Scott Galloway (7:14)

I AM in Washington D.C. our nation's capital.

Anne Applebaum (7:17)

How's the mood there right now?

Scott Galloway (7:20)

A little paranoid, a little stressed. I mean, it depends a little bit on who you are, but I have a next door neighbor who works for the Department of Education. I know lots of people who worked for hhs. I know plenty of people who worked for usaid. And all of them are watching things they've worked on, all of their lives be destroyed. So it's a tough moment.

Anne Applebaum (7:42)

You recently wrote a piece for the Atlantic arguing that under Trump, the US Is sliding towards kleptocracy, a system where leaders use political powers for financial gain. Before we get into the specifics, can you help ground us? What exactly is a kleptocracy and how is it different from other forms of autocracy or corruption?

Scott Galloway (8:02)

So, a kleptocracy, maybe it's a fancy word for a profoundly corrupt dictatorship, but it's a political system in which the leaders of the country not only exercise political power, but they also exercise economic power and probably own a lot of the economy. So Russia is a kleptocracy. You have people who have both political and economic power at the top of the system, and they use, I think maybe this is the key point, they use their political influence to make money for themselves. In other words, the policy of the Russian state, its foreign policy, its domestic policy, is not being made for the benefit of Russians, of ordinary Russians. The policy is being made for the benefit of a group of very wealthy people who earn their money out of state decisions. And the US Is very rapidly moving in that direction. There are questions now to be asked about some of our foreign policy. Is it being conducted in the interest of Americans, or is it being conducted in the interest of Trump? Maybe his family, maybe the business community around him. That's where you would have a real change. We've had presidents before who were incompetent or who made mistakes or whose foreign policies failed in various different ways. But I don't think we've ever had a president whose foreign policy and whose perhaps domestic policy are not designed for the purposes of making American life better. And I think that's where we're heading.

Anne Applebaum (9:37)

So just to double click on that, by some estimates, the Trump family has increased their personal net worth approximately $3 billion since the launch the Friday before inauguration of the Trump coin. Can you think of any other instance in history, anywhere, where one president, prime minister, dictator, general, consul, whatever, has managed to sequester $3 billion from the economy in a hundred days?

Scott Galloway (10:05)

Obviously not. You can point to many other instances of corruption around the world in US History. There have been corrupt presidents in the past or people who were thought to be corrupt, but that usually was. If you look at the details, there were people who perhaps tolerated some corruption around them. I don't know. Ulysses S. Grant supposedly let his wife's family make money, government contracts, that kind of thing. But there is no incidence of a president, while in office, while in office, enriching himself like this. I don't think there's any precedent for it, and I don't think we've seen anything like it before.

Anne Applebaum (10:41)

How do you respond to the notion or the argument that we've been a kleptocracy for a while? When you have Speaker Emerita Pelosi meeting with HHS and getting a sense for they're considering using AI for payment systems and then she goes and buys call options on Tempus AI and when it's disclosed she's purchased those call options, they surge. I mean, effectively, isn't Trump doing what everyone's been doing? But he's not doing it for small ball. The Democrats do it for hundreds of thousands and he's doing it for billions. But hasn't this been going on for a while?

Scott Galloway (11:17)

You can certainly talk about this slide into corruption, which goes back, as you say, a while. I mean, I don't want to put a date on it, but both the, I think certainly since the Citizens United Supreme Court decision that made US Elections a kind of Las Vegas free for all, where almost any amount of money can be spent, and certainly the change in ethics, I think that meant that more and more members of Congress were using insider information to play the stock market, both Democrats and Republicans. And those are pieces of the story and the buildup to where we are. And maybe they explain part of why so many people tolerated Trump. Again, I don't think there's an example of any politician using office while in office to become a multi billionaire. And I don't think it's just a matter of numbers. I think it's a completely different attitude. I don't think Nancy Pelosi's entire policy while she was speaker was designed to make herself personally rich. I don't think that was her goal. I don't think that's her. And actually I don't say that I don't think there were Republicans, speakers of the House whose political philosophy was deliberately designed to make themselves rich or who were doing things solely for that purpose. And I think you can ask whether Trump is doing that. You know, one of the, you mentioned his cryptocurrency business which did a deal in the last, in the last day, day or two with the Emirates. It was a sort of major Emirati investment into that company. And this actually Trump also has a financial relationship with the Saudi government whose state owned Saudi companies sponsor his a golf tournament that took place at his golf course a few weeks ago. And the head of the Saudi sovereign wealth fund was, was at that tournament and as one of its sponsors. In other words, these are countries with which the US has political relationships and whose leaders are interested in influencing US Politics. And the President meanwhile, has an ongoing financial relationship with those governments and with those leaders. That's not anything that Nancy Pelosi did in the past.

