The Prof G Pod with Scott Galloway - No Mercy / No Malice: More

Episode Date: July 8, 2023

As read by George Hahn. https://www.profgalloway.com/super-drug/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

I just don't get it. Just wish someone could do the research on it. Can we figure this out? Hey y'all, I'm John Blenhill, and I'm hosting a new podcast at Vox called Explain It To Me. Here's how it works. You call our hotline with questions you can't quite answer on your own. We'll investigate and call you back to tell you what we found.

We'll bring you the answers you need every Wednesday starting September 18th. So follow Explain It to Me, presented by Klaviyo. Support for PropG comes from NerdWallet. Starting your credit card search with NerdWallet? Smart. Using their tools to finally find the card that works for you? Even smarter. You can filter for the features you care about, access the latest deals, and add your top cards to a comparison table to make smarter decisions. And it's all powered by the Nerds expert reviews of over 400

credit cards. Head over to nerdwallet.com forward slash learn more to find smarter credit cards, savings accounts, mortgage rates, and more. NerdWallet. Finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. I'm Scott Galloway, and this is No Mercy, No Malice. The arguments surrounding affirmative action are misdirects from the true culpable party here, academics and their leadership. College education, elite college education in the United States has not only become too expensive, but inaccessible. It's not a question of who gets in, but how many.

More, as read by George Hahn. What if there was a drug that extended life, made you happier, healthier, and wealthier, and strengthened your relationships? The good news? It exists. The bad news? It's being needlessly hoarded. This drug is higher education. America is the world's premier source, producing the compound at a purity no other manufacturer can rival. Harvard, for example, quadruples the patient's income. It also dramatically increases their odds of becoming president. Millions come to the U.S. to access

this drug. In a rational world, we'd be making as much of it as possible. Instead, we sequester it behind ivy-covered walls and sky-high tuitions. And for centuries, we prescribed it almost exclusively to white people. In 1960, the black student population across Harvard, Yale, and Princeton was 15. That's 15 people, not 15%. In 1965, President Johnson made the case for doing something about it. You do not take a person who for years has been hobbled by chains and liberate him, bringing up to the starting line of a race and then say you are free to compete with all the others and still justly believe that you have been completely fair.

Subsequently, affirmative action has helped reallocate elite higher education more equitably. Between 1980 and 2020, the non-white Ivy League student population went from 14% to 50%. Affirmative action has been controversial, and disputes about race-conscious admissions regularly reach the U.S. Supreme Court. This week, the court dismantled affirmative action, determining it unconstitutional to consider race in university admissions. I believe this is the right answer, but the wrong question. More on that in a moment. I'm not alone in this view.

Affirmative action is broadly unpopular. In the U.S., 74% of people don't believe race should be used as even a minor deciding factor in college admissions. California ended affirmative action at public universities in 1996, and in 2020, voters rejected a measure to reinstate it by 14 percentage points. The benefits of race-based affirmative action have expired. See above the changed racial makeup at Ivy League schools. To be clear, race is still a powerful force in American society,

but it lags a more sweeping agent. Money. Money. Students from the top family income bracket score higher on standardized tests and are far more likely to go to college. At Harvard, 71% of Black, Latino, and Native American students come from college-educated homes with family incomes above the national median. Reshuffling elites by race is still elitism. In a capitalist society, money is increasingly the ultimate determinant of everything. Beyond your college performance, the amount

your parents make improves most other outcomes, from teenage birth rates to life expectancy. While it's true a poor black kid is disproportionately affected by poverty more than a poor white kid, the more meaningful macro indicator of their success isn't race. It's that they're poor. Family income isn't a proxy for inequality. It is inequality. Americans support class-based preferences by two to one, and they work. Without looking at race, my alma maters, UCLA and Berkeley, consistently admit the highest percentage of students receiving federal Pell Grants. In 2021, the UC system admitted its most racially diverse class ever. The court's ruling has inspired an overdue conversation regarding legacy admissions. They're a double-edged sword. It's wrong that the unimpressive kids of shopping mall developers gain easier admission to the best colleges. Admissions directors know this,

but money is the neosporin for their souls. Happy alumni are generous alumni and could, in theory, provide the resources to help disadvantaged kids. But that justification is inconsistent with the rising cost and elitism of higher education. In the past five decades, the price of college has risen 1,600%. Meanwhile, increasingly commonplace sub-10% acceptance rates are viewed as a feature, not a bug. Some nuance here. This tuition increase is not evenly distributed, because the richest schools have torrents of money for scholarships.

