A student asked him what shaped his political views (Buffett is a Democrat). The famous investor offered a great through experiment, which helped him think through the kind of world he wants to live in. In it he characterizes something he calls the 'Ovarian Lottery':
My political views were formed by
this process. Just imagine that it is 24 hours before you are born. A
genie comes and says to you in the womb, “You look like an
extraordinarily responsible, intelligent, potential human being. Going
to emerge in 24 hours and it is an enormous responsibility I am going to
assign to you – determination of the political, economic and social
system into which you are going to emerge. You set the rules, any
political system, democracy, parliamentary, anything you wish, can set
the economic structure, communistic, capitalistic, set anything in
motion and I guarantee you that when you emerge this world will exist
for you, your children and grandchildren.
What’s the catch? One catch – just
before you emerge you have to go through a huge bucket with 7 billion
slips, one for each human. Dip your hand in and that is what you get –
you could be born intelligent or not intelligent, born healthy or
disabled, born black or white, born in the US or in Bangladesh, etc. You
have no idea which slip you will get. Not knowing which slip you are
going to get, how would you design the world? Do you want men to push
around females? It’s a 50/50 chance you get female. If you think about
the political world, you want a system that gets what people want. You
want more and more output because you’ll have more wealth to share
around.
The US is a great system, turns out
$50,000 GDP per capita, 6 times the amount when I was born in just one
lifetime. But not knowing what slip you get, you want a system that once
it produces output, you don’t want anyone to be left behind. You
want to incentivize the top performers, don’t want equality in results,
but do want something that those who get the bad tickets still have a
decent life. You also don’t want fear in people’s minds – fear of lack
of money in old age, fear of cost of health care. I call this the
“Ovarian Lottery”.
My sisters didn’t get the
same ticket. Expectations for them were that they would marry well, or
if they work, would work as a nurse, teacher, etc. If you are designing
the world knowing 50/50 male or female, you don’t want this type of
world for women – you could get female. Design your world this way; this
should be your philosophy. I look at Forbes 400, look at their
figures and see how it’s gone up in the last 30 years. Americans at the
bottom are also improving, and that is great, but we don’t want that
degree of inequality. Only governments can correct that. Right way to
look at it is the standpoint of how you would view the world if you
didn’t know who you would be. If you’re not willing to gamble with your
slip out of 100 random slips, you are lucky! The top 1% of 7 billion
people. Everyone is wired differently. You can’t say you do everything
yourself. We all have teachers, and people before us who led us to where
we are. We can’t let people fall too far behind. You all definitely got
good slips.
Even if you don't buy Buffett's idea that only government can
alleviate certain forms of inequality, one thing that's great about
Buffett is his appreciation of luck, and the realization that he won a
lottery ticket by dint of his birth. So many of our elites can't stop
talking about how hard they worked, or the importance of taking risk and
all that. Buffett readily acknowledges that he had incredible fortune
from the moment he was born.At the same event, Warren Buffett also explained why he thought George W. Bush said the greatest economic statement of all time.
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