Warren Buffett’s Exit Shows How Long Power Can Last Without Becoming Tyranny

That a single man should preside as chairman over one great trading company for more than fifty years would, in my own century, have sounded like a species of commercial monarchy; that he should depart it at ninety‑six, become something styled an emeritus, and hand the chair to his son, would have raised grave suspicions of a disguised inheritance of power. Yet the reports before us speak, not of tumult or accusation, but of a deliberate succession, long prepared, with another trusted officer already acting as chief executive and a board publicly commending the founder’s impact upon the owners. I am moved, therefore, to ask what makes such a concentration of power tolerable, when in politics it would be intolerable.

When I wrote the “Second Treatise of Government,” I defined political power as a right to make laws with penalties of death and lesser pains, all for the regulating and preserving of property in the wide sense of lives, liberties, and estates. A corporate chairman does not bear the sword of the commonwealth; he commands no prisons, he cannot dragoon consciences, he cannot, merely by a board resolution, deprive men of life or civil freedom. His authority is nearer to that of a steward, entrusted with a stock of wealth by many proprietors, empowered to manage it for their advantage, and removable by them when that trust is judged broken. The form is not the same as government, yet the principle of fiduciary trust is.

In every society of free and equal men, power must show its title. No man is born with a natural right to rule investors any more than to rule citizens. That title, in civil government, I place in the consent of the governed; in these great companies, it rests in the consent of shareholders who, by rules they have assented to, choose directors, and by them, their principal officers. If the facts can be trusted, this chairman served since 1970 and earlier, and the company’s owners, knowing this, continued to hold its shares and attend its meetings. Their continuing to employ him, on terms they might have altered or revoked, supplies here the place of political consent; they are not his subjects, but his principals.

Yet long possession of power, even when born of consent, carries temptations that reason must distrust. A man may come to think the office his own, and the institution his private estate. The danger I most fear in governments—the making of the ruler a judge in his own case, armed with force to maintain his claim—has its likeness in commerce when managers can entrench themselves, obscure accounts, and bend rules so that the very owners cannot peaceably dislodge them. Of such mischiefs I see no detail in these reports; instead, they speak of a succession “deliberate,” carried out “step by step,” a son set to guard what they call the culture and values, another officer long since running the day‑to‑day business. So far as appears, the transition is orderly, not forced by exposure of a long train of abuses.

Still, the reader should not be soothed by the mere words “steward” or “guardian of culture,” however often repeated. Power that claims to act for others’ good must at all times be controllable by those others; it must be, as I have elsewhere said of the legislative, a fiduciary power, forfeited by breach of trust. In a company, that means owners must retain clear rights: to examine accounts, to replace directors, to sell their shares when they judge the governors unfaithful. If a chairman could name his successor, fix his own protections, and so bind the hands of the proprietors that they had no practical redress, the thing would differ little, in spirit, from political usurpation, though it wielded only money and not muskets.

The succession described here, so far as the scant facts allow us to see, does not wear that face. The retiring chairman expressly places confidence in identified successors; he does not, so far as is said, command their appointment by force of law, but recommends to those who hold the true property and the votes. The new executive already manages the enterprise; the son, long a director, is to preside over the board and, in their phrase, “guard its culture and values.” This may be wise or unwise in the particular, profitable or not; that is for the proprietors to judge. What matters to natural right is that they retain the power to judge, and to act upon that judgment without fear.

I see here, then, not a model for political succession—for crowns descending from father to son, or presidents appointing their heirs—but an example of how even very long, very personal authority can end without convulsion when all parties remember that power is held on trust, that it must be continually consented to, and that it is always, in principle, revocable. Men are, under God, born to liberty, not to serve in any master’s estate; but they may, for their convenience and advantage, employ stewards over their stock, and even retain one steward for a lifetime, provided they can dismiss him tomorrow. Where that remains true, a quiet resignation at ninety‑six is no tyranny, but a trust decently surrendered.