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Berkshire Hathaway, under the leadership of Warren Buffett, again performed well in 2024.

Jonathan Stempel of Reuters reported that:

Berkshire Hathaway (BRK-A, BRK-B) shares rose to a record on Monday after the conglomerate, run by Warren Buffett, posted its highest-ever quarterly profit, driven by improvement in insurance operations.

The price of Berkshire’s Class A shares rose as much as 4.3% to $749,611 by early afternoon, NYSE data show.

That surpassed even the $741,971 recorded by some stock price services last June 3 following a trading glitch.

It boosted the Omaha, Nebraska-based conglomerate’s market value to about $1.08 trillion. Multiple analysts raised their price targets and earnings forecasts.  Buffett’s own net worth surpassed $155 billion, according to Forbes magazine. (In comparison, CEO of JP Morgan Chase, Jamie Dimon’s net worth is estimated at $2.6 billion, Elon Musk’s net worth at $384 billion and Mark Zuckerberg at $236 billion.)

Buffett issued his highly anticipated annual letter on February 22.  He makes the case for capitalism as wealth creation, not “moneyism,” using the financial success of Berkshire Hathaway.

He reports the annual percentage change per year in the per-share market value of Berkshire from 1965 through 2024 as 19.9% and the corresponding annual percentage change per year for companies in the S&P 500 (including dividends paid) as 10.4%.

The overall gain in value from 1964 through 2014 of Berkshire Hathaway stock was 5,502,284%, but only 39,054% for stocks in the S&P 500 companies.

For Buffett, capitalism is the alchemy of creating wealth as assets.  He looks at balance sheets to measure the results of capitalism, not P&L statements.

He wrote:

In 1965, the company did not pay a dime of income tax, an embarrassment that had generally prevailed at the company for a decade.  That sort of economic behavior may be understandable for glamorous start-ups, but it’s a blinking yellow light when it happens at a venerable pillar of American industry.  Berkshire was headed for the ash can.

Fast forward 60 years and imagine the surprise at the U.S. Treasury when that same company – still operating under the name of Berkshire Hathaway – paid far more in corporate income tax than the U.S. government had ever received from any company – even the American tech titans that commanded market values in the trillions.

To be precise, Berkshire last year made four payments to the IRS that totaled $26.8 billion.  That’s about 5% of what all of corporate America paid.

(In addition, we paid sizable amounts for income taxes to foreign governments and to 44 states.)

Note one crucial factor allowing this record-shattering payment: Berkshire shareholders during the same 1965-2024 period received only one cash dividend. … For sixty years, Berkshire shareholders endorsed continuous reinvestment and that enabled the company to build its taxable income.  Cash income-tax payments to the U.S. Treasury, miniscule in the first decade, now aggregate more than $101 billion . . . and counting.

Huge numbers can be hard to visualize.  Let me recast the $26.8 billion that we paid last year.  If Berkshire had sent the Treasury a $1 million check every 20 minutes throughout all of 2024 – visualize 366 days and nights because 2024 was a leap year – we still would have owed the federal government a significant sum at year end.  Indeed, it would be well into January before the Treasury would tell us that we could take a short breather, get some sleep and prepare for our 2025 tax payments.

Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities, although many of these will have international operations of significance.  Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.

Paper money can see its value evaporate if fiscal folly prevails.  In some countries, this reckless practice has become habitual and in our country’s short history, the U.S. has come close to the edge.  Fixed-coupon bonds provide no protection against runaway currency.

Businesses, as well as individuals with desired talents, however, will usually find a way to cope with monetary instability as long as their goods or services are desired by the country’s citizenry.

So, too, with personal skills.  Lacking such assets as athletic excellence, a wonderful voice, medical or legal skills or, for that matter, any special talents, I have had to rely on equities throughout my life.  In effect, I have depended on the success of American businesses and I will continue to do so.

One way or another, the sensible – better yet, imaginative – deployment of savings by citizens is required to propel an ever-growing societal output of desired goods and services.  This system is called capitalism.  It has its faults and abuses – in certain respects, more egregious now than ever – but it also can work wonders unmatched by other economic systems.  America is Exhibit A.  Our country’s progress over its mere 235 years of existence could not have been imagined by even the most optimistic colonists in 1789, when the Constitution was adopted and the country’s energies were unleashed.

