Preet Bharara:

From CAFE and the Vox Media Podcast Network, welcome to Stay Tuned. I’m Preet Bharara.

Scott Galloway:

We have morphed from being the greatest upper lubricant in mobility in the history of capitalism to the enforcer of the caste system. You want a caste system? Don’t go to Europe, come to U.S. higher ed.

Preet Bharara:

That’s Scott Galloway. He’s a professor of marketing at the NYU Stern School of Business, a serial entrepreneur, and my friend and colleague at Vox Media, where he co-hosts the popular podcast, Pivot, alongside Kara Swisher and The Prof Pod With Scott Galloway. We discuss several of Galloway’s thought provoking positions, including his belief that elite universities have collectively created a virtual caste system in the U.S.. Why he thinks Mark Zuckerberg is the most dangerous person in the world, and how the pandemic has fundamentally changed the way we work. That’s coming up. Stay tuned.

Preet Bharara:

Before I get to your questions, I want to note that the CAFE merch shop is now open, right in time for the holidays. And we’ve got some fan favorites like our signature Stay Tuned sweatshirt and coffee mug. You can get them at cafe.com/shop, that’s cafe.com/shop. Now let’s get to your questions. This question comes in an email from Blake, who writes, “Michael Cohen said a lot of interesting things on Meet The Press this Sunday, including that the Manhattan D.A. is going after Donald Trump and his family, and that former Trump org CFO Allen Weisselberg is not the key to this investigation. What are your reactions to those comments? How would Cohen be in a position to know?” So it’s kind of interesting. You’re obviously asking about Michael Cohen, who was the former personal lawyer to Donald Trump, who pled guilty to charges in my old office, the Southern district of New York, was sentenced to three years in prison.

Preet Bharara:

He has now served that time and he’s making a lot of statements that might seem odd to folks because how would he be in a position to know? I don’t know how much he knows, but what has been reported, and what he has revealed is that he’s had a lot of conversations, I mean, debriefed by the Manhattan D.A’s office. And often you can get some insights from the questions that are being asked and the topics that are being covered. He may be in some position to know that something’s going on. I do take a lot of what he says with a grain of salt, for a couple of reasons. Number one, he’s a problematic witness himself. As I pointed out before, on other occasions, the Southern District of New York attorney’s office never signed a formal cooperation agreement with him. My suspicion is that they found him either not to be forthcoming, or not to be completely candid, and so he was a problematic witness.

Preet Bharara:

He’ll be a problematic witness in any future proceeding in any event, in part, because he has literally pled guilty to lying. On the issue of whether Allen Weisselberg is or is not the key to the investigation, I’m not sure what he means by that. Maybe Cohen is thinking that he now serves as the key to the investigation against Donald Trump and members of his family. The full quote is rather interesting and he’s pretty stridden about it. He says, “You can bet your bottom dollar, that Allen Weisselberg is not, and I truly, I mean this, Allen Weisselberg is not the, you know, the key to this.” That’s probably true now, because as you may recall, Allen Weisselberg has been charged himself with multiple counts of criminal conduct, including evading taxes with respect to fringe benefit payments he got as the CFO to the Trump organization.

Preet Bharara:

But certainly it’s the case that the Manhattan DA’s office was acting like Weisselberg was the key to all of this, given how much they were going after him, given how much they were attempting to flip him, given that they were making presentations to him before they actually charged him, given the speculation, and I think it’s reasonable speculation, that they were hoping the charges once finally brought, would change his mind about flipping against his former colleagues at the Trump organization. And common sense also tells you that if someone is the CFO of a company, they know a lot about the finances of the company. They know a lot about representations that have been made to financial institutions, which are among the things that we understand the Manhattan D.A’s office to be looking at. And not only did he have that position, he had it for years and years and years.

Preet Bharara:

So we are now in the month of December, Cy Vance’s tenure as Manhattan district attorney ends in four weeks. So I think this is an important period. Cy Vance has been overseeing the investigation since its inception, I would think he would want to make the decision about it in the near term. I don’t know what that decision will be, but maybe Michael Cohen knows more than other people know. I wouldn’t bet on the though.

Preet Bharara:

This question comes in an email from Clara. Hi, Preet, love the show. Can you help me understand what’s going on with the 01/06 committee’s subpoenas? What does it mean that Mark Meadows is now cooperating with the committee? Could he still face charges? So it’s very interesting. It’s fluid. We’re recording this on Wednesday morning, December 1st. By the time you listen to this, there may have been other developments. But I think what you’re seeing here with respect to Mark Meadows and his change of heart, because he was initially very defiant of the subpoena. Didn’t even show up in front of the committee. You’re seeing the Bannon effect. And I’ve talked about this before, and Joyce and I have spoken about it on the Insider Podcast.

Preet Bharara:

But we’re actually seeing the practical effect, I think, of how significant the indictment of Steve Bannon for contempt of Congress has been. You had a defiant Bannon; you had a defiant Mark Meadows; you have a somewhat defiant Jeffrey Clark; and then Bannon gets indicted. And then Mark Meadows has a decision to make. Do you figure out a way to negotiate some parameters with the committee? Maybe make some narrow claims of executive privilege because as Mark Meadows, unlike Steve Bannon, was actually working in the White House at the time of January 6th, or you just thumb your nose completely. You now know that it’s not an empty threat, the possibility of indictment. And Steve Bannon may want to be a martyr, and may want to fight, and may want to have his time in the sun, because that’s the kind of nihilists he is, but not everyone is that way.

Preet Bharara:

Mark Meadows is a former member of Congress. Maybe he has a little bit more respect for the former body in which he was a member than Bannon and others. And it’s not pleasant to get indicted. It’s not pleasant at all. And it’s costly, and it’s a diversion. It takes up a lot of your time, and it can have future consequences in your life as well, even though it’s only a misdemeanor in this case. And also, by the way, there’s prison. Mark Meadows maybe doesn’t like prison. A year may not seem like a long time in the vast scheme of things, but a year is not a short period of time, particularly at the age of Mark Meadows. The question is whether he could still face charges? Yeah. It depends on how much he cooperates, it depends on what the agreement is, it depends on how the negotiations are going.

Preet Bharara:

I think the committee chairman has made clear that with respect to Mark Meadows and other witnesses, if there’s partial cooperation, but then it stops or there’s some defiance later, they still reserve the right to take a vote to make a referral for contempt of Congress. I think that that becomes more difficult to do, the more cooperation that there is, and it may not rise to the level of criminal indictment. But I think this is a good development. The indictment of Steve Bannon has had the desired effect. Stay tuned. There’s more coming up after this.

Preet Bharara:

Provocateur, entrepreneur, outspoken, erudite, just a few words to describe my guest today, Scott Galloway. We discuss a range of highly charged issues, including his belief that Facebook continues to outfox everyone, and why we’d be better off redefining conventional constructs of masculinity. Scott Galloway, welcome to the show. It’s good to see you, although I’m not seeing you.

Scott Galloway:

So let’s be honest. I’m sloppy seconds. Who canceled? Why am I here?

Preet Bharara:

Nobody canceled. We wanted you for a long time. You are now my colleague at two fine institutions.

Scott Galloway:

I know one. What’s the second?

Preet Bharara:

New York University. I teach at the law school. You are a professor of marketing at the Stern School of Business. And the other is, of course, Vox Media, and we have become… You might as well tell people, we’ve become very close.

Scott Galloway:

Well, I’m glad to see you’re finally investing in our relationship and more in touch with your emotions.

Preet Bharara:

Can I make an opening comment about you?

Scott Galloway:

That depends. Go ahead. Yes. Let’s talk about my favorite subject; me.

Preet Bharara:

Hold on. I’m reminded that we have a third institution. We both also work for CNN.

Scott Galloway:

Oh, that’s right. You know what? I was literally taping my pilot, and they asked me for a list of people who’d be great contributors. I’m like, “You know who’d be great? Preet Bharara.” And they go, “Yeah, he’s on. He’s on payroll.” We already got him.

Preet Bharara:

We already got him.

Scott Galloway:

We already got him.

Preet Bharara:

My goal is to work for everyone you work for.

