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Scott Galloway Says Amazon, Apple, Facebook, And Google should be broken up

Scott Galloway Says Amazon, Apple, Facebook, And Google should be broken up


– Without further ado, Professor Galloway. (upbeat music) – My name’s Scott
Galloway, I teach at NYU, and I appreciate your time. I have 118 slides and 1800
seconds, 17 seconds per slide. So let’s light this candle. I have two presentations,
one is five minutes, it’s a summary of the
presentation I was gonna give, and then a 25 minute
presentation on content, that I have never presented before. The reason I highlight that, it starts with my friend Henry Blodget has plausible deniability
for what I’m about to say. This is the first and the last slide, everyone of my 6200 students has seen in the grand strategy
course I teach at NYU. You can’t build a company with hundreds of millions of users, and billions in shareholder value, without appealing directly
to a core instinct organ. So, let’s start with
the big four, the brain. Since we have come out of caves. We’ve taken advantage of
our competitive advantage as a species, and that is
we have very big brains. So big, that our bodies
need to be expelled, from our mothers, because your brain becomes too big. We’re born premature, and our, brain is sophisticated enough to ask very complex questions, but not sophisticated
enough to answer them. Will my kid be alright? We’ve all sent a prayer
up into the universe. What is a prayer, a query, assuming there’s
gonna be some sort of divine intervention, that sees everything and
send back the answer, will my kid be alright, symptoms and treatment of croup, think of everything you have typed into the Google query box, and you’re gonna
recognize you trust Google more than any priest, scholar,
rabbi, coach, mentor, boss. Google knows if you’re
about to get married. It knows if you’re about to get divorced. It knows what diseases you have. It knows what diseases you
have exposed yourself to. Google knows more about you
than any entity in your history past or present. Let’s move further down the torso. Facebook is tapping into our need to love. One of the wonderful
things about our species is that we not only need to be loved, kids with poor nutrition, and
decent amounts of affection have better outcomes than
kids with good affection, excuse me, with poor
affection and good nutrition, but we need to love others. When you decide to let your
parents move in with you, you’re life expectancy
goes up two to three years, new mothers do not die, the physical and mental
nuance of caregiving is the most important
thing for our species, in such that it literally
releases a hormone, that clears out the bad cholesterol, and you get to stick around longer. The strongest signal
of whether you’ll join the fastest growing
demographic group, centenarians is how many people in your
life simply put do you love, moving further down the torso, more, more is built into us. Again, since we emerged from caves too little was a terrible
death of starvation. So, open your cupboards,
open your closets, 10 to 100 times what you need. You rationally know,
you have 10 to 100 times what you need, and the
next feeling you have I need more, because the penalty for more is gluttony, maybe lethargy, maybe diabetes
with a 20 or 30 year lag, but more for less is the original gangster
business strategy, and typically the most
valuable company in the world is the one that offers more for less. It’s the strategy of China. It was the strategy of Walmart, and now it’s Amazon, who is going to be the most
valuable company in the world, Apple, after survival, our strongest
instinct is pro-creation. (audience laughs) The men in here are not wearing watches, they’re wearing $11,000 dollar amalgams of plastic steel and leather, that effectively communicate
to the other sex, or ineffectively in most cases. If you mate with me, your kids
are more likely to survive, than if you mate with someone
wearing a Swatch watch. (audience laughs) For the first time, we
now have a tech device, that communicates that you are
part of the innovation class. You live in a city. You appreciate the arts. You probably make a good living. You’re interesting, you’re groovy. You have better genes. Just as waving an Android phone, paying with a Discover card, or having Ad supported Pandora is like a prophylactic saying
don’t have sex with me. (audience laughs) There companies have
literally disarticulated who we are, and reassembled
them in the form of for profit companies, and created more shareholder
value and influence than any other entities with the exception of the U.S. and China, 2008, they had the GDP of Niger, in terms of the market cap. As of today, they have the GDP of India. They’ve blown past Canada,
they’ve blown past Russia, and I would argue they have more influence than any entities, maybe with the exception
of Russia or China. If you look at where the
most value has accreted it’s changed dramatically,
just in the last 11 years, petroleum companies, conglomerates, now, it’s all tech companies,
including the big four, and arguably, if I was
gonna write another book called the five, you would
have to include Microsoft. So, that’s a summary of my talk, that I usually give
about my book, the four, but what is the chapter I didn’t write? I’m coming out of the closet as somebody, who after studying these companies pretty intensely, for
two years and working in, and around them for the last ten. I believe, actually, I know, these companies should be broken up. So, why? Let’s start off, is it because they’re evil? Well, okay. There are some evil things going on, the majority, I watched
the livestream yesterday, saying we wanna give, we wanna give voice to people, that’s what I keep hearing, that’s Latin for we don’t wanna own up to the responsibilities
of a media company, we don’t wanna take responsibility, for the terrible things that happen, when we don’t monitor when
our platforms are weaponized. So, effectively, you have
the majority of fake news, being sponsored by social media, who legitimizes fake media, by putting legitimate news
next to it on their platforms, and I, I signed a code of
conduct every year at NYU, saying I won’t curse, I won’t be sexist, I won’t talk about politics. So, I am absolutely not gonna say here, that Zuckerberg has become Putin’s bitch. I’m just not gonna say it. (audience laughs) The initial response is not a crisis, that does the damage, it’s the response to the crisis, that does the damage to a company. So, the initial response, that the Facebook platform
