The Greater Good

In between the bowing and genuflecting before the altar of the Oracles, here’s a question I hope someone asks Warren Buffett and Charlie Munger at this weekend’s Berkshire Hathaway lovefest: What is the right balance between acting in one’s self-interest versus acting for the greater good?

If any two people can provide the answer to this question and apply it specifically to economics, finance, and business (not to mention the current regulatory and legislative environment targeted directly at the financial services industry), it’s the Oracles.

Now, we know that the decision regarding self-interest versus the greater good has already been decided quite some time ago in certain realms. For example, the Vampire Squid was certainly acting in its own self-interest when it exploited its market maker position via its prop trading using what one of the Oracles called “financial weapons of mass destruction”. And, despite political posturing from semi-informed Senators, the Vampire Squid is certainly correct in arguing that the “sophisticated” investors on the other side of their prop trades know “buyer beware” applies at all times. Moreover, there is little doubt certain other squid-like entities with prop trading businesses share the same sentiments and philosophy.

Then there is the political realm, which is rife with self-interested behavior. For example, a Senator or Congressperson representing a state or district is elected to do the bidding of his/her backers – a little pork here, an earmark or two there.

Where it gets most intriguing is when the two realms – finance/business and politics – intersect a key moment in time. I am speaking of Senator Ben Nelson of Nebraska (the state within which Omaha and the Oracles reside) and his no-debate-on-financial-regulatory-reform-until-we-grandfather-key-derivativs-transactions vote.

On the surface, Senator Nelson appears to be acting for the sole benefit of a key constituent – Berkshire Hathaway. But is that action in the best interest of the state that Mr. Nelson represents? It’s citizens (beyond the Oracles and their local employees)? The country? What exactly does being elected to represent a state within a union mean?

This is what I hope someone will engage the Oracles for an answer. And I am not speaking of it in the obvious, narrow partisan political sense but in the larger context of individual self-interest and the greater (collective) good.

What is the right balance? What serves the greater good – acting in one’s own self interest even to the seeming detriment of the greater good or deferring (eliminating?) the self-interested benefits at potentially great individual expense (for the moment or longer) and thereby allowing others to gain?

Is the first approach solely about greedy behavior that serves no purpose beyond enriching those directly involved? Or is such a Darwinian/advocate/self-interest approach vital to growth, peace, and prosperity for more than only those directly and favorably impacted – in effect for the greater good?

Or is the second approach one that seemingly enhances the greater good at the expense of a diminished entrepreneurial spirit – a spirit that enabled homo sapiens to evolve out of the primordial swamp (the pleasure principle, writ large)? Moreover, will the second approach produce an arbitrage situation in which self-interested parties seek other outlets thereby damaging the greater good?

What Oracles Are For

These are kind of questions that Oracles are created for: To provide insight into the larger themes that impact all of us. To impart wisdom into areas that require it and that can enrich us in immeasurable ways.

Being in the presence of greatness does not make you great. You cannot gain wisdom and good judgment simply by viewing a work of art or by catching a whiff of a great man’s aftershave lotion. Rather, taking advantage of the collective wisdom of the Oracles is far more rewarding via challenging questions for great minds.

The pilgrimage to Omaha, at this specific point in time under these specific circumstances involving these specific parties, provides the ideal setting for all us mere mortals to derive the benefit of the wisdom of the Oracles. Wisdom that will hopefully serve the greater good.