the economy, which he measures in stock prices. This may not be quite as reassuring to the 78% as it would be to the 22% who may, to varying degrees, have some cash to invest in the stock market. But he appears to have noticed that even when all the benefits of increased productivity go to the richest companies and the wealthiest 1%, the realization of that glaring inequity — which traditionally provoked scandals in the media and demonstrations and riots for the general public — now only incites people to wait for the next election to vote for a populist leader. That does no harm to the stock market, though it does make for messy politics.

Convinced that the only significant game in town is the growth of “productive assets in the country,” which he takes as a definition of America, Buffett doesn’t bother to specify the nature of the assets he refers to. Does he mean stocks listed on American stock exchanges, some of which may be foreign, or American companies listed on any stock exchange in the world? By productive assets, does he mean capital assets or virtual assets (shares) that produce a profit for shareholders, irrespective of the economic activity they represent? In other words, by “productive” is he thinking of the capacity to manufacture or put goods into a marketplace, or does he simply mean that the combined assets visible on the stock market, whatever their nature, will grow in value?

For Buffett, it doesn’t really matter, since there is an obvious link between both types of asset from an investor’s point of view. But from a national point of view, in terms of the balance of trade and employment, the difference can be significant. Buffett’s specialty and unique focus is investing, not manufacturing, jobs or industrial trends. In other words, it’s just about profit. As the defender of the faith, he wants everyone to believe that so long as enterprises are profitable, jobs will be created and national honor for the United States preserved.

And like every good preacher, he assures Becky Quick that her children and grandchildren “will have a better life” if they believe in his vision of America. He can confidently do so because he knows Quick isn’t part of the 78% who live from paycheck to paycheck and probably, as a media celebrity with a husband in a high-paying job, is among the 1% who can put their money up to match their depth of their faith. Even a debutant oracle could come up with that prediction, though the world of even Quick’s grandchildren, a few decades on, may not be quite as stable as the comfortable universe Buffett has been used to.

Historical note

Warren Buffett knows that he is a product of the 20th century who has survived into the 21st. His thought, his values, his vision of both the economy and geopolitics reflect the culture he was brought up in — the culture of the first half of the 20th century, when the US was just discovering the dominant role it would end up playing in global politics. The respect and admiration that people and especially the media have today for the wisdom of the Oracle of Omaha — the Midwest’s quintessential faux small town with a big name — derives from the nostalgia they feel for the glory days of the rising economy and growth in political prestige of the US during and after World War II.

The media, including the financial media, Ěýshould be very aware that the world is changing in radical ways, because its economic and political culture has already changed. The kind of nostalgia that Buffett projects tells us that the change we notice — conflict with traditional allies, the inexorable rise of China, ever increasing income inequality, to name only those — is superficial, a turbulence on the water’s surface, while down below the river flows powerfully along its accustomed course. This contrasts with President Donald Trump’s nostalgia, which aims at restoring what is perceived as lost through an act of deliberate will and the manipulation of power. Explaining his negotiating tactics, Buffett “bluntly says what he plans to do and he ends up doing just that,” a further contrast with Trump who constantly plays on bravado, threats, deception and bluff.

Was the 20th century the era of rule of law, honest even if aggressive diplomacy, Buffett’s style of planning and “doing just that,” while the 21st century has become the era of deception, bluff, data manipulation and hyperreality? Has the emerging dominance of big data, pervasive surveillance and the impenetrable algorithms of artificial intelligence reduced human discourse to such a level of trivial meaningless that politicians, business leaders and stock market oracles now have the right, to express any thought that drifts across their calculating mind and expect people to believe it?

You’d better believe it.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book,, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post Is Warren Buffett the Last True Believer in Constant Progress? appeared first on 51łÔšĎ.

Interviewed in the wake of the Berkshire Hathaway annual meeting by journalist Andy Serwer of Yahoo Finance, Warren Buffett’s alter ego and fellow billionaire Charlie Munger shared his of US history and the people that made it. Not the people who populated the continent for millennia — absent from history — but those who turned it into a capitalist paradise in the space of a few centuries. This is one example of how US culture doesn’t so much explain away its more ignoble past as erase it from memory.

Munger agrees with President Donald Trump on immigration. It’s generally a bad thing because “very few people want unlimited immigration of a different culture,” he said. Munger doesn’t bother to wonder whether the native tribes in the 17th century may have had similar feelings. And why should he, if he assumes that they didn’t exist? When the interviewer reminds Munger that the US economy was molded into its current form by immigrants, he explains: “We made it work in America, but we had a vacant continent to work on. That was easy. Vacant and rich in oil and minerals. Wonderful soil.”