had been weaponized was this notion is crazy. Then it graduated to okay, a few million people
saw these impressions. Now we’re at hundreds
of millions of people have seen content, whose soul purpose was to sell chaos, and what was the incredible artificial intelligence to save us through this, it’s somehow missed that these ads were paid for with a credit card, and in rubles, which give you a sense of
the amount of resources being devoted to insure these
platforms are not weaponized. We’re not a media company. We’re a technology company. We’re allergic, we love the
celebrity, the influence, and the margins of a media company, but we’re allergic to
the responsibilities. We’re a platform. So, query me this. If McDonald’s said alright, we’ve been serving 80%
of our beef as fake, and you’re angry at us, because people are getting encephalitis, and making really bad decisions, and you say hey
McDonald’s, I’m pissed off, 80% of your beef is fake, and you’re not taking responsibility. Would we accept McDonald’s
saying well hold up, hold up, we’re not a fast food restaurant, we’re a fast food platform. We wouldn’t accept it. (audience laughs) We wouldn’t accept it from McDonald’s, nor should we accept it from Facebook. Facebook says they’re not a media company, the definition, the literal
definition of a media company is a firm that uses a medium
for reach and influence. There is no other entity
in the history of mankind, that is more media-ish,
than Facebook is right now. Some quick definitions, as you go into this
conference for the second day, to help you sort through what
people are saying on stage. When people say platform. What they really mean is we’re a media company,
but wanna operate in another land of unprecedented multiples and no accountability. When people say things like impossible, or first amendment, or we can’t be harbored as a truth, what they’re really saying is we’re not gonna do anything that’s unprofitable, Facebook could absolutely stop all this negative behavior. If the New York Times can save us from being weaponized by Russia, with a 100 million and free cash flow, then Facebook can do it, with
20 billion in free cash flow. We’re not talking about the
realm of the possible here, we’re talking about the
realm of the profitable. So, when Google and Facebook
say this would be impossible, what they’re saying is it would dent our profits, which in our mind is
unthinkable and impossible. Innovation, at conferences like this, typically means elegant theft, a way to leverage other people’s cars, other people’s capital expenditure, your data. We need to do better, hear that a lot lately. What does that mean? We know we’re wrong, and have no intention of
doing anything about it. (audience laughs) These companies wrap
themselves in a progressive neon blue pink rainbow blanket to create the ultimist illusionist trick. Hey, aren’t we nice, cause we progressives are largely seen as nice but weak, we’re Alan
Alda not a threat to anybody. Whereas conservatives are
seen as smart but mean. So, the perfect illusionist trick is to have very overt progressive values these companies pimp, because it creates sheep around what is effectively companies that during the business day are more like the Darth, excuse me, the spawn of
Darth Vader or Ann Raynd. So, the ultimate cover, hey everybody, lean in, if Sheryl Sandberg was
for gun rights or pro life would Facebook be flying
her around the world to talk about her political views. I’m not doubting their actual principles, and their political views, but it’s convenient that it foots to this illusionist trick, that we’re nice and cuddly. So, you don’t need to worry about our rapacious behavior during the day. Mark Zuckerburg wants to give voice to 1.4 billion Chinese. Now, I’m a bit of a cynic, I think he wants to give
more advertising to Chobani to an emerging market
of disposable income, but we’ve given voice, or Facebook has given voice, to about 350 million
people in southeast Asia. There’s a lot of very
negative things happening, on that platform, yet
there doesn’t seem to be much of a reaction, or
responsibility for the voice, that has been given to
folks in southeast Asia, and what are some of the
outcomes around that. I wanna acknowledge upfront, there’s a ton of great stuff
happening on these platforms, whether it’s parents with
kids with unique diseases, or the Arab Spring, but until about three months ago, that is literally all we talked about, and we have to have an adult conversation, about both the upsides and the downsides, and I feel like for the first time we’re having a serious conversation. So, whose fault is this? Whose fault is it? What’s gone wrong? It’s our fault. We have elected leaders, that effectively don’t hold
these companies accountable. When Google lies to the EU,
and uses their influence to pimp their downstream businesses, and send traffic to their own properties, which they’re not supposed to do, the EU fines them 2.7 billion dollars, which is equivalent to 3% of their cash. When Facebook lies to the EU commissioner, trying to get the WhatsApp, WhatsApp
approval merger approved, they say it would be
impossible, quote impossible, for them to share the data
between their core platform, and the what and WhatsApp. The merger is approved, spoiler alert, three months later, they figure it out. The EU says we feel lied to. So, we’re gonna fine
you 122 million dollars, which is equivalent to .6% of the 19 billion dollar
acquisition prize. If Mark Zuckerberg could buy
an insurance policy for .6% called lying, that the
acquisition would go through, wouldn’t that be a good insurance policy? To purchase, these VR elected officials. We’re a democracy. We have basically told these companies, that the smart thing to do, the shareholder thing to do is to lie to us, and to break the law. We are issuing 25 cent parking tickets, on a meter that costs $100
dollars every 15 minutes, what would you do? Why are we so angry? I did this for a friend last night, It’s like no, why are you so angry? (audience laughs) And I reminded him, that I hate my life
less and less everyday. Anyway, so. (audience laughs) I think we have for whatever reason, we personify these brands. We feel that we’re in
a relationship with em, and we’ve also come to believe that technology is ultimately a weapon of betterment for humanity. So, let’s review that, In 1942, 100,000 very smart Americans got together in the southwest, with literally the objective
of saving the world, they were using swing
shot like technology, and they came together, and said, we’re in a