Anne Applebaum (13:41)

I actually see the more damaging part of this. It's not as romantic or interesting as that companies. Now there's, I would describe this sort of domino of cowardice in the private sector where nobody wants to speak out because you do his bidding, he'll make you rich. I believe about 30 people within a few hours made 7 or $800 million in the launch of the Trump coin. And then over the course of the next few weeks, when it crashed, about 80,000 retail investors lost several billion dollars. So there's upside down. But there's also a downside, and that is if you speak out, he might decide that you don't get an exemption for the tariffs or he might implement some sort of crazy policy that just distracts or hurts your company. Is that the difference? Is that a slide from kleptocracy to autocracy?

Scott Galloway (14:31)

It certainly makes the state, and in particular Trump himself an arbiter of the economy in a way that, that we used to think as Americans, and I think this is even both Democrats and Republicans, was damaging and immoral. It puts the White House in a position of being able to decide who wins and who loses, at least for large companies and at least in some businesses. And that does make us certainly on the path to becoming a Russian style political system. Yes.

Anne Applebaum (15:07)

Speaking of going from depressing to really depressing, this isn't like we've uncovered something. It's been not transparent, but it's out in the open. And it appears that despite what is obviously a slow creep or a fast Train barreling down the tracks towards a kleptocracy that if America doesn't want it, it's tolerating it. I just saw a poll saying that if the election were held again today, Trump would still beat Harris and the Democratic Party is less popular than Trump. Hasn't the failure been? Or do you think the failure kind of rests with US Educators, the media, the lack of civics courses, our inability to communicate to the populace that the kleptocracies don't typically serve the citizenship well, because as far as I can tell, America has decided they'd rather have a kleptocrat than a weak party. Your thoughts?

Scott Galloway (16:09)

I don't know that most people understand yet what's happened. I mean, you know, these stories come very fast. I actually started collecting the kleptocracy stories. Some of them are in that article I wrote for the Atlantic a couple weeks ago. But I'm also collecting them for future use. And there is something almost every day. Either it's a violation of the emoluments clause of the Constitution, which says that Trump shouldn't. Or the president, sorry, shouldn't take money or any favors from foreign governments or foreign countries, or it's a merging of a new conflict of interest. Somebody in the administration has clearly conflicted both a business and a political interest in something. I mean, the classic example of that is Elon Musk, who is. Has influence now over government agencies who regulate his own companies and who subsidize his own companies. That's an outrageous conflict of interest of a kind that we would have thought was illegal. Or it's a legal change. The administration announcing, for example, it will no longer enforce the Foreign Corrupt Practices act, which prohibits American companies from bribing using bribery abroad, or the Corporate Transparency act, which was supposed to make the world of shell companies and anonymous businesses more transparent. Or it's just plain corruption of the kind that we've been discussing. The Trump family just taking money in exchange for political favors. And there's many, many of those stories every day. And I am not sure how much people are yet able to pay attention to them or to understand them. I mean, there's another problem. There's been a problem for a long time with the world of kleptocracy and the world of money laundering and shell companies and so on, which is that it's very, very complicated. It can be hard to explain. I mean, I've read a lot of books about money laundering. There have been some good ones in recent years. There's a good book called American Kleptocracy. There's a good book called Kleptopia. And almost all of them would be hard for layman to grasp. It's a story about moving money around the world very quickly. It's about shell companies, it's about manipulation. And I'm not sure that people get it yet. You know, what will have to happen is for people to begin to connect these stories to their own personal experience when they understand that they are poor, because the Trump family is rich. And this is something, when you look at anti corruption campaigns around the world, this is the moment when they succeed. So, I mean, the most famous example of this is Alexei Navalny's campaign in Russia. So this was the great Russian dissident who was died in a Russian prison some months ago. And he was the most successful campaigner against Vladimir Putin. And he did so by talking about theft and by talking about corruption and also by talking about how bad the roads are in Russia and how bad the hospitals are and how underpaid the doctors are. And he made the case that there was a connection between these things and people understood him. He made these spectacular. They were documentaries, really, I was going to say videos, but they were long. They were an hour or two hours. And he would sketch out these elaborate schemes that the President was carrying out or the President's entourage. And he would. And he would show that sometimes they were funny, they used video, they used drone footage, but they also showed the connection between that world and the world of ordinary Russians. And that is the link that the Democratic Party will have to make and that I hope journalists who cover this stuff will also begin to make. You know, it's not enough to talk about crypto or schemes or fraud. That's something that I don't think people get. But when you explain, as I said, that they are doing this in order to benefit themselves and not you, and that the policy of the United States, whether it's the foreign policy or the domestic policy or the economic policy, is being twisted and manipulated to benefit them. Them and not ordinary Americans, then I think you'll begin to get some political leverage from this.