True, our country, in its infancy, sometimes borrowed abroad to supplement our own savings. But concurrently, we needed many Americans to consistently save and then needed those savers or other Americans to wisely deploy the capital thus made available.  If America had consumed all that it produced, the country would have been spinning its wheels.

The American process has not always been pretty – our country has forever had many scoundrels and promoters who seek to take advantage of those who mistakenly trust them with their savings. But even with such malfeasance – which remains in full force today – and also much deployment of capital that eventually floundered because of brutal competition or disruptive innovation, the savings of Americans has delivered a quantity and quality of output beyond the dreams of any colonist.

From a base of only four million people – and despite a brutal internal war early on, pitting one American against another – America changed the world in the blink of a celestial eye.  In a very minor way, Berkshire shareholders have participated in the American miracle by foregoing dividends, thereby electing to reinvest rather than consume.  Originally, this reinvestment was tiny, almost meaningless, but over time, it mushroomed, reflecting the mixture of a sustained culture of savings, combined with the magic of long-term compounding.

So, thank you, Uncle Sam.  Someday, your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024.  Spend it wisely.  Take care of the many who, for no fault of their own, get the short straws in life.  They deserve better.  And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.

Thank you, Warren, for your efforts.  May others do as well so that governments can benefit, customers can be satisfied, employees paid and investors enjoy asset appreciation.

Berkshire Hathaway owners do not extract cash from the company.  The liquidity of their assets must come from their future sale to others.  Thus, they must gamble that there will always be buyers seeking to buy shares of Berkshire Hathaway at ever rising prices.

In this commentary, Steve Young encourages us to think about war through the lens of the Russian/Ukraine war and as reflected in time-honored U.N. declarations, as well as other long-standing arguments that define the concept of just war, including the Caux Round Table Principles of Moral Government.  He finds the U.S.’s current approach to these issues wanting.

Arguments can be made for war, but what should those arguments be based upon?  To start, history holds no moral debt to the present.  A war – armed invasion or cyber-attack – must always be evaluated on its own contemporary merit.  Simply because my ancestors were murdered by your ancestors and took their land carries no moral justification for revenge.

The death of people will always be an outcome of war.  What ethical argument can be advanced to claim that anyone (people) has the right to kill other people?  To ignore this truth is to invite war on yourself and to break the important laws and rules of just war developed and agreed upon over many decades.

Last Friday, U.S. Vice President J.D. Vance offended many European leaders with a short speech at the Munich Security Conference.

Vance spoke frankly as guided by his values.  But, given his audience and his objective of bridging differences between some in Europe and the Trump Administration, whether he was appropriately tactful and sufficiently gracious is less certain.

But what struck me was how fully he spoke in support of one of the foundational best practices advocated by the Caux Round Table’s Principles for Moral Government – discourse.

Here are excerpts from Vice-President Vance’s remarks:

Free speech, I fear, is in retreat …

Now, to many of us on the other side of the Atlantic, it looks more and more like old entrenched interests hiding behind ugly Soviet era words like misinformation and disinformation, who simply don’t like the idea that somebody with an alternative viewpoint might express a different opinion or, God forbid, vote a different way, or even worse, win an election. …

I believe deeply that there is no security if you are afraid of the voices, the opinions and the conscience that guide your very own people. …

And of course, we know that very well.  In America, you cannot win a democratic mandate by censoring your opponents or putting them in jail.  Whether that’s the leader of the opposition, a humble Christian praying in her own home, or a journalist trying to report the news.  Nor can you win one by disregarding your basic electorate on questions like who gets to be a part of our shared society. …

I believe that dismissing people, dismissing their concerns or worse yet, shutting down media, shutting down elections or shutting people out of the political process protects nothing.  In fact, it is the most surefire way to destroy democracy.  Speaking up and expressing opinions isn’t election interference. …

To believe in democracy is to understand that each of our citizens has wisdom and has a voice. And if we refuse to listen to that voice, even our most successful fights will secure very little.  As Pope John Paul II, in my view, one of the most extraordinary champions of democracy on this continent or any other, once said, “do not be afraid.”  We shouldn’t be afraid of our people, even when they express views that disagree with their leadership. …

Here is the relevant Caux Round Table Principle:

Discourse ethics should guide the application of public power.