foot race with Hitler, if we don’t get there first, it’s the end of the world, and we literally did save the world. My mother in 1944 was a four
year old Jew living in London, a strip of ocean, the
brains, brawn and blood, of the British, the U.S.
and Russian soldiers, combined with technology saved her life. I would not be here if
it wasn’t for technology, 25 years later 40,000 British,
Canadian, and Americans, and some former Nazi rocket engineers, using more sophisticated, but still fairly rudimentary technology, did the impossible, and
put a man on the moon, which given the technology at the time is still likely the most
impressive accomplishment we as a species have pulled off. Now, we have 700,000 of
the best and brightest from the four corners of the earth, they are literally
playing with the lasers, compared to the squirt guns, and the slingshots and the NASA, and Manhattan projects, and what is the greatest
collection of humanity, of IQ, and a financial capital been brought together to accomplish to solve world hunger, it’s a great, greater comity of man, to perhaps get us to
communicate more thoughtfully, about how we lift ourselves up. How we communicate before conflict. I don’t think so. I generally think I know why these companies have come together. I know their singular mission, of the greatest
concentration of IQ capital, and technology and history, and simply put, it’s just selling at a fucking Nissan, and I think we are really dissapointed. I think we got spoiled. I think we’re used to technology being 99% the betterment
of humanity, 1% the pursuit of shareholder value, and slowly but surely since 1970, it’s entirely flipped, and now technology is 99%
about shareholder value, and 1% about the betterment of humanity. Should we break them up,
because they avoid taxes? – We not only comply with the laws, but we comply with the spirit of the laws. – No, not really. (audience laughs) Not really. This is Apple’s Headquarters. Apple licenses their IP to
their international unit, in Jersey, which is as far as I know, a small
island somewhere in Europe, and then the international unit, charges their high tax domains, U.S., tens of billions of
dollars in licensing fees, suppressing the profits,
in high def tax domains, increasing the profits in low tax domains. So, this is the headquarters
for Apple International, that’s the sign out front in Jersey, as a result, they have 250 billion, or a quarter of a trillion
dollars of the GPD of Denmark, held overseas, and has created a narrative but let us bring it back. It shouldn’t have been
there to begin with. We’re talking about
giving him a tax holiday. Here’s an idea, tax him 1% a month, for all profits that
have been held overseas, because of gymnastics in tax avoidance. They’re effectively paying a 4% tax rate on these profits held overseas. What is your tax rate? Apple’s not alone here. Amazon has paid 1.4 billion in taxes since the Great Recession. Walmart has paid 64 billion. What does it mean when the
most successful companies in the world don’t pay taxes. It means our firefighters,
our soldiers and our roads gotta be paid by companies,
that are less successful. Our tax system has basically become a regressive structural economic system, that holds back the small
and medium sized businesses. Alexa, is this a good thing? This is despite the fact, that Amazon has added
the market cap of Walmart in the last 19 months, but it’s paid 1.4 billion in taxes verus Walmart at 64 billion. However, everybody in this
room tries to avoid taxes, General Electric tries to avoid taxes, They’re doing what they’re
supposed to be doing. Again, we have elected the people, it’s our fault to hold these companies to the same scrutiny and
standards we hold other citizens, and other companies to. It’s our fault. We’re letting them do this, it’s legal. Should we break em up,
because they destroy jobs. This year Google and Facebook will add 23 billion dollars in income in order to service that income, they need to hire another 14,000 people. This is, by the way, is a
zero business advertising. So, every person or
every dollar they take. Someone else is losing it. Traditional media companies
in order to service, the 22 billion dollars,
that they’re gonna lose, need 150,000 people, or put another way, this is gonna be out of 140,000 people, from the communications
and media industry, globally, who are gonna
decide to spend more family, more time with their family this year. That’s 2 1/2 Yankee stadiums
filled with copyrighters, strategy planners and account executives, who every year on January one are gonna get their pink slips courtesy of Facebook and Google. Australia’s a pretty good proxy, for what happens when big tech shows up. Traditional media in
Australia has gone from in 2010 from 12 billion to
6.5 billion, just in 10 years, whereas tech’s gone
from 1.5 to 10 billion. So, do we break em up
cause they destroy jobs? Again, that’s a hard rational. Manufacturing destroyed
a ton of jobs in farming. Service is destroying
jobs in manufacturing, and now tech is destroying
jobs in services. We need job destroyers. It’s kind of a synonym for innovators. So, alone, it’s really not
a reason to break em up. So, why do we break up these guys? Why do I believe we should break them up, and my belief is that we go in, and we break these guys up, because full stop we’re capitalists, and what does it mean
to be a capitalistic? I believe that capitalism is
the worst system of it’s kind, except for all the rest, and I’m stealing from Winston Churchill, who said the same thing about democracy, but effectively for capitalism, you need private property,
wage labor, voluntary exchange, price system, and most importantly, you need competitive full body contact market places, and what I’m here today to tell you is that I believe the markets have failed. Now, some examples of how they’ve failed. Google can’t resist, and overtime the shade in
telling you that this isn’t us, this is a paid ad has slowly gone away. Google used to say, we’ll
take you to the best place on the home screen. Now, slowly but surely, because they have to increase
their earnings every quarter, they’re no longer taking
you to the best place. They’re taking you to their place, where they can monetize more of the screen through PLA’s and such. So, they are effectively
restraining competition, by using their massive
gateway to curb people, into the things that they own. – [Narrator] The company says
it’s investing for the future. Skeptics say it would
