The Prof G Pod with Scott Galloway - Conversation with Mathias Döpfner — Protecting Democracy Through Trade

Episode Date: September 14, 2023

Mathias Döpfner, the CEO of Axel Springer, joins Scott to discuss his new book, The Trade Trap: How To Stop Doing Business with Dictators, the current geopolitical landscape, and his take on the media ecosystem.  Check out Mathias’ book here.  Scott opens by telling us what he thinks about the Google antitrust case, and gets extra heated when he talks about how young people aren’t doing as well as their parents were at their age.  Algebra of Happiness: What can you modulate? Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 267. 267 is the area code belonging toiladelphia pennsylvania and its surrounding areas in 1967 the green bay packers defeated the kansas city chiefs during the very first super bowl what do you call a 300 pound packers fan anorexic that's just wrong on a lot of levels go, go! Welcome to the 267th episode of the Prop G-Pod. We just had a conversation, like, was the joke too offensive?

And here's the issue. Like, I don't especially care. I never want to diminish people. But I think that humor is a fantastic way to soften the beach. And the thing I hate about progressives, of which I would include myself, is that we're fucking humorless. And that if you look back in history, the people who've softened the beach for real political change, no, we can't have that. I think it's because I have money and they don't or I have enough because I'm fucking ancient and they're not. And I'm a baby boomer who's essentially hoarded all the capital that our society has produced and we've given you carbon. Thank you. Thank you. You're welcome.

Anyways, there's going to be, I think, a lot of discussion over the next few years around the role that off-color humor presents. And I like to think that it has a role, that it has a role, that it's a star in making the world a better place. Anyways, in today's episode, we speak with Matthias Dofner, the chairman and CEO of Axel Springer, the German media conglomerate behind several brands, including Political Insider and Morning Brew. We discuss with Matthias his new book, The Trade Trap, How to Stop Doing Business with Dictators, the current geopolitical landscape, and his take on the media ecosystem. I've known Matthias for a while. I think a lot of Matthias. He's someone I look up to. Not only is he a baller, but I think of him as a great example of masculinity, raised four sons, very successful, a decent person,

takes his role in society and his citizenship really seriously. I think he's, you know, he's just always been kind and nice to me before he had any reason to be. And he takes on big issues and is unafraid. And I think it probably costs him some credibility and absolutely some money in the business world. But I find he probably costs him some credibility and absolutely some money in the business world. But I find he's not one of these CEOs who just wants to stay out of it and not say, not get political for fear he might lose shareholder value. I think he, not only that, he's one of the few CEOs of a media company that's committed to nonpartisanship, whereas everybody else has figured out that, no, just be partisan and entertain people. Don't inform them.

Anyway, I like Matias a lot. All right. What's going on? Google and the DOJ have entered a 10-week trial to figure out whether the former has abused its monopoly power in the search market. This marks the most significant antitrust case since the government went after Microsoft in 1998. Google's total market cap, $1.7 trillion. Its total revenue, $283 billion. Search makes up more than half of that revenue, 162 billion, and I would bet, you know, even more in terms of its profits.

It's estimated that Google pays Apple around 20 billion to remain the dominant search engine within its products. Google controls 80 percent of the search market on desktop and 94 percent on mobile in the U.S. It handles more than 90% of search queries globally. What is Google saying in their defense? Everything it does is perfectly legal. Users can easily switch their default browser. It's the market leader because people prefer it. Looking at search as a general term is insufficient because competitors, including Amazon, capture nearly half of online shopping searches. And I think that's reasonable, except when you actually think about it. And let's compare Microsoft during their antitrust case to Google's here present day. A lot of similarities. Microsoft bundled products. Microsoft had about a 90% share of the operating

system market. And essentially, if you wanted to get onto the internet or into a digital world, 90% of the time you had to go through Microsoft Office or through Internet Explorer. Was that what it's called? Basically, they would use their mind and they would say, okay, Dell, if you want to have Microsoft Office bundled onto your Dell laptops, which you have to because we own the market and no one will take you seriously, you can't bundle in these other things and you can't give... I mean, basically, they use monopoly power to put Netscape, a superior browser and first mover, out of business and just suffocated them. And their bundling power was so strong and their pockets so deep that over time, they basically start some margin from the entire

ecosystem. And while the breakup was overturned, the consent decree they had to sign prohibited them from squashing competition early in the crib. So if the DOJ had not gone after Microsoft, we'd all be saying, I don't know, bang it, because Google would have never emerged. And now we have Google with 90 plus percent. And the argument they would make is, well, Scott, actually, in this instance, it makes sense to be that big to have that kind of control. Similar to it makes sense for Florida Power and Light to be able to establish a monopoly and have that size so it can deliver.