Scott Galloway:

There you go. There you go. That’s the easiest way to look good.

Preet Bharara:

So there are many [inaudible 00:08:55] of your self confidence. There’s a bunch of people who know you and follow you on social media. But one in particular struck me because you go on hiatus sometimes from one of the podcasts you do with our friend and other colleague, Kara Swisher, the Pivot Podcast, which is also part of the Vox Media Podcast Network. I’m going to stop doing any promotions in a moment. But you went on break for a while, and Karen needed a bunch of guest co-hosts. I served one time. That’s not a thing that I like to do. I finally did. It took me years to do that because I’m always worried people are going to find out that the substitute is a lot better than I am, and I’m going to be like that quarterback who gets injured, who’s very, very good, but not.

Scott Galloway:

And then Steve Young comes out the bench.

Preet Bharara:

Yeah. And then all of a sudden, nobody wants Preet back.

Scott Galloway:

Yeah. No.

Preet Bharara:

How did you develop such self confidence, sir?

Scott Galloway:

First off, thank you. Everyone has to have a code, and I’m getting very serious [inaudible 00:09:56]. One of my codes are a huge point of inspiration for me professionally and personally is my atheism. I think there’s going to be a point where I look into my kids’ eyes and know our relationship is coming to an end. And so I do try and ask myself, “Will I regret doing this action or activity when I’m at the end?” Because the end is just coming a lot faster than I anticipated. I think we’re about the same age, but I just can’t get over the waterfall or the speed of the velocity that time is accelerating into. And I just don’t think I’m going to regret taking all of August off for the rest of my life. And I tell everyone I work for, even the CNN deal. And they looked at me pretty aghast when I take all of August off.

Scott Galloway:

So let me be clear. I’m still rabidly insecure. I listen to all your podcasts and I look at the tweets to see, to make sure that you’re not too much more popular in me, but it’s not a function of being secure. It’s a function of fear of death, or a recognition that death is coming sooner than I like. And I want to spend August in beautiful places in Europe with my family.

Preet Bharara:

I learned some things about you, as our crack team here developed a Scott Galloway memo. And it was interesting to see, and I was startled to hear you didn’t have the greatest of all childhoods.

Scott Galloway:

I think you’re trying to set me up for success, and I appreciate you saying that. It depends the aperture or the perspective of the lens. And I think that’s one of the things you start to evaluate or register as you get older. Until the age of 40, I was very fond of virtue signaling or the humble brag of saying I was raised by single immigrant mother, our household income was never above 30,000 or 40,000 a year. I was a Pell Grant kid. And you think to yourself, and then based on the lens focused on where I lived in California, I was probably… I described my household as being upper lower middle class. And I was worse off economically or from a family support perspective than most of my colleagues. But all you have to do is zoom the lens out a bit.

Scott Galloway:

And I started doing this when I hit my 40s and recognized I was born a white male heterosexual in 1964, which basically put me in the top one percentile of the most fortunate people in the world, because what did that give me, Preet? It gave me access to the University of California, Los Angeles, and UC Berkeley, not only for [inaudible 00:12:20] for free, but for unremarkable kids. I couldn’t get in now. And that was an incredible blessing. My roommate in my fraternity, my freshman year, [Pat Jarvis 00:12:31] was born a white male homosexual. And I go on to have what I would describe as a fairly remarkable career. I’m the first person to graduate from high school from either side of my family. I got free education, I was born into the internet age, I came a professional age out of Berkeley in the 90s. We were processing power in cheap capital.

Scott Galloway:

We’re fueling anybody much less, somebody with a shaved head and a good wrap. I could raise tens of millions of dollars. And so I’m here because it’s kind of 50% luck, 50% timing, and the rest is talent. So all I need to do is take the lens back. And then my college freshman roommate, God reached into his soul and made one slight change, changed his sexual orientation, and he died alone of AIDS at the age of 33. So all you need to do in my life is just take the aperture back, take the perspective back, and it’s like, “Well, did you grow up under hard conditions? Or are you one of the luckiest people in the world?” And as I’ve gotten older, I recognize that, yeah, things are a little bit harder for me than a lot of my colleagues growing up. But I also wonder if that is why I’m here. I often say…

Scott Galloway:

I know you have kids, and I don’t know if you feel the same way, but I often say, “I wouldn’t have what I have if I’d had what my kids have.” And that is at a very young age, I registered the connection between success, influence and economic security, and work. And I struggle with how my kids are going to make that connection. Anyways, long-winded way of saying, yeah, relative to… If you zoom in, relative to my peer group at the time, I probably had it a little bit tougher, but if you zoom back to the country as a whole, much less globally, incredibly blessed.

Preet Bharara:

And I get all that. But it was as recently as 2019 that you talked about what the sort of the mood in the home was, you wrote, “Slowly, our home became infected by ambivalence.” And then you said this, which struck me, given what I know of you and your personality now. You write that for a variety of reasons, there was “no affection, no teasing, no arguing, no discipline, no conversation.” You are a person who is very affectionate. You tease, you argue, you make your living by conversation. Was that a conscious rebellion against what your house felt like when you were young? Putting aside all these other issues of privilege.

Scott Galloway:

I feel a lot of emotion just hearing you articulate those things. Yeah, I grew up with my parents. My parents accomplished what I think the box you want to check as a species or as parents, and that they were much better to me than their parents were to them. But they were European… My father, I would describe as a fairly low character person, started his third marriage while he was married to his second wife, my mom, and just wasn’t around a lot or especially engaged. He wasn’t a bad person. Never abused me or anything like that. I think my mom was suffering from what I call low grade depression. And all I remember growing up was just sitting around the dinner table and no one saying a word. And there was just this sort of uncomfortable tension.

Scott Galloway:

And then my parents went through it. I think a lot of families go through, and that was a pretty ugly divorce, where when my dad came to pick me up every other weekend, my mom wouldn’t walk me out because she didn’t want to see his car. You know, that kind of bullshit. I was an eight year old. I was delivering very heated vitriolic messages back and forth between the two of them. “Tell your father, if I don’t get the child support in the next week, I’m calling the police.” And my dad’s saying, “I’m not paying…” You know, you don’t do that to an eight year old. And it’s not because they were bad people, they didn’t know any different. But I’d like to think that there’s a certain amount… You know, whatever doesn’t kill you makes me stronger. I decided at an older age, once I had kids, that I was going to really be affectionate.

Scott Galloway:

And that not only because I thought it was the right thing to do for them, I think the best thing you can do for a kid is just, in explicit and implicit ways, every day tell that kid, “You’re wonderful.” That someone impressive and a good person, “Me, dad or mom just thinks you’re wonderful.” And I think over time, they start believing it. And I think that’s hugely important.

Preet Bharara:

What about when they screw up?

Scott Galloway:

Yeah. So this is where I think I’m not a great dad. My partner is a disciplinarian. And what I’ve come to appreciate is discipline is really hard, because it’s much easier to say, “Hey, let’s go to iPic and watch the new Avengers film,” even though you got a C on your test or that you’ve been acting out and you’ve been really difficult. My partner runs the household like a panzer tank division and I’ve really come to respect how important that is. I’m not as good around the disciplining stuff. I’m kind of the-

Preet Bharara:

Well, maybe it’s okay if you compliment each other in that way. So you get to be fun dad, and is there new resentment about that?

Scott Galloway:

I think there’s resent meant that I’m just not as competent as I should be, and that I don’t participate as much as I should. Everybody finds their dynamic but circling back to affection, I spent a lot of time thinking about coaching young men. And I would say to young men that if you don’t have the confidence to be affectionate, and not only… Affection, as a young man, you’re taught… At least my generation, you were taught that it either signaled weakness or homosexuality. And both of those things were considered bad things. And what I would coach young men is that if you don’t really embrace affection, and that is affection with your mate, affection with your parents, and especially affection with your kids and your boys.

