tv The Communicators Scott Galloway CSPAN November 23, 2018 10:33pm-11:04pm EST
big policy debates because the administrator seems to be staring the aid in a direction it -- steering the eight in a direction it has long gone. arol: and he has mainly bipartisan support. heublicans like him because guards taxpayer money and democrats like him because he runs development programs they believe in. host: thanks for coming on newsmakers. where history unfolds daily. 1970 nine c-span was created as a public service by america's cable television companies. and today we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public-policy
events in washington dc and around the country. c-span is brought to you by your cable or satellite provider. professor scott galloway, in our,ing your new book, the f the adage, what is good for gm is good for the country comes to mind. is that fitting? prof. galloway: there is a rhetoric fomented by big tech that what is good for tech is good for america, so it is an apt analogy. book,you write in your the four: the hidden dna of amazon, apple, facebook, and google. write these countries are not benevolent things yet we invite them into the most intimate areas of our lives. prof. galloway: yes, if you think about who really knows
you, is your wife, your kids, your therapist, is it your friends? i would argue the entity that really knows the real you is google. it knows if you are contemplating divorce. google knows what ailments you have, what ailments you worry having exposed yourself to. google is the real you. god,ere is a modern man google sees all your intentions and how those intentions will likely translate into action. these organizations know who we are connected with, no our no our intentions, and we have openly invited them into the brightest and darkest order of our lives. host: help us figure out what you mean when you say these four companies have made the world a better place, yet you still refer to them as the four horsemen, referring to the apocalypse. four i think --
prof. galloway: i think we are net gainers from fossil fuels, net gainers from pesticides, but that doesn't mean we should not have a conversation about the downside of these incredible entities and what should be done. should decided that we regulate companies, there should be emissions standards, there should be labeling standards, but as a society we seem to no longer worship at the altar of kindness, we worship at the altar of millionaires and billionaires. as a result some of these companies have run amok. they have largely run unchecked. weree same regulation applied to this sector as applied to others, we would not have tolerated a lot of the behavior that has taken place here. the four is meant
to be a cautionary tale. i am a fan of these companies and use their products but it doesn't mean we should not have a conversation around the downside. yet you have called for them to be broken up. why? prof. galloway: adam think they have done anything wrong. i don't think they are bad people. i don't think the people at -- people let ma bell were bad people, but when they are inhibiting competition and killing small companies in the crib that would otherwise grow up to be innovative in themselves, prematurely euthanizing companies. and i think we are at that point when we have one company controlling 50 cents of every dollar on e-commerce. the market needs to be oxygenated and we should absolutely break these companies up. host: give us a snapshot of
these four companies, what is a snapshot of their gdp? combined they: have about half a million employees. more than half of those work for amazon and many of those work in fulfillment laces and warehouses and would be in what are described as low to medium wage paying jobs. employeesas 24,000 and a market capitalization of $600 billion. you look at auto companies that have a quarter of a million people with upwards of $50 billion to $150 billion. so we have never had this few people with such outsized wealth concentration. combined, these four companies' market capitalization is greater than france. countries iny four the world that have a greater market capitalization than these japan,rms, and that is
the u.s., china and germany. it is staggering, a staggering amount of wealth spread across an increasingly few number of people. host: back to your book, the four: the hidden dna of amazon, apple, facebook, and google. disturbingly few reap the economic benefits of these companies. prof. galloway: we are barreling toward a society of 350 million serving 3 million lords. it's great if you own real estate in san francisco. it's great if you work for one of these companies. but it has never been easier to be a billionaire. i teach a class to 160 kids at nyu and believe there will be a billionaire from investment. at the same time it has never been harder to be a billionaire. the general compact america has had with citizens is that if you
work hard and play by the rules you might be able to aggregate $1 million in wealth between your home and your 401(k). it is getting harder. the opportunities have never been greater for the exceptional, but the opportunities seem to be more and more difficult to come by for just the above average. we live in a lottery economy. americans are optimists. we like to think it would be that one person through luck, pedigree. agreed -- but the majority of people are statistically average, and it is getting harder when you have a smaller number of companies representing a greater amount of economic growth. keep in mind, amazon was responsible for 25% of all retail growth last year. if you talk about the cloud, digital marketing, the most exciting parts of our economy, there is increasingly few companies that dominate the sectors. host: you write that of the 10