have to sell every book being sold in the world today, to justify it’s stock price. – I think my generation
grew up with Sears, and Amazon is worth 20%
more than Sears is worth in market capitalization. – I think if you’ve heard that phenomenon, that Amazon today is
worth more than SEARS. – Investors are focusing. – Well, let’s look at that phenomenon. Today, SEARS is worth .5 billion dollars, Amazon is worth 570. Does this look like a healthy
retial eco system to you? Retail is probably the second or third largest business in America. This is the eco system right now. These are the largest retailers,
and their performance. Jeff Bezos announces in
early January of this year, we’ve had our best holiday ever. What happens the next day? Amazon stock goes up, and every other retail stock goes down. The markets are failing
in the consumer world. Because consumer stocks
now move for three reasons. One, the underlying performance of the stock, two, the macro environment, and then three, what Amazon is, or isn’t doing in that sector. Key to robust markets
is that no one player or individual had too much influence, and now I can tell you as someone who’s in somewhere between 40 and 50
consumer board meetings a year, all we’re doing is allocating capital, around what we think Amazon
is or isn’t going to do, the markets are failing. Amazon acquires Whole Foods. So, this is me boasting. Amazon will make a transformative brick and mortar acquisition, in the next 12 months. In sum, I predicted, I got lucky, I predicted that Amazon
would acquire Whole Foods, the week before it happened. I still believe they’re
gonna buy a Macy’s. And by the way, I wanna
acknowledge, that seeing me, a video of me on top of me
is like shavings of shit on a shit salad, so I apologize, (audience laughs) and people say, well,
how did you know this, this is how I knew that Amazon was about to acquire whole foods. We bark at Amazon Alexa all the time. Alexa, buy whole milk. – [Alexa] I couldn’t find
anything for whole milk. So, I’ve added whole milk
to your shopping list. – And then I barked. Alexa, buy organic foods. – [Alexa] The top search
result for organic food is Plum Organic’s baby
food, banana and pumpkin, 12 pack of 4 ounces each. It’s $15 dollars total. Would you like to buy it? – And then as often happens, more frequently at my age, I bark the following accidentally, Alexa, buy Whole foods. – [Alexa} I have purchased the Outstanding stock of Whole Foods Incorporated, at $42 dollars per share. I have shared 13.7 billion to
your American Express card. (audience laughs) I thought that’d be funnier. (audience laughs) Amazon announces they’re
acquiring Whole Foods, their stock price, their
market cap goes up, by almost the acquisition price, and the value of their
competitors goes down, by more than the acquisition price. Amazon can now acquire other companies, on someone else’s credit
card, market’s are failing. Since they’ve purchases it, they’ve Whole Foods, they’ve cut the price
of kale 13%, salmon 33%, and in between the time they purchased, announced the purchase of
Whole Foods and closed it, the price, the value, of the largest peer play grocer in America,
Kroger, declined by 33%, and this is a company that is 11 times the size of Whole Foods. Every company know seems to go down based on what Amazon does or doesn’t do, including manufactures brands, Nike announces that they’re gonna be in distributing on Amazon, they go up, every other footwear company goes down, in one day, they add the
value of Federal Express, or 400 of the S & P’s evaluation combined. Our democracy is breaking down, because these companies
have become too powerful, the HQ2 thing is outta control. My favorite one is Chicago is offering to return employed
payroll taxes to Amazon, and put another way, they’ve given Amazon permission to tax their own employees, keep those taxes, then decide, how those coffers, or how that money, that used to go into municipal
coffers should be spent. I think our government
has basically folded, and said we acknowledge
you’re more powerful than us. I think that’s markets failing. People say well, if he, as long as they’re good for the consumer, and they’re low prices. We shouldn’t break em up. That’s kind of University of Chicago, and Bork basic trust theory for antitrusts. If it’s good for the
consumer leave em alone, and these are low
prices, but tell me this, if at some point, there’s
going to be Monopoly prices, if at some point we wake up, and there’s really not
very many retailers around, no cloud providers except for one, they will have monopoly like power, and be able to extract monopoly rents, and people say well,
that’s not really true, that’s conjecture, and I say well, let’s look at the ultimate arbiter, of what is probably gonna happen, and I would argue that’s the markets. What is the market telling us? The market puts a multiple
on eVita of Macy’s of 5.3, target 6.1, Walmart 11, Walmart’s having it’s best year ever, trades in multiple eVita, and the market has decided that Amazon gets a multiple of 47. So, isn’t the market telling us, that at some point soon, Amazon is gonna have so much power, it’s gonna be able to
charge monopoly like rents. Now, the narrative Amazon puts forward is wait, hold on, we’re only 4% of retail. How can you break us up, and regulate us, we’re only 4% of retail. Yeah, sort of, they’re also 24% of all retail growth, in the largest economy in the world, they’re also a third of all cloud revenue, the fastest growing most
profitable business in technology. They’re also 44% of all
U.S. e-commerce sales. They’re, can you back up one slide? They’re 55% of all black Friday sales. They are 62%, of U.S. households in the form of Prime, more people have cable pipe of stuff in their house called Prime
than voted in the U.S. election, or have landline phone
in three to five years, of trans continue, more people are gonna
have a cable pipe of stuff called Prime coming into their household than cable television. Oh, and that they have 70% share, of the most important technology
of the next ten years, voice, 4%, I don’t think so. They’re not the only ones. Google has a 90+% share
of a market search, and now by dollar volume
is a bigger market, than any advertising market, of any nation with the
exception of the U.S. If hotels, railroads, airlines, advertising, if any of these industries, petroleum had a 90+% share in the U.S., wouldn’t we be talking constantly
about breaking them up, digital marketing, that’s the future, that’s where the growth is, that’s what’s gonna
