The Prof G Pod with Scott Galloway - Ending the Two-Party Political System — with Katherine Gehl

Episode Date: November 3, 2022

Katherine Gehl, the founder of The Institute for Political Innovation and co-author of “The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy,” joins Scott to discuss why it’s time to disrupt the politics industry with Final Five Voting.  Scott opens with his thoughts on why Twitter’s subscription model is all wrong.  Algebra of Happiness: Get memories out of your parents while you can.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Episode 209. 209 is the area code of North Central California. In 2009, President Obama was sworn in as the 44th President of the United States and Captain Sully safely landed a commercial plane on the Hudson River. I think of Barack Obama every Valentine's Day as I am Obama myself. Go, go, go! Welcome to the 209th episode of The Prop G-Pod. In today's episode, we speak with Catherine Gale, the founder of the Institute for Political Innovation and co-author of The Politics Industry, How Political Innovation Can Break Partisan Gridlock and Save Our Democracy. We discussed

with Catherine how we can fix our broken two-party system with political innovation and what to look out for in our midterm elections next week. Okay, what's happening? All right, so we've got a megalomaniac running a social media platform. I should say we have another megalomaniac running a social media platform. Let's start there. What should we talk about? What's the 411? What's on the docket? What wave is forming? Let me think. What should we talk about? Shortly after Elon took control of Twitter, a wave of right-wing politicians celebrated their right to free speech, and also racial slurs and anti-Semitic memes spiked on the platform. Just to be fair, it looks as if most of this came from a small number of sources that were sort of testing or, I don't know, battle testing free speech, if you will.

Also, Russia's former president praised him by tweeting, good luck at Elon Musk in overcoming political bias and ideological dictatorship on Twitter. Oh, thank God. By the way, Elon believes that we should seriously consider China or Hong Kong should consider or enter into discussions for Taiwan to become an administrative China. And wouldn't you know, what a coincidence, probably half of Elon's net worth is tied up in the blood sugar level of Xi Jinping. And that is factories and their biggest growth market in China. And what do you know? He's carrying Xi's water and now parroting talking points for Putin and now controls Twitter. What could go wrong? Or maybe the question is, what could go right?

Can you believe? Seriously, seriously, can you believe this shit? We have this individual now deciding battlefield technologies. Anyways, good for you, Elon. Really glad everyone has their free speech back and we're freed of Twitter's former dictatorship. I mean, my gosh, I just felt so censored on Twitter. There was that time when I wasn't censored and then there was that time I said something really obnoxious and totally inappropriate and I wasn't censored. I mean, what is it these people want to do on Twitter exactly?

When has Elon been censored? You have to be so vile or spread so much misinformation before they even threaten to delete your account. It's just, what on earth? And this notion of free speech, it's not free speech. It's not the public square. It's the guy on private square. It's the private square. Do I have an obligation to have AOC and Ted Cruz comment, come on my podcast

and spew whatever they have to say? No, because it's a private company. It's just crazy how we have totally confused what free speech in the first amendment is. And by the way, let's talk about Twitter from a business perspective in moderation, if you will. What is the least moderated platform? That's 4chan.

And then somewhere in the middle, you'd argue that it's Pinterest, Twitter, Snap, Meta. And then what by far is the most moderated platform, where if you post a video and use the terms COVID, that video gets taken down and your account suspended? You guessed it, TikTok. And now let's look at success. And what do you know? There is a near perfect correlation between moderation and economic growth and economic value. By the way, TikTok, the most moderated platform in the world, is now worth more than, get this, Meta.

ByteDance, the parent company, repurchased shares from employees or offered to repurchase shares at a valuation of $300 billion. And now Facebook's about $250 or $260. So ByteDance is now worth more than Meta. And what do all of these things have in common? Simple. The more moderated, the more moderated, the more valuable, the greater the growth. So Twitter's limited success is a function of its moderation, not despite it. So anyways, good luck with that. He's already walking it back. And by the way, he's already parroting the dog's talking points around business strategy. I think subscription could work. They've kind of fucked up or they kind of don't have a sense for it. They want to anchor it around the blue check. That doesn't make any sense because

