The Prof G Pod with Scott Galloway - Office Hours: Are Fitness Brands the New Religion? The Tyranny of OPEC, and Fighting the Cost of Higher Ed

Episode Date: October 19, 2022

Scott answers a question about the power of luxury fitness brands to build community amongst an increasingly secular society. He then shares his thoughts on the corruption of OPEC and finishes with a passionate rant about lowering the cost of college. Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today.

Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Support for PropG comes from NerdWallet. Starting your slash learn more to 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. Welcome to the PropG Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehoursatpropgmedia.com. Again, that's officehoursatppertymedia.com. First question. Hey, Scott. Andrew here from Pittsburgh, Pennsylvania. I read an article back in 2018 from Vox that really stuck with me. The article included an interview with the authors of a Harvard study called How We Gather. The study looks to explore ways modern millennials seek out meaning in a society that seems to be pulling further and further away from organized religion. The article centered around the quasi-religious role that

fitness classes such as SoulCycle, F45, and Orange Theory are playing among wealthy, urban, millennial demographics. It does seem to me that although expensive, these classes offer a more tactile form of community and transformation through suffering than traditional churches can. I haven't heard you comment much on these brands, so two quick questions. Number one, where do you rank these luxury fitness classes in terms of brand strength? Are they here to stay forever or just a reaction to a pandemic that left us all feeling isolated? And two, if these fitness classes are the new church, what new forms of togetherness will replace church for less wealthy demographics who cannot afford these options? Thanks so much. Andrew from Pittsburgh, that's a really thoughtful question. So I really buy into your thesis.

So as a society becomes wealthier and more educated, its reliance on a super being and church attendance declines. But we still have a need for community. We still have a need for answers. And into that have slipped new forms of community. I would argue that the Peloton brand still has a lot of opportunity because it has such a rabid community. I would argue that the Peloton brand still has a lot of opportunity because it has such a rabid community. Its NPS scores are greater than Netflix or Apple. And we are happiest as a species when we are in movement or in motion surrounded by others. The things you're going to remember when you're older or walking around with your kids around Rome, you're going to remember if you get the chance to play sports, one of those rare

moments where you kind of scored a goal or points as the clock wound down. Those are the moments that really resonate with you. And fitness, the idea of fitness being this new form of church, being around a bunch of other people, kind of doing something in the agency of something bigger that is health or fitness and doing it with each other. I think it's really wonderful. And there's been some amazing brands, as you referenced. SoulCycle is one of them. Orange Theory.

And you left out what I think is arguably one of the best brands in the fitness space, and that is Equinox. And I think part of the reason Equinox has been so successful is that it appeals kind of the top 10% who have just continued to kill it. So I think the trend is right on. Now, to your point, what do the bottom 90% do that can't afford to spend $240 a month, which is what I think Equinox charges? I think this is a big issue. And there was a great article on quote-unquote third spaces, and that is new places for people to establish community,

new places to meet strangers, to come and be friendly to each other, to establish friendships. There used to be community centers when I grew up. Remember senior centers? I think we need to invest more in community centers. When I was in high school, I went from junior high, I played sports my whole life, to high school. And I went to a high school that was huge. In the 11th grade, I grew about six inches with no accompanying weight gain. So I was basically 5'10", 120 pounds, which didn't make for a great football player. But I went to Westwood Park and Westwood Park was well-funded with property taxes. And they had all sorts of leagues and any kid from the neighborhood, any kid from anywhere could show up. And for a reasonable amount of money, I think it was like

28 bucks. And I remember once my mom calling the community park director and probably communicating that we didn't have much money and they always figured it out. They were always good to us. And I played in all of these leagues in high school, even though high school sports, I wasn't, at least in my 11th grade, I wasn't skilled enough to play competitive high school sports at a huge public high school in Los Angeles. So I think we need a fairly significant investment in community centers. I think we need a bigger investment in afterschool sports and afterschool activities. When I went to my old high school university charter school, I got pitched on giving money for afterschool activities because of funding cuts. They don't have things like band, everything from chess club. But the opportunity to get young people together,

I think, is enormously important. We are separating. And it's, I think, one of the biggest threats to America right now. And that is we're not developing empathy. We're not meeting friends. We're not meeting mentors. We're not meeting mates. Because 50% or the number of high schoolers that see their friends every day has been cut in half in the last 10 years. People don't talk to their neighbors as much. People aren't joining the Boy Scouts or the Girl Scouts. So we need to find reasons to create more connective tissue and more contact. We are a social species.