You don't need two coal fire plants or however it is they generate their electricity. And one set of transmission lines. And it makes sense to have a regulated monopoly. And that is called a utility. So which is a Google? If you have 90 plus percent share of $150 billion market or $170 billion market, does that mean you've been squashing competition unfairly and abusing your monopoly power? Or are you just so big that it lends itself to monopoly and you should be regulated as a monopoly? The more you kind of understand about Google, that they are essentially the market maker,

the buyer and the seller of just so much of what happens in the internet, you begin to realize just how dominant their power is. In addition, the way I think you sell this into the public is not to position it as they're big and bad and all this kind of billionaire identity populist bullshit that we hear from the far left, but to say, to position it as if you were to break up Amazon, if you were to break up Meta, if you were to break up Alphabet, you would effectively be the largest corporate tax cut in history. What do I mean by that? The thing about making investments across different mediums is that you hope to establish some sort of competitive differentiation. William Sonoma

decided we're going to get really good at catalogs. We have beautiful photography, beautiful merchandising, and then we have this database, and we do all this lifetime value modeling, and we know better than anyone how to send who and how many Pottery Barn catalogs to send to which household and how to calculate their lifetime value and then use sort of this 1 plus 1 plus 1 equals 5 across catalogs, e-commerce, and stores, multi-channel marketing, and we use kind of this database that we can then funnel people into West Elm,

which was their growth vehicle for a while, who's good, who should be getting William Sonoma catalogs, William Sonoma Pottery Barn and West Elm, all owned by the same company. By the way, William Sonoma has been a fantastic performer and Laura Albert, I think I'm saying her name correctly, has been one of the more impressive CEOs in the world of retail and has been there a while. I go way back with William Sonoma. They were one of my first clients. I have such affection for them. Howard Lester was just a baller and a

great leader. Pat Connolly, the CMO there, was like this incredibly, like he pushed them to go into e-commerce. That's how I got to know Pat. And arguably, I think one of the, like, brightest business people who's also, like, one of the most gentle men, you know, I've ever met. Anyways, they leveraged catalogs. Nike leveraged broadcast television. You could just smell a Nike commercial. And they were points of differentiation. They established a competence around those things that gave them differentiation, irrational margin, incredible returns to stakeholders. Now, let's talk about Google. Well, can't you establish the same type of differentiation using search? Isn't it the same thing? No, you can't. Because the genius of Google is how egalitarian it is. And that is nobody can ever establish competitive advantage using Google buying terms. I don't care how good at search you are as a brand, a retailer, a small business. Everybody has access to the same analytics, the same information. So if one company, whether it's Burberry or Home Depot, gets good at it, someone else figures out what they're doing in reverse engineering. So slowly but surely, everyone, including Joe's taco truck to Home Depot, Even individuals have to buy their own search term for fear that someone else will buy it. And what you end up with is because no one can establish differentiation, but everyone has to use it. It's no longer a tool. It's a tax. And how do we get a tax cut? If you were to break up the three biggest toll booths in the corporate world,

Alphabet, Meta, and Amazon, here's a stat that'll blow your mind. If the venture capital community raises $100, 40 of it, 40% of all the money raised by venture capitalists that is then invested in their portfolio companies ends up at one of three places. And you guessed it, it ends up at Alphabet, Amazon, and Meta, because they are the toll booths to acquire consumers online. There's no way to avoid them if you want to build an online business. And if you're going to build an online business or you're going to add shareholder value, you have to show increasingly strong metrics relative to your competitive set around online sales, online customer acquisition, and it all leads to three mob bosses.

So what would happen if you took those three companies and turned them into 11, which you could do? Google should be probably a digital marketing company. They have to spend what was DoubleClick. YouTube becomes its own. I mean, there's just all kinds of ways to split the baby here. And what happens? Oh, no, we won't have the money to reinvest, said AT&T. Now, when we cut you up into, I think it was nine baby bells, all of them were worth more than the original AT&T within 10 years.

And what do you know? All of this innovation is unlocked. Why? Because they didn't want to eat their own young or kill their own business. And what do you know? Fiber optics, data, sell all emerged. So who wins here? Shareholders win. Who wins? Corporate America. The tax on these corporations goes down because there's no longer just one search engine. There are several, all bidding for your business, all lowering the prices on search terms, which would be the mother of all tax cuts. Let's go to a larger problem. Let's go meta. What's the problem that ails America right now? What is ground zero? A 30-year-old man or woman

isn't doing as well as his or her parents were at the age of 30. That is the first time that has happened in our 250-year history, and it results in shame and rage and a lack of confidence in our government, in our system, in our country. And people start blaming each other. And then there's meta right there waiting to feed you the misinformation that justifies your conspiracy theory or lets you hate government and hate each other. It results in polarization and a discourse becoming more coarse. And what's causing that? It's simple. Young people aren't doing as well.

So what does that mean they're not doing as well? They don't have as much purchasing power. Shit's got to get cheaper. And we can do that. You know how we make shit a lot cheaper? Federal legislation where anyone can sue a local housing board that keeps rejecting housing permits. We need millions more homes.