biggest retailers in 1990, only to remain on the list in 2016 -- list in remain on the 2018. amazon didn't even come online until 1994. prof. galloway: the disruption in retail has been extraordinary. you are right, there are only there.panies we are going to see more bankruptcies in retail this year than in the previous five years. is doing well, walmart is holding on, and everybody else is getting taken to the woodshed. retail is the third largest employer in america. there are more cashiers in the u.s. than there are teachers, and about a third of them lost their jobs. when amazon goes to artificial intelligence, that went live
last year. i'm going to read a line and let you expand. you write that apple is the most innovative company in the world. prof. galloway: they are largely is seen and steve jobs as the most innovative individual since edison. some would argue elon musk is the new steve jobs or thomas edison. tois a company that appeals our need to be, i think it communicates sexual strength. the organization has figured out a way to make people feel more wealthy and more attractive. if you own an iphone you likely live in a city, part of a creative class, make a good living, can afford to spend $1000 on an item that cost $300 to build, which means you have disposable income.
you look at high-margin products, at the end of the day they express something good about you. that is why they are able to garner this irrational martian. irrationahis l margin. we have never seen a company this profitable in history. this quarter apple will do twice the profits then amazon has registered in its entire history as a company. profitable than i think one third of the s&p 500. the first trillion dollar market capitalization company. host: risa prized apple was first over amazon? you surprised apple was first over amazon? prof. galloway: for several
years i was preaching amazon would be the first trillion dollar company. been saying that since amazon was 200 billion or 300 billion. i should have said amazon was going to be the first $2 trillion company. shareholder appreciation has been extraordinary across all four of these countries. -- of these companies. it amazon is the most reputable -- you write amazon is the most reputable? their execution is outstanding. they've done a great job managing the brand. amazon right now according to interbrand is the most trusted brand in the world. host: what do you mean by weaponize? prof. galloway: it's the ultimate trojan horse, this story of people breaching the walls with something innovative.
imagine the trojan horse the spartans paid for. that's effectively what happened here. the most innovative thing in the last decade in terms of technology wasn't the apple launch, it wasn't amazon echo think it was russian intelligence, the russian intelligence arm of the russian government weaponizing facebook and blowing it up in our face, and subterfuge in our democracy using assets that we not only built but are the object of our affection. these platforms have been weaponize by bad actors. if these companies don't have regulation they are never going to connect the dots and ensure they won't be weaponize to get. the rhetoric coming out of facebook is, there will always be bad actors, which is
basically saying it is going to happen again. host: facebook is thought to be the best term to work for. prof. galloway: there are different surveys, but facebook, at amazon isage because the disproportional amount of employees in warehouses. amazon employees in arizona is on some sort of food assistance. wage at facebook is greater than $200,000. when you have 24,000 people along with investors splitting $600 billion, you have extraordinary wealth creation. i don't doubt it's a great place to work here and they have a lot of resources, it is a very agile company. i would argue the crisis management has been poor after some recent actions but by all accounts i am sure it is a great
place to work. 's facebook good for the country and good for the planet? you also write facebook may be the most successful thing in the history of mankind. prof. galloway: sure. a thing as a man-made thing, something we invented that wouldn't be produced organically. newsld argue the facebook is the most successful thing and history, and that it it has been adopted by 2.2 billion people, and that is more successful than capitalism, communism, more successful than coca-cola. it's difficult to find with the exception of google any man-made adding that has had that source sort of usage. the number of people who subscribe to the church of facebook is greater than
christianity. the only thing i could come up with soccer. soccer has 3 billion fans worldwide. are moreook consumers actively engaged on a regular basis than fans of soccer. but i would argue facebook is the most successful thing in the history of mankind. host: you make references to religion throughout your book. why is that? specieslloway: we as a have a need for super things. is large enough to ask robust questions but not large enough to answer them. we asked the unanswerable, and in order to fill that void we have manufactured 3500 super that give us comfort around some of the unanswerable. and i believe into this void have stepped big tech.
