Amazon has been hugely disruptive due to the brilliance of Jeff Bezos, whom Charlie earlier called the business mind of our generation. What is your current outlook on Amazon, and why hasn't Berkshire bought in?
Well, because I was too dumb to realize what was going to happen, even though I admired Jeff. I've admired him for a long, long time and watched what he was doing. But I did not think that he could succeed on the scale he has, and I certainly didn't — I didn't even think about the possibility of doing anything with Amazon Web Services or the cloud. So if you'd asked me the chances that while he was building up the retail operation he would also be doing something that was disrupting the tech industry, you know, that would have been a very, very long shot for me. And I've underestimated — I've really underestimated the brilliance of the execution. I mean, it's one thing to dream about doing this stuff online, but it takes a lot of ability. And you know, you can read his 1997 annual report and he laid out a roadmap, and he's done it and done it in spades. And if you haven't seen his interview on Charlie Rose three or four months ago, charlierose.com, go to it and listen to it because you'll learn a lot. At least I did. So I just — it always looked expensive, and I really never thought that he would be where he is today. I thought he would do — I thought he was really brilliant, but I did not think he would be where he is today when I looked at it three, five, eight, twelve years ago, whenever it may have been. Charlie, how did you miss it?
It was easy. What was done there was very difficult, and it was not at all obvious that it was all going to work as well as it did. I don't feel any regret about missing out on the achievements of Amazon, but other things were easier, and I think we screwed up a little.
No, we won't pursue that line. Well, I meant Google. I think we were smart enough to figure out Google. Those ads worked so much better in the early days than anything else. So I would say that we failed you there, and we were smart enough to do it and didn't do it. We do that all the time, too. Yeah, we were their customer very early on with Geico, for example, and we saw — I don't know, these figures are way out of date, but as I remember, you know, we were paying them ten or eleven dollars a click or something like that. And anytime you're paying somebody ten or eleven bucks every time somebody just punches a little thing where you've got no cost at all, you know, that's a good business unless somebody's going to take it away from you. And so we were close up seeing the impact of that. And incidentally, if any of you don't have anything to do in your hotel rooms tonight, just keep punching 'progressive' or something and — don't really do that. The thought just happened across my mind.
But you know, that is — you know, you've never seen a business, almost never seen a business like it. And I think for LASIK surgery and things like that, I think the figures were, you know, sixty or seventy bucks a click with no incremental cost. So — and I knew the guys. I mean, they actually designed their prospectus. They came to see me a little bit after the original one when they went public, a little bit after Berkshire even. So I had plenty of ways to ask questions or anything of the sort, educate myself, but I blew it. And we blew Walmart, too, when it was a total cinch. We were smart enough to figure that out and we didn't.
Yeah. Yeah. Figuring out execution is what counts. So anyway, well, and I could be making two mistakes on IBM. I mean, the — you know, the — it's harder to predict, in my view, the winners in various items or how much price competition will enter into something like cloud services and all that. I will — I made a statement the other day which is really remarkable, and I was asked, Charlie, whether he could think of a situation like it where one person has built an extraordinary economic machine in two really pretty different industries, you know, almost simultaneously, as has happened — from a standing start at zero, with competitors with lots of capital and everything else, to do it in retailing and to do it with a cloud like Jeff Bezos has done. I mean, people like the Mellons invested in a lot of different industries and all of that, but he has been in effect the CEO simultaneously of two businesses starting from scratch. That if — you know, Andy Grove used to use at Intel used to say, you know, think about if you had a silver bullet and you could shoot it and get rid of one of your competitors, who would it be? Well, I think that both in the cloud and in retail, there are a lot of people that would aim that silver bullet at Jeff, and he's done a — it's a different sort of game, but he's, you know, at the Washington Post, he's played that hand as well as anybody, I think, possibly could. So it's a remarkable business achievement where he's been involved actually in the execution, not just bankrolling it, of two businesses that are probably as feared by their competitors almost as any you can find. Charlie, you got further thoughts?
Well, we're sort of like the Mellons, old-fashioned people who've done all right, and Jeff Bezos is a different species. I certainly have no special insights on artificial intelligence, but I will bet a lot of things happen in that field in the next couple of decades, and probably a shorter time frame. They should lead, I would certainly think, but again, I don't bring much to this party, but I would certainly think they would result in significantly less employment in certain areas, but that's good for society, and it may not be good for a given business.
But let's take it to the extreme. Let's assume one person could push a button and essentially through various machines, robotics, all kinds of things, turn out all of the output we have in this country. So everybody — there's just as much output as we have. It's all being done by — you know, instead of 150-some million people being employed, one person. You know, is the world better off or not? Well, it certainly would involve less hours a week of work per week and so on. I mean, it would be a good thing, but it would require enormous transformation in how people relate to each other, what they expect of government, you know, all kinds of things. And of course, as a practical matter, more than one person would keep working, but pushing the idea that way is one of the — you'd certainly think that's one of the consequences of making great progress in artificial intelligence, and that's enormously pro-social eventually. It's enormously disruptive in other ways, and it can have huge problems in terms of a democracy and how it reacts to that. It's similar to the problem we have in trade, where trade is beneficial to society, but the people that see the benefits day by day of trade don't see a price tag at Walmart on socks or whatever they're importing that says, you know, you're buying — you're paying X, but you would pay X plus so many cents if you bought this domestically. So they're getting these small benefits and invisible benefits. And the guy that gets hurt by it, who's the roadkill of free trade, feels it very specifically. And that translates into politics. And so it gets very uncertain as to how the world would adjust, in my view, to great increases in productivity. And without knowing a thing about it, I would think that artificial intelligence would have that hugely beneficial social effect, but a very unpredictable political effect if it came in fast, which I think it could. Charlie?
Well, you're painting a very funny world where everybody's engaged in trade and the trade is: I give you golf lessons and you dye my hair. And that would be a world kind of like the royal family of Kuwait or something. And I don't think it would be good for America to have everything produced by one person and the rest of us just engaged in leisure. How about if we just got twice as productive?