Scott Galloway:

I remember this exact moment, my best friend, [Lee Lottos 00:18:17], this Italian guy, his father looked like Burt Reynolds. His father, for me, growing up was like the image of masculinity. And when his father, Lee Snr., used to show up, he’d walk over to Lee and kiss him on the lips as an adult man. And I thought, Burt Reynolds can kiss his son on the lips, so can I. It was one of those moments where I thought, “These guys get it. They’re affectionate with each other. They love each other. They express that.” And I grew up in a household where I didn’t have that. So at a very young age, I thought as long as my kids are going to let me, I’m going to be very affectionate with him. It’s a gift from God. Our species; mammals we’re supposed to touch. My dogs, every night, do the same thing. They come lay on me because that’s their natural state. I think that’s our natural state.

Preet Bharara:

I hug my kids nonstop. Two of them are now in college. We just saw them over the Thanksgiving break, and they flew back to college and we came back home to New York from the Chicago area. It’s hard to explain for people who are in families where that doesn’t happen. But I think if families hug each other all the time every day, over time that makes a big difference. And I think there are actually studies that bear this out, but I think you’re right. I’m going to ask you one more question about your younger days, and then get to something that you mentioned in passing a few minutes ago. So you were a young man working on Wall Street in the 80s. Do you have any observations about that time period and what that was like?

Scott Galloway:

First off, I had no idea what investment banking was, but I thought it would impress women. So I thought-

Preet Bharara:

Who you also wanted to hug.

Scott Galloway:

Yeah, sort of. But also, my roommate desperately wanted to be an investment banker. And I was very competitive with him, and I thought, “Well, if Gary wants to be an investment banker, then I’m going to be an investment banker.” I had no idea what it was, but I interviewed well. And I got a job at Morgan Stanley. And I’d heard they didn’t drug test, which was one of the reasons I accepted an offer with them, which ended up being not true. But anyways, I started in Morgan Stanley in 1987. I was very fortunate to be there. It was kind of my bootcamp. I didn’t do very well. I got a 2.27 GPA out of UCLA. I spent majority of my efforts trying to figure out a way to make bongs out of ordinary household items.

Preet Bharara:

How did you get the Morgan Stanley job?

Scott Galloway:

I lied about my grades.

Preet Bharara:

Oh.

Scott Galloway:

I lied.

Preet Bharara:

It’s all right.

Scott Galloway:

Yeah, I’m not proud of that, but yeah, I lied. And they didn’t check transcripts at the time, which is probably why I can never… This podcast is why I can’t run for Senate. Anyways. But my observations, it was very male. Assholly behavior was tolerated and even encouraged, but it was a fantastic bootcamp for me. And attention to detail working hard, and I recognized that not because of UCLA, but because I hadn’t worked as hard, I wasn’t as skilled as my analyst class and every Tuesday more morning for the first year I worked there, I would go into work Tuesday at 9:00 AM, and I wouldn’t leave till Wednesday at 5:00 PM because I didn’t have dogs or spouses waiting for me at home. I was physically fit and I wanted to signal that I came to play.

Scott Galloway:

And that kind of behavior was really rewarded, for better or for worse. They used to give you a clean white shirt, and at the end of the year they’d count how many white shirts you had. So it was sort of an abusive testosterone field behavior or environment, which I think has changed a lot for the better. I learned a lot about the markets, and more than anything, I learned about attention to detail, because we used to have to read prospectuses, frontwards and backwards. And most jobs are one or two things; they’re either very interesting but a lot of pressure or they’re either boring but not a ton of pressure. Investment banking is this unique combination of incredibly dry, boring material with a ton of pressure placed on it. That’s why they have to pay them so much.

Scott Galloway:

You’re not doing deals on a Concord, you’re proofing a prospectus, and if you get the true interest cost calculation wrong, you’re going to get fired. It’s like if there’s any mistake in the document, you’re going to get fired as an analyst. And that was a great training for me. I think you get some of that training, I would imagine, in law school, and working with the Southern district. Everything that leaves your desk has to be pretty close to perfect.

Preet Bharara:

It’s actually not that different from my recollection of experiences as a junior associate at a top law firm, where the young lawyer who just graduated from the great law school or had the great clerkship is not going and fighting courtroom battles. You’re sitting there and it’s not a prospectus, although if you’re on the corporate side maybe that’s part of your job. But on the litigation side, your job is to really flyspeck a brief that you’re probably not even senior enough to have written or drafted, that’s a mid-level associate most likely, and you’re checking every site. You’re making sure that every comma-

Scott Galloway:

Yeah, everything.

Preet Bharara:

Period, hyphen, em dash-

Scott Galloway:

Yeah, 100%.

Preet Bharara:

Is correct. And it’s not inspiring work, but I’ve often said something parallel to what you just said, which is, it is a training in how to be detail-oriented and in a rigor.

Scott Galloway:

100%.

Preet Bharara:

And if you don’t have that as a foundation for other things you do later, you’re in trouble.

Scott Galloway:

It’s like serving in the Marines, you’re glad you did it. You came up with skills. You wouldn’t want to do it again, but I absolutely needed it. And it also was a blessing, and that is, I knew I didn’t want to do this the rest of my life. And that’s a blessing when you go into something that’s a great training. The pedigree Morgan Stanley probably got me into graduate school. It gave me incredible kind of bootcamp, and also I was blessed to find out this absolutely is not what I want to do with my life. And that’s a blessing to figure that out quickly.

Preet Bharara:

It is. So it’s interesting what you said earlier in the conversation about having made the decision you want to take August off. There is a lot of discussion these days about the nature of work, how people work, how much people work, where they work. I know that you and Kara talk about this all the time. This August off issue, there are people in America who make fun of the Europeans who do some version of this. Should the American workforce be clamoring for a month off every summer?

Scott Galloway:

So first off, I need kind of a disclaimer here. And that is, a lot of this is a function of my privilege. A lot of people just can’t engage in this conversation, much less have the option to do it. So I recognize that I’m privileged to be able to do this.

Preet Bharara:

Well, more people would have the option to do it if their employers paid them for that month off.

Scott Galloway:

That’s right. I think there is something to be said. You know, it all depends. I say this because my ability to take August off is because not that long ago, just 10 years ago, when I started L2, an analytics company, me and my partner on Thanksgiving, every Thanksgiving, for about eight years, we left for Europe Wednesday night because Thursday and Friday were opportunities to work in Europe because America was taking two days off. And that was our opportunity to lap the competition. That’s how we thought. And I think you need a certain amount of that warrior attitude with a small business. There’s Hallmark channel version of small business that, “Oh yeah, everybody gets to bring their dog and has a lot of family leave. It’s never the person, it’s the role.”

Scott Galloway:

Startups are hand to hand combat. And I think you just have to work your ass off. I’ve never known anybody who got to a certain level of economic security and then had the option to take August off as I do without spending 10, 20 years plus working their ass off. What I call it is… There is no such thing as balance, there’s only trade offs. And you have to decide at a young age, where do you expect to be economically, in terms of influence? And if you do want to be in the top 10%, much less, the top 1%, there’s going to have to be kind of a multi-year stretch where you are working very hard, very hard. And I did that. And as a function of that, I want to take advantage of some of the economic security I have and take August off. Now, the larger question around whether it should be a societal norm, I don’t know.

Scott Galloway:

I think in America, we decided that we believe in winners and losers. I think America becomes more like itself every day, and that is a loving, gentle place for people with money and a rapacious, harsh place for people without money. And there’s just no getting around it. The more productive you are, the more progress you can make relative to your competitive set, the more economics you can capture. So I like the idea of more people taking August off. My new company, Prof G Media, I try to actively encourage people, and it’s more than just words, we shut down and we take time off. But that’s because we’re sort of blessed with a certain amount of credibility and economics that come from experience. And the fact that a lot of us log those decades. I can’t imagine how hard you must have worked Preet. I can’t imagine as an associate or as the person running the Southern district, I just can’t imagine it was a lifestyle job for you.

Preet Bharara:

No, it wasn’t. And look, one of the reasons that I was happy to be in public service was when I missed birthdays and I missed events for my kids, and I was working Saturday and Sunday and all the of time, it was not on behalf of some corporations doing some other corporation.

Scott Galloway:

Yeah.