there's some people with a blue check that should be free. Journalists, nonprofits, whatever, political figures, creators, content creators. But there are a lot of people who have massive followings who get paid to tweet. Why wouldn't Twitter take on the same complexion as Apple and say, we're going to take 30% of that cabbage? When Prop G promotes his podcast here for free or promotes his podcast on Twitter for free, there's some economic value there and they should be able to assess what that economic value is and step in and say, hey, Prop G team, we're going to charge you 10, 20, 30% of what we perceive that economic value to be. Every corporation in the world, every entity in the world now has a Twitter account that they use similar to a firm called PR Newswire. They used

to spend $70, $80, $120, $1,100 to put out a press release to various periodicals and media outlets all over the world and pay a fee. Why on earth would Twitter not charge that? What happens? A, it's a better business model. It's more enduring. It survives a recession. And B, it creates better incentives. Your incentive is around adding value to the end consumer, not around weaponizing or enraging them such that they just keep coming back to the platform by spreading incendiary content. It's the ad model that has fucked everything up. Everything reverse engineers to Sheryl Sandberg's success at Meta. When she created an ad model, it was hugely scalable with an incredible ad stack. And as a result, and I don't believe this was intentional on her part,

she just ignored it when she saw signs that shit was getting awful. It creates an ecosystem where we just want you engaged no matter what, which equals enragement, which equals more Nissan ads. And by the way, this is nothing that CNN and Fox don't do themselves. It's just that these platforms do it at scale. So where does Twitter need to head? It needs to head to subscription. Still have their head up their ass, slightly starting to pull it out, starting to pull it out. We can see the neck again. We can see the neck again. But they're not thinking correctly here. They're not price discriminating. That same seat on my flight from LAX to Denver is worth more to different people at different times.

They need price discrimination and segmentation here. Caitlyn Jenner's blue check is worth millions of dollars to her. The blue check for Stephen King is worth a lot less. And the blue check from Planned Parenthood is worth a different amount of money. I mean, this is just, come on, guys. Think. Think. You're supposed to electrify the automobile industry.

You think you can put a man on Mars, but you can't figure out price discrimination or surplus value. There is immense surplus value that needs to be captured and charged for on Twitter. Okay, so back in February 2021, I wrote the following in our No Mercy, No Malice newsletter. Open quote, Twitter's management enabled by legacy board members has demonstrated an alarming disregard for the commonwealth, weak strategic thinking, and an ability to create a fraction of the shareholder value that is possible for the platform. Twitter's financial weakness gives it a chance for redemption. It's time, close quote. So does that redemption appear to be taking place? Is Twitter being redeemed?

Is Musk redeeming himself, if you will, around some of the shitty behavior leading up to this acquisition? Let's talk about what's happened so far four days post-acquisition. Firing Parag and other senior managers for cause. By the way, quick story, quick story on firing people for cause. You can't, you can't fire people for cause. I had an employee at my last firm who was addicted to opiates, stole $120,000 from the firm. And my counsel's advice to me, it's going to be really difficult to fire her for cause. Unless the senior management team at Twitter gets convicted of a crime by a jury of their peers, then Elon has a shot at firing them for cause. But this is nothing but an attempt to intimidate them, try and reduce

their payouts, which they are obligated, which they are owed. And guess what? For the second time in as many months, the day before this thing goes to trial and he might actually have to go under deposition, he's going to see the light and pay them everything they are owed. Just humor him, charge him a million dollars in legal fees, and then tell him that he's going to lose, said every lawyer that has worked for Musk in the last six months. And how does this help the culture? I'm not going to uphold your agreements if I don't like them. So what do we have here? We have the retweeting of baseless conspiracy theories, an attack on employees' contracts, an attempt to intimidate them and take the money that they are owed. And also my favorite, appointing advisors that are literally the worst advisors in the world. Guys in their 50s who have used the platform to weaponize their user base, to attack incessantly people who attempt to have a conversation around the value of the septic tank

that is their portfolio companies. Look at who he has decided to appoint to be his advisor. It's literally the council on little dick energy and pumping my investments and attacking other people who want to have an honest conversation. What have we decided? Okay, this platform is toxic. I don't know. Let's pour more fucking cyanide into the river that is Twitter. Jesus Christ, day four.

