Factually! with Adam Conover - Big Tech, Workism and Killing Companies in the Crib with Scott Galloway

Episode Date: July 3, 2019

Author, public speaker, and clinical professor of marketing at NYU's Stern School of Business, Scott Galloway, joins Adam to talk about breaking up big tech, billionaires being the new Jesus Christ, a Hunger Games economy and Amazon lobbyists. Plus, The Algebra of Happiness [amazon.com] and "impossible" being latin for "improfitable" in the world of big tech. Learn more about your ad choices. Visit megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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So if all of that sounds good, if you want a big box of delicious snacks like this for yourself, use the code factually for $15 off your first order at Bokksu.com. That's code factually for $15 off your first order on Bokksu.com. I don't know the way. I don't know what to think. I don't know what to say. Yeah, but that's alright. Yeah, that's okay. I don't know anything. Hello and welcome to Factually. I am Adam Conover and here's a question. What happened to the internet? You know, in the early 2000s, the internet was a frontier. Anyone with a modem and a PC could stake their claim, learn some code, homestead a little blog on the prairie, right? Anyone could set up a business and pursue their homespun entrepreneurial dreams on their own terms. And that's what we thought would happen, right?

There would be an ever-expanding number of sites, platforms, and companies suited to every interest under the sun. I mean, heck, there was a whole world of them. You know, you could spend hours mining dumb videos on FARC or eBalm's world or whatever. Then you'd trade the links with your friends like they were sacred relics. Ooh, look at the cool one I just found. If you were sad, you'd post cryptic song lyrics on your live journal. That's how we expressed ourselves emotionally back in 2004, if you can imagine. And when you got tired, you could retreat to the e-farm

and play with your neopet, which reminds me, I should check up on my dragon Carlotta. You know, I haven't fed her in over a decade. She's probably fine, right? And we all thought that that's what it was going to be like forever. We thought that that world was the new world the internet had brought us. But today, that dream is dead. The internet is now totally run by a few mega corporations that completely dominate the flow of information and attention online. Take Google and Facebook. Google commands 90% of the search engine market. At this point, it's weird if you're not using Google. Like, who are the people making 2.84% of internet searches using Yahoo? That's a bold stand to take, right? I mean, look, I'll be honest. I'm a duck,

duck, go user, and I get uncomfortable when I have to tell people that. Like, I don't show them my browser, you know? It's a great service, but they think I'm weird. Or how about YouTube? YouTube should have been the canary in the coal mine, frankly, because as soon as it arrived, it was the only viable website on the supposedly free and open internet where anybody was watching video. It was a complete monopoly overnight, and that monopoly has persisted ever since, well over a decade. And yeah, yeah, I know, Miss Fancy Pants Film School, you uploaded your short film to Vimeo, but give me a break. You got 200 views. No one's watching that. They're neck deep in the YouTube algorithm to the tune of a billion hours of viewership a day. And consider this,

over just three months of 2018, Facebook's users spent 300 billion hours on its app. 300 billion hours. And despite years of bad press, Facebook is still growing their user base worldwide. There are almost 2.5 billion Facebook users. I'll remind you there's only 7 billion people on earth. And 2.5 billion of them are I'll remind you there's only 7 billion people on Earth. And 2.5 billion of them are united around clickbait, political propaganda, endless pointless argument threads, and, you know, sometimes a baby picture or two. And consider this.

Just these two companies get three out of every $4 spent on digital ads. And in 2018, an analysis showed that almost 50% of all digital media is consumed through their apps. Google and Facebook almost literally are the internet now. And it's not just digital media, all right? Amazon controls nearly half of the US e-commerce market, and Google's Android and iOS account for a combined 99% of worldwide smartphone operating systems. 99% of people are using software from just those two companies to run the computers that they use every single day. So what does this mean?

A digital world that for me was about exploration, connection, and something like real freedom has been taken over. The internet used to be a wild, chaotic, and opportunity-filled frontier, but now it's more like a farm with a small number of companies overseeing us, in control, hooking the rest of us up to their milking machines that

are pumping out more and more of our data and our dollars every day. Now, I guess it's not surprising that I abandoned Carlotta, right? Who needs a neopet when you've become one? Ooh, that was cool. That was like the Twilight Zone. I got chills. So what can we do about it? What can the American people do to change the course of consolidation that's gone on this entire century?

Well, our guest today is an expert on the business of tech and the consolidation of the tech industry. He's a professor of marketing at NYU's Stern School of Business and is the founder of several companies. He's the author of The Four, The Hidden DNA of Amazon, Apple, Facebook, and Google, and more recently, The Algebra of Happiness. And he most recently appeared on a recent episode of Adam Ruins Everything called Adam Ruins Tech. I think you're going to love this conversation.

Please welcome Scott Galloway. Scott, thank you so much for coming on the show. Yep. So I'd like to start by just sort of talking about your background. You are a business school professor. You are a startup founder yourself, correct? Yeah, nine businesses. Nine businesses.

And you're also a major critic of the tech industry and specifically the sort of consolidation we've seen in the industry, which is, I think it's safe to say, somewhat unusual for an avowed capitalist. So how did you come to that critique? Yeah, so the book is, I published this book before, and because my dean said if you want to be taken seriously as an academic, you either have to do research or write a book. So I decided to write a book and decided to write a book on these four companies because I think that- On Google, Amazon, Apple, and Facebook, correct? Yeah, thanks for that.

As I referred to this, the four, because I think the dirty secret of business school is the reason we have a second year is so we can charge them double the tuition. And my suggestion has always been that the only thing we should teach the second year is we should do classes on Apple, Amazon, Facebook, and Google. Because if you were to understand those platforms, you would really understand technology, social policy, media, e-commerce. And so I decided to really try and understand these four companies that I admire, that are the largest recruiters out of my class, that have been economically very advantageous for me. I love these companies. I have huge respect

for them. But as I really delved into understanding these companies better and better, I got more and more concerned about some of the impacts they were having on our economy and on our society. And I was writing the book two and a half years ago, and my publisher and editor read the book and said, are you sure you want to say this? And I'm like, yeah, there's something wrong in Mudville here. So it ended up being sort of a cautionary tale. I don't think they're bad people. I don't even think they're bad companies.

I just think that one of the wonderful things about capitalism is that we employ referees on the field and regulators and lawmakers to ensure that no one company becomes an invasive species and starts killing small companies in the crib and prematurely euthanizing big companies. And I think we have several of those companies right now. And I don't think we as voters are doing our job. And that is we're not electing officials who have the backbone to step in and do what they did to the oil companies, to AT&T and break these guys up. Right. So there's a lot to unpack there.

I want to start with the idea of these companies stifling competition and killing companies in the crib, you know, in my own experience, I think about how, you know, my first real job in comedy, I was working for college humor,

the comedy website, and that is an old school internet company, you know, that was founded by kids in their dorm room, Ricky Van Veen and his buddies, you know, just posting funny videos. They got a lot of traffic. They started selling ads. They started commissioning original work, right? I had come from this world of making sketch comedy on the internet. They started hiring internet sketch comedians. One of them was me and we made videos, right? And College Humor had an ad sales team. They would sell ads on those videos. They would go out to brands. We would make custom

videos. They would skin the site, stuff like that. It was a very profitable business. And then slowly everything started moving. Hey, let's start posting the videos on YouTube. There's this big thing called YouTube. Let's post the videos on there. Oh, cool. We get a few more views that way. Well, except they don't really monetize at all. And then they start monetizing, but the profits are much less. And then all the eyeballs move there. The same thing happens with Facebook. Fast forward to over 10 years later, and CollegeHumor barely exists as a website anymore. It's now a YouTube channel and an Instagram account that brings in a fraction of the revenue.

And they've figured out new ways. They have a new subscription service called Dropout that's sort of a lot more independent and is putting them on a more stable financial footing. It's a great service. But I really saw firsthand how these major platforms, in this case, YouTube and Facebook, just started sucking all of the air and eyeballs to themselves so that, whereas previously you could live as an independent business, now you had to play by their rules. If their algorithm likes you, you're great. If their algorithm doesn't, you're dead and you can't make any money except the money that they choose to give you. 100% Adam. And what you're saying, it's kind of times a million describes our business.

And unfortunately, there are a small number of very well publicized companies that break through and do well. But we'd like to think we're in an era of innovation. But the reality is, if you look at the data, we're in an era of non-innovation. There were twice as many companies being started when Jimmy Carter was president than are being started today. Wow. And the reality is that it is so difficult to break through that Facebook and Google, so the fastest growing medium, if you will, is online. And so the fastest growing media business is online advertising.

And there are two companies that are responsible for two-thirds of all of that revenue. So that means everyone else is fighting over that one-third that every day gets smaller and smaller and smaller. Kids come to my office hours. And when I say kids, I mean students, and they want to talk about their careers. And they say, well, I'm going into digital marketing because that's the hot place.