Millions. And, and what else can we do? We need an era of trust busting. We need to bring costs down. I'm not just talking about big tech. I'm talking about big chicken. I'm talking about big pharma, where what do you know, costs have skyrocketed because guess what? The biggest company has access to cheap capital, goes and buys their number two, their number three, their number five. And then overnight, what do you know? There's a chicken company that controls 45% of all chickens, sometimes 70% or 80% in certain regions. And what do you know? Chicken prices keep going up. They keep going up. The concentration of corporate America, their weaponization,

their overrun of D.C. has resulted in a massive increase in prices across the sectors that young people can't avoid. Food, education, energy, housing. For God's sakes, it's pretty fucking simple, folks. Put more money in their pockets and make shit cheaper. Let's repeat. Let's review. More money in the pocket of young people. Make stuff cheaper, as it was for us.

And then the incumbents will say, no, it's all about network effects and a global economy. Oh, these weapons of mass distraction, these head-fake jazz hams from the incumbents and the baby boomers in corporate America

who have increased their lobbying budget. Example one, Microsoft and Google. Microsoft decided, we're not going to play that game. We're not going to give money to politicians.

The politicians are like, fuck you. If you're not going to help me get reelected, I'm going to stick the DOJ on you. And that very unlikable Bill Gates, well, he's unlikable. Let's give him a consent decree. And then to their credit, Alphabet says, no, we're not going to. Let's learn from the sins of our father. One, let's give a lot of money to politicians. Let's fucking overrun D.C. There are more lobbyists, full-time lobbyists living in D.C. than there are sitting U.S. senators. And, and by the way, Sundar Pichai, and I have fallen for this shit, not only is he a great manager, you know what he is? He's really fucking likable. Oh, that nice guy, he wouldn't

engage in monopoly abuse. And he'll say at conferences, we need to have competitive ecosystem. And I think these concerns are really worthy of looking at. And just as he's saying that, he is deploying an army of lawyers and PR spin bullshitters to overrun, overrun governments such that any attempt to pass antitrust, as Senator Klobuchar will tell you, is met with. It is a staff of 12 or 15 people working in a senator's office up against hundreds, if not thousands, of lawyers. You want to talk about communications? Jesus Christ. The number of journalists in the last 30 years has been cut in half. The number of PR comms people has gone up sixfold. So the ratio of bullshit to journalism

has gone up 12x in the wrong direction. What does that result in? A concentration of power, monopoly pricing, increased prices on young people. We need leaders who start reinvesting in America again, start investing in young people. If your kids aren't doing as well as you were at their age, they're going to be pissed off. And whose fault of it? It's our fault. We have decided it's cocaine and champagne for us, except I'd like you, and when I say you, I mean my kids

and other people's kids, I'd like you to experience the hangover. Enough already. We need to start reinvesting back in the future of America. What a rant. What a rant. Speaking of champagne and cocaine, what is the dog on? He's on nothing. He's on nothing. He hasn't eaten. And that's why I'm so angry. We'll be right back for our conversation with Matthias Doepfner. we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you? And what privacy issues should you ultimately watch out for?

And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you. Deliver that feeling to your customers every time.

Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM. Welcome back. Here's our conversation with Matthias Doepfner, the chairman and CEO of the German media conglomerate Axel Springer. Matthias, where does this podcast find you? I'm in Berlin in our building in a beautiful, sunny evening in Berlin.

So let's bust right into it. In your new book, The Trade Trap, How to Stop Doing Business with Dictators, you explore a blueprint for reshaping global trade dynamics. Let's unpack that. What solutions would you recommend to try and, if you will, reshape global trade dynamics? Well, the solution that I'm suggesting is very concrete, and its main purpose is to really kind of accelerate, concretize the discussion of an obvious topic. three criteria of adhesion can become members of a new form of trade organization that should have the potential to replace the dysfunctional WTO. And the three criteria are the acceptance of the rule of law, the acceptance of human

rights, and the acceptance of mutual CO2 targets. I am convinced that this is the most efficient tool to safeguard democracy and freedom, which I think is seriously threatened. We have all been shocked by the warning call that the Russian war is, still is, but we should also be realistic that is only the beginning. I think China is the way bigger issue in what China may do with Taiwan and what they will do to world peace and what ongoing dominance of the world economy by China will do to democracy and freedom and values of the open society. I think that is really something that we have to discuss more thoroughly. And that's why I came to the conclusion, particularly under this impression of the annexation of Crimea many years ago, that we got to do something and that waiting is

not a good option. Yeah, so let me just first acknowledge, it strikes me that there is a need for some sort of governing body or some sort of standards. Now, who gets to apply those standards and measure them and identify red lines or when someone qualifies or doesn't qualify across your three dimensions, that's obviously a very complex mandate. But the thing that convinced me or that I think was sort of a pivotal moment, and I'm curious if you agree, is that Germany decided, and I would advocate for this, that the strategy to bring Russia into a better universe of behavior was to engage them commercially. And it ends up that that kind of backfired on Germany, didn't it? That when

