The DOJ's Case Against Google

Roger McNamee joins Scott to break down the US Department of Justice's antitrust lawsuit against Google and how monopolies stifle innovation. They also discuss the sharing economy, how the social platforms tear at our society, and the remedies that can be put in place moving forward. Roger is an activist, investor, and musician. Follow him on Twitter, @Moonalice. This week's Office Hours: stocks Scott has his eye on, industries Zoom could enter into, and thoughts on Bitcoin. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Scott Galloway?

  Episode 32, "The Freezing Point of Water is 32 Degrees Fahrenheit." When I was 32, I started my first and last firm that would ever go public on the NASDAQ, the number of completed numbered piano sonatas by Ludwig von Beethoven. Let's Ludwig von bitch this podcast. Go, go, go!

• 0:29Scott Galloway?

  Welcome to the 32nd episode of the Prov G Show. In today's episode, we speak with Roger McNamee, an American businessman, investor, venture capitalist, and founding partner of the venture capital firm Elevation Partners. He's also the author of Zucked: Waking Up to the Facebook Catastrophe. We discuss the big news around the DOJ suing Google for violating antitrust laws, how the social platforms destroy democracy, and what remedies can be put in place moving forward. We also get into the sharing economy and why Roger is hopeful for the next generation of innovators. Instead of reviewing the news, I think Roger cuts a lot of it down or distills a lot of it down in its relevance, so let's bust right to Roger.

• 1:15Scott Galloway?

  Roger, where does this pod find you?

• 1:17Speaker 01

  I'm in California, where it is still fire season, but we are enjoying a lovely early autumn day today.

• 1:26Scott Galloway?

  Nice, good to hear it. So the big news today, today, we have the DOJ suing Google for violating antitrust laws. So give us a sense of the action today and provide us with some context.

• 1:40Speaker 01

  So the Department of Justice has been pursuing Google in several ways for several years. And today, the announcement is that they're going to sue Google with respect to search and to the monetization of search. And the documents for the case.

• 2:02Speaker 01

  Reveal relatively little that is new, but describe patterns of behavior that have been around us for so long that few people question the legitimacy of Google's business practices. And the country is undergoing a reappraisal of economic policy, specifically with respect to the concentration of economic power and whether we should revive antitrust law to try to restore competition in the hope that it will also be something that helps democracy.

• 2:39Scott Galloway?

  My understanding of antitrust law is it's not in and of itself illegal to be a monopoly. It's illegal to abuse your monopoly power. Tell us how Google abuses their monopoly power.

• 2:52Speaker 01

  So if we think about economic policy broadly defined, there was a time when monopoly itself was considered to be un-American. In fact, that really goes back to the founding of the country, that one of the things that the early Americans associated with monarchy was monopoly. And the choice to focus on capitalism as defined by Adam Smith in 1776 was that it was inherently pro-democracy, that lots and lots of small businesses competing

• 3:33Speaker 01

  with each other, highly distributed economic power would be something that would help to further the American dream. Today, we are 40 years into a period of time when a different philosophy has prevailed, when essentially the notion was put forward by Robert Bork and others in the 70s, that concentration of economic power was not a problem so long as consumers didn't suffer higher prices.

• 4:04Scott Galloway?

  Mm-hmm.

• 4:05Speaker 01

  That led to the extraordinary economic growth that occurred from 1980 to 2000 and to the extraordinary concentration of wealth that has taken place since 2000. And we're at a point now where prosperity is so unevenly experienced within the economy that

• 4:30Speaker 01

  The vast majority of the population doesn't benefit from long economic periods of economic growth. Mm hmm. So if you're Google, this has been a perfect situation. The company gets started in the days immediately before nine eleven. It enjoys after nine eleven, the support of the government to build this civilian surveillance system. It builds what Shoshana Zuboff describes as surveillance capitalism. This notion that you gather all the known data about the people who use your product. You use that initially to predict their behavior. You then sell those predictions to advertisers. You build an extraordinary business around that.

• 5:13Speaker 01

  You then create parallel and ancillary products that leverage the data that address different parts of the human experience. And you gradually increase the efficiency of the economy, capturing most of the economic gains for yourself by using algorithms to standardize human behavior. If you think about it, it's the sort of thing that only works if you have something that approaches monopoly scale. And in Google's case, you can see that in the case of this DOJ case relative to search. But the same thing is true in browsers. The same thing is true in maps.

• 5:52Speaker 01

  Same thing is true in video and especially in the infrastructure that supports the online advertising economy. And so I think as as the users of internet products, we've all become accustomed to the notion that Google dominates in search. They dominate in browsers. They dominated video. They dominated maps. There are alternatives, but in many ways it's hard to get at them. It requires an ordinary personality, which, by the way, I bring to this particular party because I have for the last three years made. Avoiding Google into a life of work.

• 6:36Speaker 01

  And I treat it like a video game where you may remember Frogger, where you had to get across a river by hopping it from log to log. And I treat this whole experience like Frogger. And I'm trying to, the other logs, the logs going by are the products you use instead of Google. Google's the river and you're trying to avoid falling into the river. It turns out to be incredibly difficult. And it took a year before I had weaned myself from everything but YouTube. And as somebody who is a musician, as well as what I do in the daytime, I can't avoid YouTube because that's where all the music is.

• 7:12Scott Galloway?

  So the economic, the economic harm of a monopoly seems pretty straightforward, right? Small companies can't get out of the crib. Big companies are prematurely euthanized. You've spoken about some of the harm.

• 7:26Speaker 01

  Innovation suffers, right? I mean, from a consumer perspective, you have fewer choices.

• 7:31Scott Galloway?

  Yep, yep. And we don't, we don't miss what we don't have, right? We are with it, we don't know what we're missing, so to speak. You've talked about some of the other harms, though, in that much more broader, even more frightening harms. What are, what are some of those? Speak to the, speak to how Google and monopoly power is undermining our democracy and tearing at our fabric of our society.