create all of our jobs, for all our young people, but guess what, two companies own a 103% of the growth, meaning if you’re digital marketing, and not Facebook or Google, you join newspapers, you join magazines, and then your business
is in structural decline. Snap, more, great, supposed to be a third player, Snap is going away, Snap is the walking dead. Their last quarter, which
was a horrible quarter is gonna look like an amazing quarter, when their next quarter comes around, and then the next quarter. This stock will die
below ten bucks a share, and Mark Zuckerberg’s
hatred for this company, and he has unbelievable weapons
to put him out of business is gonna drive Evan
into the arms of Google. We’re all hoping Snap would
be the Facebook of video, the Facebook of video is Facebook, specifically Instagram, and Facebook can use it’s monopoly like power six of the top ten apps to put any company in the app business out of business. The markets are failing. This is the scariest thing
I’ve heard this year. – Don’t let nation states disrupt our future, and you’re the front line of defense for. – This is the president, this is the chair of the central intelligence committee, telling Google, Facebook and Twitter, they’re our front lines. – Yeah, fuck that. These are my front lines. The notion that we don’t have our marines, people like John McCain,
and Tammy Duckworth as our front lines, that’s
not our front lines. The Zuck is our front lines, the market are failing, quick side bar, Time Warner and IT&T. AT&T – AT&T is buying Time Warner and thus CNN, a deal we will not approve
in my administration, because it’s too much
concentration of power, in the hands of too few. – Okay, so let’s look at that. Content times distribution is
the axion we’re worried about. Two much content in the
hands of a distributor. They can pull it from people, extract unfair rents, too much power around distribution, you can unfairly spread your content. So, let’s look at it, they have some fantastic content, 140 million AT&T subscribers, 25 Direct TV subscribers
in terms of distribution, but let’s look at the peanut butter, and content distribution of the four. Google has unbelievable
amount of YouTube content, 1.2 trillion searches a year, that inform their content, and they have distribution on 2 billion captive Android phones. Apple has 34 million songs, 2. million
apps, 2.2 million apps a billion dollars committed
to original content, and they’re installed in distribution called a billion IOS devices. Amazon is committed to 4.5 billion dollars in original television content, second only to Netflix, they have 70% share of
voice, 62% distribution through the U.S., 62% of households, no cable company is in 62% of households, and they have unlimited capital. Oh, but wait. We need Time Warner to sell Adult Swim. So, one thing is happening here, either Time Warner trying
to block Timer Warner from acquiring, excuse me AT&T, blocking AT&T from acquiring Time Warner is either just insane, or we should have blocked and broken up, Google, Facebook, Amazon
and Google five years ago. It makes no sense. Okay, we so we need to get
rid of mantra test time, If Paul doesn’t gone over, I’ll go two minutes then I’m done. There’s a certain fear, people like me, that we come across as wimps, when we start talking about regulation, because the narrative being
fomented by these companies is that regulation equals European, which somehow, someway
became an insult in America, and then even worse socialism. I go on Fox News, every week, because I keep my friends close, and my enemies closer, and this is how they introduce me now, when I suggested Amazon
should be broken up. – He’s a socialist, but
we’ll have him on the show. – Are are you a social, you
are a socialist, are you not? – I’m full throated capitalist. Okay, so, let me ask you this. If the Department of Justice
hadn’t moved on Microsoft, after they killed Netscape, would Google have ever
made it out of the crib, regulation creates unbelievable shareholder
value, when it’s done adjointly. We have 700 billion dollar
company called Google, because the Department of
Justice stepped in on Microsoft, and said stop killing Nasin companies. Some final words, I believe the purpose of
an economy and companies is to create a middle class. Two metrics, how many girls go to college, and how robust is your middle class, and I’ll show you the
freedoms and prosperity, of any society based on those two metrics, and our middle class has
gone sideways for 30 years, in what is the greatest experiment in mankind called the U.S. It won’t be easy to break these guys up. Why? Because this individual has aggregated a great deal of power, and is smarter than the rest of us, 77 full time lobbyists in Washington. The ultimate prophylactic,
the New York Times, if a liberal paper is saying
don’t break these guys up, then we’re safe. Oh wait, the New York
Times can’t be bought, has a trust five to six cousins, it’s a effectively a suicide
pact, you can’t buy it. What’s the second best
thing they could buy to put sheep’s clothing
over the wolf that they are, here’s an idea, or let’s make an investment in
this cool new media company. (auidence laughs) Awkward. (audience laughs) My last slide. Try and put aside your political feelings, your economic concerns, and the gag reflex, reflex we have as Americans
around regulation, and just do a Darth. I think every business
problem can be solved, with a scene or a saying from Star Wars, and I’m gonna ask you to take
the advice of Darth Vader. – Search your feelings
you know it to be true. – Search your feelings
you know it to be true. Imagine an eco system
with these four companies, which eco system has more job creation, which eco system has a broader tax base, which eco system has
thousands and ten thousands of millionaires, maybe
not as many billionaires, but tens and hundreds of
thousands of millionaires, which system has more
venture back companies, more M&A, more robust deal activity,
and more capitalism, and more full throated, full body contact competition. This eco system, or this eco system. We don’t break these guys up, because they’re evil, that’s bullshit, they’re no less or more evil than us. We don’t break them up, because they avoid taxes. We need to hold all companies accountable, that’s our own fault. We don’t break them up, cause they destroy jobs. We need innovators to destroy jobs. We break these guys up, because we are capitalists. My name is Scott Galloway, I teach at NYU, and I appreciate your time. (audience claps) (mellow music) – [Narrator] Please welcome
Mathias Dopfner with Henry.