they integrated with Russia, thinking the trade creates better behavior, it actually came back and bit them. Your thoughts on that? 100%. I mean, that is this old idea of change through trade. That is a phrase that has been basically invented in Germany in the 60s and since then used by politicians and business people all around the world. And it is mainly to defend your business relationships and your stronger ties with regard to trade with non-democracies based on the hope that autocratic systems would change through trade and would become more democratic, more freedom-oriented, and with that, trade would have a positive impact. What it did in many cases, and most importantly, and most obviously in the case of Russia, it made the autocratic system even more autocratic,

even less democratic, but more powerful, and it created, in the case of Germany, dependency. When Angela Merkel took office in Germany, it was roughly 33% of German energy consumption that came from Russia. When she left office, it was north of 60%. The whole idea of Nord Stream 2, this famous gas pipeline where the U.S. has always warned that this would create an even further dependency, has worsened the situation. And you could say, with the billions of daily payments of EU members, and in particular Germany, to the Russian energy industry, the EU and Germany has partly financed Putin's war.

In any case, it has enabled him to do so because he, as a kind of scientist playing with the West, trying to predict what the West is going to do, he could always test and test and test and go further. And what he did in Georgia remained without a consequence. What he did in Crimea basically remained without a consequence. And then, of course, he saw that as an encouragement. Energy dependency has been stronger. It became stronger than ever. So let's go further and try to go for the whole Ukraine. I think that is a very concrete and telling lesson. It is for me, in a way, you could say the final warning call. That is the reason

why in the end I said I have to write that book because I'm really, really worried what the next chapter could do to us. And that is, as I said, China and also some Islamist autocracies where more and more dependencies are created. So let's use a couple other examples. So, and I'll put forward a thesis and you respond. So obviously the kind of the elephant in the room is China. And I would argue that until Xi, what, there's even, the term is a German term. What's the term for incorporating

trying to get closer to them with trade? Germany has a term for it, don't they? They call it now de-risking. So that is their alternative to decoupling because there is the idea that Europe could somehow continue to deal with both sides, with China and America.

And you also have to acknowledge that the German car industry is to large parts completely dependent on China. The thing that is underestimated in Europe is very often that it is not only the question if and when and how we de-risk or we decouple together with the U.S. or alone from China. The real question is, when is China decoupling from us? And the big deal when BYD, this Chinese car company, sold 100,000 units to the biggest German car rental company, of course, based on a state-subsidized offering, that in a way was quite a shock to many people

who thought we can continue to do business with China and there will be no consequences. Or take the other example example when Daimler, another big German car company, used a quote from the Dalai Lama, one of the most hated people in China, used a very harmless quote of the Dalai Lama for an advertisement. And then the CEO of Daimler had to apologize twice publicly to the Chinese government for having hurt their feelings. I mean, this shows that business dependency and business relationships will come with political influence. call it hopes of less autocracy in exchange for engagement, that if we incorporate capitalism and become sort of mutually dependent, that both sides start behaving better. I think that's ideally the kind of the aspiration of capitalism. And I would argue that in China it was working,

that pre-Xi, that China was a reformer, brought half a billion people out of poverty, and then things dramatically changed with Xi. Is this evidence that it can work or evidence that when you're hopeful and kind of delusional that it'll work, that you just end up emboldening them and giving them more power and more exit wounds when they start kind of returning to their autocratic ways? How would you describe China as an example of where this has worked or not worked? So first of all, I would agree with your observation.

China under Deng Xiaoping was a different China, a different policy approach than under Xi. And also Xi has changed and in a way radicalized himself during his time in office. I think partly it is driven by the growing self-confidence of China. I asked once a Chinese woman why China is treating an artist like IYY so badly, although he is obviously not a serious threat for China's security, but quite a risk with regard to reputation. And she said, because we can. And I found that answer very telling. Why do you do that? Because we can. So that would be also an answer to your question. They act in that manner, in that kind of way more authoritarian and dominant manner,

because they can and just take the numbers. I think one of the biggest mistakes of the West was the exception of China as a full member of the WTO in December 2001. And China benefited because of the double standards that also the WTO allowed. China, being meanwhile the second biggest economy in the world, is still considered as a developing state, which comes with a lot of privileges and exceptions. And that leads to asymmetry. We are far away from reciprocity. We are in the midst that leads to asymmetry. We are far away from reciprocity. We are in the midst of a growing asymmetry. And if we continue to allow that, that will lead in a kind of intrinsically still authoritarian system and political leadership style to the conclusion,

okay, we do it because we can. And based on what you feel the standards would be across these three dimensions, would China qualify for this? Would they, but they would have to improve on certain metrics? Would they be immediately, would there be a call? I mean, the only way this works is if there's some teeth and we all hold hands in the West across democracies and, you know, all hold our nose and say, okay, this country is violated. None of us are trading with this country across these categories. Where would China, do you think, fall here? Because