I'm like, digital marketing is an outstanding career as long as you work for Facebook or Google. Yeah. Because digital marketing sans Google, Facebook, and now Amazon that is growing its online media group

faster than any media company over a billion dollars. If you're not working for one of those three firms, the business is actually shrinking, which means if you're in digital media and you don't work for Facebook, Google, or Amazon, you join the Yellow Pages, broadcast television, and newspapers, and then you are in a declining industry. And the world of media has always been a full-body contact, difficult place to exist, but people could bust through. people could start a local newspaper people could have a blog that got some traffic i was on the board of the new york times and we bought this company called about.com

i remember that company yeah do you remember about yeah all these little blogs a woman who's really into southern cooking would start a blog on Cajun cooking and she got a decent amount of traffic and we'd help her monetize that. And then, and, and we'd get revenue from Google. And then overnight, Google did a panda and literally flipped the switch and our revenue got cut in half. What's a panda? A panda is like a, they redo the algorithm where they decide. So for example, Wikipedia used to come up first. If I typed in Adam Conover, the first thing that used to come up was Wikipedia. Right. Because the idea was Google wanted to send you to the best place.

And Wikipedia probably does a pretty decent job of saying, this crazy guy with great hair, this is how he got started at CollegeHumor, et cetera. But now Google said, you know what? There's better ways to monetize it. We would rather it go to a YouTube video of Adam because we can monetize that. So Google no longer takes you to the best place. They take you to the place they can monetize. And 93% of intention turning to action, which is decided by Google now, is architected by a group of people.

We don't know what's going into the algorithms. And at any given moment, they can kind of kill you or promote you. And it's true of Facebook. It's true of Google. They're basically have become the arbiters for who survives and who gets oxygen. And the reality is every day, a smaller and smaller number of companies

aggregate more and more of the spoils. And we're under the impression that it's more of us than we think. The most recent example is Lyft went public, achieved the same valuation as Fiat Chrysler. Fiat Chrysler has 200,000 employees. Lyft has 4,100, but it has 1.4 million drivers. And the 1.4 million drivers

make between eight and 12 bucks an hour, but the 4,100 people are going to split the value of Chrysler $20 billion with their investors. So we've literally figured out a way to create this Hunger Games economy where a small number of incredibly talented and fortunate people split more and more of the spoils. And it's become, I think we've gotten to a breaking point. Wow. I've never thought of it that way. Just elaborate on that. What do you mean by a breaking point? What do you expect to happen? So I think this is, and granted, this sounds a little bit Darwinian, a little bit dramatic, but typically throughout history, when income inequality hits the levels it's hitting now,

where you have 27 people who are worth more than the entire Southern Hemisphere, then when you hit these levels of income inequality inequality they self-correct. That's the good news is they do self-correct. The bad news is the vehicles or the mechanisms for self-correction are usually either war famine or revolution and I would argue that what's happening here in the US is sort of a soft

revolution and that is the middle class for the first time in the history of our nation a 30 year old is not doing as well as his parents was at 30. True. We have kids getting into schools that aren't as good as the schools their parents get into. They can't buy a house as soon. They can't get married. They can't take the same risk and start a business.

They have debt. They're worried about a financial crisis because of health care. And I think the outrage and the decline in self-esteem when you feel when you can't take care of your family, when you can't look after your parents when they get sick, has resulted in this primal scream where we say, okay, we want people on the very far left or we want people on the very far right. I think this Varsity Blue scandal is a little bit of a soft revolution. I mean, should Aunt Becky go to prison? Aunt Becky's going to prison. And the reality is I'm not sure. Like, I think what she did was wrong. I think she should be hit hard.

But they're talking about putting her away for 10 or 20 years because, you know, the bottom line is people show up with pitchforks. And I think we're in the middle of a kind of a primal scream and a revolution because the middle class, the greatest source of good in the history of mankind, I think is capitalism, the American middle class, cured polio, you know, arrested Hitler's march. And these guys, you know, this class as a whole is not doing well. And when you see one man aggregate the wealth of the GDP of Norway, whose company isn't paying taxes and they're working so damn hard

and they're paying 28, 30% taxes. I think people say, you know what? I'm fed up. So let's elect a guy. Maybe he shares our values. Maybe he doesn't, but he's angry and he's going to burn the village to save it. I'm going to vote for him. Let's go to socialism. Let's go to nationalism. But I think we're in the midst of what I would call a soft revolution because people are just fed up. Yeah, I mean, there's this sense that these companies that you're talking about are providing – and I think this is probably true. A lot of the pattern you're talking about is true across the entire economy, but just keeping it to those four companies. They provide services that seem so revolutionary, especially when they came out. The iPhone was like the iPhone was

like, you know, the future just dropped in your hand, you know, Amazon, you know, Amazon prime until I started to like, you know, really feel the impacts of it. I, you know, felt like a miraculous service. Oh my God, anything in two days and it's cheaper than anywhere else I could get it free shipping. Holy crap. You know, YouTube is like for all of the, you know, it was part of Google for all of the downsides. It's like, holy shit. I can watch any video that's ever been made instantly. I can watch any Thelonious Monk performance that's ever been done. You know, like if I, for example, I can learn any language, et cetera. But despite that, despite that we have all this, all right, we're living in the future. We got the jet packs and the flying cars in a sense, right?

Everyone's actually not doing as well. Like the fundamentals of our lives are not improving commensurate with that. Yeah, so it's great. So you can take a car to the airport, a Lincoln Town car for $60, and it's on demand. You can have more processing power in your pocket than Apollo 13. You can get your Nespresso pods for less than they cost within 40 hours. You can have an enormous TV and watch endless amazing content for $7.99 a month. But at the same time, you're probably not making as much money as your parents.

You're probably insecure about your health care. You're probably worried maybe about your teenagers being biomechanically addicted to something that creates a lack of self-esteem. So what we have in our society is we have incredible prosperity, but we don't have any progress. We as a nation, I mean, for example, metrics are so important because people study to the test. And the most famous metric in the world is the Dow Jones Industrial Average. And I think it's one of the most damaging things ever invented because it creates this illusion of prosperity. Because everyone, every morning, constant media outlets talk about, at Times Square, there's a green means the Dow Jones is up, meaning the world is better today. Red, the Dow Jones is down, meaning the world is better today. Red, the Dow Jones is down, meaning the world is worse today.

But the reality is the Dow Jones Industrial Average is a metric on the economic health of the top 10%. And guess what? The top 10% are killing it. It's never been better for them. Right. But what's a better metric? I mean, literally, if you want to measure the health of the U.S. population, then measure the health of the U.S. population than measure the health of the U.S. population. Life expectancy, again, for the first time in our history, has declined three years in a row.

And it's largely because more people are going to die from opioid overdoses this year than died in the entire Vietnam conflict. But I also think the levels of stress and the levels of shame that we feel because we can't take care of our kids at the same level that our parents are able't take care of our kids at the same level that our parents are able to take care of us, that the constant reminders of the fact that we live in a meritocracy and

people can become billionaires and you're not, so you feel bad about yourself. Your most successful friend constantly reminding you of their success via Instagram. I think the level, you know, the skyrocketing depression among teens, teenage suicide among girls up 120%. I mean, some of the more important stuff, some of the stuff that really matters, right? So, economic success is hugely important. But your kid's depressed, you just don't care if you have a Lexus or a Toyota. You know, your whole world comes down to that kid's depression. And there are some very troubling indicators that say, yeah, we got prosperity, but we don't have progress. And I think a big part of that is we've fallen in love with these companies and we're comfortable with a company like Uber that is more valuable than, get this, Adam, Delta, American, Hertz, Ford, and Royal Caribbean, and throwing JetBlue, and yet it's only 22,000 employees who get all the revenue, get to split all that money with

their investors, and then 4 million drivers who are just making 10 or 12 bucks an hour. So I feel like we've lost the script. We've fallen out of love with the middle class. So I feel like we've lost the script. We've fallen out of love with the middle class. We've fallen out of love with people I would ascribe myself to. I was a very unremarkable kid, but I got remarkable opportunities through state-sponsored education. And I feel as if America has fallen out of love with the unremarkables. Well, so let's return to the sort of ills of the broader economy in a second.

I just want to get back to the topic of tech consolidation. Do you feel that that process was inevitable? Because I've, for instance, read – the writer Tim Wu has written about how the same thing – Great book. that happened with radio. When radio came out, everybody thought, hey, everyone's going to be a listener and a broadcaster. Everyone will have their own set, point to point, you know, the democratization of media, right? No more newspapers. Everyone's going to be talking now, right? It was like that for a couple decades. And then very quickly, we had NBC, CBS, and ABC. We had these national, you know, this oligopoly that persisted for close to a century, right? And in that retrospect, I mean, I grew up in the frontier days of a century, right? Yeah. And in that retrospect, I mean, I grew up in the frontier days of the internet, right? Of that, in that wild west period,

anybody can have a go of it. And now when I look at it, I'm like, hey, my sketch group that started in college, we had some viral video success in 2003, 2005. We wouldn't have been able to do that now because we'd have to be competing with the YouTube algorithm. There's no way that we'd win. Do you feel that process of these initial disruptors then

entrenching their advantage and becoming larger and larger and sort of eating up the entire ecosystem, was that inevitable? Is that just how the economy works? What do we credit that to? how the economy works? What do we credit that to? So consolidation among the winners, and that is the folks that make the jump to Lightspeed and through outstanding execution or luck or access to capital, kind of pull away from the rest of the pack

and then decide the best way to maintain their leadership position is either to use their bundling and economic power to put that new upstart Netscape out of business, which is what Microsoft did, or that anyone who's a threat or manages to survive and get out of the crib, we acquire, as Facebook did with Instagram or WhatsApp, because they had such incredibly inflated or rich stock price. Or copy. They're famous for copying. Or rip it off.