• 7:52Speaker 01

  When I think about how internet platforms went wrong, monopoly underlies all of it because with market power comes the ability to control other things. But there are privacy issues that have been raised and safety issues. And if we're thinking about democracy, if we're thinking about public health, the safety issues of internet platforms are what drive that. It is this notion that in order to build an advertising-based business, they have found ways to both grab our attention and hold it. And they play on the weakest elements of human psychology.

• 8:32Speaker 01

  Core to that is this idea that they will use their algorithms to promote content that is most likely to engage us emotionally.

• 8:42Scott Galloway?

  Right.

• 8:43Speaker 01

  If you want to do that, you want to appeal to fear and you want to appeal to outrage because those are essentially the triggers of flight or fight, which is our survival instinct. Now, what content does that? Hate speech, disinformation and conspiracy theory.

• 9:01Speaker 01

  And so the algorithms wind up promoting that kind of content and giving excessive power, both political power and other power, to the most extreme voices on their platforms. They've essentially made their information spaces a contest between facts and opinion. And they've given opinions a massive advantage. And so it should be no surprise that that's undermined journalism. A situation that was made worse by Google and Facebook and Twitter inserting themselves

• 9:40Speaker 01

  between publishers and their audience and then using their ad tools to essentially siphon the economics away. But then you've seen directly in the case of politics, the algorithms amplifying disinformation in ways that have caused our politics to be no longer a battle of value systems against a shared set of facts, but rather a battle of essentially completely different realities. And there is no opportunity for compromise, no opportunity for constructive engagement. Now overlay the pandemic. Here, disinformation about COVID,

• 10:24Speaker 01

  conspiracy theories about vaccines have been layered on top of the disinformation related to the election to create a catastrophe so that our public health response to COVID was undermined by the exact same tools that had been undermining our democratic processes for the last four years. And that perfect storm took place in plain sight. And I think that that is going to remain the world we live in until policymakers implement through the law and through regulation requirements that they behave differently.

• 11:09Scott Galloway?

  Let's be hopeful, and I've had my heart broken before, and I think you have too, that we're going to make some progress. They're going to be found guilty, or they're going to, the courts are going to say, "All right, Google. All right, Facebook. There's a problem here." Let's move to the remedy side. What do you think are the most, what technologies? What, is it rewriting our antitrust laws? Is it breaking them up? Is it new regulation? Is it a perp walk? What are the remedies here?

• 11:34Speaker 01

  Yes, Scott. So like you, my heart's been broken more times than I care to count.

• 11:39Scott Galloway?

  Yeah.

• 11:40Speaker 01

  I believe that we need to have a regulatory program with three distinct elements: antitrust, privacy, and safety. Antitrust is a structural remedy. It's super important. I really believe that the country loses out in terms of innovation, in terms of consumer choice, in terms of many different value things, because our tech industry, in fact, our whole economy, is far too concentrated. It's more concentrated than it's been at any time in a century.

• 12:15Scott Galloway?

  Mm-hmm.

• 12:16Speaker 01

  So we definitely need to do that, and I'll come back to that in a moment. But I want to touch on the other two first, so we have context. The privacy issues are also super important, because at the heart, Google, Facebook, and increasingly, Amazon are in the surveillance business. And the basic, accepted notion is that any corporation that touches a piece of data can claim that piece of data as an asset and do with it as they wish. And this has given rise to what Shoshana Zuboff calls surveillance capitalism, where everything that is known about us, every time we travel, every time we use a financial

• 12:57Speaker 01

  instrument or a credit card, any time we get a medical test, or use an app, or travel around the web, or just every location we're in with our phone, all that data winds up in a marketplace. And when it is combined with the the data that people like Google and Facebook have, it creates what Tristan Harris calls a data voodoo doll. It's our whole lives in digital form. Zuboff believes, and I agree, that that data voodoo doll is simply a digital body part. And as such, we should view it as a human right, not an asset. You're not allowed to trade, you're not allowed to sell a kidney.

• 13:43Speaker 01

  Why should you be allowed to sell your personal data? And especially, why should anybody be able to just take it, claim ownership of it, and use it without your permission? Right? So we need to have a very serious debate and much better stuff going on there. The safety piece is the one that gets the least discussion in many ways is the one that has the most potential for remedying harm already done. Silicon Valley operates with this notion of the minimum viable product. This idea that you create something new, you ship it into the marketplace and then test it. See how it goes, make changes, put it back out, test again, make more changes.

• 14:27Speaker 01

  The explicit assumption is that quality assurance is the job of the people who use the product. That any harm experienced by those people or by other people who don't use the product but are affected by it, that that is not the responsibility of the company creating the harm. If you think about it, this is the only sector of engineering that I can think of, where the engineers are not accountable for harm they do. In the building trades, the architect, the builder, the subcontractors are all responsible for their work. In fact, they're personally responsible for it. In the medical field, if you make a pharmaceutical,

• 15:11Speaker 01

  you have to demonstrate safety before you're even allowed to ship the product. And if you have a problem after that, you're accountable for it. Chemical industry, at one time, it was okay for the chemical industry to pour waste wherever it was convenient. So they would pour mercury into fresh water or spew toxic fumes into the atmosphere. The country said, you know what? That's not going to work. It now has a set of rules, both to prevent future harm and to remediate harm already been done. And I think the intersection of those three things is the framework that needs to be applied to tech. That it's okay to ship a minimal product, but you have to take responsibility for any harm that ensues. And it has to be at the individual engineer level

• 15:55Speaker 01

  because you have to change incentives and behavior. So the notion is, if suddenly your AI product exhibits bias and that deprives somebody of a job and that somebody sues, you're one of the people on the hook for that. That's going to cause you, as an engineer, to be a lot more careful. Now, they're going to push back and say, oh, but that's going to slow everything down. I'm going, yeah, it is going to slow everything down, but in a way that serves the interests of humanity. And there's more to the safety thing than that. You know, we have Section 230 of the Communications Decency Act that is a safe harbor for internet platforms that has been abused horribly. The First Amendment has been abused horribly.

