Professor Scott Galloway On Whether Our Economy Is Rigged (And What To Do About It)

Professor Scott Galloway swings by to discuss how our economy can at once feel rigged yet loaded with opportunity. Galloway describes a “tilted” system that makes life difficult for young people and wage workers while lifting up assets like stock and equity and helping older generations. We talk not only about the problems, but the solutions for the system and the individuals within it. As usual, Galloway is a tour de force who comes loaded with insights and keen observations. Check out our sponsor, Flatfile: https://flatfile.io Scott's New York Magazine Q&A: https://nymag.com/intelligencer/2021/04/unified-monetary-theory-beeple-biden.html Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

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• 0:43Alex Kantrowitz?

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• 1:14Alex Kantrowitz?

  Hello and welcome to the Big Technology Podcast, a show for cool headed nuanced conversation of the tech world and beyond. Joining us today is one of my favorite voices in tech and business. He is the professor of marketing at New York University Stern School of Business and the author of The Four: The Algebra of Happiness and Post Corona New York Times Bestsellers. He's also the host of The Prof G Show and co-host of Pivot alongside Kara Swisher. I think we got it all. Professor Scott Galloway, welcome to the show. Thanks for having me, Alex. It's great to have you here. So I wrote to you hoping to get you on after I read this great New York Magazine Q and A that you did about the state of the market in our society as well.

• 1:55Alex Kantrowitz?

  And the subtitle of that piece was, "In a System Rigged by the Rich, Outsiders Have to Make Their Own Volatility." So I guess I wanted to start with like this theme of whether the system is rigged and whether this volatility is needed. Because the system does feel rigged, especially when you look at stuff like education spending and how fulfillment work has replaced factory work, which we've talked about on the show, and the tax system. Yet there seems to be a ton of opportunity now, maybe more than ever before to make it and make it really big. So I'm curious what you think. Can can we have those two things existing side by side, sort of a rigged system, but also great opportunity to make it?

• 2:36Speaker 01

  So I would describe the system as, and that's a big word, system. I would describe it as not rigged, but tilted. If you look at the percentage of total wealth that is controlled by people under the age of 40, in the last 30 years, it dropped from 19% to 9%. And everything from housing to education to healthcare, things that young people have to purchase, has exploded in costs. Meanwhile, wages have remained flat. And tax policy and monetary policy has really benefited asset owners. So the tax rate on your sweat is much higher than the tax rate that on what money

• 3:17Speaker 01

  makes. And the people who own assets are generally older people and the people who make the majority of their income with their sweat are younger people. So whether it's minimum wage, which impacts young people much more than older people, exploding from $7.25 to $7.25 over the last 30 years, it does seem as if the game is tilted towards the existing rich. Now, a lot of people would say it's more insidious than that, that it's this wide heteronormative cohort that has basically said, we're going to transfer wealth from a younger, more gender balanced, more multi-ethnic cohort to kind of the existing patriarchy. I would argue it's just kind of selfish

• 4:01Speaker 01

  behavior, where basically my generation and boomers have figured out a way to weaponize government and figure out a way to have tax policy with the top 1% pay lower taxes than the bottom 50% to respond to crises by flooding the market with stimulus, much of which ends up in the market, which accelerates residential And capital markets, ninety percent by dollar volume of those assets are owned by the top one percent. So I would argue that the market is tilted such that young people, for the first time in our nation's history, someone at the age of thirty is not doing as well as his or her parents at the age of thirty. And that is the kind of the core compact you enter into with a society. And when society breaks that compact, and by

• 4:45Speaker 01

  the way, more than fifty percent of people under the age of thirty are now living at home, which means you have these reminders called mom and dad reminding you every day that you're not doing as well as they were at the age of thirty. It just creates immense levels of shame and rage across tens of millions of households. And the most dangerous person in the world is a young, broke, and alone male, and we're producing too many of them. And that's not to say that economic opportunity or shame for young women isn't as serious, but women have a tendency not to pick up AR-15s or start smashing windows during a protest. And I think if you feel like, okay, I can't get my entry point into

• 5:26Speaker 01

  the markets, the game is tilted, you're going to create your own volatility. You're going to find different asset classes that are more volatile. You're going to find reasons to turn righteous movements, whether it's Black Lives Matter, or Me Too, or the meme stock movement. And the underlying incendiary is that, you know, if you're not attaching to school, if you're not attaching to a partner, if you're not attaching to work, because you just don't have the same opportunities, you're going to get angry. And I think that's where we are. So I think the kind of the incendiary, it's turning a lot of worthwhile movements into something more dangerous, whether it's nationalism, is, for lack of a better term, not only income inequality, but kind of intergenerational equality. It's really sort of young versus old here.

• 6:10Alex Kantrowitz?

  Right, and I definitely want to get into the wages versus asset stuff in a bit. But you know, this, this conversation makes me think a little bit about, we talk often about how the system has to change, but I wonder about what's the best way for an individual to act within the system. You teach, you know, business school students. So should we be telling people that you should go out and continue to work for wages? Or maybe the fact that, um, you know, we now have the lowest amount of time it takes to bring a company to market at the lowest cost, people should be, uh, starting companies more often? How does the individual change their behavior to sort of buck this trend that you talk about with a tilted system?