there's just no getting around. We're so inextricably linked to China. How would it play out here? Envision that you have a magic wand, this body is created. What do you think would happen in the short term with our trading relationship with China? Well, I think if we look at the China of today and the recent developments and actions of the present government, China would not qualify to become a member. And one of the very obvious reasons is the climate policy in China. I mean, China is the biggest CO2 producer in the world. More than a third or roughly a third of world CO2 emission is coming from China. China has quadrupled its coal plant capacity within one year and is now contributing more than the rest of the world, that shows that China is so far from any acceptance of mutual standards that it could not be a member in that idea of an

alliance. But I think that the powerful establishment of that alliance could be a reason for China to rethink its policy. It's interesting because I have no moral clarity around this issue because I look at China and I see an asymmetry economically. And I think that one of the few things in my view that Trump got right was pointing out the asymmetry in the relationship that they basically create what is the ultimate propaganda tool here in the form of TikTok. And they would, you know, they let our media companies over there just long enough to steal our IP and then prop up a local entrepreneur and kick the media company out and capture all the

value. And yet we seem to be wringing our hands over whether or not we should have TikTok or not. But anyways, the harder question I have... Although it's an important thing, Scott, if I may just briefly say, I mean, we had the discussion at the CodeCon about TikTok. And shortly thereafter, there was this hearing. And before that hearing, suddenly the Chinese government declared publicly that a sale of TikTok is inconceivable and would not be accepted and so on, which is, in a way, a clear proof. It was a clear proof that TikTok is closely linked to the Chinese government and the Communist Party. So let's not be naive about it. Incorporated into every Chinese company's bylaws is that they will support the CCP.

I mean, it's just there is I look at, I see the U.S. election is similar to the geopolitical chessboard across the world. And that is the presidential election here in the U.S. will be decided by a small number of people in a small number of swing states that are moderates. It's 45 of our 50 states. The election is already over. It comes down to a small number of people who are moderates and a small number of states that could go either way. And I see the same. I think the analogy is apt and holds for the world. And I see the swing vote, if you will, in the new global economy are going to be one first and foremost, probably India. And number two would be the kingdom of Saudi Arabia simply because they just have so much money. And when I have dealt with the kingdom, and I get a lot of pushback on this, the human rights violations are just frightening. But at the same time, I think you could make an argument that MBS is actually a reformer and has pivoted from funding terrorism to embracing capitalism. And when you just look at the adult realities of how much capital is there, that you could advocate for an engagement strategy and say, all right, come with us on this ride.

You need to pivot away from a fossil fuel economy. You need to pivot to education, tourism, infrastructure, technology, which I think they buy into. And then my priority is to create as much tax revenue and social programs for European and U.S. citizens, and that the way we're going to get there is engaging India and the Kingdom of Saudi Arabia. But at the same time, I see your point, and that is, do we just embolden them and empower them to continue with these human rights violations? What are your thoughts on India and the kingdom being the swing votes

in an engagement strategy? So first of all, I think we should be in touch and in dialogue with every country and every system, and we can by that kind of empower positive change. Saudi Arabia is clearly a very, very special and complicated case because the strategic logic, also with regard to the whole situation in Middle East and particularly the situation in Israel, is a very strong argument for a special relationship with Saudi Arabia, which is also given not only on a business level, but also on a security level. At the same time, if we look back to the experience of America, that this rule, the enemy of our enemy is our friend. I'm not so sure if the bottom line of these examples where we basically lift up to

that were very encouraging. Look what happened in Iran, in Iraq, in Egypt, in Afghanistan, in Syria, even to a certain degree with regard to Turkey. So very often, if the system is intrinsically not democratic, is intrinsically not based on at least partly mutual values, there will be at a certain point of time an opportunistic move where this player can really absolutely turn against us, can turn against the West. That's why I will be really careful. But this is an area where the discussion gets really complicated. I'm not stubbornly kind of driven by this is the only solution. If it is about the American election and policy, I will be even more reluctant because that is particularly for

somebody from Europe, from Germany, not something where we should give any advice. There is only one thing where I'm absolutely certain. I think the most dangerous thing of US politics is isolationism. I think it is absolutely not the time to say under the kind of idea of America first, in the end, America only. I think we are living in times where the big challenges can only be solved together based on at least a basic set of mutual values and mutual interests and business goals. If one player tries to achieve that alone, that goes even more extremely for Europe. If Europe thinks that we can have our own way, our third way in dealing with China, we are lost. We are absolutely lost. Maybe that the US and the EU is not enough together. We need more. We need India. We need other continents and countries and other democracies, Japan and others.

But if we think that one of the two can do it alone, we are lost for sure. So a comment on media, and I think it buttresses your point, moving, talking about geopolitics, and that is, it strikes me that when you think about media, there's now a bigger and bigger business in capturing your attention, not for 20 minutes a day on the local news or even an hour a day, but to just capture it every 10 or 20 seconds with news alerts. And in order to keep people's attention, it tends towards the negative and the catastrophizing. And what I don't think gets enough positive coverage is that to your point, the power of an alliance between the EU and America is exceptionally powerful.