Yeah. We're either going to kill you by stealing, and if we can't, we'll acquire you. And this is a natural part of the economic cycle. You know, AT&T was broken up into seven companies, and now we're kind of back to three, right? But what's also a natural part of the economic cycle until recently is that we decided that competition is great, that a key part of capitalism is competition, and that if Microsoft puts Netscape out of business, the DOJ is going to step in and say, okay, we're going to break you up. And all of a sudden, Microsoft says, well, before we start using our bundling

and our economic power to put this shitty little search engine out of business and promote Bing, we better not because the DOJ has fired a flare across our bow. And the object of every innovator's affection now, Google, would not exist had the DOJ not moved in on Microsoft in 99. We'd all be saying, I don't know, Bing it. So the natural part of the economic cycle you're referring to will always happen.

But key to that is our attempt to sort of re-level the playing field, ensure that the economy stays oxygenated, ensure that entrepreneurs have a fighting chance, is we have regulations and antitrust in the form of the DOJ and the FTC. And we've also had what I'll call class traitors. Now, it was Teddy Roosevelt was elected by the railroads. They financed his campaign. And the moment he got in office, he said, I love you guys. I'm breaking you up. Right.

And AT&T said, you can't break us up. We need to fight off NTT. The Japanese are invading us. You hear these arguments over and over. But we've always demonstrated the backbone to move in and say, you know what, AT&T? We're breaking you up into seven baby bells. And by the way, the next 30 years, unleashed a torrent of innovation, cell, fiber, optics, data, analytics.

Those companies all ended up being worth more than the original AT&T within 10 years. Yeah. But for some reason around, well, not for some reason, but around big tech, we've lost the script, Adam. We've let these companies go way beyond

where we've let other companies get to, and they become invasive species where it is – think about it. The most robust, powerful parts of our economy – search, e-commerce, tech hardware, mobile – there's no startups because no one can compete with these guys. Yeah. And if you're a startup, your entire strategy is to be acquired by one of them. So we're at a point now where I would argue what you argue is natural, the consolidation aggregation. But what's also natural is that we step in and we break these guys up. And that's the part that's missing right now.

So let's talk about why we haven't. I mean, I sometimes wonder if it's because, especially, say, during the Obama years years when these companies were really, we had a love affair with them, right? I mean, I remember Twitter taking off during Obama's inauguration was how it felt to me. You know, I remember sitting there looking at Twitter during the inauguration and we sort of fell in love with these companies

and my theory is kind of, and look, I don't know shit about it. So that's why I want you to tell me, but my theory is kind of and look i don't know shit about it so that's why i want you to tell me but my theory is sort of like this is the part of the uh american economy that's that's doing great right now you know it's it's some bad years but hey facebook google amazon apple american companies killing it internationally everyone loves their products they've got a sheen of newness they all seem to be you know progressive organizations that are saying hey we want to do good in the world. I mean, Google's don't be evil mantra actually carried water when they came up with it.

And it worked for about five, six years. It was like, hey, yeah, this company seems to be behaving better than other entities like Microsoft that we used to dislike. And so it seemed like our leaders have been very averse to tussle with them because for that reason. Yeah, you touched on a lot of the reasons, and your instincts are right on. It's like, how did we let it get this far? And it's a confluence of things. It's kind of the perfect storm of bad things. The first is that we are fascinated by these companies, and I would argue that we're engaged or infected with what we call a gross idolatry of innovators and billionaires. And that is if you made billions of dollars in iron ore smelting and you're an ugly 65-year-old white guy, we're more inclined to let regulators move in on you. But, hey, everybody lean in.

Sheryl Sandberg is one of the most likable people in the world. She's inspiring. She's written eloquently about personal loss, about the important discussion around gender. So when she oversees a business unit that's weaponized by the foreign intelligence arm of the Russian government, we're a hell of a lot more forgiving of Facebook than we would be of any other company in the world. We seem to think that billionaires are our new Jesus Christ, that they are, Steve Jobs is the new Jesus Christ of our society, despite the fact that he denied his own blood under the threat of perjury when he was worth a quarter of a billion dollars.

He lied, denied his own blood so he could avoid child support payments when he was worth $250 million. And that's our new Jesus Christ because he made a better fucking phone. So I would argue that we're the gross idolatry of innovators and billionaires. Two, in terms of regulation, only 4% of our elected officials have a background in technology or engineering.

So they don't even really understand these technologies or know where to start. And three, these companies have gotten much smarter. They've learned from the sins of the father. They've said, we need to be likable. We need to invest in Washington. Amazon has 88 full-time lobbyists. Think about this, 88 highly paid, highly educated, highly talented people in D.C.

who every day wake up and say, how do I make sure that all laws favor Amazon, that we get more and more subsidies, that no one ever talks about antitrust. Google has – there was this sex trafficking act that got 97 to 1 passage in the Senate, the most bipartisan legislation of the last 20 years. And it ended up shutting down – it's basically this site that was kind of almost like a porn site or connecting people interested in adult services called Backpage. I heard a little bit about this. And then an entity is now challenging that ruling and is willing to take it to the Supreme Court. And that entity, it called, you know, Americans for Freedom or something, is a front for Google because Google thinks that any

threat to censorship around any platform is ultimately might be a threat to Google. So the fear is that, and Tim Wu, who wrote The Curse of Bigness, he argues that a key component or a key step to fascism, especially in World War II with the Third Reich, was private companies basically become the government and start serving their own needs as opposed to the needs of everybody else. And you could argue that with big tech, we're almost at that point. The fastest growing expense lines among these companies is not artificial intelligence. It's not R&D. It's lobbying. Wow.

So if you're a congressman looking to get reelected, it's going to take you a year to even understand privacy around algorithms and how to deal with this issue. Most, you know, the number one job, think about the average age of an elected representative. A lot of them come from things like insurance sales or they owned auto dealerships. So they're not that technically savvy. So you have, we're outgunned, we're out-resourced. The public has an idolatry of innovators. A lot of us have no somebody that works there. So we think they're great. We think of them as our heroes. No one wants to believe that Tom Brady is actually cheating. We're in love with these companies.

So it's been this perfect storm of bad thing where these companies have reached a level of share, reached a level of influence, have committed what I'd call nefarious acts and not put in place safeguards. This company we're in right now, Stitcher, what's the name of this company? Who owns you, Adam? Who do you work for?

Who's checks do you cash? You're in the Stitcher studios. I'm here in the Earwolf studio. I believe we're both part of Midroll. Is there a larger corporate parent than that? I'm not sure. It was Midroll. Anyways.

It is. Scripps is our- Scripps. Yes. Scripps. Okay. I wasn't even aware. So Scripps.

Scripps. Yes. Scripps. Okay. I wasn't even aware. So Scripps. Scripps, great company. If we found out that Scripps was taking ads from the Russian government to try and discourage turnout in our elections, and they were paying for the ads in rubles, and your ad salespeople never took the time to say, you know what, maybe there's something wrong here, Scripps would be done. You'd be done. But Facebook, it's like, oh, they're a platform, not a media company. Right. We need to do better. What kind of internet do we want?

We're proud of the progress we've made, blah, blah, blah. And they literally continue to make $400 million a week in free cash flow. And delay and obfuscation becomes the most profitable strategy in the world because while I don't think they're bad people, cigarette companies were killing a half a million people a year, but they were making so much money that it's easy to not understand something when you're paid billions of dollars not to understand it. So it's like,

well, if we can put off legislation, if we can maybe have these conversations around teen addiction or the weaponization of our platform next week, we're going to make another $400 million. So it's not, I would argue that they're not even the ones at fault. It's you and me that haven't, for whatever reason, been able to elect the leaders that developed the backbone to really say, okay, guys, enough's enough. We got to break you up. We got to regulate you. We got to start fining the crap out of you. Google has paid more in fines in Europe than they paid in taxes. And it's a calculated decision because they've decided as long as the gross margin on their products times their growth is greater than any fines we might pay, continue to break the law.

Yeah. You know what really struck me was I read about how the Volkswagen scandal, which to me is one of the most heinous corporate scandals I've ever encountered, where they one of the most heinous corporate scandals i've ever encountered right where they specifically lot they created a specific device to conceal the deadly emissions of the car in order to and they claim that it was a breakthrough they claim they invented a new magical type of diesel engine that didn't have these emissions and it turned out what they did was they cheated right um and they did this massively and they sold so many of these cars they made billions off of it and they were really punished for it by the u.s government my girlfriend had one of these cars and they did this massively and they sold so many of these cards. They made billions off of it and they were really punished for it by the U S government. My girlfriend had one of these cars and they bought it back full price.

The, the, the original price she paid for it after three years. So she ended up like getting to drive the car for free, a deadly car for three years, you know? I was like, that's a pretty strong punishment. Should have been stronger, but that's pretty strong in the EU. Nothing happened to them. Um, I, I later read that. In Germany, their home, there was very little punishment whatsoever.