• 6:49Speaker 01

  And so I just recognize I didn't, I didn't fully answer your question because you said, you know, how do you circle the square of there is tremendous opportunity. There's more and more opportunity that's crowded towards fewer and fewer people. And that is there are the 1%, it's never been easier to be a billionaire. It's never been harder to be a millionaire. And in my class, when I graduated from business school, we all made kind of between 70 and 100 grand. I would say the majority of us are doing, we're doing well to really well. Uh, in my class of 280 kids, there's a billionaire in there. Somebody through alternative investments or a tech startup is going to be a billionaire. I also

• 7:29Speaker 01

  think quite a few of them will probably end up, uh, living at home or, uh, kind of wardens of the state or, or government, under government assistants because slowly but surely, when technology comes into an economy, it creates a crowding or sort of a winner take most environment. And we'd like to think that, yeah, there's a lot of opportunity if you write this, if you have the right skills, the right pedigree, the access to right resources, even the right zip code. I don't think there's been a company started that gets to more than 10 billion in value or 90% of them are sort of been a bike ride from a world-class engineering university. So there's tremendous opportunity for the kind of what I'll call the remarkable, or the top 1%. I would say the two cohorts that are killing it are what I call the freakishly

• 8:12Speaker 01

  remarkable that understand technology, and children of rich kids that are given tutors, access to elite universities, and kind of are shot into the career, into the workforce at an incredible trajectory. Who aren't thriving are the unremarkables, and that is, America's, I think, collective goal used to be, how do we take the bottom 90% and give them a real shot at being in the top 10%? Great schools that just someone good can get into, tax policy that is progressive, not regressive. But now we are under the illusion that this is this great innovation era. It's not. There were more new businesses. There were twice as many businesses being formed every day during the Carter administration than now.

• 8:56Speaker 01

  It used to be 15% of companies were less than one-year-old, now it's 7%. And I think there's a lot of factors around that, but mostly I think it's that the highest-growth sectors in our economy, technology, search, social, computer hardware, digital marketing, are controlled by monopolies or duopolies. And so new business formation in some of the highest-growth sectors in our economy is really low. Whereas if you look at the sectors that aren't dominated by monopoly or duopoly, fintech, biotech, they're creating new businesses at a much greater clip. So I think, I think we have let, we've been overrun by monopolies. I think we have decided that we live in a meritocracy, and because we

• 9:35Speaker 01

  no longer integrate with other people at the mall, at the movie theater, or in schools, slowly but surely, the wealth, kind of the shareholder class is segregated. We don't have as much empathy, and we've bought into the ugly notion of meritocracy, and that is, we constantly see on Instagram or on CNBC that anyone can become a billionaire. And so if you don't, or if you don't make it, the ugly side of meritocracy is that if you're poor and struggling, it's your fault. And whether it's, I mean, we just see evidence of this everywhere, whether it's minimum wage, whether it's college being out of reach for people, whether it's acceptance rates declining dramatically because we're drunk on luxury, we have fallen in love with the remarkable. We've said, if you're in the top 1%, we're going to optimize the economy

• 10:19Speaker 01

  for you. I would argue that's not what America is about, that America needs to fall back in love with the unremarkables and give, you know, sort of average to good kids remarkable opportunities. And I think that's what America used to be about. I think that's what higher ed used to be about. But it seems like our collective goal is how do we create people who might be worth 100 billion? And I don't think that's, I think that makes for fantastic headlines and interesting CNBC stories, but I don't think that's a healthy society. It definitely feels like we've gone to sort of a Hunger Games approach to our economy.

• 10:50Alex Kantrowitz?

  Yeah, no doubt. One of the things that I, that just kind of keyed in my brain when you talked about how we, wealth has been insulated or sort of removed from the rest of society is, you know, I'm living in San Francisco, so close to Silicon Valley. I have friends that are, you know, in the circles and close to the circles. And one of the things that I've learned is that there's wealth, and then there's wealth. And, you know, you can get close to it, but you can't really touch it. There's just this kind of wild upper stratosphere where money means nothing and, you know, it exists and there, but there's really, you know, I mean, whether you want to get into it or not, it just doesn't seem like there's possible roads into it. And yet, everybody else has mortgages and,

• 11:32Alex Kantrowitz?

  you know, even if they're making 200, 300,000 dollars a year, thinks about, you know, I guess they're, they're still extremely distant from, you know, the people who actually are, you know, in those money bathtubs in Silicon Valley. I'm curious what you think about that.

• 11:47Speaker 01

  It is interesting. So just looking at tax policy, we tend to think, okay, the wealthy are screwing the poor. And if you look at it, the tax burden on the poor and the middle class has kind of stayed flat. The tax burden on the super rich has gone down, right? The 1% now have a lower tax rate than anyone else. And we have optimized an economy for our quote unquote innovators, where a guy like Elon Musk can add the GDP of Hungary to his net worth since the pandemic. And then he can piece out and move from California to Texas such that he can save 15% on that $120 billion in unrealized gains he has.

• 12:27Alex Kantrowitz?

  This is all from the capital gains tax, like 20%.