• 16:37Speaker 01

  And we need to change incentives by clarifying that the people in this industry have some duty of care. They must take responsibility for what they do. And there have to be economic disincentives for doing harm. Now, if you do that in combination with privacy regulation and antitrust.

• 17:01Speaker 01

  Then you can accomplish two things. The first is to mitigate past bad behavior and limit future bad behavior by the existing players by changing their business model and changing their incentives. But every bit is important. You can encourage new generations of technology companies with new business models. I'm incredibly excited by that, that the level of monopolization that the industry has experienced over the last decade has meant that every new company has to operate with more or less the same value system because their end goal is to get acquired. Right.

• 17:44Speaker 01

  And so you see predatory business models everywhere. I mean, it's insane. I mean, you expect it with Robin Hood on Wall Street, right? But Uber and Lyft and DoorDash are so predatory to the people who drive their product. It's exploitation economy. Right? Spotify towards the musicians. Everything is exploitative. And, you know, in the old days, most of my career, most of your career, technology was about empowering the people who used it. And I want us to get back to that. And I think that's, you know, this notion of distributed identity where people have control and where they actually get to have sanctuaries in their life where people are not looking at them. That, that will be a very exciting world.

• 18:25Speaker 01

  And I think it will be, as we try to rebuild our democracy, rebuilding our economy around lots and lots of smaller business opportunities. You know, in the model I envision, there may not be a new Google or a new Facebook thing, but there will be thousands and thousands of really successful companies and they'll be all over the place, right? They don't have to be in one small geographic area anymore. So to me, what I want to accomplish with antitrust is two things. I want to use it to encourage competition, to essentially create protected spaces.

• 19:05Speaker 01

  Where startups can try things that you couldn't try in a world dominated by a handful of giants. And then I want to make sure that the handful of giants have a need to not just change their business model, but to change their business practices. So that they cannot do what the local telcos that were spun off from AT&T wound up doing and reconsolidate. The breaking up of these companies is the last step. But before you do that, you have to make sure that good housekeeping ideas, like if you operate a marketplace, you may not also participate in it. So Amazon can't sell its own products in its own marketplace.

• 19:49Scott Galloway?

  It's regulation and additional antitrust.

• 19:51Speaker 01

  Right. And Google and Facebook cannot favor their own products in their.

• 19:56Scott Galloway?

  Yeah. Apple, Apple TV Plus, Apple Music, yeah.

• 20:00Speaker 01

  Exactly. So there are all of those things in there. Those are all good housekeeping rules. And, you know, this is the place where Apple gets brought into the same conversation because they clearly have been less attentive to those issues than they should have been. But the antitrust issues that Apple faces are materially less significant to their business than they are to the other three. And they are less of a threat to the economy than the other three. But nonetheless, Apple's got real issues and as far as I can tell, is going to be forced to adjust its business pretty substantially. And anyway, when you've done all these other things, when you've reintroduced competition,

• 20:41Speaker 01

  when you have eliminated the ability of monopolists to essentially buy or create new things and pass along the benefits of monopoly to those things. When you've done all those things, then you break them up. And you, at that point, have a much more diverse economy. And I think that's going to unleash a period of growth and innovation that will exceed anything we've ever seen before.

• 21:09Scott Galloway?

  Yeah, so we're, I mean, we're brothers from another mother around this stuff. Some of the, some of the stuff around cadence and order. I wonder, well, let me, a couple of things. One, the idea, I like the idea of holding, figuring out a mechanism for attributing specific actions to an individual. I wonder what that would mean, though, in terms of general corporate law, because even the, you know, the guy or the gal that came up with Joe Camel, they said, all right, it's a corporation, the company can be sued, the company can be fined, but we protect the employees. They have this thing called a corporate shield that I think has served probably more good than bad. I think there should be an ability to pierce that shield for the officers, you know, the

• 21:52Scott Galloway?

  CEO and his or her direct reports, such that they think twice before the slow roll and knowing, you know, some of the emails we've seen from Mark Zuckerberg and Discovery have shown that, you know, they're not, they're just at a minimum, they're not very earnest about the steps they've been taking, and also that they recognize the harm they've been doing. And also, my sense is a lot of what we're talking about, and tell me where I got this wrong, we would get to with severe antitrust, like taking these companies, they just wouldn't have the power to do the harm they do, because when faced with more competition, their end advertiser would have the luxury of selecting different options based on good and bad

• 22:34Scott Galloway?

  behaviors, that we would get a lot of that better behavior with just more competition. Am I being too simplistic about just, we should just bust to the breakup, take these four firms? And by the way, I think we could do this across Big Pharma, Big Ag, this same virus that's infected us around the curse of bigness, as Professor Tim Wu calls it, I think it's infected a ton of industries, it's just this is the one that gets the most attention because it does the most harm, but why wouldn't we just bust a move to antitrust and see where that gets us?

• 23:01Speaker 01

  So Scott, I think you are right about antitrust relative to the economy as a whole. And I began with precisely the same view of how to solve things that you just presented. In the past couple of years, I started to ask questions about the nature of human rights relative to privacy and related to the harms from the business model.

• 23:33Speaker 01

  And frankly, from the culture of tech that could not really be addressed through antitrust law. And, you know, I think it's possible that antitrust law done aggressively enough will in fact take care of everything. But the culture of Silicon Valley right now encourages entrepreneurs to create predatory business models and to cut corners everywhere. I mean, think about Uber and Lyft or Airbnb. Their starting premise was that the law did not apply to them. And if you think about Robin Hood,

• 24:15Speaker 01

  if we still lived in a world where brokers had a fiduciary responsibility to their client, could Robin Hood exist? Because if you think about it, you know, gamifying options trading

• 24:30Speaker 01

  is a strategy with predictable harm. And in a world where you're forced to be a fiduciary, that wouldn't arise, but we've long since gotten away from that. And I think what you're describing and what I'm describing is essentially, we ran an experiment for 40 years of deregulating everything and trusting the market to allocate resources. What we forgot in that decision is that for capitalism to thrive, it needs to have some organization that sets and enforces rules. And traditionally, at least in our capitalism, that has been the role of government.