What do I also think we need? I think we need some sort of mandatory social service or national service for people after high school. One, young men need to redshirt before they go to college. Most of them, or most of us, I should say, are too immature. When I showed up at UCLA at the age of 17, I just started abusing alcohol, ended up in the emergency room once, and was just generally a fuck-up that wasn't ready for UCLA. Now I got through, and it was a wonderful experience, but I think I could have used another year of marinating. So I'd like national service to get people from different income groups, different demographics, different backgrounds, doesn't matter what your politics are, working in the agency of something bigger than themselves, similar to what they do in Israel and some countries in Northern Europe, much more investment in community centers that give young and old an opportunity to get together. And I think we need

a massive change in our mentality. Let's stop being so coarse to each other. Let's take down the temperature and let's figure out that as humans, we are mammals and we love and appreciate one another and we should do our best to interact more so with one another. I'd like to see this institutionalized on a national scale. That was a word salad. Thank you for the question, Andrew from Pittsburgh. Question number two. Hi, Scott. This is Justin from Des Moines, Iowa. First of all, I want to express my gratitude to you, your content, your insights. I've been following you since you were posting YouTube videos for L2. I genuinely believe that you're a good example, maybe despite yourself, of masculinity, of a capitalist, of a wise, funny, savage man, and a progressive. So, again, thank you.

I have a market question. So the U.S. dollar and oil commodity prices tend to be inversely correlated, where a stronger U.S. dollar buys more oil. Given the strengthening dollar as a result of increased inflation and a more aggressive OPEC plus price fixing of oil, what do you think breaks first? What are the cascading effects or any other negative externalities that you might speculate on. Again, thank you for receiving my question. I hope to hear from you. So first off, Justin from Des Moines, you saying you're from Des Moines, Iowa, just makes me believe that you're probably this good guy. Iowa and Des Moines are just great brands. If you say you're from New York, if you're say from LA,

it has a set of associations. When you say you're from Des Moines, Iowa, everybody thinks, oh, this must be a nice guy who has kind of, is it Midwest? I don't know if it's considered Midwest roots. Anyways, good for you. Also, thank you for the generous words. You're much more secure than I am. I thought that complimenting people was a zero-sum game. That if I demonstrated recognition or admiration for another male, that somehow that made me less masculine

or less strong. So you're much more secure with your own masculinity than I was at your age. And also, you shouldn't believe that people know you admire them. You need to express it. You might think,

oh, this person doesn't need recognition or won't appreciate it because they get it elsewhere. Doesn't matter. You love hearing it. So thank you. It made me feel nice to hear those words. And I just appreciate you articulating them.

OK, so the dollar, back to your question, the dollar is up 17% year to date against a basket of currencies. That might not sound like a lot, but it is an absolute tectonic shift in the global market. Since June, oil prices have fallen more than 30% from $120 a barrel to around $80 a barrel. They have peaked or spiked up a little bit, but still, they're well off their highs for the year. Three things that could still raise the cost of oil. OPEC is cutting oil production by 2 million barrels a day beginning in November. The most corrupt cartel is the cartel, and that is OPEC. Read a list.

Read the list of OPEC nations, and it reads like a most wanted list in terms of denying women basic rights, of human rights valuations, and generally just mendacious fuckery around the world who would be irrelevant and wouldn't be able to impose their will around the world if they weren't sitting on top of massive natural resources. I should also point out that America is blessed with extraordinary natural resources. So a lot of our prosperity is also not our fault. Anyway, I would like to see oil prices come down. I believe that in addition to what I would like to see, I believe that you're going to see a massive decline in inflation in the United States. And some of that is probably a bias as I would like to see Biden reelected. And I just don't think there's any getting around it. I believe Biden should be reelected based on his handling of Ukraine. I think that this will go down as one of the most seminal moments of this century. And that is we are staring down autocracy.

And I think it's going to come out that the EU, NATO, and the US played a much bigger role in the heroic efforts of the Ukrainian army's ability to turn back a ferocious army that was much better resourced, much bigger. I think it's impossible to underestimate what an important moment this is for us, basically turning back an autocrat and refusing to kowtow to somebody who has benefited from the impression that he's a madman armed with nuclear weapons. I think this is a big moment, and we're going to find out we played a bigger role. Having said that, the election likely hinges on one thing, the economy. And people's perception of the economy comes down to one thing, inflation. Simply put, they're purchasing power and their quality of life. So if inflation comes down, I think Biden gets elected. If it accelerates

him here, he's probably not going to get reelected. So I would like to see inflation come down. And I think there's some signals that it is going to come down. One, we have the ungunking, if you will, or the unmucking of the supply chain globally. We have historically unprecedented strength in the dollar. I think energy prices come down. The wonderful thing about cartels is they usually don't work effectively over the long run. The temptation to cheat is too great. And we'll find alternative sources of energy. I think we should be drilling like there's no fucking tomorrow here in America and then taxing the shit out of it and creating EV charging stations and EV subsidies such over the medium and the long term, we can move off of fossil fuels. Thank you so much for the question and the kind words. We have one quick break before our final question.

Stay with us. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories,

and how do they find their next great idea. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. 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. Welcome back, question number three. Hey, Scott, this is Andrew Collin from New Jersey.