Preet Bharara:

It was on behalf of the public. I’ve had this conversation with friends of mine, and that’s why I choose to do what I do now. I think it’s valuable and worthwhile, and it has meaning. There are a lot of people who work at jobs where they have some professional connection and professional pride in what they do. But if the work doesn’t have meaning, then it’s not for me. And so maybe it’s the case that for lots and lots of folks who do work that isn’t inspiring like that. “The mass of men lead lives of quiet desperation,” so was said. Should they get the benefit of more benefits from their companies, family leave and those sorts of things? And also an entire month off like a lot of Europe does.

Preet Bharara:

And another example of something that’s been debated a lot recently, and I wonder what you think, the four day work week. And there are some studies that show that in certain industries, there’s the equivalent level of productivity with a four day work week. I want you to comment on that. And then my last question is, this issue of how people work, and how hard they work, and where they work, has that been disrupted temporarily, not at all or forever by COVID?

Scott Galloway:

A lot in there. I think that the four day work week, there’s a large cohort of the American working population that doesn’t live to work, they work to live. And God bless them, there’s nothing wrong with that. And they want to make a good living, but they have a balanced life, and the opportunity to not have to commute or spend an hour or two hours or three hours a day getting ready, putting on a suit or a pant suit, blow drying their hair, commuting on the Long Island transit, to offer them that Friday at home or a flexible work week is a huge benefit, and there’s a war for information workers. So it’s another form of compensation that companies will reluctantly be forced to offer. I think that’s coming. And I think COVID has trained corporations how to rent human capital more efficiently, even if that human capital does not show up into 50-story amalgam of asbestos steel and glass.

Scott Galloway:

We’ve just gotten better at it. We can maintain much more productivity. And also, when you give people back two hours a day and you kind of split it with them, everybody ends up better off. And it costs about $28,000 a year for corporations to office an individual, so if they let them work from home, everyone’s kind starting-

Preet Bharara:

Is that the average everywhere? That’s not a New York city average, is it?

Scott Galloway:

No, I think it’s nationally. It’s more expensive than you think. When you talk about security, the real estate, the insurance, a lot of times they compensate you for your transportation. It’s pretty expensive. All the people to kind of get you that cubicle or get you that corner office.

Preet Bharara:

On a macro economic level, is this a good thing for corporations to embrace it? Because the other debate that’s been going on, there were a couple of articles recently that I saw, this tug of war between the employees on Wall Street and the major banks; JP Morgan, among others. We talked about your time back in the heady 80s, who’s going to win that battle? And who should win that battle?

Scott Galloway:

Well, have a tendency, whenever we’re faced with a dilemma and a problem that has a lot of different dimensions to it, we want to bifurcate into zeros and ones, because that’s the easiest way to process information and get to a decision. The conversation is usually framed around, “We’re going all remote.” They talk about companies that are all remote, and then they talk about Jamie Dimon says everybody has to be in the office five days a week back to normal. And the answer is 90% of companies will be neither. They’ll be somewhere in between. Apple has said that they’ve requested that people be back on average three days per week. And when you think about that, that is just a tectonic shift in work and assets. Now what do I mean by that?

Scott Galloway:

If the gross destruction and demand for office base is 40% across most corporations, in other words, they’re asking people or the demanding that people be in the office 40% less. Because I do think there’s a lot of value to being in the office, but there are just going to be certain days where you could probably get most or all of what you needed to get done at home. And people will be more tolerant and more demanding of that type of flexibility. But if 40% of the demand for commercial real estate office base goes down or gets evaporated, even if it comes back to 30 or 20, because people are going to want more space per employee for distancing, or they want it to be more inspirational from when people do show up to work, you’re talking about a six to 12 trillion asset class, depending on how you calculate it.

Scott Galloway:

So what you’re going to have is the dispersion or the reallocation of two to three trillion dollars of the GDP of Germany from offices to residential. It’s an enormous shift in our economy. Something you said really struck me. You said that you didn’t mind working Saturdays and Sundays because it was meaningful work on behalf of the state. You’re much more quite frankly thoughtful and you’re much more of a patriot than I was as a young man. I know the moment… And this is some virtue signaling here, but I know the moment I decided I was going to work really, really hard. And up until that moment, I had been an extraordinary underachiever, and it was my second year in graduate school when my mom got very sick and she got discharged from the hospital early, it was obviously clearly too early.

Scott Galloway:

She was at home. I flew home. It was just one of the worst weekends of my life trying to figure out what to do with my very, very sick mom. And I recognized at that moment, we don’t have enough money. If I had money, I could take care of my mom, and I can’t… And I remember, literally at that moment, I wasn’t about serving the Commonwealth, I wasn’t about doing something meaningful, I decided at that moment, Preet, I was going to be rich. And it sounds gross, and it sounds materialistic to say that, but at that moment I said, “Whatever the fuck it takes…”

Preet Bharara:

Just to defend your younger self for a moment. You weren’t saying it because you wanted fancy bubbles, or a bunch of Le Creuset cooking pots. Right?

Scott Galloway:

I wanted some of that. I wanted some of that, but it was really… Healthcare shoved in the face of a family that was underinsured. I imagine you feel these… I don’t know what you call them, masculine…? You feel this very protective notions around your mother. And when you’re the only child, and you’re the boy, and you’re 27, you’re supposed to be taking care of your mom. And I wasn’t. I felt like I had failed. That was really motivating for me. Really motivating.

Preet Bharara:

So do you think these changes will be permanent? It sounds like you do.

Scott Galloway:

Yeah.

Preet Bharara:

That the economy has permanently changed for people who can… And not everyone can, of course. For the people who can accomplish their work from home. Let me make another comment before you answer. There seems to be a generational shift, and this is anecdotal on my part. But I ask everybody that I hang out with, have lunch with, have interactions with, outside of CAFE, if they go to the office or not? And basically everyone who runs a business or is the head of their firm, or is in leadership, whether it’s a hedge fund or a consulting business or whatever else, for many, many months, they always tell me, “I go in basically every day.” And I say, “What about the 30 people who work for you?”

Preet Bharara:

And the young people don’t. And the older people… I wonder what the psychology of that is. Part of it in their case is obviously it’s their business. They have the investment, they kind of feel like you need to be with the ship. The captain doesn’t leave the ship kind of mentality. But do you think people will come around and the pendulum will swing back to eventually everyone comes back? So I’m just re-asking the same question in a third way. What’s it going to look like in five or 10 years?

Scott Galloway:

Oh no, it’s a structural shift. We’ve just gotten much better. I mean, first off, if anyone complains or talks a big game about privacy or demands that everyone’s back in the office, it means they’re over the age of 40, if not over the age of 50. There’s just certain tells on how old you are. I can’t think of a CO under the age of 40, who’s put out a mandate that everybody needs to be back in the office five days a week.

Preet Bharara:

Is part of that because people think that folks are screwing around and goofing off if they can’t be seen working?

Scott Galloway:

It’s just what they’re used to.

Preet Bharara:

Yeah.

Scott Galloway:

I know the CEOs of Goldman and JP Morgan. It’s just what they’re used to. And to a certain extent, there are in a situation like that when somebody says, “Give me the tenure,” and they’re on the phone with a big client about to make a trade that’s very time sensitive. You can see why it’s important they’re together when they’re doing deals. There is a magic in electricity to people bumping off each other in-person. So there are certain industries where they’re going to need to be back in the office. Call it three days a week, I don’t think. I think unless it’s a kind of a time sensitive job or you’re the monitor at a nuclear power plant or something. I don’t think any industry is not going to see the greatest distraction in time in office of the human capital they rent.

Scott Galloway:

It’s a structural change. And this has gone on so long that companies and people have gotten really good at it. And technology’s gotten really good. I mean, in the ’60s, the economist, Peter Drucker said that these huge office towers would be like the pyramids, and that is we would come and marvel at them, but they would serve no functional purpose. And he was a little bit early, but I don’t know what they’re going to do with all those buildings in Midtown. We talked about my first job, Morgan Stanley. It was 1251 Avenue of the Americas. They track, for security purpose, how many people are in the building? On an average weekday, pre-COVID, there was 8500 people in the building. It was averaging 500. I think it’s over a thousand now, but it’s nowhere near 8500.