100 comments

breaking up a company like Google or Amazon is definitely an interesting perspective and I've heard decent arguments on both sides. One side that says hey that company has build up what they have and there are other websites like them and anybody could build a website and do what they do. I've heard arguments on the other side that said these companies are basically a monopoly and are so big that the free market really can't compete because of its size nobody could make another one and be able to get off the ground. I kind of lean a lot more for the former since I am a Libertarian so I believe heavily in the free market but I do understand the argument of them being monopolies.

The markets are working how they're supposed to. This is what eventually happens in Capitalist "free markets"; monopolies or duopolies or oligopolies eventually form. What was once a diverse market becomes dominated by 1-5 corporations flat-out and the only way to stop this natural way Capitalism will progress would be to use regulations where you're essentially interfering with the natural progression of those competitive markets, not somehow protecting them.

Needless to say, as much as I like how well-intentioned this guy is, he's also wasting his time talking about how people have elected officials who don't do much against these companies while calling these countries democracies. Apologies but not a single country in the West (or on this planet) is a democracy. Certainly not the US, these countries are usually Republics (slyly often labeled "Representative-Democracies") which means you're meant to elect people who represent you; as in, people who get to make decisions on your behalf as they see fit. It's essentially just an oligarchical system where the common folk get to choose who sits at the top of the oligarchy who still often tend to be wealthy and famous people who can actually muster the support and campaign donations to reach such high echelons of power.

Worse yet, you have the Republican system of governance existing alongside Capitalism which obviously will lead to only a few people holding the majority of wealth in the world relative to the overall population. So I ask you… In this setting where there are people with net worths in excess of 1 billion US dollars and people who essentially have no net worth beyond what's in their pockets; who do you think these representative officials, who tend to really need things like campaign donations, will respond to? I write this quite sadly when I tell you that you're deluding yourself if you think the majority of them will ever respond more to the latter demographic.

And finally, a democracy actually involves everyday people having a part in the decisions that effect them. It is self-governance and is nothing like what republics are. Humorously, the founders of Scott Galloway's current home country (the USofA) were well aware of this which is why the word democracy never appears in the United States constitution because they were all, to speak overly simplistically, snooty wine snobs who held nothing but contempt for the idea of common people ruling themselves and bought into this silly (and unfounded) ancient Greco-Roman belief that this would only lead to utter chaos. They did this whilst taking steps to ensure that only men of privilege such as themselves would have much of a chance of rising up to the highest positions of the republican system they'd chosen and all you're seeing today is that already elitist system making love with Capitalism, a system, at a base level, even more elitist than it is.

You're not going to make any sort of great difference by fighting within the system like this man suggests. All you'll accomplish, if you're lucky, is establish a decent Social-Democratic sort of state of affairs like with Iceland or Norway or what have you where everything is still republican and capitalist but at least somewhat more humane for the common person with a robust welfare system, higher and more responsible taxation on the wealthy and so on. But this is doomed not to last and someday your country will end up with a Reagan or a Thatcher or a Shinzo Abe blabbering about something that sounds an awful lot like trickle down economics while working very very hard to gut your country's welfare programs over the span of decades in conjunction with winning the rich more and more tax-cuts whilst they already dodge taxes with overseas tax havens and you'll be right back at square one; chattering about fixing the system from within.