• 25:13Speaker 01

  It sets the rules and enforces them fairly. And by deregulating and defunding the government's role in the economy steadily for 40 years, we have produced what might well have been a predictable outcome, which is massive concentration of economic power where consumers have few, if any, rights. And the country is going through a period of self-assessment right now. I mean, we've, you know, we've got a pandemic. We have an economic collapse that's driven by that. And then we have the murder of George Floyd, which is causing us to reflect on our racist past and our racist present.

• 25:55Speaker 01

  So these things are causing us to ask, what are our priorities? My sense, I spent a lot of time in Washington, is that the people in Washington really believe that we have to repair democracy first. That means voting rights. It means getting the census right. But it means something more than that. It also means restoring a world where we have one set of facts and politics is about bringing different value systems to bear against that common set of facts. And if we're going to do that, I mean, if we want to make any progress on any substantive issue, whether it's climate change, gun violence, public health, doesn't make any difference

• 26:40Speaker 01

  what the issue is. You have to do something about internet platforms. I don't see any way for antitrust law to pull that off. That requires you to think through the incentives of the industry and to think through some business practices that are unique to this industry. The surveillance piece, which they're now spreading to other industries, but began here. And then also this issue of whether you have an obligation to respect the right of self-determination of the people who use your product, because that is conspicuously lacking here.

• 27:20Speaker 01

  And again, I would argue that engineers in every other field are accountable when their products fail.

• 27:28Scott Galloway?

  You always open my eyes and stuff whenever I speak to you. And I, you touched on a couple of things I want to talk about. One, I'd love to know if you think just 230 should be removed or if it should be updated. And I also want to talk a little bit about Uber versus Airbnb, because I don't see the two as analogous. So let's start there. 230, removed or updated?

• 27:45Speaker 01

  So I would like to update. I think it is core to any kind of safety regulation that you have to make the safe harbor conditional on good faith and determined efforts to protect the safety and the self-determination of not just the people who use your products, but anyone who's affected by them, which is essentially common to any other industry. It just happens 230 provides a safe harbor here that has been interpreted very, very broadly.

• 28:22Scott Galloway?

  Airbnb versus Uber. I see Airbnb or I see Uber, and this is part of, we started with this, what I'll call manufacturing-based economy, then service economy. We went to an innovation economy, unlocked from manufactured and service products with the introduction of digital, to unfortunately, an exploitation economy. We exploit or arbitrage our rage. We exploit or arbitrage this permanent underclass of four and a half million driver partners. I do see Airbnb as different. I see them as, you know, they say the share economy is about arbitraging fallow assets. Uber's not arbitraging cars. It's arbitraging four and a half million people who are desperate for flexibility because they don't have access to the same opportunities as, as other people. And I see Airbnb as in fact arbitraging apartments,

• 29:07Scott Galloway?

  and that the hosts actually make a better living than the drivers. You see the two as analogous?

• 29:13Speaker 01

  I see aspects of them as being identical and other aspects being very different. So they both started with the premise that the existing laws did not apply to them. And they would ask forgiveness rather than beg permission.

• 29:28Scott Galloway?

  So not pay taxes, not pay hotel taxes, skirt laws imposed, you can stay, you're not supposed to stay longer than seven nights. They would just ignore that without getting a hotel license, just kind of flout local civic regulations?

• 29:42Speaker 01

  Well, and not just that. They've flouted civil rights regulations. I mean, you know, there are really serious issues of racial bias in Airbnb. At least that is my understanding. But let's move on to the other piece of this, right? Which is that Airbnb created, as Uber did, an illusion in the minds of participants about what the real economic model was. And the result is that there were more than a few people who invested in real estate to participate in that arbitrage you're describing.

• 30:22Scott Galloway?

  Yeah.

• 30:23Speaker 01

  So they would buy a condo or an apartment and use it as an Airbnb place, arbitraging between the daily rate, if you will, and the ownership rate. And that that had a very, very negative impact on real estate prices, therefore housing prices in

• 30:46Speaker 01

  Many of the most important cities in our country.

• 30:49Scott Galloway?

  Well, it's a transfer of wealth from residents or renters to travelers, right? Travelers have more options at a lower price, better value, can rent a two bedroom in a great part of Manhattan or in Honolulu. And but the apartment owners in Honolulu see their rents go up because Jane, who had one Airbnb, found it was a great arbitrage and rented six apartments solely and turned them into Airbnbs, right?

• 31:17Speaker 01

  Right.

• 31:17Scott Galloway?

  Isn't some of that accomplished with, shouldn't it be accomplished with taxation or just higher minimum wage? In the case of Uber, minimum wage, that's not while you're working for us, but a certain number of hours, much higher minimum wage. And with Airbnb saying, we are, we have a housing problem, we have a housing stock problem, so we need you to pay those hotel taxes. It does feel like regulation.

• 31:41Speaker 01

  Oh, for sure.

• 31:42Scott Galloway?

  I think Uber is just broken and I don't, I don't know how you, it seems to me the entire business model is preying on, there's 20,000 people at headquarters, four and a half million driver partners who are desperate for flexible work, desperate to make some money and are almost willing to kind of use their car as a payday loan. And it always ends up badly for them, whereas Airbnb does feel to me like there's a, there's a pony in there somewhere.

• 32:07Speaker 01

  Yeah, let me, let me agree with that. I mean, I believe that there could be a really, really interesting business in ride sharing. The argument that I made to Emile Michael, the one time I met him many years ago, was that I thought that Uber needed to either own the cars or employ the drivers, or it had no.

• 32:34Scott Galloway?

  Vertical, yeah.

• 32:35Speaker 01

  And that the, the big flaw in this whole thing was that it's been a transfer of wealth from investors and drivers to the passengers. And that the company has not been intellectually honest, either, certainly not with the outside world, and I'd say probably not with itself, about the viability of the strategies it's been implementing. You know, they're spending what, $250 million to get Proposition 22 passed in California, which essentially locks into the law.