But their artificial limits on supply arbitrage good kids from middle-class families down the cartel chain to schools that charge the same price but don't offer the same financial aid or the same certification and experience. A kid from a top 0.1% income earning household is 80 times more likely to get into an elite college than a kid from the bottom fifth. College sweatshirts would be more honest if they printed CAST above the logo. The discussion around affirmative action and the emotion it evokes distract from the real issue and culprits. The question facing American higher education is not who, it's how many. The answer should be more. Specifically, lower cost, increased volume. More kids of color, more middle and lower income kids,

more trans kids, more men, more women, more legacies, and more international students who pay full freight and become evangelists for the U.S. when they return to their native countries. Or stay to run a NASDAQ company. We need to stop finding reasons to divide us and focus on solutions that enrich us. Hoarding a life-saving drug like this would cause chaos and anger. And it has. Ask any parent of a senior applying to college. The Supreme Court has, accidentally, illuminated a path forward. Striking down Biden's debt relief program freed up $500 billion earmarked for higher education.

Something with a $500 billion price tag should be for an investment in the future of the country, not a populist bailout. The student debt relief package was an effort to shrink the tumor, but it did nothing to treat the underlying cancer, cost, and access. It's telling that the affirmative action debate is irrelevant to most colleges and college applicants, as they do not have demand that far outstrips supply. That's the answer. Supply. Here's my proposal. The federal government should offer the largest 500 public universities, approximately the top third, an average of $1 billion per school, adjusted by size, in

exchange for the following commitments over the next 10 years. Reduce tuition by 2% a year, expand enrollments 6% a year via investments in technology and infrastructure, and increase vocational certificate programs to 20% of students. The net result in 10 years would be double the freshman seats at half the cost, accounting for inflation, and a step change in opportunity for kids who do not have the money, skills, or desire to pursue a traditional four-year degree. Nearly 50% of Germans have some sort of vocational certification.

In the U.S., it's 5%. Pro tip, neither you nor your kid have failed if they don't get a four-year liberal arts degree. Note, spare me the bullshit about an erosion in brand equity if our best universities broaden admission standards. When I attended UCLA, it had a 76% admissions rate and the brand was outstanding. Scarcity is for luxury brands, not education. Rejectionist nimbyism is a means of transferring of wealth from young and poor to old and rich.

Skyrocketing value in existing degrees and houses, while the cost for young people to attain their dreams has, in lockstep, also skyrocketed. If we can scale companies 40% per year, then we can expand enrollments at our great public universities 6% per year.

The system is ready. Remote learning and utilizing campuses during non-peak periods, summer, nights, weekends, could double capacity. Stop building luxury dorms and lazy rivers. Abandon our obsession with four-year liberal arts degrees. We can continue to produce poets and philosophers, but also plumbers and cybersecurity technicians.

Most elite schools, however, are quote-unquote private, though, right? Sort of. Even more than most private enterprises in the U.S., universities are profoundly entangled with the public purse. Why the Supreme Court can tell Harvard how to run admissions. They are non-profits and don't pay taxes on their endowment income. They are the recipients of billions in government grants, and their students pay tuition with federally subsidized student loans and financial aid.

Accordingly, we should revoke the non-profit status of any university that enjoys a $1 billion plus endowment but isn't expanding its freshman class size at the same or greater rate than population growth. If an organization is growing its endowment, i.e. revenues, but not their service to the Commonwealth, there is a term for that. For profit. Student loan debt is a problem, but it's not the generation-wide disaster the left claims it is. Most student loan holders have manageable debt. The average payment is about $500 per month, or less than 10% of the median starting salary for a college graduate, which they pay off. That's how loans work. But we should expand our existing loan forgiveness programs for those who take public service jobs or were affirmatively misled. And we should put schools on the hook

for the bad debt they create. If a college's graduate defaults on their student loans, the college should own 25% of the loss. This would force colleges to either improve the ROI of an education that foots the real economy or stop loaning $200,000 to kids they know will struggle to pay it back. They have this data. A student loan bailout enables universities to continue growing the tumor with increased prices. Yes, it helps young adults who've seen their wealth cut in half, real benefit, but it also bails out universities who will not alter their predatory lending practices, meaning this generation will ultimately have to pay for another bailout. UCLA and UC Berkeley were transformative for me. I've given approximately $18 million to the

University of California, and I still owe them. But when I applied, UCLA's acceptance rate was 76%, and I had to apply twice. Today, it's 12%. The secret to my success was being born before me and my colleagues in academia mutated from public servants to luxury brands. The media-fueled fight over affirmative action is the latest grist for the mill of a growing insidious American pastime. Hating each other. The answer isn't which people, but more people. The right has lost the American script,

which is investing in youth whose best days are ahead of them. And the left wants to be wokesters versus warriors attacking the real enemy. We're missing the forest for the anger. The answer is more. Life is so rich. What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average U.S. company deploys more than 100 apps,

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