And that's really interesting to me because that made me think about how the EU is much harsher on Google to a certain extent. The GDPR and everything else and privacy with Facebook, et cetera. We won't do shit to these companies. Is it because they're American companies?

Well, again, I think your instincts are right on because in the U.S., you would argue if you take big tech as one big corpus, we're on the whole net gainers. And that is we're having an important conversation around job destruction, monopoly power, teen depression, anti-competitive behavior, tax avoidance. anti-teen depression, anti-competitive behavior, tax avoidance. But on the whole, there probably isn't a country in the world that would say, we'll take all of your problems if you relocate your HQ here. They'd all decide to take that trade. If they all said, we're fed up with all this whining in America, hey, Ecuador, we want to come down and make Google, Facebook, Amazon,

and Apple's headquarters in Quito, they'd say, bring the problems. We're fine with that. Come here. So we're probably net gainers in the U.S. The problem is the word net, and that is we're probably net gainers from pesticides, but we still have an FDA. We're probably net gainers from fossil fuels, but we still have emission standards. In Europe, they get all of the downside, the weaponization of these platforms that pervert their elections, the job destruction, the tax avoidance, but they get a fraction of the upside.

There are very few hospitals, hospital wings, or university buildings named after Google or Facebook billionaires in Europe. So their attitude is, okay, all of the calories, none of the great taste. We don't like this soda. So it is stiff in the backbone. And like all the great conflicts of the 20th century, I think the war against big tech is and will continue to break out in Europe. Because at the end of the day, I mean, look at New Zealand. What has New Zealand gotten from Facebook? Yeah. What have they really gotten from Facebook?

Yeah. They've gotten a platform that, you know, some terrible content has ended up on. You can't blame Facebook for having this. But are they really getting anything from it? Has Facebook created jobs there? Has it created tax revenue? I'm sure they've figured out a way to create an LLC in Ireland that funnels the revenues from New Zealand advertisers through that entity. What they get is a platform that creates teen addiction, makes people feel worse

about themselves. Sure, a lot of people get to see updates from their cousins. There is some good here. But at some point, one of these nations is just going to say, you know what? We're going Chinese. Now, what do I mean by that? China's approach to big tech is to say, okay, come on in, Google. Come on in. Put your code on our servers. They steal it. And then they prop up a local entrepreneur, kick Google out, and capture the value domestically. And we immediately, as capitalists, go, that's not fair. That's a violation of our IP. Look at Italy. Italy lets Google in. Their newspapers go away. Their media companies are a shadow of themselves. Startups decline. Middle class under pressure. And basically, there's this giant sucking sound of money coming out of Italy going to Ireland and then going to the shareholders in San Francisco.

Ireland where Google is incorporated. Google International, right? They all incorporate in like the Isle of Jersey, right, or the Isle of Man. And then effectively what you have is this incredible transfer of wealth from the rest of the world to the U.S. And then from the middle of the U.S. to the coast. I think at some point Italy is going to go, you know what? We're going Chinese. We're going to kick Google out.

We're going to start our own search engine. And it's going to look frighteningly similar to Google. And if you want to sue us for IP fraud, fine. But China, too, you know, I don't agree with what China's done. But I think at some point, nations are going to say, why are we making people in San Francisco rich? Yeah. Well, let's talk really quickly, because you touched on something. You touched on, is Facebook responsible for the content that's posted there? And you earlier said, these companies want to say,

hey, we're just the platform, right? And I've thought about that a lot because in the early days of the internet, that was sort of a core value, right? When the RIAA was going after file sharing sites or going after search engines saying, hey, we're going to shut you down because people are able to find MP3s, right? Those companies and the rest of the internet community, myself included, said, hey, you can't blame those people for those Yep. Those companies and the rest of the internet community, myself included, said, hey, you can't blame those people for those things. That's just the technology. You can't blame the technology

for what people do with the technology. Go after the criminals if you want, right? Go after the people sharing the files, but don't go after the companies, right? And that to me was sort of a core value of the internet. Hey, we're just the pipes, right? Don't go after the pipes. But now we're in this world where the pipes are YouTube you know i talk about this in my new show that i'm touring

on the road people are watching a billion hours of youtube a day 70 of those videos are being served by the algorithm um and that's how people are why and the algorithm guess what is serving people anti-vaccine information serving people white supremacist content. It's serving like that on a massive scale. I demonstrate this in my show, how this works. And what those companies say is they either say, Hey, it's not our fault because we don't control what's on the platform. Or they say, Oh, so after a couple of years of getting bad press, they'll say, Oh, so sorry. We'll change the algorithm in a way that we're not going to disclose. And you'll have to figure out yourself, whether it worked, you know, by, by checking your search results for a couple of years. At the end of the day, I start thinking, Hey, hold on a second. Aren't these the kids throwing the house party

where like, you know, 200 kids come and then someone breaks a vase and like, well, how am I supposed to police all the kids at the party? Well, you threw the party. I don't know. Right. Yeah. Um, there, there's some degree to which they seem to, they seem to want to have it both ways where they're creating this massive infrastructure that is making them a ton of money and they want to have no responsibility for what goes on, on it. Uh, and I'm starting to feel like that deal that I was happy to make in 1999, I'm not so happy about anymore. Yeah, I think everyone's coming to a similar conclusion that the house party where kids keep drowning in the pool, at some point you say to the owner of the house, should you put a lock on the door? It's just there's – and the notion – so delay and obfuscation are kind of their weapons of entrenchment and their primary tools for keeping kind of the regulators at bay. And part of that delay and obfuscation, it takes on different forms.

First, it was we're not a media company. We're a platform. The definition of a media company is a firm that uses a medium for reach and influence. So by that definition, we have never had firms that are more media companies than these firms are now. And they like to say we're agnostic. We're the postman. We're not the publisher. But they're not.

They've been editing for a long time. You mentioned anti-vax content. The algorithms are benign or they're not malicious. long time. You mentioned anti-vax content. The algorithms are benign or they're not malicious, but the algorithms have been written to ensure that the maximum number of Nissan ads are served so they can make more money. And unfortunately, our species is quite tribal. And the fastest way to get people to engage them is to enrage them. So anti-vax, and it sounds like you've talked about this, and I'm excited to see it, because you have this artful way of breaking stuff down

in an entertaining and articulate way. But the anti-vax content, the algorithm loves. Now, the algorithm isn't mean. The algorithm doesn't want little kids having their feet amputated because of measles, because a bunch of fucking idiots can't understand science. But anti-vax content gets more oxygen on Facebook because the algorithm goes, when we put up anti-vax content, people get angry and start engaging and commenting and

forwarding and responding. And all that rage, the algorithms are like a T-Rex. It's drawn to movement and violence. And if they can find content that enrages people and creates more rage and more engagement, that's more Nissan ads. That's more Chobani ads. That's more shareholder value. Right. So, unfortunately, and this is an unfortunate thing about our species, is that we respond to rage and controversy. controversy. And if I put out an incendiary tweet or a controversial tweet, it gets more likes, more comments, more comments back. And the Twitter algorithm goes, oh, we love this.

Scott's being Scott. He's saying something that's off color or that pisses people off. And the algorithm surfaces that. So we have these underlying business models that promote rage, promote polarization. And that's just sort of, okay, that we weren't anticipating that. And initially, the notion was, like you said, they're going to cure death. We're connecting the world. No, they're not. I mean, and the notion, they've then fallen back to, well, now the new one is we're going to build a nation state screening mechanism. And last year, Mark Zuckerberg was saying we're hiring tens of thousands of people to screen the content. Notice how you haven't heard much about that anymore because it doesn't work. They still don't have the ability to do this.

So now he's thrown up his arms and said, you should regulate us so he can abdicate all responsibility. The reality is I believe that there's one solution or two solutions. All responsibility. The reality is I believe that there's one solution or two solutions. The first is if you started finding YouTube a billion dollars a week every time there was terrible content next to kids' content, the geniuses at Google would figure it out. Yeah. They would figure it out. Right now what we have, Adam, is we have a parking meter that costs $100 every 30 minutes, and the parking ticket is $0.25.

