It’s not often that I’ll find the brass nuts to call out the Sage of Omaha for talking through his hat, but this is one of them. In the usual fabulous letter to his shareholders including one heartwarming extract from Grandpa Buffett extolling the virtues of old-fashioned thrift. Nothing wrong with any of that. It’s here where I part company with the Sage of Omaha a little bit:
Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.
Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.
The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.
We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.
The problem with this is that it is entirely ingenuity-centric. Human ingenuity and graft were undoubtedly a lot of why America’s best days lay ahead in 1776, though let’s face it they could hardly have lain behind 😉
And yet for all of the remaining three dates, human ingenuity had its little helpers, the gift of ancient sunlight that gave it a leg-up. For sure, that ingenuity was necessary to make use of it, but it is insufficient on its own to do all of the stuff we take for granted. London lies some four hundred miles from Edinburgh. In 1776 it would have taken the best part of a month to do it using renewable energy (horse power). Now I can decide to leave at noon and be in Edinburgh by sundown. Human ingenuity created the means, but it doesn’t power it.
Warren is right in that America will probably not run out of human ingenuity. But it might run out of resources that human ingenuity needs to deliver its current lifestyle. Whether or not America manages to use its human ingenuity to find a different, perhaps better lifestyle is going to depend on it getting rid of human ingenuity’s evil twin, America’s human sense of entitlement.
Just like Scarlett O’Hara was at her best when she clawed as the soil of Tara and declared that she would make something from nothing, so it seems so often that human ingenuity achieves its best when it does not have the drag of a sense of entitlement pulling people back. Entitlement makes us avoid seeing the world as it is by imposing the world as we”d like it to be onto it.
America’s best days may well be behind it. This won’t be because the wellspring of ingenuity will fail in America. If it happens it will be because Americans’ sense of entitlement to the benefits of cheap energy will blind them to alternative solutions that would need less energy.
Warren may be right in the end and Americans step up to the plate. But for once it won’t be their ingenuity that gets them through. It’ll be ditching their sense of entitlement.
Buffet was talking about Americans, so I’d followed the theme. But it applies to all of us who currently have our lives made easier and more plentiful by cheap oil. We all need to lose the sense of entitlement, and learn to give energy the respect it deserves. Though I can easily bike to work and back, I am not a good enough cyclist to sustain the power to run this laptop computer I am writing this on for the amount of time it took me to write this post. But I have enough ingenuity to imagine an alternative which would be be just as rewarding. Sometimes it is good to drink a few beers with friends and hold forth on a subject. Humans did that well for centuries before the oil age.
Our challenge in the coming decades will not be finding enough ingenuity. It will be getting rid of our sense of entitlement…