• 33:10Speaker 01

  A sharecropping class. The issue that's involved here, I mean, the timing of it is perfect because the country really is asking questions about what kind of a society do we want to live in? And the thing I take great hope from is that people are waiting in line five, seven, nine, 10 hours to vote. You see a level of engagement in our democracy that is unlike anything that you and I have seen since we were kids. Agreed. And from that, I take great hope. And, you know, we've had a 40-year period where capital has had the every possible break.

• 33:54Speaker 01

  And if we spent the next 40 years where consumers, you know, citizens and people who live here got every single break, that would be justice. And if I could wave a magic wand, it would be to get everybody to read either Jill Lepore's History of the United States or any one of half a dozen others that give you the context for why the present moment is so out of bounds relative to our culture. And the United States has always lived around a mythology and we've always been way too focused

• 34:35Speaker 01

  on, you know, things that weren't real, you know, these imagined virtues of the country. And every once in a while, we're forced to look at ourselves in the raw. And we're having one of those moments now. And when you're in that position, the point is not to talk about how bad we are, but rather to talk about what the opportunity is and how many good things we could do together. What are the things that we have in common? What are the things that we could create if we cooperated instead of fought with each other? And I find it ironic that the most extreme voices in the Republican Party are always harkening back to the

• 35:18Speaker 01

  Fifties as some idyllic period. And I look at that and I go, wow, that was the period when Americans believes in collective action. We had very high tax rates and we invested a ton of money in public.

• 35:30Scott Galloway?

  Corporate tax rates were seventy percent or taxes on millionaires were seventy plus percent.

• 35:34Speaker 01

  But my point was, we invested in public goods like education, like healthcare, like transportation.

• 35:39Scott Galloway?

  Middle class.

• 35:40Speaker 01

  And for the last forty years, what have we done? We've been converting those public assets, those public goods into private wealth. And, you know, bridges collapse and hospitals cannot adjust to a pandemic. Our supply chains are so thin, we can't make personal protective equipment in a pandemic. We can't do enough tests. You know, I mean, it's all of these things are not, those are not signs of something working well. Those are signs of something desperately in need of change. And this is the moment where we begin to choose what the future will be like. And the election is just the starting point. And in my mind, what's really great about the world that I live in is that

• 36:25Speaker 01

  very brilliant people have looked at every aspect of this and have some really cool ideas. Not all of which are compatible with each other. But we can have a debate and we can collectively choose. And it's not going to happen overnight. This is, this is a project that'll take a generation or two. And that's the way it works in this country when it works well. And so I'm hopeful that the future will be much brighter than the past because we really have the ability to say, you know what, these guys have had their day. And that it's like playing a video game. They've won.

• 37:09Speaker 01

  Declare victory. I mean, that's all that antitrust law is. Antitrust law is.

• 37:15Scott Galloway?

  You won. Well done. We're going to break you up. Well done.

• 37:18Speaker 01

  No, it's the prize at the end. And, and the thing that people forget in tech. Is that antitrust law, the application of it has triggered almost every major way. Starting in 1956, when we locked AT&T into this narrow space that effectively created an independent computer industry. We were the only country in the world that had one that wasn't tied to its telephone company. We also took the transistor and put it in the public domain, which created Silicon Valley. The IBM case made software a separate industry.

• 37:52Scott Galloway?

  Yeah, data cell, optics.

• 37:54Speaker 01

  Right. And then you go on to Carter phone, which created data networking, then the second AT&T case.

• 37:59Scott Galloway?

  I agree.

• 38:00Speaker 01

  I mean, you just look each time. And so investors should be embracing antitrust law.

• 38:06Scott Galloway?

  Now, we need to oxygenate the economy. You, loosely speaking, the way I distill your argument down is there's always a usually healthy tension between capital and labor. And capital's been kicking the shit out of labor for the last four decades.

• 38:19Speaker 01

  Yeah.

• 38:19Scott Galloway?

  It just, and it's just gotten totally out of control. And even I would argue that there's the innovator class versus government. We've decided that it needs to be an innovator to put us on Mars versus NASA, that it's going to be a vaccine that saves us. We don't need to invest in the CDC. There's just been, there really are some tensions that are out of whack. I want to finish up by talking a little. I've known you for a while, Roger. And one of the things that I don't think people appreciate is that most of the people in this fight have a vested interest in the fight beyond just trying to be good citizens. And you generally just bring citizenship to this. You are, you are, you don't own stocks. You haven't shorted them in these companies. It would be much easier for you

• 39:00Scott Galloway?

  to, to maintain. I mean, I constantly get into Twitter wars with people and the one thing that it tends to, my haters have in common is a zip code. And that is they're all in San Francisco and you live there. I can't imagine the amount of shit you get on a regular basis. You're not a politician looking to be elected. You're not a professor looking for tenure. I don't really think, you've written a book, but I don't think that, you know, that's not that important to you. You are genuinely doing this. Because you think it's the you think it's the right thing and you want to pay it forward, so to speak. I just a couple of questions for you. Who are your heroes? When you look at thought leaders, when you look at elected officials, who do you think we need to rally behind?

• 39:40Speaker 01

  So, you know, in in the area of activism, the people who really stand out for me, Shoshana Zuboff is an enormous hero of mine. And her work is extraordinary. There's a woman out here who's a dear friend of mine named Judy Estrin, who is one of the great technologists in the history of Silicon Valley and has helped me really become an effective voice on on these things. There are in the various domains, you know, whether it's Sophia Noble or Joy Buolmuni in algorithmic justice, whether it's Kathy O'Neill, also in the algorithm space, whether it's it's Danielle Citron or Mary Ann Franks looking at the legal things.

• 40:25Speaker 01

  I mean, there's a common thing that I'm pointing out here is that most of the really great people in my world are women. And so I follow them really closely. And it turns out in politics, something similar to that is true, although it's not it's not 100%. You know, obviously, David Cicilline on the antitrust of Subcommittee is is amazing. And

• 40:46Scott Galloway?

  Did a great job.