Yeah. And if that were true, if we had that meter in front of our house, you and I would break 25 cents. Yeah. And if that were true, if we had that meter in front of our house, you and I would break the law. Right. And that's what these companies continue to do. They continue to break the law because the downside is a fraction of the upside of continuing to delay, obfuscate and break the law. You put one of these guys in prison, they're going to figure it out. And what you have is this notion, they say, it would be impossible. And unfortunately, media has bought into this rap. It would be impossible for Facebook to screen and regulate its content of white net. No, it's not. They can figure it out. Maybe they can't figure all of it out. But in the world of big tech, impossible is Latin for unprofitable. Because with $200 million in free cash flow,

the New York Times can look any advertiser or reader in the eyes and say, we will not be weaponized by white nationalists. We will not let anti-vax hoaxes, Columbine hoaxes end up on our platform. They managed to figure that out with $200 million in free cash flow. But Facebook claims they can't figure it out with $20 billion in free cash flow. So we're not talking about the realm of the possible. We're talking about the realm of the profitable. Well, let's talk about how we make them do that right after this. We just got to take a short break. We'll be right back. So Scott, before we talk about your new book i want to get back to the topic of the economy as a whole and the sort of socioeconomic changes that are happening and the political changes that are hopefully going to lead to more regulation of these businesses. One thing I thought was interesting was your ideas about

breaking up big tech, that that's something we should do, just like the oil companies. That's something that's actually starting to be laid out by a couple of presidential candidates, at least a little bit. We're starting to hear politicians talk about it. Is that encouraging to you? Yeah, it is. Unfortunately, there's not a lot of meat on the bones. The only person that's sort of even gone as far as to say how you would break them up is Senator Warren. But I wrote an article in Esquire basically talking about the scale of these companies and some of the issues we've been discussing. And then I suggested that the answer is antitrust is breaking them up. And that day when the article came out, I got calls from Senators Warren and Cruz's office. And when you hear from those two people, I thought, wow, this could be the first bipartisan legislation we have in a while. So I'm

actually hopeful it's going to happen. It's going to take a while. There's some fear that we're outgunned, that there's so many lobbyists and so much money involved from these platforms that it might not happen as fast as we'd like. But for the first time, I'm actually hopeful that we might have some sort of real tangible antitrust. I think it could happen. It is true that even when you're looking at sort of the fringes of the partisan internet, the people who are the most committed, the one thing that the alt-right and the sort of socialist left-right

can agree upon, is that they both hate Facebook's guts. Yeah, everybody, they hate them for different reasons. The far right thinks that there's an anti-conservative bias among the content that these algorithms promote. And the far left hates them because they think that, because of job destruction and attack on the middle class. But the bottom line is, hopefully, we can all be—

when the Russians—when the Germans rolled in their Panzer tanks into Poland and Slovakia, the Russians, the British, and the Americans figured out a way to get along. I think that these companies now are posing such a threat to the economy, such a threat to traditional norms in society and everything from teen depression to monopoly power, that kind of the Russians and the Americans are figuring out a way to get along. I think this could be bipartisan legislation. So I'm actually, you know, more hopeful than I've been in a while. Right. But it seems to go against, you know, I mean, I've seen your appearances on, you know, Fox Business News, right? And they'll introduce you and say, oh, hey, here's Scott Galloway. He's a socialist.

You have to say, no, I'm a capitalist. I'm a startup founder, right? And it runs so contrary to the sort of Reagan consensus that we've been living under for the last couple decades that like, hey, capitalism is good, right? And the interesting thing is to me it's it's those folks those folks love to talk about competition right competition is the great thing it's a great thing that america has uh that's what we do that's the essence of capitalism

but they seem to neglect that we don't have competition anymore that competition is is dying and that you need to preserve and protect competition um But what you're proposing, though, seems to fly in the face of what so many folks have been saying for decades and decades at this point. Yeah, I think there's a knee-jerk reaction that any sort of antitrust or any sort of regulation is anti-competition. And my viewpoint is that central to the notion of capitalism is competition. And when Spotify, which I think is a vastly superior service to Apple Music, is now growing more slowly in the U.S. than Apple Music because Apple owns the rails upon which we have to buy or see an app. And they can tax Spotify 30% of their revenues. They can maybe get Spotify the tools to update their app in the App Store a little bit later. Doesn't work as well with AirPlay, all those sorts of things.

All that stuff, right? Then what we have is better companies that aren't seeing the light of day. And people say, well, Amazon and Facebook, they're amazing products. But we don't know what we're missing. There's hundreds of companies that just aren't getting started in these spaces because, I mean, Google and YouTube are coordinating and cooperating. Imagine if we broke them up. I would imagine that all of a sudden YouTube's going to decide to get into text-based search and Google's going to decide to get into video search.

And then they're going to have to pay more for cool content like yours, which probably isn't a bad thing, right? They're probably all of a sudden going to have – one of them's going to have to raise their hand and go, you know what, if we want P&G to advertise their Pampers brand, we've got to figure out a way to keep objectionable content off of kids' searches. One of them will figure it out. So the notion that somehow antitrust is socialist is just strange to me because a key component of capitalism is referees on the field and regulation to ensure we have more competition, that we have more full body contact

players ensuring that new companies get started, that somebody has a fighting chance as opposed to these companies that basically either kill or acquire almost everything in their space. Right. Well, going back to that idea you were talking about, about maybe a revolution being a brewing, right? When inequality gets this bad, a revolution can brew. And the problem with revolutions is that they're extremely unpredictable.

You don't necessarily know which kind of revolution you're going to get, right? That's right. If you live in a country that undergoes a revolution. And hey, say, maybe we're not talking about a coup or anything like that, but we are talking about a political sea change, right? If you live in a country that undergoes a revolution. And hey, say, maybe we're not talking about a coup or anything like that, but we are talking about a political sea change, right? Is there a, are you revolution averse, or is there a version of that revolution that you welcome? So I find what's going on, and a lot of this is articulated by Tim Wu in his book, The Curse of Bigness. So what we have now, that we have the front runner for the Democratic primary is a Democratic socialist.

And that believes that there should be taxes of 70% plus on incomes over a certain amount. I would argue that that is getting toward what I would call kind of PG-13 socialism. And our way may not be the right way, but it is our way. And I do believe that just fundamentally people should keep at least the majority of the money they earn. And I also think kind of Medicare for all, I think it's a great idea. I think it's unsustainable from a cost standpoint. And I do believe in capitalism. We do believe in winners

and losers. We believe that people play by the rules, get lucky, work their asses off. They should have a lot more than the people who don't. And I'm not saying that's the best way. Seven out of 10 of the happiest countries in the world are in fact socialists, but it's our way. We're Americans. We believe in that. At the same time, if you don't have competition, people go to the far left or they go to the far right with this nationalist BS where people start demonizing immigrants. They start refusing to condemn violence. They start speaking in very racist, very ugly tones that take us back to some of the darkest moments in our history and really dark moments in Europe. And my sense is,

if we don't earn more or return to our roots of capitalism, what we have now is not capitalism. People make the mistake of thinking if this is capitalism, it doesn't work. I want socialism or I want nationalism. Capitalism, we don't have capitalism. We have cronyism and kleptocracy, where the most powerful people, billionaires on average, speak to their senator once every two to three months. Billionaires pay lower tax rates than millionaires. It starts to get, our tax policy becomes absolutely regressive. My thesis is that Jeff Bezos, the wealthiest man in the world, not only does his company not pay taxes, they didn't pay taxes in 2016 or 2017. I believe that Jeff Bezos, the wealthiest man in the world,

not only doesn't pay taxes, I think he has a negative tax rate. If you were to calculate all of the subsidies that have gone to Amazon from governments after those 88 full-time lobbyists kind of do their job,

and he owns 17% of Amazon. So when Bill de Blasio and Cuomo talk about a $3 billion subsidy to Amazon, that's a $500 million payment to Jeff Bezos. In addition, he has never sold stock. And what he does is, or I would imagine he does, say he needs $50 or $100 million a year to live. He lives pretty large, right? And good for him. He doesn't sell stock. He borrows money against his stock at about 2% a year and just keeps rolling it. So he never triggers a taxable event personally and just keeps paying 2% and then gets massive tax subsidies in the form of tax credits, incentives from these local governments.

So I think we have a system, unfortunately, now where the wealthiest man in the world is being subsidized by you and me and the guy driving a cab down the street. And I think people are just getting fed up. And they think, well, if this is capitalism, I don't want to roll with this. So I'm either going to go far left of Bernie or I'm going to go far right to Trump and some other people. And I think it's dangerous because I do think capitalism, and it's hard to spot the pendulum at the middle, but capitalism works. The selfish, take care of yourself first profit motive is a powerful motivator. It works really

well. Winners and losers works really well. But at the same time, we've always injected capitalism with this comity of man, the sense of fair play, the sense of a progressive tax structure, this sense that there should be a safety net, the sense that we want, you know, to a certain extent, we've decided we no longer want millions of millionaires. We want dozens of billionaires. That's kind of, it feels like the decision we've made that we're no longer as focused on helping kids become millionaires through public education and more robust business sectors. What we want is we want to crown the first trillionaire.

That's our new goal. And so the question is, is this Hunger Games economy what we want? But circling back to your question, I think we need to double down on true capitalism, which brings a lot of the economic viscosity around incentives and winners and losers. I believe in that. We should have billionaires. I'd like to be a billionaire, wouldn't you, Adam? I don't think there's anything wrong with that.

The question is, should we have people like Sheryl Sandberg and Mark Zuckerberg, who may be not good for the world, worth $60 billion or $2 billion, respectively? Should we have one man who's never really paid taxes worth $150 billion? So it seems like things have just gotten out of skew, if you will. Right. But the interesting thing to me about your position, right, is that, look, I love the vision of, you know, this is true capitalism, it would work so much better this way, right? Yet, the folks who have been espousing capitalism the most strongly for my entire life, right, the forces of capitalism

out there in the media, the people saying capitalism is great. None of them seem to be talking about the issues that you're talking about, right? They're not talking about inequality. They're not talking about, we need referees on the field, right? Instead, they seem to say, oh, we don't want referees on the field. We want, you know, they sort of neglect the issue of, you know, Jeff Bezos essentially being subsidized by the government, right? And the folks out there who are most vociferously sort of making common cause with you seem to be the socialists, right? Like if I were to look at who is going to, who is going to enact, you know, Galloway's plan here, most likely, right? It's not Joe Biden, right? I think

it's probably Bernie or Warren, right, who are seen as the more far left Democratic candidates. And so I wonder if, I mean, how do you see that tension? Is it a matter of the forces of capitalism sort of not making the proper case for themselves? Yeah, so I do think, I think the fastest way, and I mean, it's pretty, you know, I live in New York. I went to Berkeley. What do you know? I'm not a Trump fan, right? So that's probably not going out on a limb here.