• 12:30Speaker 01

  Yeah, basically, Texas has no income tax. So when he begins to monetize his holdings, his gains in Tesla, despite the fact that he created most of those gains while as a resident of California and benefited from the roads, the culture, the universities there, about the time he's ready to sell stock, he moves to Austin and avoids all of that tax. So should the two wealthiest men in America, Bezos and Musk, control the wealth of the bottom 40% of America? And should they be able to avoid taxes? Should, should Amazon, who's registered 20 billion in profits over the last 10 years, paying effective tax rate of 4.5%? So I think you can look at a lot of stuff and say, wow, the, it really is tilted against us.

• 13:12Speaker 01

  90 of the Fortune 500 paid no income tax last year, including Federal Express and Nike, who are incredibly successful companies. But what people miss, where the nuance is, is that the people who have gotten also pretty screwed here are what I call the workhorses. And that is, say you're a partner in a law firm, say your wife is a chiropractor and you have a combined income of $600,000. You're kind of killing it, or 800,000. You're doing really well. But you have to live in San Francisco or New York. You have to live in an urban center because of proximity to those types of jobs. You're, but if you're living in New York, Manhattan, or San Francisco, and you're making 600, 800 grand, and you're making all of your money from current income, you're probably paying a 50% tax rate.

• 13:57Speaker 01

  And when you take home 400 grand, living in San Francisco or New York, and no one feels sorry for those people, I get it. But that's not, you feel pretty middle class. I mean, you're not, you are worried about money. Money is a stressful part of your life. And we live in an Instagram age where basically every piece of media you see is telling you how much better everyone else is doing. So the people who've gotten really screwed with our tax code, I mean really screwed, are the, what I call the workhorses. And that is people who make a lot of money, but it's all through current income. Those tax rates have exploded to 50% plus. Entrepreneurs such as myself, or people who make the majority of their income through

• 14:40Speaker 01

  appreciation on assets, or through equity in companies they start, their tax rate is probably below 20% because of 1202. So we fetishize innovators, we have fetishized the really wealthy. You know, the top 1% used to pay 60% in taxes in the 50s, then it went down to 40 or 50% in the 80s, and now it's, you know, it's kind of 20, 23%. So we have made a conscious decision, people will say that the world is what it is, it's about a network economy, and there's some truth to that. The internet kind of provides or digitizations, everyone has access to the best, so the best garner a disproportionate amount of the resources. We've also made a conscious decision that when someone gets on the gold medal podium, we're going to give them two or three gold medals.

• 15:21Speaker 01

  We're going to decrease their taxes, we're going to give them a tax code that is so complex that people with the most money have the ability to navigate it. I think complexity is a transfer of wealth from the poor to the rich, because if you can navigate by starlight, you want to race your boat at night. And we've created an economy where the people, we're racing boats at night. The tax code is so complex that people who are wealthy can hire these incredible navigators to really figure out how to work the tax code. It's a tax rates are almost, I think, a little bit, we overestimate or inflate the importance of tax rates. What we underestimate is the tax code. I mean, it really doesn't matter what Amazon's tax rate is, their effective tax rate, the

• 16:03Speaker 01

  corporate tax rate, their effective tax rate is 4.5% because they know how to exploit, they know how to... There are more full-time lobbyists in DC right now, working for Amazon, than there are sitting US senators. And what do you know, our tax policy ends up with a bunch of goodies that play really well to a firm like Amazon. So we have consciously made a decision that we want to reward our innovators, that we want, we want to see these people, and we've created an economy where if you're remarkable, it's the best place in the world. My dad, who is an immigrant from Scotland, always used to say, "America is a terrible place to be stupid." And capitalism...

• 16:42Speaker 01

  And I'm not saying this is a bad thing. Capitalism purposely says, and this is harsh, we can't reward the winners without punishing the losers. It is worse in America to be bad at what you do and not to be smart around money than it is in Europe. At the same time, it's gotten to a point where it's become dangerous not to be good at what you do. Your life expectancy goes way down, your likelihood of stroke, your diabetes, your absolutely your mortality rate from the novel coronavirus. And the question is, is that the world we want to live in? Meanwhile, we have individuals who are worth the GDP of nations. So I would argue that capitalism is a conscious decision to have winners and losers, and I

• 17:26Speaker 01

  think people accept that, and I think they're comfortable with that. But it feels as if it's gotten just out of control.

• 17:32Alex Kantrowitz?

  So we talked a lot about systems so far, and I want to go back to the individual. So let's say you're just someone listening to the show, or you might, you're, you understand that this is the system you're faced with, and you're not Elon Musk.

• 17:48Speaker 01

  Yep.

• 17:48Alex Kantrowitz?

  How do you thrive in this system? Can you take anything into your own hands? What decisions do you make? Or do you just sort of throw up your hands and say, well, I'm unremarkable and so be it?

• 18:02Speaker 01

  Oh, well, yeah, yeah. I mean, absolutely, you don't give up. But I think the first thing as citizens is that we have to acknowledge the problem and elect leaders that have the backbone to break up big companies, have the vision to decide it is unacceptable in the wealthiest nation in the world to have one in five households with children be food insecure, to figure out, to recognize that young people have gotten kicked in the gut as a generation for the last 30 years, and to invest in things like vocational programs. I'm a college professor, and I believe the most important thing, or one of the most important things we need to do. Is to build onramps into our economy for people who don't go to college. Two thirds of young people will not get a bachelor's of arts degree.