google is the god. anyone who has kids has prayed. will my kid be all right? dialoguen the google locks, you trust google more than sending a prayer to the universe that there will be some sort of divine entity that answers every other query in the universe. i believe in a modern economy, where our attendance on church dependent on religion declined, and it happens as countries become more educated and apple hasin this case become the church of innovation, and our modern jesus christ is steve jobs, who was taken from us early, and is referred to in almost godlike terms, despite
being a mortal man and in my view a slide human. i think it's dangerous that we look at these companies is being superhuman. the reality is that they are inanimate legal entities overseas for tax purposes, they are not going to take care of us they areet older, for-profit entities and unless we regulate them, they will do anything to increase profits, just as tobacco did, just as auto manufacturers would pour mercury into the river, we let them because it would make them more profitable o. hold them to the same scrutiny as every other company in our economy. host: is there a tobacco-like addiction to these companies? prof. galloway: absolutely. these companies are very good at figuring out dopamine hits.
i was just on msnbc and i will see what response i got. i go to youtube to see how many likes i got. i'm not addicted to social media but i am addicted to feedback and the dopamine hit. im at least aware of it, think i can modulate it, but the fear is around the addictive nature of these companies that they actively foment and put their service quality to promote that type of addiction. is, is it bad for people who may not be able to modulate? in the last 10 years the number of teens who see their friends every day has been cut in half. there are good things. driving, debtsn by auto, teen pregnancy, but teens aren't having sex because they are on their instagram feed.
and we are seeing a large spike in teen depression and teen suicide, and we have to have a conversation about whether social media is good for people under the age of 18. it's an opportunity for them to see what they are not included in, an opportunity for them to be uncivil. despite the campaign of connecting the world and this blather that social media is going to make us love each other is there is aity lot of uncivil activity online. when you talk about young people unable to modulate it, you see negative outcomes. we need a conversation around what these platforms are doing to not only the developing brain, but in terms of teen depression. host: let's talk about it couple of the issues we are debating, including privacy and social media and censorship. do these companies have the right to censor what is on their
feet? -- on their feeds? prof. galloway: they have an obligation to. these are media companies. doesn'tame way c-span want to give legitimacy to social mediaiers, decided the best business model is to throw up their arms and abdicate responsibility. they wrap themselves in the first amendment blanket. when people find this content to gives it legitimacy. the unfortunate thing about our species in the way we interact with information, it is that lies travel faster than the truth. in india we have had terrible incidents of people being pulled out of cars and lynched because of false rumors, hoaxes that have been spread on the whatsapp application that facebook owns.