My question is about the rising cost of education and what I'll call the education luxury complex. You've spoken a lot about the rising cost of education and the dangers it presents to education luxury complex. You've spoken a lot about the rising cost of education and the dangers it presents to our society, which I agree with 100%. You've even name-checked NYU Stern, where you teach, as an example of this. On the other hand, you've also spoken on this podcast occasionally about doing a market check for your value as a professor, which garners you a higher salary, which no doubt NYU is smart to give you. So my question is, how can you use the influence and resources that you've gained to help protect

others by fighting the rising cost of education? Andrew from New Jersey. I realize it sounds offensive and it's also virtue signaling, but I have given my compensation back for the last decade or probably longer. One, because I'm privileged and in a position to do that. And two, because it seems sort of hypocritical for me to bite the hand that feeds me. So now I bite the hand that doesn't feed me. I love teaching and I do get a lot of non-economic or soft economic benefit from NYU as a platform. I think people take me more seriously. It's tremendously guiding for me. I have wonderful friends there. And it also imposes a certain discipline on me.

I do the team here at Prop G. We just collect more data than I think your average bear, if you will, a podcaster. And we do fact check a lot. We do miss stuff all the time. But I would argue we probably take this a little bit more seriously than most podcasters because I'm affiliated with NYU and I want to live up to the academic standards of peer-reviewed research, although our research is not peer-reviewed anyways. You get the point. So for a lot of colleges, a lot of families, it's not even about economic affordability, which is a challenge. It's just

accessibility. So what can we do to bring costs down? What can we do to bring costs down? A third or half of our sessions, not our classes, you still need interaction. There are some classes where you want to have the buzz and electricity of all being together in a Greek-style theater or Greek-style classroom, but probably safely, conservatively, a third of those sessions could be taken online. Ones that are more lecture-based and Socratic, one where there's little interaction. What does that do? That technically increases the supply or the capacity of the university by 50%. And people will say, administrators will say, yes, but Scott, what about the leadership? And what about the socialization? Guess what? 19-year-olds are

really good at scaling that on their own. We need to scale access. So what would that get you? You need to get much more efficient with your administrative investment because what do we do at universities? We create departments on leadership and ethics. We love departments with no measurable outcome. And by the way, I don't think I can get my 15-year-old at this point to be more ethical, but I'm going to take a 27-year-old first-year MBA and somehow figure out a way for them to be more ethical. What extraordinary bullshit. But here's the thing that's great about these departments. We hire these formally important people. We pay them

really good salaries with amazing benefits, and there's no measurable outcome. So guess what? These departments never go away. We have diversity and inclusion departments in almost every major university right now. And let's be honest, you need more resources. As you bring in people to college from different backgrounds who may not have had family members go to college, you need additional resources to ensure they graduate. But most of these diversity and inclusion departments are nothing but massive woke signaling and virtue signaling. You know what would help diversity? Bringing down the cost of education and these administrative jobs that we create never go away. And they're expensive. Administrative bloat needs to go away.

We will pay for technology to increase scale. We can scale Google 23% a year, but we can't scale public universities more than 0.4% a year, which is how fast they've been growing. Bullshit. We can grow them much faster with deft use of technology and accountability. And also, what are you going to do with some of that money? You're going to start offering vocational certification, one and two-year degrees in specialty construction, in plumbing, in installation of solar panels, in repair of energy-efficient HVAC, in repair of electric vehicles, in healthcare technology maintenance.

These are good jobs. What do you think the demand is for a graduate of a joint program between the University of California, Berkeley, and UCLA, I'mclass economy are. They're enormous. They're enormous. But instead, we have to shove everyone through this traditional four-year liberal arts degree because we've decided that our arrogance and self-aggrandizement should outweigh every signal we're getting from the marketplace around what is needed for the middle class and what is needed for this economy. We need to stop fetishizing elite universities in this traditional four-year liberal arts degree. We need to tell parents it's okay if your kid gets a one- or two-year certification. We also need to dispel the notion that kids don't need college. No, more kids need college, or they at least need access to college. It's a great plan B. The guy

right now ranting and dropping F-bombs can do this because he's unafraid because of economic security. How is he economically secure? The generosity and vision of California taxpayers and the regents of the University of California. Because it was not only affordable, it cost $1,000 a year to attend the University of California, Los Angeles, the greatest public institution in the history of mankind. Maybe a toss-up with where I went to graduate school, the University of California, Berkeley, but it was accessible, C above, 76%. America's job and university's job isn't to identify the top 1% by income earning household or freakishly remarkable achievements. Most of us don't peak at the age of 17. The idea is to identify opportunities we can give to the bottom 99%. America follows the lead of our universities, and this bullshit caste system enforced by me and

my colleagues has to stop. We're not fucking luxury brands. We're public servants. Let's start acting like it. We need to fall back in love with the unremarkables. Oh my God, I could faint. That was such a rant. Andrew from New fall back in love with the unremarkables. Oh my God, I could faint. That was such a rant. Andrew from New Jersey, thank you for the question and I apologize for the screaming. That's all for this episode. Again, if you'd like to submit a question, please email a voice recording to officehoursatpropgmedia.com. Thank you. Gpod from the Vox Media Podcast Network. We will catch you next week. 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,

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. 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 clavio turns your customer data into real-time connections across ai powered email sms and more making every moment count over 100,000 brands trust clavio'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.