Newsflash, the systems themselves are corrupt and always were. You want change? Break it all down and replace it with something new and truly democratic or good luck with your reforms, lol.

gosh I love his message, and find his mind sexier than any man I have ever met. sigh. Would love to hear more from him. I have watched this 4 times now. he he sexy brains rock. serious messages with no shinny is brilliant. love shit on shit salad.

That crowd sucked ass. That was an amazing speech! Especially the part about Facebook, Google and Twitter not being the front lines of a nation. As a veteran, I couldn't help but take offense to that.

Great video! As a cynicist seeing absolutely no action towards breaking up or even controlling the companies, this makes me consider adding amazon to my stock portfolio haha

15:42 "Alexa, is this a good thing?"

Lol…kinda odd to promote breaking up Amazon when you're relying on their products to move your presentation along. This is the problem: these "successful companies" have such a broad reach (honestly…we're almost always on one of those platforms, or some other large social media network, like Reddit/Snapchat/Instagram), it's almost impossible to have far-reaching conversations online without touching them. It's…complex.

With my previous comment notwithstanding, this dude certainly gets it: capitalism can't work when companies can completely overrun the market. There's always going to be some "quirk" (political or otherwise) that will allow some companies to grow much larger than is healthy for a functioning market. Galloway is right: it's not evil on either side (government or business) to "cool the heat" of a too-strong conglomerate. We just need a political establishment (and a voting public) that is aware of the dangers of these new kinds of monopolies…it's not as concrete as the telephone and railroad monopolies of yesteryear.

Break them up because in the future they may wield unbelievable power over humans, society, and life, power that could absolutely dwarf the system of laws and rights that we've developed.

I get that Apple sells products and delivers a service to people but ffs why is the stock of FB equally high.
They offer hosting + chat service, makes no sense to me.

Oh Lord, such propaganda. Every Media outlet in the WORLD is a platform for propoganda. At some times more other times less.
This guy wants more oh wave a magic wand of regulations and save us from the evil Facebook. How about just encouraging people to actually THINK critically and to make informed decisions. Including should I even use whatever platform which has known psychological affects which may actually be detrimental to ones health?
NO.. regulation super man please save us.

The big point he misses… the actual media companies did their best to elevate trump during the election giving him billions in free air time. Les Moonves, head of CBS ""Donald Trump is horrible for America, but great for CBS". So to compare Facebook to and actual media company to make the point that they are not living up to a media company's "standards" is just laughable.

This guy is arguing for these companies to "take responsibility" for whats posted on the platform in other words he's arguing for Censorship, fuck off. But I agree with everything else he said. Particularly about tax.

Anyone who believes Facebook is really worth $300 Billion is a delusional fool or more likely part of the Wall Street Casino/Ponzie Scheme. The entire tech industry here in the San Francisco Bay Area is getting a load of corporate welfare. In fact, Obama and Hillary visited the bay area at least 27 times to fund raise and they're sending billions back to the contributors. this is a recipe for another economic melt down that will be worse that 2008.

If hillary had one of because of some way that facebook and google. His lecturw would be reversed. You can not see the idiolgy bs that his full lecture is

If Facebook is weaponized then cable tv is weaponized cause they use ads all the time. Most of them are fake! Including political ads. Shut down cable while your at it

In a Communist country, government owns the businesses.
In a Capitalist country, businesses own the government.

You’re either getting screwed from the front or the back, but you’re still getting screwed if you aren’t a business tycoon or a political tyrant.

The problem is we want it that way because we’ve figured out the more they own, the happier we are. If Facebook bought Google, we’d be excited because then we’d have one less tab to open.

Galloway is appalled that Facebook, Google, Amazon, and Apple got away with it and rightly so. But it’s no surprise we got here. We saw what they were doing and we wanted them to do it; that’s why we did nothing to stop it. However, we didn’t give them so much power without getting something in return. Think about it, we did this knowingly, willingly. We voluntarily gave them this power in exchange for the cheapest high on the market – the pleasure you feel from somebody liking your post.

Look at the internet usage Galloway cites – it’s insane! That much usage can only indicate one thing: a world addicted to the internet. And somebody is always profiting from addiction. Zuckerberg is nothing more than the modern day Pablo Escobar who sells the virtual equivalent of cocaine. It’s cheap, just as fleeting, and keeps you coming back for more.

What Galloway noticed is not a lapse in the Capitalist system working properly. And it’s not going to get solved by applying Capitalist measures either (i.e. “ break these guy’s up because we are Capitalist”). Why? Because again, if we were true Capitalist’s we would have done something about it by now. But it’s not going to happen because underneath every Capitalist, Communist, and Socialist is a miserable human being that just wants to get high enough to escape pain and stay sober enough to enjoy pleasure.

There is no way you’re going to take away my virtually induced high. Zuck is my dealer and Facebook is my snuff. I want it that way. Don’t bother me. Like this comment if you agree.