• 40:46Speaker 01

  Jan Schakowsky, who runs the Consumer Protection Subcommittee of Energy and Commerce, you know, you're going to see her a lot in 2021 because she's got both privacy and safety under her mandate. Elizabeth Warren has been amazing on this stuff. In California, we have Anna Eshu and Jackie Speer, who represent Google and Facebook and YouTube, respectively, and yet are absolutely front center in this fight. Nancy Pelosi, who's been fantastic on it. Zoe Lofgren and Adam Schiff. There have been a lot of members of Congress who've done really fine work around this. You know, Senator Mark Warner and Senator Richard Blumenthal have been really important leaders and Ed Markey from Massachusetts.

• 41:31Speaker 01

  So it's there. There are a lot of people that I really, really admire there. If I step back from it. There's a man named Clarence Jones, who was Martin Luther King's lawyer. And he's the guy who smuggled the letter out of Birmingham jail. He also did speeches. So he wrote the new portion of the "I have a dream" speech from the Washington Monument or Lincoln Memorial, excuse me. He's been my mentor for my activism. He's one of the people I really, really look up to. And the leaders of the civil rights movement have always inspired me. And at present, that's Derrick Johnson at the NAACP and Rashad Robinson at Color of Change. It's Jessica Gonzalez at Free Press.

• 42:15Speaker 01

  My dear friend Jonathan Greenblatt at ADL. And especially Sasha Baron Cohen, who has used his celebrity

• 42:25Scott Galloway?

  Amazing.

• 42:26Speaker 01

  in the most powerful way.

• 42:27Scott Galloway?

  I agree.

• 42:28Speaker 01

  So to answer your earlier point, I have a different set of friends now than I had. You know, it is interesting, you know, when

• 42:35Scott Galloway?

  Sounds like a more interesting set of friends.

• 42:37Speaker 01

  Well, Silicon Valley people are wonderful, okay? And we see the world differently. We have different value systems, and those are in conflict. And I'm not willing to just go with the flow. And so that tension is here. And there's plenty of people here who are not interested in my point of view anymore, and that's their right. But, you know, I have persisted in the face of all kinds of pushback. And you're right, I really feel like this country's been incredibly kind to me. And I owe it my best effort to give the next generation a chance equal to the one I had. And, you know, I don't know that I'm going to get there, but I'm doing my best.

• 43:22Scott Galloway?

  Roger McNamee is an American businessman, investor, venture capitalist, and musician. He's the founding partner of the venture capital firm Elevation Partners and author of Zucked, Waking Up to the Facebook Catastrophe. He joins us from his home in San Francisco. Roger, you continue to be an inspiration for me. I want to be as successful as you. I want to be as fearless as you. I want to be as thoughtful as you. You have a nice means of making your point without ever antagonizing or disparaging people. I think there's a really nice grace you bring to an important argument. So keep up the good work, brother.

• 44:01Speaker 01

  Thank you very much, my friend. Back at you.

• 44:07Scott Galloway?

  Stay with us, we'll be right back.

• 44:12Scott Galloway?

  Support for the show comes from Built. Most of us work hard to earn our keep, but usually there's no one around to hand you a cookie when you successfully pay your monthly housing bill. No one except Built, that is. Built has expanded from their original rental rewards program, and they have a lot more going on for members now. For example, members can earn points on mortgage payments, too. Every housing payment gets you points that get you a lot more than baked goods, such as flights with top travel partners, including United and Hyatt, Lyft rides, Amazon.com purchases, and much, much more. Here's another benefit of Built membership. You also get access to what they call a neighborhood concierge. You can make restaurant reservations, book fitness classes, and find new local spots, all while rewarding you at more than 45,000 merchant partners. It's simple.

• 44:54Scott Galloway?

  Being a renter and now owning a home feels a lot better with Built. You can download the Built app and join the membership for where you live at joinbuilt.com/profg. That's J-O-I-N-B-I-L-T.com/profg. Use our link so they know we sent you.

• 45:12Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. Their Agentic Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 45:57Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash prop G for $1,000 off.

• 46:28Scott Galloway?

  Welcome back. It's time for Office Hours. As a reminder, if you'd like to submit a question, please email a voice recording to [email protected]. You know you want to, [email protected]. Question number one.

• 46:44Speaker 03

  Hey Scott, it's Paul here from London. Big fan of the podcast, please keep it going. Wanted to ask a quick question today around the stock market. Recent content that you've put out suggests that the stock market is well overinflated. That's my opinion also, and I take from your comments that you believe a crash is pretty imminent. If that happens, I wanted to know whether you've got your eye on any particular companies that you believe have huge potential, but are currently, their share price is too high. Will you be going out and purchasing stocks when the share price falls? My understanding is that to date you've exclusively invested in the big four, but are there any other companies that catch your eye and are just currently priced too high? Thanks Scott.

• 47:28Scott Galloway?

  Thanks Paul from London. A thoughtful question. So first off, there is some wisdom to, or I think some credibility to the notion that you always want to be in the market. It is very difficult to time the market because, well, I think the market is overvalued and frothy right now. The obvious question will be, well, why wouldn't you sell? It's difficult to know when to sell. And there is something to be said for always being in the market because the analysis of the research shows if there's just like 11 or 12 days you missed in the last 10 years, you'd miss half the gains. And so it's difficult to decide, okay, I'm going to be smarter than everybody else and put a bunch of cash on the sidelines, which earns no money, and then move back in. I think what you can do is be a little bit more diversified such that...

• 48:13Scott Galloway?