Anne Applebaum (20:20)

So there's so many ocracies to think about. And the thing that feels even more differentiated with this administration is, okay, there's other kleptocracies, but kakistocracy. And that is, I would argue, that Putin and Xi have competent people around them. And I don't think that's the case here. Any thoughts on what could I think could be fairly described as a kakistocracy. Now, in the United States, do you do much thinking or writing about this topic?

Scott Galloway (20:48)

I don't think I've ever used the word kakistocracy in my writing, but maybe I've addressed the idea, which is that it's the rule of the worst people or of the least competent. I mean, there is something about who Trump attracts to his orbit and what kind of people want to work with him and be around him. And almost anybody who has real character, who has any ideals, who has any commitment to truth telling, to evidence, to even just to reality itself, to the world of real facts, is almost immediately made uncomfortable in the presence of Donald Trump. Because Donald Trump is somebody who's constantly seeking to shape reality to his own benefit, to change the facts, to tell a story or make up a myth, and who's perfectly capable of being totally inconsistent from one day to the next or even from one hour to the next. I mean, the tariff story, one minute he was justifying the tariffs because it's going to bring back manufacturing to America. Another minute he was justifying them a few minutes later on the grounds that he was going to do great deals with countries. But if you're going to do deals and lift tariffs, then that's not going to bring back manufacturing, manufacturing to America. But he feels no need to be consistent, and he feels no need to be accurate. And so anybody who does, anyone who cares about telling the truth or about presenting accurate vision of the world, or who cares about making policy based on reality and not on this fiction that Trump promotes is uncomfortable. And that means that all the people around him are either they're simply manipulable and they're willing to just do whatever he says, or they're people who have made a big a kind of moral sacrifice, who are doing something they know to be wrong. And sometimes you can see it on their faces. I mean, I think this was the core problem that Mike Waltz had, actually. The reason why he didn't fit into Trump's inner circle wasn't just because he put my editor, Jeffrey Goldberg, on a signal chat. It was also because he, at least in the past, had had an attachment to a certain ideas about foreign policy, a certain belief of America, what role it should play in the world, and he was just unable to lie convincingly on behalf of Trump when that violated his own morality or his own sense of the world. And he just couldn't be around Trump any longer. And of course, that happened repeatedly in Trump's first term and in his second term. These are people who are self selected. They're people who know what kind of person Trump is who want to be there anyway. And so as we used to say about Polish Communists, for listeners who don't know, I live part of the time in Poland, either they're liars or they're stupid. I mean, either they go along with it because they don't know better or they go along with it but know it to be wrong.

Anne Applebaum (23:41)

So let's move to potential solutions. And granted, this is a naive take, but my sense is the only way to step back from a kleptocracy is fairly swift punishment. That sends a very strong signal that this won't be tolerated. And I don't know if America's capable of that. So one, do you agree that it's hard to pull back from it without pretty swift punitive action, imprisoning people or worse, or more generally, how have you seen large economies that claim to be democratic walk back from this type of kleptocracy or autocracy?