Here is today’s 3D definition:

Vacant:

Land unclaimed as property and, therefore, claimable by those who view all land as property, meaning any land not claimed by those who simply occupy it is ripe for the takingĚý

Contextual note

The interview reveals some of the stereotypes the US media accepts uncritically, especially when expressed by someone as financially successful as Munger. The vacant continent Munger describes reminds us of the phrase often attributed to Zionists but, in , “coined and propagated by nineteenth-century Christian writers” concerning Palestine: “A Land without a People for a People without a Land.”

Western racism, based on that very premise, permitted the multi-century genocide that made North America appear vacant and ready for the taking. A nation can be made “to work” as a nation, when white Europeans take control. For Charlie Munger, US history starts with a radical form of racism, which is now a fixed part of the culture and a defining trait of its history.

His second lesson concerns the Manichean view of society that establishes a moral system based on the unique criterion of success. When Serwer expresses his admiration for the Berkshire spirit, Munger elucidates: “Both the shareholders and the employees of Berkshire are so extremely enthusiastic … They think they’re on the right side.” He doesn’t bother to explain what the side is or why it’s right, but the message is clear: It’s all about financial success.

In an odd moment of intellectual honesty, Munger surprises his interviewer with this appreciation: “It’s like a cult.” Serwer is taken aback, because cults generally have a poor reputation. After a moment of hesitation, he timidly suggests, “in a good way, though.” Munger agrees: “Yes, a good cult.” Munger, the shareholders and employees are not only on the “right side” of the implied moral system, but even in their cultish excesses they are “good.”

Serwer then focuses on the speeches at the annual meeting, mentioning that “a lot of it is common sense.” Munger corrects him: “All of it is common sense.” Then he makes a subtle distinction, indicating that what they do is “uncommon sense,” since anything that is common must be vile. “The standard human condition is ignorance and stupidity,” he explains. The moral of the story: In the land of equality, the successful and wealthy possess uncommon sense while the vast majority of the population is ignorant and stupid. That’s how oligarchies justify themselves.

When Serwer asks what the notion of uncommon sense implies in practical terms, Munger replies: “You take advantage of other people. You improve your own life by eliminating their miscognitions.” Munger likes this word and repeats it several times. Has he been studying Jacques Lacan’s ? Probably not. More likely, it’s just an example of his own miscognition. When you spend so much time and energy taking advantage of other people, you have little time to study the subtleties of Lacan’s psychanalysis. The moral of the story (hardly different from ): Life can be improved when you take advantage of others. “Greed is good.”

Serwer then raises the much talked-about issue of wealth and income inequality. For Munger, like the pre-Columbian population, it simply doesn’t exist. “It’s a problem when enough politicians are screaming about it, that makes it a problem.” He claims that once politicians stop talking about it, “it will go away by itself.” He summarily informs us that “the people who are screaming about it are idiots.”

Asked about specific screaming politicians, despite his appreciation for Senator Elizabeth Warren’s manner, he believes she hasn’t studied Adam Smith enough. As for Representative Alexandria Ocasio-Cortez, he’s convinced that she doesn’t know “who Adam Smith was.” But does Munger know his Smith or is he just repeating the myths he learned at school 80 years ago?

Contrary to his values, The Wealth of Nations the attentive reader that “Smith’s system … precluded steep inequalities … by virtue of the design that aimed to maximize wealth.” More importantly — and this, for Buffett and Munger, would be pure heresy — “profits should be low and labor wages high, legislation in favor of the worker is ‘always just and equitable,’ land should be distributed widely and evenly, inheritance laws should partition fortune.” Clearly Munger hasn’t studied Smith enough to know that he shouldn’t be recommending him.

Historical and cultural note

Let’s try to sum up what Munger’s wisdom tells us about US history and its political and economic belief system as it exists today.

There are two classes of people: the smart and the stupid, or the wealthy (the oligarchs) and the struggling (everyone else). The stupid are content with “common sense,” but the smart have uncommon sense, which allows them to take advantage of the stupid. The criterion for intelligence is an economic treatise written in the 18th century, The Wealth of Nations by Adam Smith. What’s important is not to have read it, but to have understood its very simple message: Free markets are good, government is inefficient and wealth inequality not only is never a problem, but should be considered a blessing. Adam Smith himself wouldn’t have agreed with that assessment, but that is probably because he died before the potential Ěýof casino capitalism could flower.

There is yet another class division to be respected, between people of European extraction and immigrants “of a different culture.” The first should be free within our borders and take care of business (even the business of foreign lands), but the second should stay on their side of the border.

Once people understand all these things, as spoken by the respected associate of the Oracle of Omaha, they too will be able to feel that they are on the right side of history and may even be tempted to join the cult.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, , in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post Berkshire’s Charlie Munger Explains US Culture appeared first on 51łÔšĎ.