And I think that Putin absolutely underestimated how powerful that alliance could be and underestimated our ability to actually form that alliance. My sense is Ukraine is, so far, an enormous victory for the West and speaks to the power of the type of alliance that you envision. What are your thoughts on Ukraine, how it's playing out, and the alliance thus far? So I fully agree. Putin has miscalculated the ability of America and Europe to stick together if it really matters

and to reestablish the Transatlantic Alliance and to particularly strengthen NATO. He thought that he can easily disentangle Europe from America, particularly Germany from America, out of these business interests that we spoke about. That didn't work out. So you could say the international institutions are stronger than ever, and particularly NATO is probably in its best shape for decades.

So Putin has achieved so far pretty much the opposite of what he wanted to achieve. And he achieved that because in that very moment, we were doing the right things and acted together based on that kind of mutual interest, because everybody understood what happens there in Ukraine is not about the country only and its sovereignty. It is really about the sovereignty of democracy. It is about our freedom. And fortunately, America took a very strong stance. Fortunately, even Germany, always in this kind of old pacifist mindset that was based on... Leopard tanks, HIMARS. Yeah, but, I mean, you should see that I'm rarely defending the German government, but we have to see where they come from.

They came from a policy, never get involved in any war, never deliver weapons to any country that is at war. The wrong lesson from our own war history, instead of saying, never ever genocide, never ever racism, the German learning was never ever war, never ever get involved. And that was all turned upside down, by the way, by a green foreign minister, Annalena Baerbock. I was totally surprised by that. This party has been founded on the myth of pacifism. That was the founding myth and anti-NATO. And particularly this party and this secretary of state, Foreign Minister Alena Baerbock,

was basically advocating create peace with more heavy weapons. That it didn't go fast enough and it's not bold enough, okay. But we should take into account where Germany comes from. And that is altogether, I think, encouraging. You could say it is an important moment, a historic moment of the West and its re-established alliance. Take that also as an encouragement for what we could achieve together in the context of these imbalances in global trade. Just hearing you talk, I think that, okay, the bottom line is, if you're one of the 10 largest economies in the world, which both

Germany and Japan are, isolationism just isn't an option. Exactly. It is not an option. I could not agree more. Isolationism will weaken us and will strengthen the impact of autocratic systems, which will undermine our system, and we will end up in Europe as a

Eurasian annex of China. America will end up as a former superpower. And the kind of idea of a authoritarian surveillance state will prevail. That should not happen. We'll be right back. Support for this show comes from Indeed. We'll be right back. find quality candidates fast. Listeners of this show can get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash podcast. Just go to indeed.com slash podcast right now

and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself. The all-new reimagined Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance, We'll be right back. Available feature, Bose is a registered trademark of the Bose Corporation.

So you have one of the things I've always kind of, I don't know, felt a certain simpatico with you because I describe you as a raging moderate. I don't know if that's fair, but you've stated that back in 2022, you said in an interview with The Washington Post that you wanted to, open quote, prove that being nonpartisan is actually the more successful positioning, close quote. I would like to believe that. In U.S. media, I don't see any evidence that works. I was hoping, I was involved with CNN, I had a show on CNN, and their positioning, they decided that they were going to try and position themselves more as centrist. And so far, it just hasn't worked. And so far, most of the evidence in the United States in terms of profitability seems to enforce or reinforce the notion that consumers and the advertisers they chase just want to feel good. They don't necessarily want to be informed or see both sides. The partisanship in our media still reigns supreme. What are your thoughts? First of all, I cannot imagine that in the long run, people want to be manipulated and just want to amplify their own prejudice. It may be seductive and may feel nice at the beginning, but in the

long run, I cannot imagine that that is something that remains attractive. A second observation is don't underestimate certain swings back and forth. And also media history is full of these kinds of cyclical developments. When the golden era of newspapers started, newspapers were basically launched as party political projects. There was a conservative party that launched a newspaper and there was a progressive party that launched a newspaper. So newspapers had a clear party political agenda. Then in the next phase, it turned out that that can be actually very dangerous on two levels. First, it can get boring for the readers because they know exactly what

they get. And that is in the long run, not so exciting than getting surprised and getting inspired. And secondly, it also created power imbalance. Suddenly, media became political players. And you could say, particularly from a European perspective, that played a huge role in the rise of Adolf Hitler and the Nazi party in Germany. So the conclusion after that was in Europe and in America, you could say long before and independent from that, there should be a separation of news and opinion. Editorial pages are in a different hierarchical structure than the news section.

And there should be a balance of powers. There should be plurality and there should be more kind of independence and unpredictability and no party political agenda. That is my contrarian bet. That is at least why we bought Politico, because we think that is one of the most credible, nonpartisan, unpredictable media brands in the United States. Let us follow our strategy,

and then time will tell who is right. Perhaps both is possible, but I cannot imagine that this predictability of media and that this kind of confusion between journalism and activism can prevail. So you run one of the, if not the biggest media company in Germany, but you're also you're on the board of Netflix, Warner Music. So you're sort of an outsider looking in, but you're an informed outsider. I'm curious what you think about the kind of the U.S. media ecosystem as it relates to, you know, ad-supported cable as having a moment here. There's kind of a standoff with the writer's strike, and there's a feeling that the traditional media ecosystem, especially in television and cable, it's just collapsing on itself.