We'll be right back for our conversation with Catherine Gale. Support for this show comes from Constant Contact. You know what's not easy? Marketing. And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you,

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Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Welcome back. Here's our conversation with Catherine Gale, the founder of the Institute for Political Innovation and co-author of The Politics Industry, How Political Innovation Can Break Partisan Gridlock and Save Our Democracy. Catherine, where does this podcast find you? I am in Chicago. Chicago, nice. Let's bust right into it. Let's start with the problem. You say the two-party system is broken. Why is it broken? half of voters. It's designed to further the growth and power and revenues of the political

industrial complex, and that it's doing really, really great. So say more. How's that happen? Our constitution fits in our pockets, right? That's why we can all have the pocket constitution. And that, I think, can tell us quite quickly that there isn't much in that constitution about how we actually run the day-to-day of what I would call the politics industry or the day-to-day of how we govern, how legislation happens. And those rules, norms, and practices of how we set up the game of politics, if you want to call it that, are the elements, are the rules that create the incentives that everybody in that industry responds to. So we have had to invent, since we formed our country, the way we're going to elect people to Congress and

to state legislatures and statewide offices. We've had to invent how people are going to work together when they are deciding on legislation. And in any human endeavor, the rules of a game, be it a serious game like politics or other games like board games or basketball, the rules of a game, be it a serious game like politics or other games like board games or basketball, the rules of the game affect the way the game is played and affect the outcomes of that game. And the net result of the rules of the game in politics is that the two companies that exist in politics, the Democrats and Republicans, keep growing larger and more powerful and everybody associated with that, while the customers keep getting less and less satisfied. So we'll see that Congress has, let's say, a 10% to 20% approval rating. In any other industry that was as large and as thriving as politics with 80% of customers dissatisfied and there's only two companies, some entrepreneur would come in to create

a new company to give customers what they want. There'd be competition. And yet we never see that in politics because it turns out that the two parties work very well together in one particular way, and that is to rig the rules of the game to protect themselves jointly from any new competition. And when there's not any new competition, the customers are not going to get what they want, and that's why voters don't get what they want in this country. But everybody, I mean, the notion of a third party isn't a new one. And for the majority of democracies, it is a two-party system. Why hasn't a third party been able to get traction?

And what can you point to or what other nations can you point to where multiple parties has been an effective solution? first say that I do not suggest that any particular number of parties is going to solve our problems, a third party, a fourth party, a fifth party. In fact, our problem is not that we have only two. Our problem is that the current two are guaranteed to remain the only two, regardless of what they do or don't get done on behalf of the voters. So we don't need more parties per se. We need the threat of more parties if the current ones don't start solving problems that make voters happy and deliver results, you know, in real people's lives. So it's the pressure of competition that we need. Do you think more than a third party,

we'd benefit more from ranked choice voting or open primaries? So my preferred solution is something called final five voting, which is the combination of a top five primary and instant runoff voting general election. And that creates those two elements of election change combined third party emerge, but you'll also have lots of competition within the Republican Party or within the Democratic Party. And the most important thing that they do, and this is the root cause that we've mostly not seen, is that Final Five voting will ensure that nobody wins an election until November voters turn out. Can you explain final five? Final five voting is, as I just said, the combination of two changes to our election system, one in the primary and one in the general. In the primary, we get rid of party primaries,

where there's a Democrat primary and a Republican primary. And instead, we have just one primary ballot and everybody running is on the same ballot. Regardless of party, everybody votes using that ballot, regardless of party. Pick your favorite, polls close, count the votes, and the top five finishers will advance to the general election. Then between the primary and the general, we benefit from a debate of diverse candidacies, ideas, visions, personalities. And then we get to the general election. And now that we have the benefits of competition, we need to decide who wins. And, of course, you wouldn't want one of those five to win with 21% of the vote, which could happen if the vote split relatively equally five ways.