Another butthurt Hillary fag. The fake news spread on Facebook were so obviously fake that you have to be mentally retarded to believe it. Russia did not influence our damn election! A corrupt evil politician was exposed for who she was and anyone could of beat her. No we should not have our government break these companies up. They are the companies driving technology forward you break up google and it will be a great detriment to society. And there is a reason people turn to Amazon is because of affordability. We are not going to break up a company just to fuck us over and cause prices to skyrocket for products we want. Amazon and Google are amazing companies. Also stop blowing the cable companies and main stream media it shows that your old and do not want to progress.

What needs to be done is to break them up and use Anti Trust to prevent collusion further. If you simply tax these companies and as Hillary screamed "CLOSE THE LOOPHOLES!" You will lose all the companies. Let's say you have 100,000$ in tax revenues from 3 different companies.

What happens to that 100,000$ is it goes into a big spending "pot" where they randomly decide what to do with it. 2/3rds of it often goes into social stuff while a small chunk goes into infrastructure and even smaller goes into roads. Since all your saying is NO NO NO NO! to big businesses they will take their stuff and leave the country for good. No more Amazon period so your stuck with Ebay with broken crap from Pinky's Closet.

Not only that but that 100,00$ tax revenue is now 50,00$ so to make up for it you all demand more taxes on the 2 remaining companies that struggled but held on. Now those 2 have decided they cannot afford it as there is no benefit since they aren't rewarded for improving. They either fire everyone or downgrade their products to crap to make up for sudden lost of revenue. Now those 2 companies may bolt.

Now that 50,000$ is down to 25,000$ with all the workers homeless and demanding social welfare,unemployment benefits skyrocket and grocery stores close as there isn't enough supplies. It's like Poland during communism look it up it wasn't pretty! They had companies but they were so restricted nothing could get done so you could wind up with Safeway turning into a drug center where people can have a safe place to shoot up weed.

We published an article about the same thing. Glad to see that we are not alone in our thoughts.
https://medium.com/@umergence/is-the-future-were-building-the-one-we-want-eef65ef083c8

High Price to EBITDA a sign that they will start charging monopoly prices? And measuring market concentration by share of market GROWTH? This guy is off the wall.

After watching the video on my APPLE device… I got on … AMAZON.COM, bought his book, KINDLE edition, and downloaded it to my KINDLE DEVICE… then proceeded to share this YOUTUBE video link on FACEBOOK

Excellent speech and facts. very insulting to the many countries like Australia who put their populations on the line to help win WW 1 & 2 but perhaps that's just the American version of history. Otherwise brilliant.

Facebook and Google are free.
Not too many examples of monopolies who's product costs nothing.
Yes, the make money from advertisers but there are plenty of other ways to advertise.
Is My Space a monopoly?
It's not Facebook's fault that people choose it over others.

AN OTHER LIBERALIFDIOT THAT BELIEVES HE KNOWS EVERY THINGH SHIT ASSSX PUSSIFIED MALE OF EUROPE , THAT LET HORD OF HATEFULL IMMIGRANTS THAT HATES THE SAEST WETHER YOU EDUCATE THEM THEY STILLWEILL ATTACK YOU DESPITE YOUR PEOPLE GRANT THEY CITIZENSHIP ,. KNOWINGLY THEY,GOT A MASSION BY THEIR IDEOLOGY TO TAKE DOWN THE WEST ,PUNKASSS

Problem very well articulated by the host but the answer is to buy all products local from people you can meet face to face. It's the American way of commerce.

Please break these data spying companies up. These companies are worse then Stasi, KGB, Mossad and CIA combined.

He misses the fact Amazon doesn’t actually sell or take a position on most of the products. They are sold by 3P sellers who Amazon abuses. Amazon gets money from both ends

I bought my first Apple in 1985. I was an Apple devotee until 2018. Apple was a true "plug and play Compute. No more. I made money with the Mac. Not any more! I could repair my own mac. NOT ANY MORE!! I regret that I bought a 27 inch mac in 2018. I am pissed off. Linux is better!!

I don't think people should give up on the sheer beauty of free market capitalism. No one younger than 50 in the US has ever witnessed it in action. Free market capitalism and Crony Capitalism (which is what we have in the US) are as different as day and night.

All governments that allow this to happen, spying on everything we do can be rightly declared COMMUNIST! All those corrupt GOVERNMENTS EVERYWHERE! They spy on EVERYTHING we do. COMMUNIST BEHAVIOUR! Leave our people ALONE.All in all your just another brick in their self righteous and self spoiling wall! Pay politicians less, unless they are a genius….yet to find one! And bugger off with your COMMUNIST control.

This professors and academics always coming up with business solutions to industries that they have never even put the effort to run and manage it or even simply putting up a start up and even paying wages to workers.
They sit pretty in the comfort of their university offices read books and develop theories and boom just like that they have solutions for the real world of commerce.
The days when academics and so called intellectual educators sitting at the top of the revered people hierarchy is long gone! This century people respect people who start small businesses and grow them into giants. That is true education in progress showing "fruits" in real time not theories in books that haven't been tested yet!

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I love how people are under minded as if they are children who didn’t listen to their masters… who’s fault was it that the election turned out the way that it did?? not the people‘s fault they’re just a bunch of bumbling idiots who don’t have brains of their own so let’s blame Facebook for the outcome! Facebook is the puppet master and all of the other entities are just sore because they weren’t able to be the puppet masters! What a load of shit!

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