And that Netflix has run away with the game, if you will. And there's questions about whether they should be on the same side of the table negotiating with the unions as a Time Warner or a Disney who have quite just a different business model than Netflix. Do you have any thoughts on the current state of play in U.S. media, specifically the cable bundle and Netflix and where you think this all shakes out? Well, the first rule is you should never extrapolate. You should not extrapolate current developments and certain crises and that the kind of broadcasting model is under attack and that a lot of things have changed over the last years, I think is altogether more a healthy effect to question old models

and establish new ones. If it is now about the strikes that you have mentioned of writers and actors and media people in general, we also have seen it even at Insider, I think to a large part, it is the concern or the fear around the changes that artificial intelligence, large language models will mean. And it is a big unknown. I think as so often with regard to technological progress, it's both. It's a tremendous opportunity and it is a big threat. And what it really does depends on us, the human beings, what we do with this technology.

If it is about AI, I think if we do it right, it can even recreate the original idea of great journalism. And that is to come up with news, to come up with results of investigative reporting, to find out something that was not supposed to be found out. And I think that is the thing that AI, that large language models, at least in the imaginable future, cannot replace. For that reason, we need to make sure that if we do so, that there is a fair system of remuneration and that everybody who creates IP, being it a musician, being a movie maker, being it a journalist, gets rewarded for that. And then it is wonderful if AI helps to make it more

efficient, to make it better, to bring it into audiences that did not consume that kind of content and so on and so on. So I see a lot of advantages and no reason for kind of fundamental cultural pessimism. I don't think that the world is going to go under, neither the world that we live in nor the media world. But yes, it is changing, and let's make sure that we shape that change proactively. So I want to switch gears here in our remaining time. We have a lot of young listeners who are doing well, starting out their career, being a good dad,

what advice do you have for younger people starting out who are ambitious and look at a guy like you and think, yeah, I would like to have that kind of influence, that kind of success. But at the same time, it's always been hard, but it feels like it's getting increasingly difficult to get this type of balance, to not have the path to success involve a pretty serious tradeoff with your relationships. Any best practices around managing your role as a spouse and a father while pursuing this kind of level of influence and success? So, first of all, I should also be careful in giving lectures because I don't know if I'm the ideal role model, but I've always tried. And for me, family first is the most important rule, the rule in life, the rule in business and for a career is for me, follow your passion. If you follow your passion,

the likelihood that you're unsuccessful, and I mean unsuccessful in the broader sense, not only unsuccessful in your career, but being unsuccessful in your life, also in managing a family and a private life and a career is much, much higher. And you should not listen to any kind of analysis and statistics, which jobs, which behavior, which convictions, which industries are promising, do what you really love to do. And we should find now also the right balance between the opportunities that mobile work, remote work offered us. I was convinced 15 years ago that people should not be measured by their presence.

They should be measured by their performance. But I also think now that just being isolated at home with your family can also create some damage because we are social beings. We want to interact and creativity needs personal interaction, not only in a family, but also in a company, also at the workplace. So I think we are in the middle of that process to find that balance. I don't have the perfect recipe for that, but I'm convinced that these changes and also here the empowerment of technology can help us to simply lead better lives. So I have two sons.

My understanding is you have three sons, is that correct? Four. You have four sons, is that correct? Four. You have four sons, excuse me. Looking back, you're advising a dad or a mother who has numerous sons. What did you get right? What did you get wrong about raising boys? I think the most important thing is you can make a lot of mistakes as long as you provide unconditional love. I think if your kids feel that they are more loved if they perform better, that is a very strange feeling. If they feel unconditional love, whatever I do, whatever I do wrong, I'm loved because I am what I am.

Then I think that is the most important thing. That's what I always did. I was a very kind of anti-authoritarian father in many respects. I could have been stricter with regard to education. I remember very well when one of my sons explained me that he's never going to read a book in his life. Everything he wants to know, he knows about through YouTube and reading books is outdated and he's not going to do it. I was very kind of tolerant and said, oh, I think it's not so smart, but if you really think that's the way, go for it. Now he's reading three or five books a day. So sometimes just let them go their way and provide unconditional love. Then things will just go the easy way, the better way in the right direction. Yeah. And also, I'm not sure we have much choice. I like the term that we're not engineers.

We're shepherds. We decide where they graze and we can point them in the right direction. But they kind of come to you. We don't engineer them. Last question. Advice to your 25-year-old self. If you could go back and just have five minutes with 25-year-old Matthias Doepfner, what would you tell him? It may sound strange, but je ne regrette rien, the French would say, so I don't regret much. So I'm

very, very happy with the decisions that I made in dedicating my life to journalism media and a very creative life. Perhaps sometimes if I look back, particularly at that age of 25, I was so naive. Would I know what my kids know at that age? And would I have the education? I could have done some things simply faster and enjoy them earlier. But I don't know if I really regret that or if I would therefore really do things differently. Sometimes I did things that may seem totally unnecessary for a career. I mean, imagine that I originally wanted to become a musician.

