YAPSS
- May 13, 2022

Collection: Charlie Munger - #211 'The Next Normal - New Trend After Pandemic'

[Transcript]

BECKY QUICK 00:00

Charlie, Jeffrey Molloy from San Francisco writes in and he says, "much media attention has been focused on the large numbers of Americans who’ve resigned from their jobs over the last year. What do you make of this trend? And what advice would you give to CEOs seeking to retain their employees?"

CHARLIE MUNGER 00:18

Well, this is a very interesting thing that the pandemic has given us.

An awful lot of people have gotten used to not being in the office five days a week. And I think a lot of those people are never going back to five days a week.

It’s amazing the percentage of the people in computer science that don’t want to be in the office for a normal life. They want to do a lot of it from locations that are more convenient to them. I think a lot of that’s going to remain forever.

I don’t think we are going back to – I don't think the average corporation is going to fly its directors around so they can sit at the same table for every meeting of the year. Maybe it will have two meetings where the directors are together.

By the way, Berkshire’s directors have done that forever. The Berkshire directors have met face to face twice a year forever and done everything else on the telephone or with consent minutes. And it’s worked fine for Berkshire. I don’t think we needed all these goddamn meetings and airplane flights.

So I think part of what’s happening is quite constructive. You’ll make life simpler, cheaper, and more efficient. I don’t think we’re going back for some kind of work.

Now, on the other hand, they made the welfare so liberal of helicoptering this money out. It was just hell to even man your restaurants so you can serve the patrons. I think we probably overdid that a little. I think Larry Summers is quite possibly right that we overshot a little with some of the stimulus. It would have been smarter to do a little less.

If you stop to think about it, what makes capitalism work is the fact that if you’re an able-bodied young person and if you refuse to work, you suffer a fair amount of agony. It’s because of that agony that the whole economic system work.

And so – the only effective economies that we’ve had that brought us modernity and the prosperity we now have, they imposed a lot of hardship on young people who didn’t want to work. If you take away all the hardship and say you can stay home and get more than you’ll get if you come to work, it’s quite disruptive to an economic system like ours.

The next time we do this, I don’t think we ought to be quite so liberal.

BECKY QUICK 03:15

What about the last part of the question where he asks, "what advice would you give to CEOs who are seeking to retain their employees?"

CHARLIE MUNGER 03:24

Well, every CEO I know is adapting somewhat to some people who work differently than they did in the past. So I think some of these changes are here forever. If your job in life is to get on the telephone and talk to other engineers all over the world while you solve problems, why do you have to do it from an office?

So I think – and the commutes get harder and harder with more traffic and it’s harder and harder to handle more traffic and more people. It may be a good thing that more people are going to commute less.

(Source: https://youtu.be/8RxLj9OVqLo)

[YAPSS Takeaway]

Never thought about this before on what makes capitalism work;

"If you stop to think about it, what makes capitalism work is the fact that if you’re an able-bodied young person and if you refuse to work, you suffer a fair amount of agony. It’s because of that agony that the whole economic system work.