Scott Galloway (24:17)

The country that I know best that is trying to move back is actually Poland. Poland had an autocratic populist government in power from 2015, 2023. And one of the features of that government, like all autocratic populist government, is that it became very corrupt. The scale was different. This is Poland, not the United States. You know, they weren't, they were, they were bound by the rules of the European Union. And so that this, as I said, it wasn't the stunning theft that we're seeing take place inside the United States. Nevertheless, there were, there was a lot of money stolen, in effect, from the, the state and put into people's pockets. And we now have there was then an election which was unfair, but yet the opposition was able to win partly by putting together a broad coalition, sort of center right, center left, liberal coalition. And now they are seeking to prosecute the previous government and hold them to account. And it is indeed very difficult. It's very difficult partly because, because the judiciary was changed and manipulated by the previous government. So that's part of the story. It's partly difficult because the president, although this may change in a few weeks, is still from the previous government. And he's been blocking a lot. He's able to pardon people, actually and block a lot of the changes. But even mobilizing the prosecutors, mobilizing the state to go after in a fair and systematic and legal way is pretty difficult. I mean, I think actually Poland is a lesson of how once you destroy things, and once you destroy particularly the ethos of government, once you've kicked out of government all the people who are there for idealistic reasons, who don't mind working for less money because they think they're doing something on behalf of Americans, and once you've replaced a lot of those civil servants with loyalists, it's very hard to find new ones. And that's a related piece of the story I'm worried about in the US that once you have kicked out everyone who works for the American government because they love America, and instead have people who work for the American government because they think they might make money doing it corruptly or because they're loyal not to America, but to Donald Trump, you'll find in later years that the government lacks. Lacks capacity to do things, that the people who should be there to fix problems or to manage risks aren't there anymore. It's a long walk, walk backwards. I mean, in our case, there are really three ways in which. In which this could be stopped. I mean, the, the. Actually, the simplest way would be for, I don't know what it is, three or four Republican senators and a handful six or seven members of the House to decide they want to stop it, to join with the Democrats to elect, you know, an independent or a bipartisan speaker and a bipartisan leader of the Senate and begin to. Certainly, they could end this fake emergency decree that Trump is using to impose these tariffs. They could certainly begin to conduct investigations into what's going on. I mean, it's Congress that has the investigative power to do this. And, but right now, we don't have a majority in Congress that's able to do that. So that's actually the fastest thing that could happen. The second way it could happen is that voters decide at the next election, which is still many months from now, but they could decide to hand Congress to the opposition political party to enable them to conduct this and enable them to do it. But that would require really decisive vote from a lot of people, including in red states, because moving the Senate is not so easy. And then finally, we would need the courts to begin to respond. This would have to probably happen via lawsuits to begin to demand some kind of change. Of course, the tragedy is that the bodies in our system who are supposed to investigate federal corruption are the Department of Justice and the FBI, and those are controlled by Trump. So they're not available to us right now as tools to do that. But maybe we would now have to wait for a future president. Unless, of course, this president was impeached.

Anne Applebaum (28:41)

We'll be right back after the break. Support for Proftee Comes from Shipstation what if you never had to worry about shipping and fulfillment for your business ever again? In with Shipstation you can save hours and money every month by shipping from all your stores with one login, automating repetitive tasks and finding the best rates among all the global carriers. Shipstation grows with your business no matter how big it gets. You can ship products to your customers with discounts up to 88% off UPS, DHL Express and USPS rates and up to 90% off FedEx rates. You can also seamlessly integrate with the services and selling channels you already use. You can deliver a better customer experience with industry leading scalable features that help ensure accuracy and get shipments out the door faster. Over 130,000 companies have grown their e commerce businesses with Shipstation and 98% of companies that stick with Shipstation for a year become customers for life. Calm the chaos of order fulfillment with the shipping software that delivers switch to ShipStation today. Go to Shipstation and use Code Prof. G to sign up for your free trial. That's shipstation.com code Prof. G.