I studied bass guitar in Berkeley. I studied musicology in Frankfurt. My parents thought this is going to be a complete dropout. But it told me something that was very important. It told me the language of creative people, which is a big help running a media company, a creative company. Perhaps also I developed certain sensitivities for subtones that I wouldn't have had if I had just went straight to a business school and studied business or law or whatever. So sometimes it's the detour that is helpful. Matthias Doepfner is the chairman and CEO of the German media conglomerate Axel Springer.

Axel owns U.S. media brands, including Politico, Morning Brew, and my favorite media brand in business, and that is Insider. I love Henry Blodgett, and I've been reading Business Insider for 10, 12 years. It's literally my first read in the morning. Matthias is also the author of the new book, The Trade Trap, How to Stop Doing Business with Dictators, which presents a roadmap for redefining global trade and protecting our fundamental freedoms. On the board of a bunch of brands, he's sort of an icon of German media. He joins us from his office in sunny Berlin. Matthias, appreciate your time, and I really love your voice on these big picture issues.

I think you're an important voice and as raging moderates, we got to stick together. Appreciate your time, Matthias. It was a pleasure, Scott. Thank you. Algebra of happiness. I am freaked out about the number of successful people that are using, taking, enjoying, abusing ketamine. I know very little about ketamine. I've never done it. My drug use is pretty limited. And that is, I didn't drink till I was in college. Then I drank a lot. And then I stopped drinking when I got serious about my career. And then I've slowly kind of waddled back. And as Winston Churchill says, I've gotten more my career and then I've slowly kind of waddled back and as Winston Churchill says I've gotten more out of alcohol than it's gotten out of me I'm starting to ramp it down again

because I realized my 58 year old liver probably can't process alcohol the way my 28 year old liver can and it is five or seven thousand year old technology and I enjoy edibles but even then there's no free lunch I'm trying to do that not more than once or twice a week. I am shocked by how many people I know who are incredibly successful are increasingly talking about ketamine. And I don't know anything about the drug, but this is what I know about all drugs and all substances and all external stimuli. There is no free lunch. And I'm not going into a rant on ketamine. What I'm going to suggest to you is the following, that you do an audit around your addictions. I believe everyone has a certain level of addiction in their life. Everyone. I don't care if it's sugar. I don't care if it's porn. I don't care if it's online shopping. I don't care if it's talking or codependent relationship or you're addicted to stock market trading, everyone,

video games, everyone has a certain level of addiction is what I found. I'm addicted to other people's affirmation, and it results in me spending way too much time on social media platforms and taking the shit that strangers say or don't say way too seriously. But I recognize my addiction, and I can modulate. I want you to do an audit of your addictions. The majority of people handle their addictions productively. There's this cartoon of anyone that does drugs, that they're living under a bridge and don't have a job. Guess what?

90% of people who abuse substances are professionally competent. But that's not the litmus test. The litmus test is the following. Would your relationships, would your health, would your success in a variety of different areas just be a little bit better or perhaps a lot better if you modulate it? So the first thing we're going to do is we're going to do an audit. What am I addicted to? What have I become too dependent upon? What am I doing too often such that it is getting in the way of other parts of my life? It happens so incrementally, so easily. I have someone in my life that has said just over time, this person comes home and

with their spouse, they'd have a glass of wine. And then it ended up being a bottle of wine every night. And they just, she found herself just really looking forward to that bottle of wine every night and wasn't sleeping as well, becoming too into it, not going out with friends as much because she'd rather just stay at home and have a bottle of wine with her spouse. This happens incrementally. It happens sort of slowly and then suddenly. And guess what? Does that mean you cut out wine? Maybe, maybe not. But would your life be a little bit better if you, say, limited wine consumption to two or three times a week? Whatever it might be.

Let's do an audit of our addictions, recognizing everyone has addictions. And let's say, okay, okay. Would I be a little less shitty? Would I be a little bit better? Could I reallocate that capital? Could I reallocate that energy to something better. Because when the full story comes out about the tech community and really successful people, I think you are going to hear about how their world got increasingly small and increasingly unproductive and increasingly unhealthy through this bullshit notion that there is a free lunch out there. There isn't. There may be a freer lunch. I have found, honestly,

that edibles don't take the same toll on my body that alcohol does. So I have substituted edibles for alcohol. And I find that that works for me. But in general, I'm trying to decide maybe I just kind of modulate and take it all down, take it all down a little bit. What could you take down a little bit? What could you modulate? This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer, and Drew Burrows is our technical director. Thank you for listening to the PropGPod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on

Monday with our weekly market show. Daddy brought home the chicken. Daddy brought home the chicken. Oh, I just sneezed off camera. Do you feel like your leads never lead anywhere and you're making content that no one sees and it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers.

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