Warren Buffett, the “Oracle of Omaha,” whose wisdom everyone with the ambition to be one day worth $80 billion listens to attentively, made it clear at the Berkshire Hathaway annual meeting that he is a “card-carrying capitalist,” despite a reputation for embracing progressive causes. Buffett as a chimera, but thinks something should be done for those unfortunate souls left behind in a competitive economy. Favorable to the idea that a prosperous, wealthy nation should temper its greed and find a way to provide some kind of safety net for vulnerable people less skilled than himself at gaming the stock market, he doesn’t appear to be ready to endorse any positive action by the state to build and operate that safety net.

Buffett’s associate and alter ego, Charlie Munger, clarifies the position the two men share: “What a lot of us don’t like is the vast stupidity with which parts of that social safety net are managed by the government.”

Here is today’s 3D definition:

Stupidity:

Ineptness and inefficiency in managing critical resources, a privilege that in capitalist regimes must be granted to private enterprises only — and not government — as the condition of their freedom

Contextual note

In the wake of the Berkshire Hathaway AGM, CNBC brought together —Buffett and Munger joined by Bill Gates —Ěý to enlighten the public on the relative merits of capitalism and socialism. To call this interview embarrassing would be to flatter it. Any serious economist or political analyst would recognize a conversation that never rose above stating ancient platitudes and a few modern banalities. In short, CNBC offers us 10 minutes of billionaire stupidity, which may or may not outclass the “vast stupidity” that Munger associates with the government’s safety net.

Buffett starts things off by marveling that there are far more consumer objects available in 2019 than in 1776. “This country has done an incredible job in terms of the deployment of resources and human ingenuity and that is a product of the system.” By “system” he presumably means capitalism. Someone should inform him that capitalism is only a component of a system that also included unbridled expansion at the cost of entire populations, brutal European colonialism ultimately replaced by the equally brutal economic neocolonialism of US adventurers and capitalists, to say nothing of the permanent growth of an economy focused on military dominance. Therefore, Buffett is right to refer to “the product of the system.” He has simply failed to acknowledge what the system consists of.

Warren Buffett may have a supernatural talent for analyzing stocks. He clearly has no gift for or serious interest in analyzing societies and economic systems. All three billionaires agree that capitalism produces things and increases productivity. “It’s absolutely a miracle,” Buffett declares. Throughout the conversation, the idea of “production” and the sheer quantity of things produced justify the trio’s uncritical admiration of the system and its productivity.

But, as even they should be aware, capitalism also produces, and on an unparalleled scale, environmental destruction and social instability that compromise the future of humanity. It diminishes the material and even functional value of the generous, undemanding provider of all of capitalism’s manageable resources: the planet itself, but also humankind, which has no choice but to accept its primary status as a “human resource” to be exploited by corporations. Those concerns never find their way into the discussion, either through the (inexistent) probing of Becky Quick, or through the enlightened insight of the billionaires she smilingly and admiringly questions.

Buffett actually does hint at understanding one significant fact: that war and the preparation for war play a role in the system. But he sees that as a basic public service, like policing or industrial maintenance. As the conversation develops, the trio acknowledge the fact that all is not perfect in the world of capitalism. Buffett, for example, admits that “the market system is brutal and it leaves behind people who don’t have market-related talents.” He even seems to sympathize with the poorest, most desperate classes when he says, “In a rich society … if we have a war or something like that, we call on those people and pay them practically nothing to go fight for us.” He thinks we should “take care of people who get left behind.”

He does offer one “solution” to the social problems induced by capitalism, stating his belief that “both parties basically agree on that.” What could that radical solution be? “Income tax credit can make a huge jump in that direction,” he says. Gates appears committed to the “dream of equal opportunity.” He still believes — even while vaguely admitting his own failure — that it is all about educational reform, which means taking “the best teachers” and “spreading” their practices to produce better “statistics.” His discourse on education sounds suspiciously like the “vast stupidity” of the technocrats Munger vilifies.

Munger has his own solution. Abolishing hate, which he explains is essentially eliminating the extremists from the two major parties and getting Democrats and Republicans to agree on everything.

Historical note

In another CNBC interview related to the Berkshire annual meeting, Quick pushes Apple CEO Tim Cook to express his for Buffett and Munger’s “wisdom,” “integrity” and “humility.” Sounding like the founder of a startup, Cook tells her that he felt flattered and surprised that the legendary Warren Buffett would consider investing in his lowly company, as if anyone that serious and wise would take the risk of investing in the world’s first $1-trillion company. Egged on by Quick, who wants to make this sound like a historic event, Cook makes the extraordinary statement: “It seemed like recognition, an honor and a privilege.” Finally, Apple has been recognized and honored. Steve Jobs would be proud.

Most people believe they know the stories of Buffett and Gates, both of whom realized the American dream, building massive fortunes with their own two hands. Each in his way has provided a model that has resonated with the recent evolution of the US economy. The two most dynamic growth sectors, sources of what are considered the best jobs, are finance and technology. Buffett exemplifies the wisdom of a power investor, which in reality also involves all kinds of backroom power moves, but the media prefers painting his portrait as a folksy genius who, like an owl, sits on his perch back in Omaha, wise and humble, a paragon of integrity.