The fastest way for Trump to be reelected is these proposals around 70% tax rates and this notion that we're going to ban air travel and this kind of Green New Deal. I think it's fantastic to have these conversations injected into the discourse or the bloodstream of the Democratic Party. I love AOC. I love our leadership. I'm a fan of Bernie because he's not afraid of big ideas and he's fearless. But if the Democrats don't put forward a centrist, a Senator Michael Bennett, even Mayor Pete I would describe actually as a centrist, you know, a Senator Michael Bennett, even this guy, Mayor Pete, I would describe actually as a centrist in terms of policy. If we don't put, I would even say, you know, Beto is a centrist. If we don't put someone in there who's like, we need to double down on the American form of capitalism. And that includes opportunities, it includes competition, but it

includes a certain level of fairness. It includes, you know, when we have a company going public that has sequestered the drivers from any of the spoils as the few thousand people at headquarters, we have a problem. When tax rates go negative when you hit the 99%, we have a problem. When we don't hold these companies accountable, we have a problem. When we don't hold these companies accountable, we have a problem. So I'm hopeful that a centrist candidate who, and by the way, these aren't novel ideas. The antitrust was Teddy Roosevelt. The original gangster in antitrust was a Republican and the guys who broke up AT&T. So I'd like to think that these ideas are kind of centrist, moderate, traditional American competitive capitalist ideas. What's scary is when people mistake kleptocracy and cronyism for capitalism and then go way up the reservation to the left or way off to the right. And that's where I think we are. And I think it's dangerous. So I'm hopeful that the Democrats put forward what I'd call a wonky centrist who's remarkably calm and actually reads, actually thinks about this stuff, wants to work with the other side and get stuff done.

And when I go on Fox, I would say I go on Fox News once a week and I always like to say I do it because I'm part of the resistance, so I like to go behind enemy lines. But I think most of these guys, you know, the ones I meet when they're off camera and they're not in a coordinated attack on whatever progressive voice they've decided is the enemy, I think they seem pretty open to the idea that the economy needs to be oxygenated, that these guys have become too powerful. So I'd like to think it's a bipartisan issue. And I hope we move, at least, I hope we double down. I think the answer is to double down on capitalism. I think it's the worst system of its kind, except for all the rest, which is a quote from Churchill.

Well, let me just ask you the last thought I have is that the socialist critique of capitalism is pretty close to what we've been talking about, that capitalism naturally leads to consolidation, naturally leads to inequality, et cetera. You propose, hey, no, those are – how do you – so a socialist would say throughout the system, we need a new one, right? Yeah. Because we're talking about the inexorability of what capitalism does, right? Presumably you disagree. But at the same time, you sort of call for, well, we need those referees, right? Which seems to me does acknowledge, hey, this is like an inherent flaw that if we don't guard against, we're going to be dealing with. So I'd just like to know how you sort of respond to that critique. Well, sort of the best critique of capitalism was from Marx.

And he said that where capitalism leads is you get to poverty in a world of plenty. And that was pretty insightful for a guy writing about this stuff 100 years ago, right? For real. A lot of people would argue, I mean, where I live in Florida, I live on the beach. It's wonderful. It's an idyllic life. I feel blessed every day. You just need to drive 10 minutes west.

It gets pretty rough pretty fast. And then you could just tell people are struggling. I mean, they are struggling. This is so far from the American dream. And that's what Marx sort of predicted, that you're going to have castles next to tenements. And it's starting to get, you know, it has been getting worse slowly but surely for 30 years in the U.S. Socialism is basically when you decide that the means of production and distribution are controlled by the government. So that's basically you nationalize the factories and you have a regulator deciding, all right, what do we do with the search engine? We're now in charge of which search engines. And we've decided in capitalism that the markets are, largely speaking, a better allocator of capital, and for the most part, get to decide if the GDP is 23%

goes to the government, that 77% gets decided by the private market. And we don't cut the tops off trees. We're fine with billionaires. We're fine with people making money. And we're fine with winners and losers to a certain extent. But again, we do have that safety net, and we do ensure that there's a fair form of competition. You don't want losers to be dying in the street, right? You want them to still be able to have actualized, healthy, safe lives. Well, Bill Maher had this great line, and that is capitalism is not just about the freedoms you enjoy. It's about freedom from the anxieties of the things that can get taken away from you. It's, you know, worrying about health care costs, the shame you feel when you can't pay for your kids' college.

I mean, you work your ass off, you make a good living, and you got to tell your daughter who's a high school valedictorian that she can't go to the school she wants to go to because you just can't afford it. Or you got to sign this paperwork saying that your kid's going to have 200 grand in debt by the time they're 22 or 23. Yeah. I mean, that creates a level of anxiety and disappointment in yourself and disappointment in your economy. So, look, socialism, a shout out to socialism, socialist countries in the northern Europe, everyone talks, Venezuela socialist. Okay, maybe. But so is Norway. And they don't seem all that unhappy in Norway.

They seem like they're doing just fine. Right. But I think when we're in the U.S., we have decided we're cool with winners and losers. We're going to let a lot of billionaires here. And quite frankly, if you don't work here, you're just not going to do nearly as well. Whereas everyone, socialism says, we're going to try and push everyone,

regress everyone to the mean. On the whole, capitalism, I think, has proven over and over that it is on the whole a better economic model. And we attract people who are willing to enter into the thunderdome, right? The secret sauce of America has always been people are like, I'm talented. I work my ass off. I'm willing to take risks. I want the upside. And they come to America, and that's always been sort of this unbelievable rocket fuel that we've

been able to attract from around the world. So while I just think capitalism, I just think there's evidence everywhere that when we as a country maintain what I call this empathetic form of capitalism, that it is the gangster business model and it's the greatest source of progress and good in the history of mankind. I really appreciate the strength of your perspective. It's funny you bring up Norway because I visited there last year and it's, it's, you go there like, this is a wonderfully run country. Right. And the thing I realized, I like to read up about any country I visit, you know, and I was like, Oh, they, uh, the reason that everything goes so well, oil. Yeah. They have a sovereign. The country is a major oil company. Like the nation of Norway is a major oil company. They take the revenues. They give the revenues to everybody directly. And they have Sweden. Have you been to Sweden? No, not yet.

You look Northern European. You look like you stepped out of a Viking novel. I got Scandinavian blood for sure. Yeah, there you go. Yeah, but they seem pretty happy up there. You'd have a tough time right now. That great study came out, the happiest countries in the world, seven of them are socialist. But again, their way might be the right way. It's not our way. We believe in winners and losers. I don't, for example, Jeff Bezos has been talking about universal guaranteed income.

I think that's a terrible idea. I think that we should not pay people to hang out. I don't, I'm not saying we shouldn't have unemployment insurance. I'm not saying we shouldn't have a baseline level of health care. But I'm going to assume, I can just tell by talking to you, I don't know you, but I've gotten to know you a little bit. I get so much of my identity from my work. I think there's so much dignity in work. In America, central to our brand is liberty, competition, generosity.

And you know what we do as Americans? We work. Yeah. And the notion that we're going to create incentives or disincentivize people to get off the couch and find shit to do, it's not only, I think, totally counter to the American experience, it would literally destroy my self-worth. I'm not proud to say that. I don't get my identity from my family. I don't get it from being a good person. I get it from being relevant professionally. And I know how

terrible that sounds, but I think there's a lot of people who feel that way. And the notion that Jeff Bezos, the most visionary person in the world around business, sees a future that involves fewer jobs and people willing to work, it's like, for God's sake, show some real fucking vision. Figure out a business that puts people to work. Yeah. And there is a degree to which, I mean, I don't have that strong of a stance on UBI, but it seems like the critique, the other critique that I'm hearing of it is that it really isn't the goal if you're Jeff Bezos to create a permanent surf class where you give them just enough money where they can afford an Amazon Prime membership and they can get all their groceries that way

because they're realizing, oh, we're starving the economy so much. People can't afford our products anymore. So, hey, let's give them a salary. Let's give them a low salary so they can keep buying shit, right? But they won't own any of it. I saw a critique that I liked,

which was, hey, forget it. Universal basic income. How about universal basic shares? Give us some of these. Give us some ownership stake. You know, let us give us a voting stake in the company. Right. If that would be something. Don't just pay us off like another Uber driver.

Right. Make us one of the employees who got stock options if you really want to empower people. But that's an entire that's a topic for an entirely different podcast. Let's talk about your book real quick. You've's a topic for an entirely different podcast. That's another one. Let's talk about your book real quick. You've got a book, The Algebra of Happiness, which is another very unusual book, I think, for a business school professor to write about happiness.