Public power, however allocated by constitutions, referendums or laws, shall rest its legitimacy in processes of communication and discourse among autonomous moral agents who constitute the community to be served by the government.  Free and open discourse, embracing independent media, shall not be curtailed, except to protect legitimate expectations of personal privacy, sustain the confidentiality needed for the proper separation of powers or for the most dire of reasons relating to national security.

As U.S. President Thomas Jefferson asserted in his first inaugural address: “… error of opinion may be tolerated where reason is left free to combat it.“

Robert (Bob) MacGregor, the inspiration for the Caux Round Table Principles for Business, has passed. Bob died peacefully at his home in Illinois at age 92.

To me, Bob brought forward into our age the stalwart optimism and practicality of classic Minnesotan and American achievement.  His premise for action, which he would share with me at the end of nearly every phone call was: “Onward and Upward!”

A graduate of Macalester College in St. Paul, Minnesota and Princeton Theological Seminary, Bob was a pastor.  Then, to improve community, he got into politics in the City of Minneapolis – make things better; don’t be a by-stander; jump in, set goals, care about people, get it done.  For many years, he gave his advice to the Dayton family and their business foundation and community activism.

Learning about the Caux Round Table seeking to integrate responsibility with profit-making by giving priority to stakeholders, Bob proposed principled leadership – act from good principles first and always.  Then, to make such business leadership more attainable around the world, he proposed, to me very much in an American Protestant tradition, putting best practices in writing and holding companies to account.  Working with members of the Caux Round Table, in particular with Jean-Loup Dherse of France and Ryuzaburo Kaku of Japan, Bob facilitated the publication of the Caux Round Table Principles for Business in 1994.

These global principles were the first ethical standards proposed by business leaders.

Working closely with Bob in the drafting of the principles was Professor Kenneth Goodpaster of the University of St. Thomas in Minneapolis, Minnesota.

Ken has sent me his reflections on Bob’s contributions and having given us the benefit of a worthy life, lived honorably and with passion and dedication.  I include Ken’s reflections here:

A Grateful Remembrance

Bob MacGregor (1933-2025)

Bob MacGregor accomplished so much in his 92 years that it would be impossible in this note to comment meaningfully on it all.  Others have and will provide such a commentary in other places.  My friendship with Bob began thirty-five years ago in 1990, when he led the Minnesota Center for Corporate Responsibility (MCCR), housed at the University of St. Thomas.  Bob contributed enormous energy to the development of what became known as the Minnesota Principles for Business.  We developed these principles of business conduct because more and more frequently, Minnesota multinational companies doing business around the world were encountering cultural differences that posed dilemmas for management trying to act conscientiously – trying to do “the right thing.”  These companies had turned to the MCCR for guidance.

Charles Denny, CEO of ADC Telecommunications (a member of the Caux Round Table, as well as MCCR), shared the Minnesota Principles in the very early 1990s with the Caux Round Table at its annual meeting in Switzerland.  The reaction was more than positive.  The participants wanted to adapt the Minnesota Principles as trans-cultural moral principles for business and call them the Caux Round Table Principles for Business.  Bob and the MCCR agreed and the adaptation concluded about a year thereafter.

One might reasonably ask whether these principles are as relevant today as they were 35 years ago.  In my opinion, the answer to this question is “Yes – but with a cautionary note!”

The platform on which the Caux Principles were built was a pair of ethical ideals, one central to Eastern thought (kyosei: living and working together for the common good) and the other central to Western thought (human dignity: the sacredness of each person as an end, not simply as a means to others’ purposes).  These two ethical ideals remain central in their traditions and because of this, continue as anchors for the Caux Principles today.

The seven general principles that the leaders of the Caux Round Table agreed upon are also relevant today as guidelines for corporate conscience and moral capitalism.  And the consideration urged by the Caux Principles to the six stakeholder groups: customers, employees, owners/investors, suppliers, competitors and communities, continues to be relevant (if not more relevant) today in our new age of Artificial Intelligence.  The Caux Principles remind us that our digital creations must themselves be fashioned with careful, explicit moral guidance.

Why the cautionary note (and I know from personal conversations with Bob before his passing that he strongly agreed with this)?  The answer lies in context of contemporary business decision-making.  The Caux Principles originated as a transcultural guide to the decision-making of business leaders within their own business organizations.  They put to rest doubts about whether there could be shared moral values – consciences – among businesses across cultural boundaries as businesses became more global.