• 18:45Speaker 01

  And so if if corporations don't stop fetishizing the elite college degree, basically, when you say, and the majority of Fortune 500 companies say this, the only path to a career here is with a college degree. That is saying, we're not going to hire a lot of black people. We're not going to hire a lot of Latino people. We're not going to hire, if by the age of 22 or 23, you're you're part of the 50, 60% plus that have not figured out a way to get a college degree. You know what? Sorry, boss, you're fucked. And so we need vocational programs. We need to stop fetishizing college degrees.

• 19:26Speaker 01

  I'm working with some fairly high profile hedge funds and media companies to say, how can you take 10, 20, 30, 40% of your new hires and figure out alternative means of evaluating their skill set as opposed to just their certification? Can we find a way to provide the American dream or access to what has been the greatest wealth generator in the history of mankind? And that is the US corporation, recognizing that some people just have a much more streamlined path to a college degree than a lot of America and figure out a way to give some of them opportunities or a shot to the corporate ecosystem other than just the mailroom. So and then also recognizing that we just need more vocational training.

• 20:09Speaker 01

  Down here in Florida, the governor here, who I'm quite frankly, I'm not a big fan of, but I appreciate that he's done some good stuff, is allocating money towards vocational programming, vocational training, you know, a one year hardcore training in cybersecurity. You know, that person's going to get an $80,000 a year job right now. So Google certificates, Tesla deciding that they are going to start hiring people without college degrees. You know, this stuff is really important. I think there's some real progress and signs of hope here. But it just falling back into this kind of Hunger Games. You know, the world is what it is. It's a network economy.

• 20:51Speaker 01

  Believing that that our prosperity has translated to progress, it hasn't. The economy here has boomed the last thirty years. The markets are up, corporate profits are at all time highs, wages have been flat. So I think that I hate this cold comfort of like, the world is what it is. It isn't. The world is what we make of it. Right. Anyways, you asked me what to do. I think it's situational. If you have access to an elite platform, be it a great college or a great company, you do that. You take advantage of that. A lot of kids come to my office hours and they say, I think, I got an offer at Amazon, and, but I want to start my own company. And I'm like, don't be a fucking idiot. Go to Amazon.

• 21:29Speaker 01

  The infant mortality rate on businesses is seventy to eighty percent. Amazon is a great way to get rich slowly. If you want to start a business, start it in five years and you'll have an easier time raising money after you have five years in Amazon. So if you don't have access to those, I think you have to be very thoughtful about how do you get some sort of certification? We live in a certification economy. Is it a welder's license? Is it a class three driver's license? Is it SCUBA certification, SCUBA instruction? Whatever it is, you gotta get some form of certification. I think there's a myth among young people that they should pursue balance. I think that's bullshit. If you want to move to a low cost region, have balance in your life, more power to you. If you expect to be in the top ten percent economically, which I think is something like eighty percent of young people claim they want, I would say you have to acknowledge

• 22:14Speaker 01

  that balance is a myth and that you should just plan on working your ass off because there's some kid in India or Brazil that through access to the internet is willing to work their ass off. So I think it's a sober conversation around not balance, but trade offs. How do I get some sort of certification, even if it's not going to be a bachelor of arts? And how do I also acknowledge that we live in an economy where, you know, the world isn't yours for the asking, the world is yours for the trying. Try really hard. So I'm not, I'm not what I would call here with a message of hope, telling them to follow their passion, which I think is terrible advice. It's certification, it's a sober conversation around what economic weight class you expect to be in and what are the requisite trade offs?

• 22:55Alex Kantrowitz?

  Yeah, and if I get that certification, let's say I become a welder.

• 22:59Speaker 01

  Yeah.

• 22:59Alex Kantrowitz?

  And I'm able to save a little bit. Now the question becomes, I'm looking at, or I'm listening to what you said about how the society rewards asset holders. And, you know, does a person who gets that certification is able to save, just plow their money into the market? Especially now, it seems like it's a little volatile. Maybe, maybe people will say, okay, you know, I'll make eighty, ninety thousand a year. And I'll put the rest in speculative cryptocurrencies or in GameStop and, you know, try to get in on this party that everybody else seems to be having. What do you think about that?

• 23:36Speaker 01

  So, so if you think about, okay, so I think there's an algebra of wealth. I think a lot, a lot about this. And the algebra, loosely speaking, goes something like this. Find something, focus, find something you're good at, that people will pay you for. And generally speaking, try, you know, try to find a sector or try to find something you're good at in an industry that doesn't have a ninety plus percent unemployment rate. Sports, acting, the arts, you know, kind of what I'll call the passion fields generally have kind of a ninety plus percent unemployment rate. So find something you're good at and something people will pay you for, and then double down on it and commit to becoming great at it.

