Let’s just assume it was 24 hours before you were born, and a genie came to you, and he said, “Warren, you look very promising, and I have a big problem. I’ve got to design the world in which you are going to live in. I have decided it is too tough and I shall allow you to design it. So now you have 24 hours to think of how to design. You figure out what the social rules should be, the economic rules and the government rules, and you and your kids and their kinds will all live under those rules.
Oh now, you’d be thinking, “Oh man, I can design anything? There must be a catch.” The genie says, “Yes, there’s a catch. You don’t know if you are going to be born black or white or yellow, rich or poor, male or female, able-bodied or disabled, bright or retarded, born in a first or third-world nation. All you know is you are going to take one ball out of a gigantic barrel consisting of 5.8 billion balls. You’re going to participate in the ovarian lottery draw which will decide where you’ll be born, black or white, rich or poor, smart or retarded. And that is going to be the most important thing in your life, because that is going to control whether you are born here (in a first-world nation) or in Afghanistan or whether you are born with an IQ of 130 or an IQ of 70. It is going to determine a whole lot. So what type of world are you going to design before you draw your ball among the lot?
So before you draw the lot, it is good to look at the social questions, because not knowing which ball you are going to get, you are going to want to design a system that is going to provide lots of goods and services, because you want people, on balance and on the whole, to live well. So now what kind of world would you design besides the obvious things like everyone gets an afternoon nap and coke for free? It is better to design a world where everyone has a fair shake at success. You may not require that everyone has the exact same skills, but an ideal world would have everyone starting off on a level playing field. For example, you’d perhaps create a world where every child has a home and a caring adult or two who will watch over the child and let him or her know that someone cares, or a world where they is an equal chance for a basic education.
Unfortunately, the world we live in is not ideal. There are children throughout the world – in the thousands – who don’t have a home, who don't have an adult looking out for them, who don't get a sniff at an education. They may be in an institution where they have enough to eat and a bed in which to sleep for those so-called luckier ones among this unlucky lot, but that’s pretty much it.
Fortunately, however, there are people like Warren Buffett, Bill Gates and in the past, Andrew Carnegie who truly see through the meaning of wealth by distributing most of what they have back to society. In Andrew words, “Huge fortune that flows in large part from society shall in large part be returned to society.” In Warren words, “I want to give my kids enough so that they could feel that they could do anything, but not so much that they could do nothing.” “it makes sense for high compounder to take care philanthropy needs.” Then if you look at those many others who passed down their fortunes generation after generation, the money withheld does not help either the family themselves or the world at large. Many families are torn apart or many individual got slackened to the point of being a slouch, having no objective in life because they do not value the meaning of achieving and contributing.
The following two quotations from 1995 and 1988, respectively, highlight Warren Buffett's thoughts on his wealth and why he long planned to reallocate it:
"I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you find out how much this talent (his investment skill) is going to produce in the wrong kind of soil... I work in a market system that happens to reward what I do very well - disproportionately well. Mike Tyson, too. If you can knock a guy out in 10 seconds and earn $10 million for it, this world will pay a lot for that. If you can bat .360, this world will pay a lot for that. If you're a marvelous teacher, this world won't pay a lot for it. If you are a terrific nurse, this world will not pay a lot for it. Now, am I going to try to come up with some comparable worth system that somehow (re)distributes that? No, I don't think you can do that. But I do think that when you're treated enormously well by this market system, where in effect the market system showers the ability to buy goods and services on you because of some peculiar talent - maybe your adenoids are a certain way, so you can sing and everybody will pay you enormous sums to be on television or whatever -I think society has a big claim on that."
"I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die."
The idea of people like Warren is to leave the world a better place when they are gone, by living below their means and giving back their money to society.