Scott Galloway:

And the number of people who’ve returned to office. I mean, we’re a year and a half into this thing, is 34%. So still two and three people are not back in the office full time. So this is a permanent structural shift. There’s just no getting around it, which interesting is to think about the second order effect. So one second order effect that I’ve been thinking a lot about is that one in three relationships used to begin at work, and because of horrific abuses of power, we-

Preet Bharara:

Is that a real stat?

Scott Galloway:

One in three relationships begin at work. One in three in school and arguably like one in three other, including online. And what the biggest change has been, or one of the biggest changes, I think a lot about how young people form households and specifically mating inequality is now two in three relationships are beginning online, which has led to this very strange thing called mating inequality. And that is similar to when Amazon put all books online or made all books available. The top 1% of books skyrocketed in value, and all the neural books, there were so many of them, they plummeted in value. And what you’re having now, there is such a boom in online dating because people don’t meet at work any longer. The genie coefficient or the inequality, if you will, is greater in mating now than it is in income. And that is, if you have 50 people on Tinder or a hundred people on Tinder; 50 men and 50 women, four to 10 men will get 90% of the attention, mostly based on their ability to signal that they have their shit together and someday might have resources.

Scott Galloway:

And that leaves 90% of the men fighting over 10% of the women. And so you’re going to see, I think, a decline in merit rates. You’re going to see what I call Porsche polygamy with a top 10% in terms of attractiveness of men are having 80% of the sex and the mating opportunities. And with the scariest stat I’ve seen… And I think this directly goes back to people not being in the office or coming together in senses of places of physical community. What you’re going to see is, or you’re seeing is that now not only is there two and three or for every one male graduate in college, there’s going to be two female graduates. But the number of men who have not had sex before the age of 30… And people hear sex and neurons fire everywhere, but think of it as a key step to establishing a long term relationship. In 2008, 8% of men had never had sex before the age of 30. Now it’s 28 or 29%.

Scott Galloway:

So when you’re walking down the avenue that is America, and men and women pass by you, there’s twice as many women with a college degree, and one in three of those men under the age of 30 have never taken that step to an intimate relationship. And I think that’s very bad for society because the most dangerous person in the world is a young broke and a lone male, and we’re producing way too many of them.

Preet Bharara:

We’ll be right back with more of my conversation with Scott Galloway after this. You and I have talked about this, and we talked about in the show a bunch. You have a lot of criticism for the way higher education is done, in part how many people are permitted to get educated at universities. And you have a view of public universities and private universities. And one thing that I know you’ve talked about is the scaling up of enrollment. How many people should a typical public university accept? And how much more than they accept now and why?

Scott Galloway:

That’s an interesting question. So let’s set some context. 50 years ago, one in four jobs needed a college degree. Now it’s two and three. So the number of jobs that demand a college degree has gone up, has doubled if not tripled. At the same time, the number of seats at universities has just kept pace with population growth. So it doesn’t account for the fact that the number of jobs we need or the demand a college degree has skyrocketed. So at your top 200 universities, you’ve really seen just college seats, freshman seats, has barely keep pace with population growth. And you’re seeing an explosion in applications. And some of that is a good thing. More women are applying to college, more people of color now have the confidence and the opportunity to go to college. There’s some wonderful things about this.

Scott Galloway:

But what you have is the kind of the emergence, so the [inaudible 00:40:50], what they call a rejectionist luxury positioning of the top 200 elite universities. The first is it’s fed off of fetishization. I bet the Southern district has its colleges it likes to recruit from. I bet NYU law, UVA, Harvard law, and we fetishize these universities. And these universities’ administrators and faculty have decided, “We’re no longer public servants, we’re Birkin bags. And once we get citizenship, we want to militarize the border.” And the deans stand up and brag that this year we turned away, 92%, 93%, 95% of our graduates. And everyone stands up and applauds, which in my mind is tantamount to the head of homeless shelter bragging that he or she turned away nine in 10 people that showed up last night. And what you have is this cartel that, in my opinion, and I would love your legal view on this, that the FTC and the DOJ should investigate, because essentially you can’t borrow money to go to college unless you’re credited.

Scott Galloway:

And the accreditation organizations, which are run by, you guessed it, the incumbents, have only led in about 150 new universities in the last 30 or 40 years, which means they have grown the total number of universities like 0.7% a year. So you have restricted supply, and then the top 200 universities have this non-economic reward out of having a luxury positioning, such that they can raise their prices faster than inflation. Education cost inflation adjusted basis have risen faster than healthcare. It’s risen probably faster than any big category you can find. And we get virtue points or we get a non-economic reward from feeling like we’re luxury brands. And the result is prices have skyrocketed, and then what happens is America is slowly but surely turning into a place where it’s never been easier to be a billionaire, but it’s never been harder to be a millionaire. And this is my personal experience with this. And that is when I applied to UCLA, it had an acceptance rate of 74% and I had to apply twice.

Preet Bharara:

I was struck when I saw that figure in preparing for this interview.

Scott Galloway:

74%. And you know what it is now?

Preet Bharara:

Single digits, I’m guessing.

Scott Galloway:

It’s 12%. So it’s literally six times as hard. How many times have you been at a cocktail party, and people say, “Oh, I would never get into the school I went to.”

Preet Bharara:

Oh, I say it. But I say at cocktail parties and in my own home.

Scott Galloway:

But here’s the thing, that means your daughter’s not getting it, or it’s going to be much harder for your daughter to get in. And I can prove to each of us mathematically, and you’ve used the step before, the 99% of our kids are not in the top 1%.

Preet Bharara:

Right.

Scott Galloway:

And what college has become, and it really is sort of a reflection of America, and something I think we need to check back from is that America used to be about giving everyone a shot at being in the top to 10%. If you’re a good person, you work hard, a little bit of luck in this society, you can save a million dollars for retirement, and you can afford to send your kids to school and you go on nice vacations. Maybe give some money away. Now it’s about the hunger games. It’s become a billionaire or die trying. And college has largely become, among the elite schools, a place that lets in two cohorts. The first is the children of rich kids. If you’re from a top 1% income earning household, you’re 77 times more likely to get into an elite university.

Scott Galloway:

A third of the top 100 schools have more kids from the top 1% income earning households than from the bottom 60%. And then the second cohort is what I refer to affectionately as the freakishly remarkable. Kids who by the age of 17, manage to be the captain of the lacrosse team, have patents and then find time to dig wells in Africa. And God bless them, but guess what? Most of us don’t peak at 17. And is college about giving the unremarkable a shot at remarkable opportunities to be a good citizen, pay taxes? And for me, this is a personal story. I wouldn’t be here. It’s so easy to credit your grit and character when looking at your success and then blame the markets for your failures. I have no such delusions. The reason why I am here right now with Preet having this conversation is because of the generosity and vision of California taxpayers and the reasons to the University of California. And we absolutely need to go back. We need to demilitarize the border for entry into what is the American dream, and that’s what’s happened among elite universities.

Preet Bharara:

Isn’t one reason for that? They’re super focused competitiveness. I’ve made this point before, that when I was in the U.S. attorney’s office, I think competition is good. Competitive spirit is good. People ordinarily think about competition as between two restaurants or two bookstores in town, private enterprises, but there’s competition among public service-oriented institutions as well. The FBI is competitive with the NYPD, whether you like it or not. And that sometimes has bad externalities. The Southern district of New York was competitive with the Eastern district of New York. We wanted to get the better cases. It’s the only city in the United States of America, New York City, that has two separate federal U.S. attorney offices in the city. We technically had jurisdiction over two boroughs. They had three, but in the field of higher education, and you have these public and private universities both founded in the spirit of the public interest and to make good citizens and educate them so they can be employed and contribute to society.

Preet Bharara:

They’re essentially in the public interest. How has it gotten to the point where they’re so competitive with each other, that the tiny fractions of a difference in their yield, with respect to who decides to go to those schools or what their SAT averages are, which they care about so much so they can notch up one point in U.S. News & World Report. Why is the case that these universities care so much about that thing, which seems to me based on what you’re saying and what I’ve read, is driving a lot of this problem?