So we implement instant runoffs to narrow the field of five to to keep coming back for each additional round of runoff, the voters cast all their votes at once using a ranked ballot. And that combination is final five voting. So, Catherine, what's the biggest misconception about final five voting? Final five voting is consistently confused with ranked choice voting. Final five voting is not ranked choice voting. Here's why. Because they're trying to solve for different problems. So people who are pushing ranked choice voting want to make voting more fair, want to make elections more fair and more representative to do the work of solving our problems by working across the aisle and negotiating. And only final five voting does that because final five voting, which is the combination of the top five primary and instant runoff general,

make sure no winners are chosen until November. Whereas if you have ranked choice voting on its own and you put it, for example, in party primaries in the general election, you'll still have 85% of the House members chosen in a party primary, and they will still only answer to that segment of voters that votes in those low turnout primaries. So you don't re-enfranchise November voters. It is through the re-enfranchisement of all November voters and having real competition to hold those elected accountable and having that competition occur in November that we're going to get the better results. And I'll say a second thing, if I may. It's really not helpful to call the process by which we and that appears entirely rational to me. And whether it's gerrymandering or the primary system, we just end up with extremists on both sides. Nobody gets

along and we have what I would refer to as minority rule. My fear is that unless it's federal legislation, if you go state by state, the states that will do this and see the wisdom in it will be primarily progressive states. I mean, for example, the New York Supreme Court has basically said New York is guilty of gerrymandering, but no red states seem to be headed that way. Do you worry that this ultimately ends up being a gift, and maybe it should be a gift to conservatives? Because it feels to me like the states that will embrace this final five tend to be on the more progressive side.

Having said that, as I listen to myself talk, Alaska has embraced this, right? Right. So let's make it clear that the goal of final five voting is to re-enfranchise every single November voter and ensure that winners are never chosen until November. And that is not so that final five voting will change who wins the elections. It's so that whoever wins will be able to do different things when they're in Washington governing, that they will be able to reach across the aisle, innovate, negotiate, make a deal, and vote yes on the difficult deal that they've crafted to solve these complex problems. Now coming to your question about whether progressive states are going to implement this, the facts show us that progressive states are not more likely to implement this.

First, it's been passed in Alaska, which is known to be a, quote, red state. But the second thing is, Scott, that the next state on track for Final Five voting is Nevada. Nevada voters will vote on November 8th, yes or no, to Final Five voting is Nevada. Nevada voters will vote on November 8th, yes or no, to Final Five voting in Nevada. And the Democratic governor, the two current Democratic senators, issued a joint statement earlier this year saying that this was bad for, you know, Nevada. And Final Five voting has also done something that I don't think anything else has done in Nevada. And Final Five Voting has also done something that I don't think anything else has done in Nevada. It's united Democrats and Republicans because the Republican establishment in Nevada is also opposed, which is to say that those people who are currently in the business

of politics, they want it to stay the same. They don't care about November voters. To that point, 95% of incumbents are reelected. Congress, our elected representatives have never been older. We have sort of the oldest leadership in the world, at least of a democracy. And every year it gets older. What are your thoughts on term limits and age limits? I come from business, and so I have this rule that the only things I want to suggest that people invest their time in and hopes in are efforts like final five voting that are both powerful, as in they'll change how the results Congress gives us, and that they're achievable. And achievable is what I call a ruthless metric, because I define it as we have to be able to get that powerful in a matter of years, not decades. So the thing about term limits for Congress is that they're not achievable. They require a constitutional amendment. So that's not going to happen before I'm dead. So we could spend a lot of time talking about whether they're powerful or not. And I would actually end up making a case that they're not

as powerful as people think. But since they're not achievable, we don't even need to talk about it. What's the point? That's discouraging. I find it interesting that in business and even our own home lives, we don't talk about things that we could only dream of that aren't possible. We live in reality. But for some reason in politics, particularly in reform, we like to think about how we wish things were as if that makes them worth investing in. We need to find things that we wish were so that we have the power to make so. Yeah, I think that's really insightful. So the midterms are next week. What are you looking for? Or what are you looking out for, I should say? I'm not looking forward to this in the midterms, but I am deeply concerned that the symptoms of this broken public handles it and how media handles it and what it does to our unity, I'm likely to find it very, very distressing.

And what I hope will be the bright spot in it is that Nevada final five voting will be announced as a win. We'll be right back. Hey, it's Scott Galloway, and on our podcast, Pivot, 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. What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average US company deploys more than 100 apps, and ideas about the work we do can be radically changed by the tools we use to do it.