Scott Galloway (29:59)

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Anne Applebaum (30:31)

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Scott Galloway (32:49)

So I'm always reluctant to compare America to Nazi Germany because then all anybody can think about is how Nazi Germany ended. And I didn't feel like there's going to be a Holocaust here very soon. So it always creates the wrong image. It also creates an image of dictatorship that's wrong. When people think of Nazis, they think of storm troopers and people goose stepping through the streets and that that's what authoritarianism looks like. And of course in the modern world that's often not what it looks like. You know, the democracies end nowadays usually because they are a democratic elected leader slowly takes over the institutions of the state or quickly and it can take some time and it can be very smooth and it doesn't necessarily involve violence. And so that's the way democracies fail. If you look at Hungary, if you look at Turkey, if you look at Venezuela, if you look at what almost happened in Poland but but wasn't completed. There isn't mass violence or street violence of the kind we assess. So that's why I didn't like the comparison. However, having said that, you are right that there are multiple instances of company heads, business people In Nazi Germany, in other autocracies, thinking that they can do a deal or they can benefit from the system and that they won't eventually suffer. And there are also multiple instances of them ultimately suffering. Of course, the German economy, the stock market went up and up and up, I think, until Stalingrad or some turning point of the war. And then it collapsed, never to recover. And many businesses were destroyed and people's lives were ruined. I mean, that's an extreme example. But even if you look at Hungary, lots of business people who thought at first Orban was talking, talking the talk of free markets and he was somebody who was going to be friendly to them. I mean, they too slowly lost control of their companies as the Hungarian state played a bigger and bigger role, somewhat like Trump wants to do, in deciding essentially who got rich and who didn't, in making the rules of the system so that they would benefit a particular group of companies who are close to him. In his case, it's his son in law who became very rich rather than his sons and a couple of his childhood friends. And eventually, I mean, I know a Hungarian businessman who wound up leaving the country. I mean, he eventually sold his businesses in the country. He moved away. He was very, he had some, still had relatives there. So he's been rather quiet. But he understood finally that he couldn't operate anymore in his system unless he was going to have a kind of corrupt relationship with the ruling party. And I'm afraid that American businessmen, I mean, especially the big businesses, are making a huge mistake by imagining that it's going to be good for them in the long run to go along with this. Because if they cede that kind of power to the White House, if they let the White House make arbitrary decisions, whimsical decisions, about who can do this deal and who's allowed to escape the tariffs and who can't, then first of all, it's bad for the economy in the long term and, and just the insecurity and the volatility will be bad for everybody's business. But also at some point they could very well end up on the wrong side of that deal as the whim moves in the other direction and as others become favored. And there's, in almost every case that I've mentioned, sooner or later the economic decline catches up. Hungary is a great example. It's a, it's a country that was the early 1990s, which is when I first started going there. It was the kind of gem of Central Europe. They started privatization early in the 1980s by the time communism fell, they were sort of ready for it. There were a lot of good investment opportunities. A lot of foreign companies moved into Budapest. It's an attractive city. Food was good, and it felt like it was moving upwards. But since Orban has taken over, you saw the boom continue for a while. And in recent years, you're now beginning to see this very distinct decline. So much so that Hungary, depending on which measurement you use, is either the poorest country in the European Union or the second or third poorest. But it's behind in all kinds of measures of productivity, of governance, has a very poor healthcare system, poor education. It's sliding downwards. And. And the slide downwards is directly connected to the authoritarian system that Orban built and of course, which many people around Trump admire. It enabled corruption. It gave too much power to the state, it gave too much power to the people around Orban, again, to decide to make rules and laws that benefited them and their friends. And ultimately, it was bad for everybody else. It also encouraged a lot of educated Hungarians to leave the country. I mean, they have an immigration problem. And despite all this kind of pro family rhetoric, rhetoric that Orban uses, people don't seem to want to have children there, and they often leave if they can. And so it's a good indicator. I mean, almost every one of these countries, I mean, and there are more extreme examples like Venezuela, countries that lose out where too much power goes to one person, where institutions decline, where the independent judiciary declines, where the rule of law declines. Sooner or later, there's an economic impact and it's negative. And, you know, Jeff Bezos should know that. And, you know, everybody who runs a large company or a bank in this country should be aware of that. I mean, there. And they. And they have some other options. I mean, I understand that nobody wants their company to be picked out or attacked on truth social. But there are ways in which they could work together. You know, which universities could work together, law firms could work together, and companies could work together, too, and begin to speak collectively. And I think that might make a difference.