  If the NASDAQ sheds 70 or 80% of its value, you don't get hurt quite as badly. Anyways, the question, what stocks would I buy if they were trading at more reasonable multiples? So I think Disney is already there. I think that's a great stock, trading at what I call a cyclically impaired price. The stock, I don't think it's gone up much in the last five or even maybe 10 years, and that has huge assets. I think Zoom and Peloton, this remote, this shift, this dramatic shift to remote, and whether it's moving from the real estate of gyms or the sweat industrial complex, moving to work from home. I think Peloton is a fantastic company and there's a floor on it because I think if it were to get below a certain

• 48:57Scott Galloway?

  price, Apple would likely acquire it. Zoom obviously seems to have kind of run away with remote communications. And anything, you know, Amazon at anything below where it is, I would probably buy more just because I, it's hard for me to imagine a company that's just firing on all 12,000 cylinders the way Amazon is. And quite frankly, and I hate to say this, probably some of the fossil fuel companies. I think that when you look at the dividend and the fact that, okay, while we have 2 million electric vehicles on the road, there's 1.2 internal combustion engines and you might have a moral problem. And I respect that, wanting to have moral clarity around your investments. But I think even the fossil fuel guys are beginning to look ridiculously cheap.

• 49:39Scott Galloway?

  And if they got any cheaper than this on a risk-adjusted basis, they would be good investments. But I would largely invest around trends around the movement from university learning to ed tech, insurance tech, fintech, anything that takes advantage of the massive, the massive transition in capital, both human and financial, from one huge asset class, and that's commercial real estate to residential. What does that mean? If Restoration Hardware stock came down, it's gone from about 70 to 400 in the last six months. If that stock came back, I'd buy it. If some of the home builders came down, I'd probably buy them because I think we're going to see people decide to spend more of their. Money on home and we'll even see their employers give them more money for their homes. I think so anyways, a bunch of companies I like if they got cheaper.

• 50:23Scott Galloway?

  Difficult to know when to send such you have that dry capital. My advice is be diversified if you're my age such you don't get hit quite as hard and do what you're doing and that is do some research and buy the stock and then put it away. I like to buy stocks and own them for a long time because I think it is very hard to trade stocks anyways. A thoughtful question. Thank you, Paul. Next question.

• 50:45Speaker 04

  Hi Prof G. My name is Scott from Buffalo, New York. What are your thoughts on Zoom moving into industries that have seen recent digital communication acceleration like healthcare with telehealth and mortgage with remote online notarization? These trends don't appear like they'll be changing once the pandemic subsides in Zoom or one of its competitors already seems to be a centerpiece in these processes. Thanks.

• 51:05Scott Galloway?

  That's an interesting idea. Does Zerm go vertical in certain niches, right? The idea of them becoming, starting to offer healthcare like Zoom Health. God, that just idea just blows my mind. Zoom Health? Or would they rather just be the infrastructure? You know, Cisco never went into e-commerce, but they decided to sell their routers. I think it's a pretty good business being the infrastructure play they are. If I were going to go shopping and I were Zoom, I would probably go buy, acquire a telco and see if I could offer general telco services. So I think there's probably places, I think they want to go, if you will, I think their

• 51:46Scott Galloway?

  acquisitions want to be more around infrastructure and communications and technology as opposed to specific industry verticals. But that, I don't know. I don't know. I'm, I'm learning from you, Scott. That's, that's an interesting idea. Gangster move. They buy 98.6 or they buy One Medical or they buy what is the, one of the bigger kind of remote medicine companies and start a vertical called Zoom Health. The question is, what does Zoom bring to that? Party other than I guess a certain amount of ubiquity, but I think those companies are going to use Zoom anyway. So I'd have to think about it. I have to think about it. But with a market cap of $157 billion, they should absolutely go shopping. I just wonder

• 52:29Scott Galloway?

  if they buy a small telco like a Telefonica out of Spain and take those prices way down and see if they can begin to disrupt the traditional telco market. I think a company like AT&T and Verizon, I think they are becoming impaired. These stupid acquisitions of AOL Yahoo and of Time Warner, they clearly overpaid and they're going to be so distracted trying to clean up, trying to scoop up all the shit of these failed acquisitions. I wonder if they'll, if they're not making the requisite investments in their technology and if a company like Zoom could come in and leapfrog and offer AT&T like services for dramatically less money. It seems like those guys are kind of ripe or sticking their chin out. Anyways, it's a long-winded way of saying I haven't really thought about

• 53:13Scott Galloway?

  it, other than to say they should absolutely open up the checkbook and start thinking about whether they're going to go horizontal and that's by other telcos, if you will, or other communications companies, or if they're going to go vertical and get into specific niches. But my mind is blown, Scott. You've inspired, you've inspired an interesting question that has catalyzed a lot of thought. Let me come back to you in a few weeks with a better answer. Scott from Buffalo. Next question.

• 53:38Speaker 05

  Hey Prof G, this is Matt dialing in from London. Hope all's well, mate. I wanted to get your perspective on the latest developments in the crypto space. You've been pretty bearish on Bitcoin in the past, given the Fed is printing trillions of dollars now to prop up the US economy and with no real end to the COVID crisis in sight, combined with the news that increasingly bigger players in finance and tech such as MicroStrategy and most recently Jack Dorsey Square are now making significant investments in Bitcoins to hedge against dollar inflation. Has your opinion on the prospects for Bitcoin changed? Would love to hear your thoughts on how you see the future of Bitcoin developing over the next few years and its potential to disrupt the legacy financial landscape. Love your show, mate. Keep up the good work. Cheers.

• 54:14Scott Galloway?

  Matt from London. Thanks for the question. It seems like we're big in the UK. Is it because when I was a kid, I was a dual citizen? No joke. My mom got me dual citizenship. Why? Because Reagan invaded Grenada. My mom was worried I was going to be drafted, so she got me dual citizenship as she is a British citizen. And what do you know about three months after I was granted dual citizenship? I got a letter, a letter from the Queen saying I needed to register for conscription because they had just declared war on Argentina and the Falkland Islands and they were sending out letters saying, "Get ready for the draft." Boy, was my mom bummed. Talk about the mother of all unintended consequences. But anyways, I'm clearly big in the UK. The dog is clearly big in the UK.

• 54:54Scott Galloway?

