> Warren Buffett Blog: Free trade is great but can hurt certain segments of the population

Thursday, March 16, 2017

Free trade is great but can hurt certain segments of the population

Free trade is wonderful for the world and for the United States, but its benefits are diffused among 320 million people. You buy your bananas cheaper because we don't try and produce them in the United States. But the penalties from free trade are terrible to specific industries. And as an investor, I can own – make a dumb decision on owning a shoe company. But if I own a good insurance company, I can diversify away the problems. 

If you're a 55-year-old steelworker, you can't diversify away your talents. I mean, you had it if steel or textiles or shoes become subject to total, it all moves offshore. So you want to have free trade, but you also have to take care of the people who, through no fault of their own, have spent their life learning one profession. And you can talk about retraining and all that, but it just isn't practical. And just take Berkshire Hathaway. We started with 2,000 employees in New Bedford, Mass, turning out textiles. And that business was doomed. And we had workers there who really they didn't have alternatives at age 50. Fair number of them just spoke Portuguese. They didn't have a chance. And a rich country that's prospering because of free trade, and as the world is prospering, should keep the free trade as much as possible. But they also should take care of the people that become the roadkill, you know, when an industry moves.

You've got to take care of those people. And if I were somebody that had spent 25 years in shoes or textiles or you name it, and somebody came around to me and said, "This is great for the world and it's great for those guys on the Forbes 400, but it's just too bad because you lose your job and it makes – we can buy our shoes a little cheaper, our underwear a little cheaper, our steel a little cheaper abroad," I would say that a rich society should figure out a way to take care of those people.