Anne Applebaum (38:54)

Just for the purposes of some discussion here, just some pushback. I find that I get a lot of pushback whenever I compare the US right now to 1930s Germany. He's not a genocidal maniac. Say what you will about him. Okay, granted. But I see a nation that was arguably over the last 200 years, the most progressive, enlightened nation in the world. And it wasn't the US it was Germany that descended into this darkness for 11 years. And what did they have, they started demonizing immigrants. They had an economic shock. They started. I mean, what do we have in the US we're essentially in some form, it's a new form, but we are rounding up people in a sense and sending them to the equivalent. I won't call them concentration sites, but black sites. We have someone with extreme nationalist rhetoric who sees the world as a zero sum game. All of our problems are because of the gains of other nations and also what I think is the most dangerous component. That's similar to 30 ceremony. We have a huge group of a population that tends to be more risk aggressive and more prone to violence, specifically young men who are really struggling. And what I would offer a question and ask you to respond is, is the US that much less likely to get to that very dark place in four years than Germany was in 1935?

Scott Galloway (40:13)

So again, the only reason I hesitate with the Germany comparison, as I say, is because of how it ended and because we know the end of the story. But you are right that if you look at Germany in 1933, which was the beginning of the story, you can find some parallels. And you're also right that one of the important comparisons to make is, is the speed with which a country can transform itself. You know, that we all have this image in our head of the United States as being on some kind of even keel. You know, everything has been the same for so long and it will go on being the same. But countries do experience rapid declines. You know, they do experience rapid change. And we had it once before in our history during the Civil War. I mean, you know, our country plunged into violence and, and thousands of people killed thousands of other people. I mean, I don't foresee that happening now. But you can have moments of profound change. And you are right that people who are too complacent and who believe it could never happen here because of our history, because of who we are, because we're exceptional, whatever story they're telling themselves are missing the frequency with which this can happen. So I, I agree. It's also useful because you're also right that what happened in the early 30s is a pattern that you see in other places. So again, it's a leader who is legitimately elected or chosen as Hitler was initially then deciding to take over the institutions of the state. In other words, take over the civil service, politicize that. Take over the judges, politicize them, attack the media. Actually, Hitler had this phrase, lugen presse, which means lying presse, which is something like fake news. The Same institutions that he was attacking. And these are of course also the institutions that Orban attacked or that Chavez in Venezuela attacked. By the way, this doesn't have to be a right wing, doesn't have to be a right wing leader who does it. You can also have left wing version as well. All these moments when you see a rapid period of decline, it's the same institutions being attacked and undermined. And that is happening here. In that sense your comparison is correct.

Anne Applebaum (42:33)

Some of your writing and the writing of others is really is illuminated. And let's be honest, I'm a glass half nippy kind of guy. I was thinking about the end of America, how it might happen. And some of the stuff I've read to your point made me believe that it happens not with a bang, but with just a thud or a whimper and an example or a scenario. And I want you to respond. 2028, four major states refused to certify the election and say we don't recognize this president. And California, basically fifth largest economy in the world, starts doing trade with the Asia Pacific Rim. It's a technology based economy, develops its own leadership, its own currency. Texas oil and gas economy starts its own currency, different set of values. Maybe Florida and the south and maybe the Northeast is more about finance with strong relationship with Europe. But basically we become four nations the size of, I don't know, France and the UK lose all of our scale, lose a lot of our power in fighting, don't like each other, start putting up fences and borders and America just slowly kind of fades. Not to black, but fades to a much less powerful inspiring form of black and white. Your thoughts on that scenario and could it happen and if it could? Well, I'll start there. Do you think that is in any way a reasonable scenario?