runr response was to newspaper ads and limit the .umber of message forwards were to take you that c-span is causing deaths with false information on the platform, you would absolutely take that information down. with mark zuckerberg, holocaust and nyers were. -- zuckerberg,rs and holocaust deniers. censorship means you are being a responsible media company. firms thatever been are more media like than google, facebook and twitter. ofy embrace the influence media firms but seem to be allergic to the responsibility. they are absolutely media firms and should absolutely take an
active role in taking objectionable content down that can result in violence. is it our responsibility to protect our own privacy? prof. galloway: consumers do have a responsibility to try and ensure they are on platforms that are behaving rationally. but the sad truth is consumers will talk a big game about privacy, and don't clear the cookies and take a selfie letting everybody know where they are. uber knows where you are going and at what time. consumers talk about the importance of a supply chain and act horrified when they see a factory in bangladesh, but they still want that little black bag for $9.99. the government to think long-term for us. it is time to regulate these companies. this revolution will not be consumer led. revolution against
manufacturing and pollution was government led. these companies are not -- they are doing their job as for profit entities that will not connect the dots between unfettered content and negative outcome. so we step in and regulate them, a way togoing to find be weaponize again, our democracies will be weaponize and we will have more bad things happening on these platforms that are easy to weaponize. we have an obligation. our obligation is consumers doesn't always seem to follow through on action. change isay to foment to live up to our obligation as voters and elect officials that will hold these companies accountable and hold the subject to the same scrutiny we have held other industries to. host: google, what would you
like to see done? prof. galloway: i would like to see these companies broken up or it i would like to see google broken up into two or three google, google youtube, and google cloud. we want them to maintain their incredible economic velocity. they create tremendous amounts of innovation, tremendous wealth, they create jobs. the largest recruiter out of my class at nyu's amazon. these are economic stars. it is important that we have billionaires. it is important junk people have something to aspire to. they are fantastic in terms of innovation. , we wouldn'though but wee party down early keep it going by breaking these companies up. l, wewe broke up ma bel unleashed 30 years of growth in fiber and optic and cell phones
that likely would not have happened because a lot of these technologies were lying dormant in bell labs. imagine two systems, the current apple,d another system, itunes, amazon, aws, amazon fulfillment, facebook, instagram, whatsapp, messenger, youtube. which ecosystem has more hiring, more job creation, a broader tax base, more startups? which ecosystem will raise its hand and say to advertisers, we nosure there will be objectionable content and make sure no foreign government weaponize is our platform. these firms are effectively monopolies so i believe we need embrace full body contact
capitalism and break these companies up. host: are these monopolies a natural progression, just like we are down to three car companies, the big three? prof. galloway: sure. but you have a lot of choice. i just bought a car, and there is a lot of great cars out there. if you want to drive traffic to your website, you only have two choices, you have google and you have they spoke. if you are a consumer, amazon is futile because amazon has been able to reinvest 100 cents off the dollar into the consumer and has unparalleled selection, and it has become almost impossible to compete with amazon. amazon can practically look at a intony and threaten to go drugs and pharmaceuticals, and
you see that sector shed tens of millions of dollars in shareholder value even before amazon has gone into that sector. killing companies before you go into that these companies, in my view, are too concentrated. they haven't done anything wrong. it doesn't mean they are good or bad. they are what they are and they have been up be like power. -- to have monopoly like power. we should break them up like they did with the railroads. i think it is illuminating to break them down and see what are the assets of a culture or a company that can get to $1 billion. what are the components that are consistent amongst these and is that a means of
helping you start a business or decide what company you want to work for? one is there all great storytellers. vision able to paint a and get access to capital where they can build their future because they have access to so much capital. the majority of them are within ride of a world-class engineering university. there are not that many unicorns in lubbock, texas, or el paso. you need to be near a world-class university. no offense to the texas public school system. you need to be seen as a good citizen. vertical, toe control the consumer experience from beginning to end to control your brand. an incredibleve facility with data, whether it is artificial intelligence or just general analytics. there are a series of attributes
you can apply that are common across all these countries and use that as a means to identify other great companies who might be able to someday be trillion dollar companies. for example, taking this algorithm, two companies that i saw in my attempts to be truly dollar companies. i identified netflix and spotify. >> there's the book. it is called "the four." scott galloway is the author. c-span, where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies. today, we continue to bring you unfiltered coverage of congress,
the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. talkshow host dr. drew pinsky, conduct see -- kentucky , and talkshowtate discuss the opioid epidemic. this is one hour. >> ladies and gentlemen, thanks for coming out to this conversation and talking about the opioid epidemic. let me do some introductions. it will be prudent based on the status and stature of our guest. youngestr end is the secretary of