• 24:19Speaker 01

  Because if you're great at it, you can make good money at it. That's the first thing, focus. The second thing is stoicism, and that is our economy, our consumer economy is designed to figure out a way to link the upgrade from economy to economy comfort to economy plus to business class to first class to fractional jet ownership, to convince you that that's an investment in yourself and you're a loser if you don't have those things. There are so many incredible opportunities and seductive ways to spend money in our economy. And I would say try and live like a stoic, not only economically, but in terms of your time. Try to resist the institutionalization of trans fats, of porn, of DOPA hits,

• 25:02Speaker 01

  and be really good at focusing as much time as you can on your professional and physical progress in your twenties. And from day one, try to save ten percent plus of your money. Your wealth is a function not of how much money you make, but how much you save. And try to live like a stoic early on. I had a 300 square foot apartment. I lived on bananas and top ramen when I was at Morgan Stanley, so I could save money for business school. And then I moved back in with my mom because I wanted to have the money to go to business school. And then start investing. I would say low cost ETFs. If you want to invest in some companies because it's fun and you want to learn, I get that. But the two things there

• 25:45Speaker 01

  are diversification. You don't need to be a hero. I've made some really stupid investment decisions. I bought Netflix at 10. It's at 500 now. That's the good news. I sold it at eight. I bought a company called Ascena and within six months of me buying it, it was down 80%. But I've never put more than 10% of my assets in any one thing. And I let time take over. The most powerful form source force in the universe is compound interest. People say wealth is, you know, kind of 40% investment strategy and then 60% patience and willingness to let time take over. And then diversification such that if you get shot in the chest, if you're wearing Kevlar, it hurts, but it's not fatal.

• 26:26Speaker 01

  So in sum, focus on your talent, focus on something you're good at so you can make more money than you spend. Be a stoic. Save. Focus on your physical and professional well being when you're young because it gets harder when you get older and you start collecting things like dogs and kids. And then invest early and often and focus on diversification and let time take over. I do think, in other words, I, the good news is, I think I know how to get anyone rich. The bad news is that it's slowly. And try to resist, you know, if you want to rebel, if you're a young person, I coach a lot of young men. If you want a rebellion, if you want a cause, recognize that the institutional

• 27:09Speaker 01

  food complex wants you to be fat. Recognize that media wants you to be divided and polarized. You recognize that Robin Hood wants you to day trade. You know, recognize that Twitter wants you to, and Instagram want you to feel bad about yourself. If you want to cause, rebel against all of those things. Refuse to not be in great shape. Refuse to not have empathy for people just because they have different political views than you. You know, refuse, refuse to spend money on frivolous things. Refuse not to have empathy for fellow Americans. That's the rebellion.

• 27:49Speaker 01

  You know, that's how you should be rebelling as a young person because there are a lot of forces conspiring against you.

• 27:56Alex Kantrowitz?

  Yeah, speaking of Stoicism, you had a great conversation with Ryan Holiday, who's a fellow portfolio author on your podcast that I highly recommend. That was really interesting to hear in terms of Stoicism. Let's just, one more question about this. Would you put money in index funds in the markets right now? It does seem like the market is volatile. We've talked about it in the past about how valuations are really out of sync with reality. Would you trust it or would you wait a little bit?

• 28:23Speaker 01

  I think it's very hard to time the markets. I think low-cost ETFs, if you think this market is expensive, there's ETFs for Chinese internet companies. There's ETFs for European companies. There's ETFs, you know, for stocks in Africa. So I would say that just in generally, low-cost ETFs.

• 28:43Speaker 01

  And just start, but I think you always want to be in the market. In 1997, The Economist called the dot bomb crash perfectly. They said, this is how it will happen, but they called it two years too early and stocks went up like another 40 or 60%. It's just very hard to time the markets. And when you're young, you have, you have the luxury of waiting out those cycles. So even if the stocks go down in the short run, if you buy any, if you bought any five companies in the S and P 500, if you waited 20 years, zero out of 100 people lost money. So it's really time. And if you, if you want to say, okay, tech stocks are overvalued in the US, you know, sure, maybe.

• 29:27Speaker 01

  So maybe go to industrials or go to an Asian ETF, you know, spread it around. And if you, if you're a young person, you can afford to take some hits. Maybe pick some great companies that you think are undervalued, but you don't have to be a hero. Don't put it all into one thing. Don't even put forty, forty percent into one thing. Spread it around and make sure that you don't trade it. Trading, I think, is a real menace. Eighty to ninety-five percent of day traders lose money. If you just invested in the ten most popular stocks on Robinhood, you would have lost money. And not only that, the costs are extraordinary from a time standpoint. One of the first thing I do, and the first things I do when I meet with a young man is I say, give me your phone, and I look at their usage. I'm like, let me get this. You're spending ninety minutes a day on Coinbase? Hmm.