Scott Galloway:

So it’s multi-dimensional, but the word to use is certification. You talked about U.S. News & World Report. There’s nothing you can do in my view to set yourself up better. Everything in your life gets better. Your access to healthcare, your access to better jobs, your access to promotion, you’re less likely to have a stroke, heart disease, you’re more likely to marry a mate that’s more interesting than you. Nothing can do all of that like the certification you get from a luxury brand called a great university. And we talk about Apple and Google and Amazon as being the best brands in the world bullshit. The best brands in the world hands down are MIT, Stanford, and Harvard. No one pays Apple a $100 million to put their name on the side of a building on the Apple campus. The strongest brands in the world hands down are American elite universities.

Scott Galloway:

So the certification there is so incredibly powerful. And then as academics and as attending faculty and as leadership, we’ve discovered this incredible business model, and that has reduced the number of admittees, such that you can go up in U.S. News & World Report, who has instituted this very damaging metric called admittance rate, and the lower your admittance rate, the higher you go on the rankings. Kids have very little actual experience with their universities so they base everything off certification. So your ability to say, “I’m a graduate at Dartmouth,” makes you a more attractive person for the rest of your life. And how attractive that brand is is based on the rejectionist culture it’s able to promote. And then it works out being a fantastic business model, because when we enter into this cartel of rejectionism such that we can raise prices faster than inflation, which we’ve done for the last 40 years.

Scott Galloway:

There’s never been an assault on prosperity of the middle class like higher ed in the U.S.. If you think about runaway inflation, what it does is it decreases per purchasing power and prosperity of people whose wages don’t keep pace with price increases. There has been no sector in America that has experienced the type of inflation without the commensurate increase in wages as higher education. And most of that decrease in prosperity has been borne by middle class households who’ve had to transfer one and a half trillion dollars in student debt, transfer that kind of wealth for middle class households to the endowments and salaries and bloat of these universities. And it’s an amazing business model. We’re in the midst of a pandemic, when we’re at NYU, essentially charging people $60,000 a year for what is a more boring version of Netflix, where they have to dial in eight times a week and watch professor who brightens up the Zoom by leaving it, teach.

Scott Galloway:

And they don’t get the campus experience, don’t get the electricity, don’t get the better teaching of an on-campus experience. And yet we decide to raise tuition 3%. Why? Because we can, because guess what, Preet? Everybody in lockstep among the top universities just happens to raise their tuition the exact same amount. And by promoting these luxury brands that are fed in by these rankings, and then by restricting the number of freshman seats… If you stacked the endowment of Harvard in $100 bills, the Virgin Galactic Orbital One would barely clear it. It has the GDP of Costa Rica and its endowment, and it’s reduced the number of students it admits. Stanford has exploded their endowment. They have tripled the number of applicants they did 20 or 30 years ago, and they haven’t increased their freshman seats, because it is great once you’re in to pull up the bridge behind you and the result has been an economic model.

Scott Galloway:

Everything we do at elite universities really answers one question, “How do I, a faculty member or administrator increase my compensation and decrease my accountability?” And occasionally we do kind of civic things, in letting these really remarkable kids from the inner city to smudge or smear Vaseline over the lens of the corruption that higher ed has become. We have morphed from being the greatest upper lubricant in mobility in the history of capitalism to the enforcer of the caste system. You want a caste system, don’t go to Europe, come to us higher ed. We cement people’s wealth, we help them build dynasties, and we let in a few remarkable kids of make ourselves feel better. And then we let an international kids and call it diversity, which is bullshit. We let them in because they check a box.

Preet Bharara:

They pay full fair.

Scott Galloway:

100%. Easiest way to get into Dartmouth is to check that little box that says, “I will never seek financial aid.”

Preet Bharara:

Yeah, yeah.

Scott Galloway:

And that’s with a lot of the foreign students. Now it changes at the PhD program where we bring in this incredible secret sauce, that is one of the biggest advantages in America. And that is we bring in remarkable graduate students from all over the world, and the fact that we would do anything to decrease that supply is tantamount to the Tampa Bay Buccaneers getting every top player in the world and saying, “No, we want don’t want to do that.” It makes absolutely no sense. But we have figured out this ultimate cartel and luxury positioning that feels good for everybody, raises prices for everybody, except it soaks the middle class, and the middle class is no longer in love with the unremarkable. What do we want America to be? Do we want it to be optimized to find the top 1% household kids from households’ top 1% and remarkable kids and turn them into billionaires? Or do we want to give unremarkable kids a chance to have remarkable futures? And I think it’s absolutely got to be the latter.

Preet Bharara:

So let’s do a thought experiment quickly.

Scott Galloway:

Yep.

Preet Bharara:

The school that I know best is my alma mater, Harvard. Has about 1600 kids in every class. A little different this year because of the pandemic, but ordinarily, for many, many decades, it’s been about 1600 kids. You become the president of the university and let’s say you have unfettered power to change very basic things. The real president probably doesn’t, but let’s say you do. And you decide, tell me if this is something that you might do, in your first 100 days in office as the president of Harvard University increase by 50%, the number of students who come in as freshmen every year. So you go from 1600 to 2400. Would you do that? A and B or more? What would be the consequence, positive and negative?

Scott Galloway:

I think any university that isn’t growing, its freshman seats faster than population should lose its nonprofit status. They’re no longer a public servant. They’re a hedge fund educating the children of their donors, and some remarkable kids just to gloss over that fact. So if I were the president Harvard and have a magic wand, I’d say, “All right. This is a transformative process, what we have here. The education, the certification, the networking is transformative in people’s lives and why wouldn’t we take this unbelievable product and… You know, to redistribute the elites, but still maintain the elitism is still a form of bigotry. Bigotry is your exclusion or discrimination against a specific group. And I believe that elite universities have become bigoted against unremarkable kids. And that is why are you there? If you have a GDP… So what would we do? Immediately commit to doubling enrollment every six or seven years for the next two or three decades.

Scott Galloway:

And by the way, the University of California has just announced they’re going to increase their freshman seats by 20,000 students, or the size of U.S. campus in the next 10 years because they haven’t lost the script. And they also realize economically there are a lot of corporations that are just so hungry for people with these skills and they can’t find them. So you have-

Preet Bharara:

So you do that at Harvard.

Scott Galloway:

Yep.

Preet Bharara:

Do you do them on the premise that the other elite schools will follow suit, because you’re a first mover? And if they don’t follow suit, what happens to the U.S. News & World Report rating? What happens to applicants? What happens to faculty? What do you think happens?

Scott Galloway:

I think there’s a lot of scare tactics that are total bullshit. The first is that our brand… The reason why our brand is so strong is because we’re so exclusive. When UCLA was letting in 74% of its applicants, it wasn’t like it was shitty Winnebago Joey bag of donuts brand. I mean maybe it wasn’t the elite university, and maybe it didn’t feel like the [Ritz-Carlton Brandwood 00:54:40] which it feels like now, but it was still a really strong brand. It was a strong enough brand for me to get a job at Morgan Stanley, which was considered kind of the premier job in the nation at the time. It was a strong enough brand for me to get into a great graduate school. So the notion that if we raised our… So Harvard gets 55,000 applicants to let in those 1400 students. If they raised it to 14,000, that would still just be a drop in the bucket. It would still be an incredible… It’s as if we have this life-saving gene therapy, and we decided, “Yeah, we’re only going to give it to 1400 people.” So-

Preet Bharara:

I think just to elaborate on the point you just made, Harvard by its own admission, says and broadcasts, and this is how they explain diversity such as it is there. They could fill every single seat in the freshman class with people who are straight-A students with 1600 on their SATs, and there would be many people left over. So to expand the class wouldn’t, as some might imagine, be to lower the quality or even the testing credentials of the kids who were coming in, right.

Scott Galloway:

Well, if you even care about that, and I know that’s not the focus here. But specifically, the head of admissions at Harvard said, “We could have doubled…” He said this, I think, 10 years ago, “We could have doubled our freshman class without sacrificing any quality.” And then the question becomes, well, if you’re sitting on $45 billion endowment, why wouldn’t you? And they will claim, here’s another myth, that they’re space constrained. That’s what Stanford says, “We’re space constrained.” And here’s what we need from our faculty. You need to take 50% of your courses or move towards 50% of your sessions being online. And the dirty secret… And I say this as someone who loves teaching in person. The dirty secret of higher ed is that we could easily take 50% of our courses, make them synchronous. They’re still live, but they’re online. And for the ones where there’s not a lot of interaction, which there isn’t a lot of sessions, do it online.