What the Caux Principles did not anticipate was the polarization and politicization of corporations that we have witnessed in the last two decades.  The implications of this reality, especially in the United States, have been troubling – because they seem to have drawn business decision-making out of the internal moral reflection envisaged by the Caux Principles.  Instead, corporations have been invited to “take sides” in partisan contests that are controlled more by external pressures than by independent moral judgments.  Business ethics is becoming supplanted by business politics – with the result that corporate consciences and the guidelines that have been offered to them – may have been outflanked.

So, are the Caux Principles still as relevant today as they were 30 years ago?  Yes indeed, but with this cautionary note: Corporate leaders and their employees must return to the shared moral reflection that they practiced when the Caux Principles were adopted – avoiding the temptation to be absorbed into the partisan public sector.  This was Bob’s dream and the dream of the original architects of the Caux Round Table Principles.

Kenneth E. Goodpaster
Professor Emeritus
University of St. Thomas (MN)

Donald Trump has “Cried Havoc! and let slip the dogs of war” – trade war, that is – to bay at and harass the good people of Canada and Mexico, America’s largest trading partners.  He imposed a tax of 25% on imports to the United States from each country.

He said he did this to pressure Canada and Mexico to do more to protect America’s borders from illegal immigration and to stop the importation by Americans of the drug, fentanyl.

This is Godfather stuff: “Give them a deal they can’t refuse!”

An apt comment is: “Those whom the Gods would destroy, they first make mad.”

(In verses 620–623 of his play Antigone, Sophocles wrote: “Evil appears as good in the minds of those whom god leads to destruction.”)

Mexico and Canada immediately reciprocated, taxing imports from the U.S. to their countries.

Now, if we ask the old question “Qui bono?” – to whose benefit? – asked by the ancient Roman judge, Lucius Cassius, and passed on to us by Cicero in one of his orations against dictatorial Mark Antony, the most likely answer is: “No one.”

The immediate effect will be fewer goods showing up in American markets and higher prices for whatever is imported, both eventualities lowering the real American standard of living.

Canadian and Mexican manufactures will not likely lower their net profit margins by whatever it takes to match the 25% increase in gross sales prices to be paid by American consumers so that Trump’s taxes will have no effect on American consumers.  As the prices on Canadian and Mexican goods go up, the quantity sold to Americans will go down.  That is the law of human nature – marginal utility curves.

In the 1930s, the American Smoot Hawley tariffs contributed to worsening the worldwide great depression, adding momentum to the rise of Hitler and Mussolini and so contributing to World War II, which killed a lot of people.

Trump’s taxes on imports will also lower economic output in Canada and Mexico.

It’s a win/lose game of chicken.  Who will blink first?

On January 31, Trump also mentioned imposing taxes on goods imported from the European Union and, in general, on computer chips, steel, oil, gas, copper and pharmaceuticals.

With his tariffs, Trump has violated the Caux Round Table Principles for Business:

Principle 5: Support Responsible Globalization

A responsible business, as a participant in the global marketplace, supports open and fair multilateral trade.  A responsible business supports reform of domestic rules and regulations where they unreasonably hinder global commerce.

His tariffs are a form of “brute” not moral capitalism, consistent with the thinking of Herbert Spencer, who argued that humans, like all other members of the animal kingdom, do not have a moral sense, only a predatory instinct to kill or be killed, eat or be eaten, whereby only the fittest survive, while the rest find themselves dishonorable graves (see Chapter 3 in my book. Moral Capitalism).

The first meeting of the Caux Round Table was convened at Mountain House in Caux, Switzerland, to discuss ending the trade war between Japan and the U.S./E.U., triggered by Japanese capitalistic prowess in making consumer electronics and automobiles of better quality and at lower cost than the Americans and Europeans were able to do.

By raising their cost, the American and European governments prevented their citizens from personally benefiting from Japanese innovations and quality improvements.

On their side, however, the Japanese restricted the import of American agricultural products to protect Japanese farmers and their small rural communities, which were no longer price competitive.

The business leaders gathered at that first meeting of the Caux Round Table came to an agreement on ethical grounds that all deserve access to the fruits of Adam Smith’s “invisible hand” that, through ethical, reciprocally balanced relationships and cooperation, improves quality, increases quantity and lowers prices through innovation.

In this regard, consider what DeepSeek just did to the demand curve for AI.