Bill Gates’ story is more about mother-reliance than self-reliance. This author heard from two insiders how IBM Gates — through the agency of his mother — the task of creating PC-DOS without realizing the implications of allowing him to market it as his own product, MS-DOS, guaranteeing his eventual rise to billionaire status. Gates did build the company from that point on. Like Buffett, he dedicated himself to managing, expanding and consolidating what he had, manipulating and bullying whenever necessary.

Neither Buffett nor Gates has had the time, talent or inclination to begin to understand, let alone address, the social problems they want people to think they are sensitive to. Munger even less so. And yet because of their success and wealth, the media look to them to provide answers

The two CNBC interviews reveal much about the capitalist culture and ideology of the US. It relies on perpetuating superficial ideas and stereotypes about both the economy and human society. These superrich, monopolistically-oriented financial celebrities — Quick herself being something of a star in her field of journalism — praise one another as they celebrate success, which will always be measured in terms of quantity of production, levels of income or profit and attainment of obscene degrees of personal wealth.

Could the expression of such banality also be a form of stupidity?

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, , in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article are the author’s own and do not necessarily reflect 51łÔšĎ’s editorial policy.

The post Buffett, Munger and Gates Share Their Wisdom appeared first on 51łÔšĎ.

When you’re as rich as Warren Buffett, you must be smart. And if you’re smart, you can clearly establish the difference between things, especially things you’re in contact with in your profession or that keep your waking hours occupied. Buffett, as everyone knows, knows about investment.

Interviewed by , Buffett makes the distinction between investing and speculation.

Here is today’s pair of 3D definitions:

Investing:

Putting your money in something you don’t control, but which you believe someone else controls or can actively influence, with the hope that the value of your stake will be worth more in the future

Speculation:

Putting your money in something you don’t control, but which you hope someone else controls or can actively influence, with the expectation that the value of your stake will be worth more in the future

Contextual note

This distinction — which contrasts belief, hope and expectation — is no worse than Buffett’s own. Buffett does have a point, however. An investment in its classic definition is the expectation of gain through a participation in something whose practical use is known and understood. In other words, it has a purpose in the economy beyond increasing in value.

On the face of it, the same cannot be said of bitcoin or any other cryptocurrency. But others would argue that cryptocurrencies do have a purpose other than making money for their owners. They broaden the economy in various ways, sometimes criminal, but sometimes in a very utilitarian way by making payment possible.

“If you buy a farm, apartment or a business and look to the asset itself to determine whether you’ve done something, what the farm produces, what the business earns and so on… and it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you,” says Buffett.

He adds: “Now if you buy something like bitcoin … you don’t have anyone producing, you’re just hoping the next guy pays more. If you ban trading in farms, you could still buy farms and have a perfectly decent investment … But if you ban trading in tulip bulbs or if you ban trading in some bitcoin … people would say ‘why in the world would I buy it.’ You aren’t investing when you do that. You’re speculating.”

The reference to tulip bulbs shows that Buffett knows his , but curiously it undermines the very point he’s making. Tulips, just like Coca-Cola, which Buffett has invested in, have intrinsic material value that varies with supply and demand. He’s right to claim that bitcoin has no material value. In that sense, it’s exactly like any currency. You can’t plant a dollar or euro in the ground and watch it grow. You can, however, buy stock in McDonalds because you think other people after you will want to buy stock in McDonalds. And in fact, almost everyone — from individuals to VCs and investment banks — buys stock for one of two reasons, which in some ways are the same: because they think it will be worth more later.

Buffett commits a logical flaw when he contrasts investment and speculation, as if they were mutually exclusive. Ninety-nine percent of the time what he calls investment is anticipation of a higher price. Volatility alone distinguishes the two, but even that is subjective.

Historical note

In the first half of the 19th century, the poet and satirist Thomas Love Peacock the basis of the monetary system “in which public credulity shall have given temporary support to the safe and economical currency, which consists of a series of paper promises, made with the deliberate purpose, that the promise shall always be a payment, and the payment shall always be a promise.”

To do what he does so well — accumulate wealth by buying into ventures that others have created — Buffett doesn’t need to analyse the system in such depth and draw Peacock’s somewhat cynical conclusions. The question those who revere Buffett’s “wisdom” should ask themselves is this: Does he realize how hyperreal his stock market is? Doesn’t he understand that share prices follow the same logic as cryptocurrencies, which are someone’s initiative to create something that others have a reason to buy into?

But Buffett is an icon of shareholder capitalism. As a public promoter of the system he must be aware of this truth, but he would obviously prefer others don’t mention it. It might shake their faith in the hyperreal system.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book,, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

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