• 30:12Speaker 01

  And I'm like, what's going on here? And they're like, well, I'm learning about crypto, and I trade, and I do these pulled put options. And I'm like, Jesus Christ, stop that. Take that ninety minutes, work out for sixty, right, and spend another thirty minutes at your, your real job. You know, the, the, the biggest cost of day trading is not only the fact you're gonna lose money, but you're literally pissing your life away. And people say, well, I'm learning. Are you really learning? What are you learning here? Hmm. So if you wanna be in finance, if you wanna be in the financial market, if you wanna be an investor, then sure, learn about it, get certified, try and go to school around it, try and get a degree about, try and get a job in it. But for the ninety-seven percent

• 30:57Speaker 01

  of young people that aren't gonna end up in finance, you know, what you're really doing is you're, you're pursuing a DOPA hit and you're bored. That's what I find most people who are day trading and on Robinhood and have entered into consensual hallucination that they are advancing themselves, or they are learning. Recognize that it's gambling. And by the way, I think gambling's great. I love to go to Vegas. I love to put on a kilt, take some money, go down, go down to the casino, get fucked up, I have a great time, and I generally lose it all. And the next morning, I wake up with a headache, and I'm fine with what happened. That's what you are doing when you day trade. That's what you are doing. So recognize, if you love it and it's fun, fine. If you're learning a little bit, fine. If you wanna be in finance, fine. But if you think you're building economic

• 31:42Speaker 01

  security there... Uh, no, you're in my view, you're not only taking a huge economic hit likely, but more importantly, you're wasting a lot of your human capital. Don't spend time on this bullshit. Don't, you know, social media, trading apps. It's all a giant suck where they addict you with purposely engineered psychological triggers, and then they sell your activity to other people. You are not the product. They are not in the business of making you happier or more economically secure. So I think there's, I think there's something around, I think there's a real nihilism here, especially among young men around trading apps and social media. I think they're really damaging to young, for young people.

• 32:25Alex Kantrowitz?

  Yeah, it's fascinating. And most of the conversation is around these meme stocks and Coinbase and all that stuff. But as you mentioned, time in the market, being in low cost index funds, probably the best way to go.

• 32:36Speaker 01

  I think so. And, you know, you're going to see on Instagram or Twitter, someone who took a shot of their screen account that shows the Doja Coin is up.

• 32:44Alex Kantrowitz?

  Right, they're game porn.

• 32:46Speaker 01

  Yeah. And look, I, I want to be clear, I'm, I'm guilty of this. I'm, I'm now taking money out of the public markets and putting it into the private markets. One, because I get access to opportunities other people don't. That's my white privilege or whatever you want to call it, or I've earned that privilege. It's probably, you know, it's probably both. And two, I check my stocks too much during the day. And if I can take, I probably spent 30 to 60 minutes just looking at stocks and, and calling my broker and asking questions, like, what am I doing?

• 33:19Alex Kantrowitz?

  Yeah.

• 33:19Speaker 01

  I need to find stocks and I'm usually pretty good at this. I've owned Amazon and Apple for 12 years. I buy them, I check them out every once in a while, but I just leave them the hell alone. Or I give money to someone who manages my money full time and maybe they call me once every three months and tell me how it's doing.

• 33:39Alex Kantrowitz?

  A young person's most valuable capital is their focus and their time. Devote as much time as you can to your physical and mental wellbeing and getting great at something professionally. And let someone else watch and get indigestion over Dogecoin or what's happening to, what's happening to Amazon or DoorDash today. That is not stress you want to endure. Right. Okay, we've talked a little bit about, or a lot about the difference between making money on assets and wage work. After the break, I want to talk a little bit more about wage work and what's going on inside companies today. Because there has been a lot of interesting developments like at Coinbase, like at Basecamp, look even at Shopify.

• 34:23Alex Kantrowitz?

  And of course, the big tech companies, Apple this week had a bit of rebellion from employees against management. So let's talk about that after the break. Hang with us. We'll be back right after this. This episode is brought to you by App Point. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data and most teams have no single way to see it, secure it and prove it's under control. That's exactly what App Point does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate. Your data, your cloud and the agents acting on your behalf.

• 35:07Alex Kantrowitz?

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• 35:34Alex Kantrowitz?

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• 36:19Alex Kantrowitz?

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• 36:34Alex Kantrowitz?

  And we're back here for the second half of the Big Technology Podcast with Scott Galloway, professor at NYU, also the author of many great books and the host of a couple of podcasts, which you should definitely check out, although you're probably subscribed already. Scott, I wanted to talk to you about this interesting thing happening inside companies. And maybe it's a symptom of what we've discussed so far, where there's this whole family, you know, the business is a family or the company is a family. That trope seems to be falling apart. Companies are telling their employees not to talk. Politics there, businesses that seemed mission-oriented are now, you know, getting some heat from their employees that they're not really mission-oriented. Last week, there was a long post that came out from the CEO of Shopify telling employees,

• 37:19Alex Kantrowitz?

  you know, "We are not a family. A family can't unfamily you. Stop thinking about it in this way." So I'm kind of curious. Do you think that there's this moment is something where workers and companies are starting to reevaluate the contract between them? And maybe, you know, this is also a symptom of something that we talked about earlier, where, you know, workers are seeing the difference between themselves and the executives of these companies. We have an economy that rewards innovators, and they're not getting the rewards that their CEOs are getting. Then maybe they're starting to rebel a little bit. I'm curious what, you know, what you think about when you see stuff like this go down.

• 37:55Speaker 01

  So it is really interesting. One, you do have a younger generation that seems more... Politically conscious or more conscious of some of the externalities of that quite frankly, my generation has created and they want a company that is the purpose, the purpose of the company, the purpose driven nature of a company plays a greater role than it did in my generation. So that's some of it. However, however, I do think most companies still take sort of an apolitical viewpoint and say, look, this is a fantastic platform, hopefully for you to develop economic security for us to rent your human capital and for you to figure out a way to have health insurance and put food on the table and establish economic security for you and your family.