So what is enterprise software anyway? What is productivity software? How will AI affect both? And how are these tools changing the way we use our computers to make stuff, communicate, and plan for the future? In this three-part special series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get your podcasts. So I would imagine a lot of our listeners will say that Final Five voting makes a lot of sense. If you don't live in Nevada, how can you still support? How can you be effective and not just right and help final five voting get more traction? The first thing is that people have to know that it exists and

it's an option. So if I go back to 2009, I don't know about you, Scott, but I consider myself pretty politically engaged, and I honestly did not know what gerrymandering was. I had no idea. And then gerrymandering after 2010 sort of went on this hockey stick of awareness. And now most people, I mean, I don't know the statistics, but know what gerrymandering is. And most people have a view that it isn't a good idea. It turns out, by the way, it's not in the intersection of powerful and achievable. It's not the thing we should be trying to fix right now. And final five voting really bypasses the gerrymandering problem by making sure you choose winners in November anyway. But my point is that final five voting needs to and should soon go through that same hockey stick of awareness. And if your listeners could help make that happen by, for

example, sharing your wonderful podcast, and also perhaps looking at my TED Talk, which they can get by Googling my name, my last name Gail, G-E-H-L, and TED Talk, and then sharing that with their friends. And I would also say if they get a little conversant with it by listening to this talk, watching TED, and looking at our website, which is at final5voting.org, they can talk politics at Thanksgiving and Christmas this year because this is something that people across the political spectrum really come together on. Katherine Gale is a business leader turned political innovation activist.

She is the former CEO of Gale Foods, a high-tech food manufacturing company in Wisconsin. In 2020, she co-authored the book, The Politics Industry, How Political Innovation Can Break Partisan Gridlock and Save Our Democracy with Harvard Business School professor Michael Porter. She joins us from Chicago. Catherine, I mean this sincerely. I hope your efforts get traction. I think this is an important moment where we need, I don't know, get away from minority rule and become less polarized. And it strikes me that the incentives that you have outlined are a big problem. Anyways, thanks for your time and your good work, Catherine. Scott, thank you. It's been a pleasure to be talking to you today.

Appreciate it. Algebra of Happiness. Get memories out of your parents while you can. How to Live Happy more about his childhood. And for example, I'm going to see the Glasgow Rangers soccer team in Glasgow play against a smaller team in Perth. I just think it'll be so much fun to take my boys to a football match in a small community outside of Edinburgh with a 7,000 seat stadium. I think that's going to be just so much fun. And I'm so excited. So I call my dad. He has really difficult time on the phone. And I asked him about the Glasgow Rangers when he went to those games. And he didn't remember. He didn't know what I was talking about. And it just struck me, okay, as he loses his memories, he's just lost the Glasgow Rangers.

And that's really sad. That's a moment of connected tissue between him and me and between him and me and his grandsons. And now it's gone. And it's unlikely it'll ever come back. So my advice is the following. It goes much faster than you think it's going to go. And so sit your parents down and ask them a lot of detail and maybe even video it or record it about their youth and them growing up. Because once it's gone, it's like you really miss it.

I really now am angry that I didn't find out more about my dad's childhood and the sporting teams. My dad served on a ship. My dad served in the Royal Navy. And I know he was a frogman. I know he jumped into the water. And I know he repaired planes, but I don't know which planes he repaired.

I would love to go find a replica model of the planes my dad repaired and give it to my kids. There's just so much cool shit that I could be doing right now with my dad's history that it's too late for. I know some of it, but not enough. So time marches on relentlessly. So my advice is find those memories, find that connective tissue before your parents lose them. Our producers are Caroline Chagrin and Drew Burrows. Sammy Resnick is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prop G Pod from the

Vox Media Podcast Network. We will catch you next week. That was good. Thank you. Learn more at klaviyo.com slash BFCM. disruption, with 37% seeing significant or extremely high positive impact on revenue growth. In Alex Partners' 2024 Digital Disruption Report, you can learn the best path to turning that disruption into growth for your business. With a focus on clarity, direction, and effective implementation, Alex Partners provides essential support when decisive leadership is crucial. You can discover insights like these by reading Alex Partners' latest technology industry insights, available at www.alexpartners.com. That's www.alexpartners.com.

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