It doesn't really seem like your bailiwick. So yeah, tell me how you came to write it. I mean, I really love the ideas in it. Sure, thanks for asking. So my book process me how you came to write it. I mean, I really love the ideas in it. Sure, thanks for asking. So my book process, if you will, is I have 12 sessions in my class, Brand Strategy. The second most popular session was a session on the four platforms.

I then do a video on it, gets a million views, and my book agent shows up and says, we should write a book. That was the four. My most popular session is the last session where I try to distill down some observations and some research around the difference between success and happiness. I know a lot of people who are, by most professional standards, very successful. Some are happy,

some are not. And I've done a ton of research around happiness, largely because admittedly, my blessings do not foot to my happiness. I struggle with mild depression and anger, and I want to manage it as I get older. And I'm frustrated that I am pissed off as much as I am. Because if I look at my blessings and I look at my happiness, the two don't foot to one another. So it's been sort of a personal journey to me. a series of equations with the kids and say, this is an attempt to distill down best practices around creating an arc of satisfaction or a narrative of satisfaction through your life. It's my most popular class. I did a video called The Algebra of Happiness, 2 million views.

My book agent shows up and says, let's do this book. So this book is a hard left turn for me. I talk about the equations and my observations around sort of best practices and what I think are fairly non-perishable truisms around people who tend to be happier and more satisfied. And then it's a series of personal stories, many of which I publish every Friday, about my relationships with my kids, my struggles as a younger person growing up with a single mother, economic success, health, and relationships. So, yeah, and relationships. So yeah, hard left turn. My publisher was horrified when I told her I was writing a book on happiness.

Because she said to me, Scott, you're just an angry, depressed professor with no academic credibility and happiness, but you're going to write a book on happiness. And I said, yeah, but I hate my life less and less every day. And that's a magic trick. So yeah, how do you do it? every day. And that's a magic trick. So yeah, how do you do it? So look, there's a series of equations that range from the ratio of time you spend sweating to watching other people sweat as a forward-looking indicator of your success. We're happiest as a species when we're in motion and surrounded by other people. So I think fitness or just finding a way to release that norepinephrine is really important. There is an arc of happiness.

Typically, until the age of 25, you're very happy. And then kind of you enter what I call the shit gets real part of your life where you're not going to have a fragrance named after you. You're not going to be a senator. Someone you love gets sick and dies. You maybe have some economic stress, maybe even a divorce. And then something wonderful happens in your kind of late 40s and 50s. And that is you start to get happier because you start to take stock of your life.

So the advice there is if you find a lot of stress and that you feel as if you're not living up to the expectations of the world, your mom and you have put on yourself, just keep on keeping on, that there is an arc of happiness. The relationship between money and happiness, there is a relationship.

Money can make you happier, but it tops out at a certain level. Yeah, research shows that, right? Yeah, about the time you can afford housing, nice vacations, nice shoes, make sure your kids are fine, which is like 80 grand in Indianapolis and about 800 grand in Manhattan or LA. And this is why you asked if I wanted to be a billionaire. And I actually have never had that desire. At this point, I'm making my own TV show. I'm on the low end of television hosts. I'm on basic cable, you know, but like, hey, I got a place to live. I can buy any video game I want. Right. That's my hobby. I can travel anytime I'm free. And I've never felt the need to, you know, amass, amass more than that because that sort of basic, you know, you're all those needs that happiness requires are filled by money relatively quickly, again, depending on where you live.

So you've hit the point where it flatlines. Now, if you got wealthier, you wouldn't be any less happy. That's a myth too. Billionaires are no less happy than millionaires. They're just not any happier once you reach that kind of certain point. But there's a lot of, the most important decision you'll make, most of my kids, because they're business, a lot of the most important decision you'll make. Most of my kids, because they're business school kids, think the most important decision they'll make is their career they choose. It's not. The most important decision you'll ever, you'll make in your life is who you decide to partner with in your life, and that is your spouse. And I know a

lot of very successful people that even love their spouse, but they don't have a partner. And so I go through what are sort of the best practices around picking around picking a mate. So I have just a series of equations around what I see as signals. And then finally, like if there's one quote unquote secret, if there's one, and it's not a silver bullet, but the largest study of its kind ever done on happiness is called the Harvard Grant Study. And they took 419 year old males back in 1929, which gives you kind of an indication of the way we thought in the 1920s. We're like, oh, we're going to do this large study. Let's just do it all about men. We don't really care about women's happiness. But they found 400 guys, and they measured everything about these guys, their height, their weight, what they did every

way, their relationships, their relationships with substances, their economic success. And they constantly surveyed them on how much satisfaction and happiness they felt in their lives. And they tracked these guys over 80 years until the last of the 400 died at the age of 99. They had to swap out four principal scientists because all the scientists kept dying. And they took five years or three or five years to write up the results of the largest data set ever on happiness. years to write up the results of the largest data set ever on happiness. And what they found was that the number one signal of happiness across all of these 400 individuals was the number and depth of meaningful relationships they had in their life across three specific areas. And that is, among your friends, do you feel a sense of camaraderie and joy? And not only that,

do you know they get a sense of camaraderie and joy from you at work? Do you feel admired and respected? And do you admire and respect other people? And finally, at home with your family, do you feel a sense of love and unconditional support? And do they, just as importantly, do you know that they feel that sense of love and unconditional support from you? And the finding there is that the happiest people are ones that know they're providing joy, camaraderie, and support to other people. And this is a 400-page study write-up, and it has the greatest opening line of any academic study ever published.

And that is the first sentence says, happiness is love, full stop. And that kind of summarizes what, if you do any real research around happiness, what you find is economic security, hugely important, health, hugely important, but the happiest people are the ones that have invested in and are reaping the fruits of deep and meaningful relationships across work, friends, and family. That's really wonderful. And it's one of those insights that sounds so anodyne when you say, if you were just as open with happiness as love, I'd be like, okay, yeah, man, sure, whatever.

You know, like it sounds like nothing. But when you explain it that way. Hakuna Matata. Yeah, exactly. When you break it down, it's really wonderful. some topics that we've talked about on our show, for instance, that one of the biggest killers of American men is loneliness. 100%. That American men, as they get older, tend to shed friends. And anecdotally, I've seen that to be true.

And that loneliness is correlated with early death, right? Men's mortality rates skyrocket when their spouse dies because women are much stronger at maintaining social connections than men. Yeah. If you're a dude and you want to die, just hold up, stop working out, cut off relationships, and it'll happen. It'll happen. Let me just ask you this because it's something that I've been thinking about that what you were saying reminded me of. Because you are correct. I get a huge amount of value from my work, and that's how I self-actualize in a really big way.

But I've been thinking about the idea – I've heard it put – the idea of workism in America, that we so much center our lives culturally around work. We tell each other, hey, work is the most important thing. You know, when you go watch Shark Tank, right, what's the most, what do they give people the most compliments for? It's, oh, I worked my ass off. You know, I do nothing but work, right? I didn't see my kids for a year, right? That sort of idea.

And I wonder how, and I've been thinking more about how that can really harm someone, right? And also how a lot of businesses use that as a replacement almost for wages, where you join a new company and they say, hey, we're a team here. We all work really hard. Nobody goes home on the weekends, right? And that's how you're supposed to get your spiritual fulfillment in life is by working hard and kicking ass, right? how you're supposed to get your spiritual fulfillment in life is by working hard and kicking ass, right? And maybe we support that rather than, you know, giving you vacation time, right? Or giving you sort of that nurturing time that you need. I certainly see that as a trend in

the American workplace. And so I just wonder how that corresponds with that dip you're talking about where around the ages of 30 and 40, you get less happy, right? Because that's certainly when you start really working your ass off. You know, in my early twenties, I was trying to figure out my career, trying to get started in comedy. Now I'm in it and now I'm working my ass off, right? I'm working, I'm working 14 hour days. And honestly, my struggle is, is how do I get a little time to myself so I can play, play video games and like decompress, right? And so I just wonder is, is it possible that our love of work and I do love my work, right? Is it possible that our love of work, and I do love my work, is it possible that our love of work is helping cause that dip in the 30s and 40s? Yeah, again, Adam, I think your instincts are right on.

And you have to be mindful because there's a tension here. And the tension is the following. We live in a capitalist society. And there is a relationship between money and happiness. And as much as we'd like to not think so, the more money you have, the better healthcare you're going to have, the greater selection set of mates, and just the more opportunities your kids are going to have. And the harsh reality is that while we all know somebody who is great at what they do, makes a ton of money, has great relationships, is a kayaker, does triathlons, and has a food blog and donates time to the SPCA, you should assume you're not that person. And that is, when I ask my kids, and by the way, this isn't true of a lot of people. A lot of

people say, I don't want to howl in the money storm. I'm going to move to a small town, make a good living, and just be happy with what I have. And that's fantastic. The majority of the people I'm around, I ask all the kids in my class, they're 27-year-old second MBAs on average, where do they expect to be in the income? If you want to be in the top 10%, you have to make, I don't know, like $300,000 a year. Or if you want to be in the top 1%, you have to make $700,000 a year. They all expect within 10 years or 80, 90% of them to be in the top 1%. And the reality is if you expect to be in the top 1% economically, you should just assume that balance is a myth.