• 38:41Speaker 01

  But you're going to leave your politics at home. The majority of companies are still that way. What the kind of the mistake, if you will, is that a lot of companies kind of entered into the political fray and then they want to put the genie back in the bottle when their employees actually believe that this was a forum for political viewpoints. And, and then when the senior management didn't like what they were saying or found it uncomfortable, they tried to shut it down. So they kind of invited it. And then when they didn't like it, they wanted to shut it down. I think a lot of it is narcissism. I think a lot of the companies are run by tech innovators that want a virtue signal in, in all hands meetings and talk about how woke they are. And by the way, the strange thing here is almost all of these values that come out in a company are generally woke.

• 39:25Speaker 01

  If, I mean, there's a couple of companies Hobby Lobby or Chick-fil-A that are famous for their conservative values, but And Dural.

• 39:33Speaker 01

  Some of the Teal funded companies also.

• 39:34Speaker 01

  Yeah, some of the Teal guys. Yep. But generally speaking, if you hear a company expressing political views in an all hands meeting, it's generally very woke values. If you showed up to work and said, I want to have an all hands and you stood up as a CEO and said, I really want to talk about our progress in protecting the rights of the unborn or ensuring that our second amendment rights are protected. That shit doesn't roll in corporate America. It's, it's generally seen as, and as a progressive. I say this, and I've just noticed that there is definitely a, a, a woken nature to what I'll call the overt all hands, the politicization of the all hands.

• 40:17Speaker 01

  I do think that a lot of people are snapping back and saying, look, You know, there are certain companies you're going to expect of her. If you go to work for Ben & Jerry's or Patagonia, or that you know that there's a political complexion of the founders there, and that they get psychic income, and they were, they also offer that, that reward to people who have congruent values by working there. I think 99% of corporate America is likely going to say, "Okay, this is so complicated and so dangerous that we'd rather keep this an apolitical platform." And that is, "We want to help you develop economic security, and then you should be free to exercise your political views on evenings and weekends, but you should probably check it at the door." I think a lot of these CEOs invited this, and then when they didn't like it,

• 41:01Speaker 01

  they tried to put the genie back in the bottle. I think generally accepted values around the important conversation around gender balance, around giving, you know, communities that have been discriminated against more opportunity. I wouldn't even argue those are woke values anymore. That's just kind of generally accepted behavior, I would hope at this point. So I, I, you know, I would argue that it's important for leadership to take strong stands on that. But what's happening is that the music has to match the words. Nike can't just put out a black square saying that Black Lives Matter on Instagram, and then you find out that the percentage of their VP-level officers does not match the percentage of people of color in our nation or their customer base. So, um, I, I, look,

• 41:43Speaker 01

  I think there is, I think we have probably, I think the Shopify memo was outstanding. Um, I think when the Basecamp guys decided to try and put the genie back in the bottle, they, you know, they had invited it.

• 41:54Alex Kantrowitz?

  Yeah, there was definitely a difference between those two. Right.

• 41:57Speaker 01

  But it's easy to, you know, try and cast yourself in a positive light, but I remember I went on the board of Gateway Computer, which is, I want to acknowledge is like the weakest flex in the world about 15 years ago. And I remember-

• 42:10Alex Kantrowitz?

  They were popular.

• 42:11Speaker 01

  Yeah, they actually, when I was there, we sold three times as many computers as, uh, as Apple. But anyway, uh, at the time, uh, with no margins. Um, but I remember saying, you know, that someone in a, in a, I'll have said, "We're a family," and then they asked for feedback, and I said, "Dude, don't tell them we're a fam-" "We're not a family. We might fire a third of these people in six months. You don't fire your son. Um, we're not a family. You know, at best, we're a team, hopefully, but we're, let's be honest, we're not a family." And I think that's right. And also, I think you have to respect that there's a really large population of people whose political viewpoint is to be apolitical.

• 42:47Speaker 01

  And/or there's a reason that we vote behind a curtain. Some people don't want to have it's I think of politics at work is almost like an additional tax on workers. And that is not only do you have to be good at what you do, not only do you have to get along with people, not only do you have to shave and shower and put on a clean suit or a nice pantsuit and get into work. You have to thread the needle of being politically acceptable in your viewpoint.

• 43:13Alex Kantrowitz?

  Yeah.

• 43:14Speaker 01

  That's just do we do we want to impose another tax on employees and management? I I personally think there's real value to what the CEO of Shopify said, look, that's just not the business we're in. You know, the the eight hours or 10 hours a day you're here. That's not what we're going to expect of you or ask of you, or quite frankly, even tolerate. I remember certain companies saying back in the 90s, you weren't allowed to send out a solicitation for a fundraiser for your kid. Like, look, just don't bring that shit to work. I'm sure it's a worthwhile cause, don't bring it to work. And I kind of empathize with that.

• 43:52Alex Kantrowitz?

  Right?

• 43:52Speaker 01

  Right. So I do think we're seeing a snapback, long-winded way of saying that.

• 43:57Alex Kantrowitz?