Scott Galloway:

And overnight you essentially double the capacity of the supply of that university. For example, at UCLA and at Berkeley, and I’ve met with both chancellors recently. We’re not doing a lot with our campus during the summer months. We aren’t offering hybrid of classes because in order to support the incredible prices, especially [inaudible 00:57:00] universities, we want them on campus, and we don’t want to be teaching hybrid because we don’t want be compared to a lot of the online startups. We can massively increase supply. We need a grand bargain, not with the Ivy League. Let’s not talk about Harvard. I’ve written off, they’re doubling down on exclusivity. That’s what they want to do.

Preet Bharara:

It’s a public university.

Scott Galloway:

Two thirds of our kids end up at our great public universities. That’s where we’re going to move the needle for America, Preet. And I think we need a grand bargain. And it goes something like this. We go to the state legislatures and say, “Look, we need you to step up and increase funding by 50% over the next 10 years. But what we are going to do as faculty is we’re going to commit to and embrace a big and small tech, and we’re going to increase our enrollments by a 100% at Ohio State, University of Texas, University of North Carolina, Cal State. There’s just some amazing… The Gophers, the Badgers, there’s some amazing public schools that have the scale, the capacity, the brands, and I think the inclination. I still think there’s a lot of leadership there that hasn’t lost the script, that sees their role.

Scott Galloway:

The university of Illinois, University of Georgia, these are amazing platforms and we’re going to do small and big tech to, I don’t think you can decrease costs. I think what you could realistically do is increase productivity and increase or decrease the cost per student. But UCLA should go from 6000, I think it is, freshman to 12 in the next 10 years, with a mix of big and small tech. And also ask our state legislatures to step up. Now that takes on a second order effect, and this is a more politically sensitive topic. And that is, I think we have shot ourselves in the foot at public universities because the state funding have… Federal funding’s gone up, but state funding is largely state static. And I think a lot of that is that because typically speaking, 50% of state legislatures are Republican. And funding education used to be a bipartisan priority.

Scott Galloway:

And now I think a lot of our colleagues on the Republican side of the Island’s state legislatures see these universities as moving almost towards promoting an orthodoxy that is counter to their beliefs, and so they’re less inclined to be generous in thinking about how they increase funding to our great public universities. So I think that we’ve shot ourselves in the foot and have become places where honest and open debate isn’t encouraged. There’s a certain orthodoxy that is promoted, that is I think unhealthy in terms of the notion that a campus used to be a place you’d place outside the city so you could think provocative things and have provocative arguments from both sides of any argument. I think we’ve lost some of that credibility. I think it’s hurt us long term in terms of funding.

Scott Galloway:

But I think there needs to be a grand bargain between citizens, alumni, administrators, and faculty, to say, “We need to dramatically expand the University of Michigan. We need to dramatically expand University of North Carolina, Chapel Hill. I mean, for example, we’ve got [Tide Pods 00:59:49], we’ve got a Porsche SUV… Every great company has innovated. Google owns Waze. We’ve got amazing innovation in different packaging, different technology. What would happen if Berkeley or MIT did a two year course in cybersecurity for high school grads? They say, “All right, you don’t want a traditional four year degree. We’re going to charge you $30,000 or $40,000, you’re going to go 19 months straight. You’re good at math. You don’t want a traditional BA, but we’re going to come up with different types of unbundled micro certifications.” What would the demand be in the workforce for that? But we want to do that.

Preet Bharara:

And what’s interesting is we don’t have that, and people might find this controversial, but we do have schools of journalism, about which there has been a lot of debate because you can become a journalist without going to journalism school. Journalists don’t make a lot of money, but journalism schools charge a lot intuition.

Scott Galloway:

Or social science or social work. Yeah, look, the universities have been some of the most non-innovative places in whatever you want to call us; in industry. I’ve been teaching 21 years. If you went into my class 21 years ago, the content’s a little different, but the technology, the format… The only thing that’s changed is tuition is up 150%. And think about any product that you charge $60,000… You can’t even think of it. Think of any expensive product, and think about what it was 20 years ago. Think about the car that was produced 20 years ago. Think about your phone 20 years ago. Think about the way you consume media 20 years ago. Even healthcare. If you went in for a kidney transplant now versus 20 years ago, I would imagine the procedure, the pharmaceuticals, the rehab is dramatically different. Not a lot. The only thing that’s really changed at our universities is the debt that we’re placing on young people.

Scott Galloway:

And that means something is wrong, because this isn’t… And when you look at it, it’s obvious why it’s happened. We you’ve entered a cartel, which is really advantageous for the institutions, for the endowment, and for the tenured faculty and the administrators. For everybody else, for America, I think it’s been a bad thing.

Preet Bharara:

So I expected to get to this far earlier. We don’t have a lot of time, but I do want to get your thoughts with respect to another institution that was actually founded on a college campus. One that we were talking about earlier. Give us, in a nutshell, your biggest concerns and problems with that thing called Facebook.

Scott Galloway:

Oh, look, we have an organization that influences people and serves them their content to a population that’s greater than the southern hemisphere plus India. And it’s run by an individual who can’t be voted out of office. So probably with us for 50 years. Who started his professional life with a site, evaluating women on their physical appearance, screwed over his best friend in school, then fucked over other friends outside of school, does not appear to have really any sense for the damage around our elections, teen health, how coarse our discourse has become. I think Mark Zuckerberg… I said this five years ago and everyone thought I was crazy. I think Mark Zuckerberg is the most dangerous person in the world. Biology is going to take care of Putin, democracy took care of Trump, what gets Mark Zuckerberg, who may be a well meaning person but just doesn’t have the life experience or the maturity or the perspective to be responsible for the algorithms that decide the content and kind of the decisions that a third of the world’s population makes?

Scott Galloway:

And, in addition, our idolatry of innovators. The fact that we now have more lobbyists who work for Amazon in Washington than we have sitting U.S. senators, the fact that there are now 1700 people working in PR and communications for Facebook and 1100 people in the newsroom of the Washington Post, we’ve been overrun. We fetishize these individuals. Only 8% of our elected individuals have a background in engineering or technology. We don’t know how to regulate them. We’re overrun. And these platforms are there to make money and they do that. That’s their job. So in addition to being the most dangerous person in the world, I just don’t think we’re doing our job. I think we’re supposed to elect talented, thoughtful people with backbone who will regulate these companies and hold them to the same standards we’ve held everyone else. And I’ll just wrap up with saying, I think big tech is a net good for the world. I’m not an anti-tech person. I own their stocks. Amazon’s the largest recruiter out of my class.

Scott Galloway:

The problem is with the word net. And that is fossil fuels. I believe we’re a net gainer from, but we still have a mission standards. We’re net gainers from pesticides, but we still have an FDA. There’s no regulatory body. There’s no algebra of deterrence. When they weaponize our elections, when they depress our teens, when they violate our privacy, we issue a fine that is the equivalent of a dollar parking ticket on a meter that costs a $100 every 15 minutes. The incentive is to break the law. So-

Preet Bharara:

[crosstalk 01:04:40] Pretend you have a magic wand again.

Scott Galloway:

Yep.

Preet Bharara:

Not as the president of the university, but as social media czar of the universe.

Scott Galloway:

Yep.

Preet Bharara:

Regulate Facebook slash break it up or abolish it.

Scott Galloway:

Oh, you don’t want to abolish it. They create tremendous ecosystems. They create tremendous economic value. There’s a lot of very positive things about social media. What I think we do is with what we’ve done with every other industry. I think, one, antitrust; we return to our proud legacy of breaking companies up, which is creative for shareholders, good for job growth, good for venture capital, good for the tax base, good for the planet. The only person or stakeholder that loses in a breakup is the CEO who wants to sit on the iron throne of all seven realms, just not Westeros. And unfortunately with dual class shareholder structures that non-breakup happens for way too long. Two, we regulate them; antitrust, then regulation. But also, Preet, and I’m curious to get your thoughts on this. I don’t think any of this stops until there’s a perp walk, because… Let me give you an example.