And I know that sounds harsh, but I don't know anybody who is economically very successful that hasn't spent the majority of their 20s and 30s just working and not much else. hasn't spent the majority of their 20s and 30s just working and not much else. Now, having said that, once you get to a point where you have some level of economic success, where you can afford the basics and live a decent life, I think it's important to say, well, what are the ends and what's the means? So economic success is the means, but the ends is deep, meaningful relationships and an arc of satisfaction through my life. So it's important to take stock of how do I continue to make little investments

during those times, whether it's stupid text messages, calling your mom once a week, ensuring that you get some exercise such that you're healthy, such that you have some, you're starting to make those key investments that pay off hugely. Einstein said the most powerful force in the universe, or supposedly said it, was compound interest. But it's the same as true of relationships. Tiny little investments. The reason why your relationship with your mother is usually singular is she made these tiny little deposits

in the relationship bank when you were a kid. And by the time you're in your 30s or 40s, she's a billionaire in your eyes from a relationship standpoint, right? So the same is true of your own relationships. And I think it's important at a certain point in your life to say, all right, what is the answer? It takes some discipline because you're on this hamster wheel. And it's pretty easy, as I did in my 40s, to kind of wake up and go, I'm alone.

I lost the only person who really I knew loved me, my mother. I have money. By most standards, I'm economically secure. I haven't really maintained my friendships. I don't have anyone in my life who's passionate about my well-being. If I died tomorrow, it'd be interesting for people, but it wouldn't be tragic or sad. Yeah.

And it's like, well, what's the answer? And I started making these requisite investments later than most people. And I think it's important that we keep our eyes on the prize, that you're going to want to, the arc, when people, when they get older, a couple of things, they say the advice they would give to the younger selves is they wish they hadn't been as hard on themselves. They wish they'd given themselves a little bit more forgiveness. And they wish they'd invested more in relationships early such that they had more of them when they were older. But it's not easy to be on the hamster wheel and be on it sprinting.

And then to all of a sudden kind of occasionally get off and stop and take stock of your life and what's making you happy. And as American males in the U.S., our success is largely based on one thing, and that's how much money we have in our professional relevance. Whereas women are evaluated on a number of dimensions, which makes it more difficult for them because they're expected to be Wonder Woman, right? They're supposed to be nice, have a job, hot. You and I just have to make money and we're fine. That's the bottom line. Men are judged in a very monodimensional way. But I think at your age, what I didn't do at your age,

I didn't do until I was like 10 years older, was I thought, okay, how do I ensure that I'm making small investments every day in my health and my relationships and try to figure out what really makes me happy other than professional relevance and economic success and maybe even start sacrificing some of the upside. Because even as you can work your ass off in your 20s and 30s,

when you start to get 40, I noticed when I was working 70 hours a week trying to build a company, traveling, maybe not eating as well, all of a sudden you can get some very stark reminders that you are not immortal. And so there's, I just think you need to be mindful about the time you get to your age around, most people can't really answer at your age, what really makes me happy other than just being the man professionally?

Like what do I really enjoy in my life? What gives me a sense of an arc of satisfaction? What relationships are really important? What relationships do I need to repair? Are substances playing too large a role in my life? By the way, the number one signal of unhappiness across those 400 men that was prevalent or present more often in men who were unhappy was alcohol. I was about to guess. And it's weird because this is definitely a do as I say, not as I do, because I love

alcohol and I have the approach that Winston Churchill has. I believe that I've gotten more out of alcohol than it's gotten out of me. I love to drink and I think it's been largely a net positive. But I look back on my life right out of UCLA, I was working at Morgan Stanley here in New York, and I was going out every night and getting shitty drunk at super cool places in downtown Manhattan with what felt like other successful people. And those two, three years for me were largely a waste. I wasn't investing in my relationships. I wasn't nearly as professionally strong as I could have been because I was always hungover and kind of operating at 60% capacity, which is not a good idea for me.

And I thought, you know, being a terrible student at 60% capacity, which is not a good idea for me. And I thought, you know, being a terrible student at UCLA made me a mediocre banker, but drinking every day made me a mediocre person. And I think young people need to take stock of the relationships with substances because unfortunately, we're under the illusion that substance abusers are crack addicts mugging people in Central Park. No, they aren't. The majority of addicts, the majority of people who are substance abusers are functioning, and it's the guy or the gal, and a lot of them are very successful, and we don't take stock of that stuff.

Anyway, I don't know how I got on alcoholism. No, that's fine, man. That's a big topic in my new live show as well. I quit drinking last year, and I was- How do you feel? I feel better in every way, man. I haven't missed it once. I mean, maybe after a big argument or a big show, way, man. I haven't missed it once. I mean, you know,

maybe after a big argument or like a big show, I'll be like, I could go for a drink right now, but when I don't, I still don't and I'm happier overall, you know? And I've lost weight

and I've gotten, you know, like all of those happiness metrics have gone up and whereas I was under the illusion, I was sort of under the spell thinking, oh yeah, alcohol makes me happier, helps me relax, makes me relax,

it makes me, puts me in a better frame of mind and it didn't, it was a lie the whole time. It was really, that's my experience, right? I don't put that in anybody else. And what was the catalyst, Adam? What was the day you decided to try and give up drinking? Why? In the back of my mind, and again, I was not a really heavy drinker. I was a nightcap drinker, one or two, three on the weekends kind of drinker. But the idea of not having a drink at the end of the day frightened me, right? I knew that deep down. And I knew that the more that I told people that, no, no, no, I'm actually, I'm actually just choosing to do this. I felt that wasn't true. And I kind of just

wanted to see if I could do it. And I was going through a little bit of a professional rocky period at the time. Some stuff wasn't going the way I wanted it to. And I think it was, I looked back six months later and I was like, I think I was trying to assert control over my life and say, no, no, no, I, this is something that I can control. Right. And I did it as an experiment. I was like, what's it like to do comedy sober? What's it like to go to a party sober? And guess what? All those things were exactly as much fun, if not more, you know, as funnier on stage sleep. I thought I needed to help me go to sleep, help me sleep better, you know, not, not drinking. And so it's interesting because the interesting thing about all the, all the everything that you outline about happiness is that it sounds intuitive, but it's actually not because when you're in the, you're sort of in the vortex, right? You think that, hey, actually, you know, I hate exercising and it makes me unhappy when I do it. Right. And the truth is a little bit of movement makes everybody feel better.

You know, I'm not saying everybody has to run a marathon, but getting a little bit of getting the blood pumping actually does make everybody feel better. And, you know, investing in those relationships does make everybody feel better. And to draw this whole conversation together, you know, I think what we're all sort of hoping for is a world where – because you talked about the top – to get into the top 1%, you have to work your ass off. And I don't doubt that that's true. I hope you can – there's a way to do it in a healthy manner. 10 or 20% also need to work to the exclusion of their relationships and to the exclude, they have to drive that Uber for $8 an hour and are not able to see their kids for a year just to pay rent. Right.

And I think what we're hoping for is that we can build an economy where that's, where that's not the case and, and where, you know, it's Jeff Bezos isn't getting all the subsidies and, and hoarding all the wealth. And, you know,

everybody gets to partake a little bit more so they can all live a happy relationship-filled life. Amen, brother. I think that it comes down to this notion that, you know, you live in LA, Adam? Yeah. I lived in LA. I was raised by a single mother who lived and died a secretary.

And it's not a sob story. I got to go to the University of California, Los Angeles for $400 a quarter. And then I got a job at Morgan Stanley, which got me into Berkeley. Wish it were still that cheap. But that's exactly right. I was not an impressive student. I didn't do well on the SAT. But the generosity and vision of California taxpayers and the regents of UC took an unremarkable kid and gave me remarkable opportunities. And the reason I'm here, you know, speaking to you is because of the generosity of taxpayers and the vision of government to say that we love unremarkable kids. And I wonder, you know, I worry that we've fallen out of love with the remarkables. It's never been a better time to be remarkable in the United States,

but it's never been a worse time to be unremarkable. What I would hope is that our economic policy and our leaders and our empathy, that we decide to fall back in love with the unremarkables. I couldn't agree more. Thank you so much for being on the show to talk to us about it, Scott. I really appreciate it. Thank you, Adam. I love your work. Thank you. I'm such a fan of yours as you so much for being on the show to talk to us about it Scott I really appreciate it thank you Adam

I love your work thank you I'm such a fan of yours as well so thanks for being here thanks boss well thank you once again to Scott Galloway for coming on the show

I hope you folks enjoyed that conversation as much as I did I want to thank Earwolf and our producer Dana Wickens our researcher Sam Roudman

and the party god Andrew WK for our theme song, I Don't Know Anything. Please rate, review, and subscribe to the show wherever you get your podcasts. It helps us out a lot, so please take the time to do it. I do appreciate you if you do. You can follow me on Twitter at Adam Conover or my website, adamconover.net

for tour dates and more updates and to subscribe to my special mailing list where you can get secret updates I don't send to anybody else. Until then, we'll see you next week for another episode of Factually. Thanks for listening. See you then. That was a HeadGum Podcast.