  Yeah. And one of the things that you wrote about in post Corona, your latest book, was that when the pandemic hit, you were much more likely to lose your job if you're making under $40,000 than if you were making over $100,000. Just thinking about the political shift that we're we may see in this country. I think that right now, like, it's a big shuffle in terms of who the party's bases are. Yet we see a lot of democratic politics end up in the places where the, you know, among people who are who aren't hurt very much by some of the stuff going on and seem to be the winners in the winner and loser economy. Do you think, you know, the Republicans right now are saying that there's like a big chance that that they want to be the party of the working class? Do you think there's a chance we're going to see that shift? I mean, this whole conversation that we just had about politics in the workplace made

• 44:42Alex Kantrowitz?

  me think of it. So I'm curious what you think.

• 44:45Speaker 01

  Well, like, a couple of things in that. I do think we've essentially outsourced this pandemic to poor people of color who are overweight. It's just, you know, if you're rich and thin, the pandemic has meant more time with family, more time with Netflix, and your stocks have exploded. Okay, I'm wealthier and I get to hang out at home. I mean, it's just. Which I think has been dangerous because I think it's dampened our response. I don't think this virus has seen what America is capable of in terms of a full throated capitalist response. Within seven days of Pearl Harbor, Chrysler converted its largest factory from manufacturing Pontiacs to manufacturing M1 Bradley tanks. And we punched out more tanks than the entire Third Reich did during the entire war. So this has, I think, muted

• 45:30Speaker 01

  our response. So I think it's, it's, it's been dangerous. The people over a hundred thousand dollars have seen no change in employment. Sixty percent of them can work from home. If you make less than forty thousand dollars a year, forty percent of those people have seen some sort of interruption or job interruption, and less than 10% can work from home. They tend to be more overweight. They tend to have, be underinsured, so they gotta throw their Diet Cokes and their diabetes medication in a new GluCooler and head out with an Uber app and put themselves in harm's way. So there's just no doubt about it. We have absolutely, I mean, nothing has changed here. We've just accelerated it. We knew that, that, that there were forty percent of America was like one big bill away from financial ruin or

• 46:11Speaker 01

  living in their car, and we have accelerated that. So that's, that's been, I think, one of the wriggly, really ugly parts of this pandemic is it's, it's drawn us closer to, or really shoved in our face what happens when you show such a lack of empathy. I think capitalism doesn't survive unless it sits on a bed of empathy. I just don't, you know, the redistribution of income has to happen. I don't, I, I think, I think capitalism, you know, collapses on itself inland. And if there's a, if there's a one big mistake, I think we'll, in retrospect, think, or absorb coming out of this pandemic, is that we should have been protecting people, not corporations. We're much more empathetic

• 46:56Speaker 01

  with corporations than we are with people for some reason.

• 46:59Alex Kantrowitz?

  Yeah, but let's end with this. Do you, do you think that there's still, you know, people talk about the US as like a land of opportunity. They talk about the American dream. Do you think that still exists? We talk about a tilted system. People call it a rigged system. But it does seem like there's still like a good amount of opportunity out there. So, you know, I guess I would just like to, like, hear your perspective on like what the truth of the matter is in this, in this regard.

• 47:25Speaker 01

  Yeah, look, I'm, I'm obviously a glass half empty kind of guy. But look, I believe what Bill Clinton believed, and that is I don't think there's anything wrong with America that can't be fixed with what's right with America. I think that the immunities are kicking in. We're taking antitrust against monopolies. We might unlock incredible time savings with healthcare or health tech by letting a mother with a child with diabetes take the 12 weeks a year she spends managing that child's diabetes down to four weeks with remote technologies. I think giving people the opportunity to work from home is huge. I think the most recent stimulus that increases the wages or the take home income of the bottom quintile of income earning households by 20%. I think

• 48:05Speaker 01

  we see how important cooperation is, or hopefully we'll see how important cooperation is. So I don't think there's anything that can't be fixed with, like I said, with, you know, I think we can't, that we can fix anything that's wrong with America with what's right with America. But we have to recognize that the, we are the apex species. And what is, what is the super weapon or super power of our species? Cooperation. The way we have led which cooperation into prosperity is through capitalism. And capitalism is full body contact violence at a corporate level that creates competition and prosperity such that we can be more empathetic and loving with people, such that we can ensure that our seniors don't die on the streets, we can provide food stamps to people who are in need. And we need to just reflect more of that empathy towards people and less

• 48:50Speaker 01

  towards corporation, corporations and billionaires. The immunities are kicking in. We are going to see antitrust. We are going to see a greater redistribution of income to our brothers and sisters who are struggling and are food insecure. But it is up to us. It is not an organic process. It is up to us.

• 49:07Alex Kantrowitz?

  Okay, Scott Galloway, what a note to end it on. Thank you so much for joining.

• 49:11Speaker 01

  Thanks for having me, Alex. Best of luck to you.

• 49:13Alex Kantrowitz?

  Appreciate it. Is there anything that you want to shout out? The podcast or the books?

• 49:17Speaker 01

  Nope.

• 49:18Alex Kantrowitz?

  At the end? Okay. Well, we read them all at the beginning. Thanks, everybody for listening. Thanks, Nick Watney, for editing and Red Circle for hosting and selling the ads. Appreciate you all being with us till the very end, and we look forward to seeing you next week.

• 49:39Speaker 02

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