Preet Bharara:

You’re always saying this to me.

Scott Galloway:

But let me give you the example. Let me set this up.

Preet Bharara:

Yes, you think people should go to prison. What should Mark Zuckerberg go to prison for?

Scott Galloway:

Well, let me just set it up first. If somebody calls you and says, “Preet…” So your kids are in college, but if they called you a few years ago… And so you had a good kid. Good kid, but not a great kid. But in your eyes, they’re great. They just need a little help. And says, “Preet, I can get you into Stanford. I’m the sailing coach. We have scholar athletes. By the way, if you make a $100,000 or $500,000 donation, I can streamline this. I actually empathize with the parents who did that. But then Aunt Becky did a perp walk, and you’re hanging up the phone now, what is their incentive not to continue to break the law when the penalties are just 11 weeks of cashflow. You asked me, what is the algebra deterrence? What is the perp walk? I think it’s cartel pricing. That case in Texas, I think they have lied to conference.

Scott Galloway:

I think there might be disclosures to the SCC that are mandated, that they did not make, about the performance of their business and what the research was showing. But I would put it to you. Does any of this change without a perp walk of someone in big tech? And then I’d put the question back to you. What if any laws had been broken? And have none been broken?

Preet Bharara:

I don’t know. Well, the evidence we have that no criminal law has been broken, and this is not proof positive that there have been no criminal cases brought. There are a lot of aggressive prosecutors in the Justice Department and at various other places, and Attorney General’s offices. I think there are probably civil sanctions, and we’re seeing, as you have said, a step up in antitrust enforcement, which often happens when Democratic administration comes in. So we’ll see. It is true that if you charge someone with a crime and you succeed in convicting them of the crime, then there’s a deterrent effect. The mere arrest of someone based on scanned evidence and a dubious claim of the violation of a criminal statute, if that person gets acquitted swiftly, or the case gets dismissed swiftly, does not work a deterrent effect.

Scott Galloway:

You’re worse off.

Preet Bharara:

You’re worse off, yeah. Prosecutors don’t think about you… You think in tandem about what is the crime that was committed, and what will the deterrent effect be of enforcement of those statutes. But you don’t think in a vacuum, “People are sort of generally bad and generally doing bad things, someone should go to jail.” That’s putting it backwards. And it’s often the case as was true with the financial crisis. There’s a lot of people who act in bad faith whose impact on society is negative, and it’s not necessarily the case that there’s a federal or state criminal statute as opposed to regulation, but a state or federal criminal statute that has, A, been violated, B, can prove beyond a reasonable doubt, and, C, that you can get a unanimous jury to agree upon. It’s not so easy.

Scott Galloway:

So distinct to the law, let me ask you another question, or not distinct to the law. Based on your background as a prosecutor and your law background. Two thirds of extremer sites that men join on YouTube. The page has been suggested to them by the algorithm. They didn’t find it, it was suggested to them. Since 2012, since social has gone onto mobile, specifically Instagram, we’ve seen an explosion in hospital and emergency room admittance, not self-reporting, but actual admittance from teenage girls with self-harm. It’s actually much more prevalent for teenage girls than it is for teenage boys.

Scott Galloway:

Boys bully physically and verbally, girls bully relationally. And we put these neutron bombs in their hand. It looks as if the interaction, or at least, a component of it was organized on Facebook and that they turned a blind eye to a lot of this. Aren’t there millions of people in prison who’ve done far less damage to the commonwealth in each other than some of these executives at big tech?

Preet Bharara:

Yeah. No, that’s true. And you’re pointing out a gap in law, whereby lots of people can get away with a lot of things. Like you saw that, again, in the financial crisis.

Scott Galloway:

Yeah.

Preet Bharara:

People of bad faith sold bad chunk that they were putting across as might have been valuable, but then… We talked about prospectuses or, prospectus, I don’t if that’s the plural.

Scott Galloway:

Mm-hmm (affirmative).

Preet Bharara:

That you were flyspecking back in your days at Morgan Stanley, and smart lawyers and smart accountants know what the limits of the law are and know what caveats to put into footnote 461 very deep down in the prospectus, just to give one example, of how they can avoid criminal liability. And the question is what was known, what was not known and what the particular laws are? Look, there are huge gaps in society with respect to what the legal regime criminalizes and what it doesn’t. There’s probably a lot of things that shouldn’t be criminalized, and more things that should be. But I think the revelations of the whistleblower in recent times about Facebook and the thing that you’re talking about specifically, which has not been known really until recently. I mean, some of these bad things you’re talking about are just things that sort of “buyer beware”.

Preet Bharara:

But if it’s the case like with Philip Morris and that analogy, “You have made and others have made.” If it’s the case that they were executives who knew the harms that were being caused, went ahead anyway, made misrepresentations about the harms, whether it’s in connection with securities offerings or otherwise yeah. Then we’re getting closer to what you’re talking about.

Scott Galloway:

Do you think it’s going to happen?

Preet Bharara:

I don’t know. I don’t make predictions about that. But I think that the likelihood grows as more and more people feel comfortable coming forward with information, and more and more politicians on both sides of the aisle are talking about legislation. And when they have offended everyone on all sides of the political spectrum for different reasons, and you have more aggressive prosecutors around, I still think at the end of the day, the most likely thing that happens in these circumstances is civil enforcement. And even that’s not nothing. I mean, I guess my question for you, and then we have to come to an end shortly.

Preet Bharara:

What about the reaction to Facebook itself? You have a company that is facing these threats, maybe not existential threats, from regulators, from politicians, from consumers, it’s no longer a cool brand. Are you surprised at how they’re reacting? And how successful will changing the name to Meta be?

Scott Galloway:

Oh, they’ve been brilliant. Whether it’s deploying incredibly charming people to talk about the important discussion around gender balance or personal loss to create these weapons of mass distraction, so we don’t focus on the negatives or really eloquent people with British accents then being thrown at the media or changing the name to Meta, to talk about the exciting world of the Metaverse versus really talking about the insurrection. And, “Oh, I get a subpoena or I’ve asked to come testify in front of some government body.” “Well, you really should get the CEO of Facebook. There will be a new CEO of Facebook. I’m Mark Zuckerberg. I’m just going to talk about the Metaverse.” They’ve been brilliant. There’s very few companies that have deployed, again, this delay and obfuscation in the way that face has.

Scott Galloway:

So I would argue that they’ve been brilliant. I think it’s been devastating for the Commonwealth how adept they’ve been. I loosely and affectionately call it cancer Mark Zuckerberg and his lipstick on cancer, Sheryl Sandberg. I think they’ve done tremendous damage to the commonwealth. I don’t even think it’s their fault at the end of the day. I think it’s our inability to regulate them and apply the same standards that we’ve applied to every other industry and every other company. I think the person who’s at fault here is the man or the woman in the mirror. And that is the citizens who elect regulators, elect public officials, to prevent a tragedy of the comments, which is unfolding every day with these technologies. There’s absolutely no reason we can’t regulate them.

Preet Bharara:

Scott Galloway, thank you for being on the show.

Scott Galloway:

Thanks for having me. Finally, for whoever canceled last minute. Thank you.

Preet Bharara:

My conversation with Scott Galloway continues for members of the CAFE Insider community. To try out the membership free for two weeks, head to cafe.com/insider. Again, that’s cafe.com/insider. Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Scott Galloway.

Preet Bharara:

If you like what we do rate and review the show on Apple podcast, or wherever you listen. Every positive review helps new listeners find the show. Send me your questions about news, politics and justice. Tweet them to me @preetbharara with the hashtag, #askpreet. Or you can call and leave me a message at 669-247-7338. That’s 669-24-preet. Or you can send an email to letters@cafe.com. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The technical director, who’s David Tatasciore. The senior producers are Adam Waller and Matthew Billy. And the CAFE team is David Kurlander, Sam Ozer-Staton, Noa Azulai, Nat Weiner, Jake Kaplan, Chris Boylan, Sean Walsh, Chelsea Simmons and Namita Shah. Our music is by Andrew Dost. I’m your host, Preet Bharara. Stay tuned.