  So, back to your question. October 8th, 2020, Square announced it had purchased approximately $50 million worth of Bitcoin. And if the stock hadn't skyrocketed, the board and investors would have been, "What the fuck? We don't need you to buy Bitcoin for." Square said in a statement that it believes a cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system. Hmm. In September of 2020, not to be outdone, MicroStrategy purchased $175 million worth of Bitcoin. And to date, the company has purchased almost a half a billion dollars in Bitcoin. That is because Michael Saylor, who I think is a genius, I've known Michael

• 55:35Scott Galloway?

  for a while, has basically gone in, all in on Bitcoin. He does a fantastic, or did a fantastic podcast, type in "Michael Saylor podcast Bitcoin," that really illuminated, or I thought brought home some of the power of Bitcoin. I have been, as you pointed out, a bit of a Bitcoin bear. And that is, some of it is one, I don't know what you call it, ignorance bias. I don't understand it, so I don't want to like it. And I'm also, I think, a little bit pissed off that I didn't participate in its massive run-up. It's a currency, as far as I can tell. The thing that Michael Saylor said that really struck me was that this is something you can trade 24 hours a day, that it provides more liquidity and therefore more stability.

• 56:17Scott Galloway?

  I don't understand the mining, I don't understand how supply can be limited, but I don't believe the network has been hacked. I do believe it's an interesting hedge, and that's where I go, and that is, I am thinking for the first time that I might buy some Bitcoin, because I'm at a stage in my life where after having been run over by a truck, actually that's not true, run over by a fucking truck in 2000 with a dot com explosion, and then again in 2008, you know, finally started making some money in my 30s, mostly because I'm a white bald heterosexual, born in the right place at the right time. I thought, okay, okay, I'm gonna be wealthy, economically secure for the rest of my life. Kaboom. No

• 56:57Scott Galloway?

  longer wealthy or economically secure. Scratch my way back. The dog comes back. 2007, almost there again. Kaboom. And now I am back, or I feel I'm in a better place, but there's only so many more sonic booms of wealth destruction I can endure, and I'm at an age now where there's just not that much time to make it back, so I'm getting much more, my horns are being drawn in. And one of the ways you draw in your horns is through diversification. Now Bitcoin, despite what Bitcoin bulls will say, I think is more linked to the market than they would likely profess. It's, I'm pretty sure it dove, or took a pretty big hit in March low. So there's something going on here where there is nowhere to hide, that

• 57:40Scott Galloway?

  all asset classes are somewhat linked now in our intra-digital economy, but I do think there's an opportunity with Bitcoin that it could, for some freakish reason, the same way it went from 100 bucks to 12,000, that it could go to 100,000 dollars. So I'm thinking, and again, I always anchor off, I can never buy a stock where it is, I immediately start thinking I want it 20% off of where it is, but for some reason in the back of my mind, I have this notion that if it gets below 9,000 bucks, I might take not a huge amount of my net worth, but a meaningful amount and put it in Bitcoin, because I do think it's It is different. It is a form of diversification. Yeah, it does have, it's not pure alpha. That's bullshit. There's some beta there. There's some link.

• 58:24Scott Galloway?

  But I do like it and I do think there is a non-zero probability it could go up 10x. I wouldn't put more in it than you are willing to lose 90%. I don't think it goes to zero, but this thing just feels odd to me. The thing I don't like about it is you have to put it on some sort of thumb drive and you can lose that thumb drive. I lose everything. And so the notion that I would have all my Bitcoin on something I could lose scares the shit out of me. But that's neither here nor there. Bottom line, I am looking at Bitcoin for the first time. Matt from London. Thanks for the call. Keep sending in your questions. Again, if you'd like to submit one, please email a voice recording to [email protected].

• 59:03Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The regentic trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 59:47Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash profg for $1,000 off.

• 1:00:16Scott Galloway?

  Just to wrap up today's episode, I'm going to reinforce a moment of inspiration that Roger brought up, and that is these voting lines. And I believe that the Republican Party has basically said, we're the white patriarchy, and the white patriarchy has worked for a long time in a lot of societies, and we're asking you to support us. And unfortunately, America, as sheer numbers, no longer supports the white patriarchy because it's gotten less white and less patriarchal. So we are moving to flat-out voter suppression. And that is a terrible accusation, and I believe the data is on my side. The communities of color, communities that have been economically disenfranchised, have

• 1:00:59Scott Galloway?

  purposefully and deliberately been choked of resources such that they no longer have access to what is one of the key functions or attributes or benefits of our society, and that is the right to vote. And I just, I just think it's wonderful. I think it's inspiring. I think if you want to feel better about America, to just look at these images of people waiting eight hours in line. I think of 9/11, and I think of the flight that ultimately ended up crashing in a Pennsylvania field. And that is because planes now have phones on them, when the plane was commandeered or hijacked, if you will, by the terrorists, people began calling their loved ones.

• 1:01:44Scott Galloway?

  And a couple of things happened. One, or a couple of things registered when they did kind of the forensics on these calls. The first is, once they realized they were on a plane that was headed for imminent doom, they didn't call to settle grievances, they didn't call to, they didn't call to give last rites. They basically called with one thing, and that is to tell people that they loved, how much they loved them, full stop. That was the common theme across all of these calls. And so what did they do with this information? What did they do when they knew that, okay, this wasn't like previous hijackings, they weren't heading to Cuba, they were heading towards their imminent death? They thought, okay, what do we do? Do we hope that they change their mind? Do we hope that fighter jets show up and somehow guide the plane down to a safe landing?

• 1:02:29Scott Galloway?

  Or do we crash through the cockpit door using a meal cart? Using a meal cart? An attempt to basically take the plane down, knowing that that would kill all of us certainly, but knowing we would probably save people on the other side. So you have 200 or 300 people in the back faced with this terrible decision, what to do. So how did they make this decision? How did they make this decision in what is a moment of incredible stress, of an unprecedented situation? How do they decide what they're going to do? They voted.

• 1:03:10Scott Galloway?

  Our producers are Carolyn Shagrin and Drew Burrows. If you like what you heard, please follow, download and subscribe. Thanks for listening. We'll catch you next week with another episode of The Prof G Show from Section 4 and the Westwood One Podcast Network.