Legendary investor Warren Buffett has no doubt about the direction of U.S. prosperity — up and to the right — even as confounding factors like automation are thrown into the mix.
On Saturday at the 2019 Berkshire Hathaway Shareholders Meeting, a shareholder asked Buffett how he as chairman of Berkshire Hathaway – a major employer and producer of consumer goods – viewed the outlook for the labor market amid the rise of automation and temporary employment.
Buffett responded by placing the present in perspective.
“If we’d asked that question 200 years ago, and somebody said, with the outlook for development of farm machinery and tractors and combines and so on, meaning that 90% of the people on farms would lose their job, it would look terrible,” he said.
But over the past centuries, the U.S. economy and market system “has been remarkably ingenious” in creating millions of jobs, even as others were replaced, Buffett added.
“That’s what capitalism does, and it produces more and more goods per person,” he said.
“We find ways in this economy to employ more and more people, and we’ve got now more people employed than ever in the history of the country, even though company after company – and particularly in heavy industry and that sort of thing – has been trying to figure out naturally how to be more productive all the time, which means turning out the same number of goods with fewer people or churning out more goods, with the same number,” he said. “That is capitalism. I don’t think you need to worry about American ingenuity running out.”
The billionaire investor earlier during Saturday’s session reaffirmed his commitment to the free market democracy, calling himself “a card-carrying capitalist” with complete belief in the market system on which the U.S. has been built.
And Buffett, a longtime optimist on the U.S. economy, in his recent annual letter to shareholders touted what he called the “American tailwind” – the hefty returns he and many other investors have received over the years for having faith in U.S. innovation and value creation.
Speaking to thousands of shareholders in Omaha, Nebraska, Buffett shirked concerns that automation or any incoming trend du jour could dent American prosperity.
“You look at people in all kinds of businesses, and they like to make money, but they really like to be inventive,” he said. “They like to do things, and this economy, it works. It will continue to work.”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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