Scott Galloway (44:01)

So I would like Americans to be open to the idea of thinking and imagining scenarios like that precisely because of how you ended your question, because it will help us think about how and why we might want to prevent it. I don't know if it's reasonable to imagine California breaking off or whether Texas having its own currency is possible. I can imagine very easily, actually, since we almost had it in 2020. I can imagine a challenged election in which some states either don't certify or some don't accept the result. And you could imagine in many different versions of how that could work out. And there is a president whose, who is not recognized by some state governors. And as I said, we came very close to that in 2020. And there are still, I don't know what the percentages are now, but it was at one place. Between 20 and 30% of Americans thought the 2020 election was stolen. What if that number was 60% or 70%? What if most people thought that the president was illegitimate and had good grounds for thinking that? Then all kinds of, then you have all kinds of federal institutions losing credibility and people asking whether they still need to obey the law. What happens to the FBI in those circumstances, or the Department of Justice or the instruments that the president has to use. So a kind of radical weakening of the presidency following this period of kind of hyper power being given to the presidency is something I can easily imagine. And the fact that Donald Trump introduced into our system this profound doubt about elections means that you can now hear it on both sides. Actually, you can hear. I don't know how much time you spend on social media, probably not so much. But you can see there's a piece of the left who believed the 2024 election was stolen by Elon Musk or by Trump. And that uncertainty about results and that, that doubt about the system, what if that grows to a level that makes people question the legitimacy of the whole system? And that's the version that I think we could be quite close to. So, yeah, and I think people, it's useful to imagine it. It's useful to think through scenarios because that reminds people, I think, of what's at stake.

Anne Applebaum (46:34)

One of the things I find so frustrating is gearing up for the house races in 2026. I mean, I think I'm like a lot of Democrats, frustrated that we haven't had a more robust response, if you will. Do you have any thoughts? I'm sure you could ask for your advice on what based on what you've seen historically. If people do in fact think this is dangerous and bad for America, what is sort of a playbook for more, greater viscosity, more tensile strength response than what is happening now.

Scott Galloway (47:11)

First of all, every time you see the rise of an authoritarian in any country, one of the first things that happens is that the opposition splinters because the rules of politics have changed, sometimes in ways that people don't initially understand. And whatever was the previous opposition doesn't understand the new rules and they fight with each other and they split into different parties. A country like Iran, the political opposition had dozens of parties who fought with each other for years. Russia, same story. Venezuela until recently, also the same story. Hungary, the same story. You had the rise of Orban, and in response you had the left and the Greens and others you know, fighting one another, you know, rather than, rather than unifying or finding a way to push back against the damage that he was doing. So this is normal. And so some of what we're seeing is the same. I mean, I heard this kind of frustration in Poland in 2016 and 17. It was same thing. You know, the opposition is powerless, they can't fight back and so on. One of the things that needs to happen is for people to understand the rules are different, that the, the things that divided us before can't divide us now. There was a scene, was it yesterday or the day before, of Palestinian activists attacking AOC at one of her events. I mean, this is a kind of own goal, allies turning on allies. And that's kind of, that's something that has to be avoided. But also, I think the Democrats need to look for what are the stories, what are the narratives, what are the, what are they going to find that unifies not only them and not only brings together different kinds of Democrats, but also reaches people who voted for Trump or people who stayed home, people in the rest of the country. And actually, one of the things that might eventually work once it begins to sink in, is the idea that I spoke about before, this idea of corruption and its limitations linked to your well being. And you're already hearing some of it. When AOC and Bernie Sanders talk about oligarchy, when I think it's Elizabeth Warren who keeps saying they're getting rich and you're going to lose your health care, beginning to make those links between what people are seeing and hearing, even if vaguely about Trump and the people around him and how it affects people. The same is true actually for, for the decline in the justice system is that when you talk to people about judicial independence, that can be a little bit too theoretical. When you begin to say, look, you've had these illegal deportations of people who are in this country legally, you've had even US Citizens being detained at the border. This is a new system. And eventually it could be coming for years. You, and when you, when you link together people's personal experiences and the, and the, and the political, you know, mess that they see around them, I mean, I think then you begin to get powerful narratives that move people. I mean, I, there's a, you know, there are probably, you know, names and tactics. I could, I could, I could, you know, that, that might work here, that you've seen in other countries, but I think the most important thing is for not just Democrats, but for Democrats and for company bosses and for heads of law firms and for, you know, disappointed and distressed Republicans to begin to coalesce on a definition of what's wrong that can be made clear to people and to begin to offer an alternative.

Anne Applebaum (51:02)

We'll be right back after the break. Support for the show comes from Virgin Atlantic. Let's talk about flying. I do it, you do it, we all do it. But it really comes down to how we do it. When you fly Virgin Atlantic, they make it a memorable trip right from the moment you check in. On board, you'll find everything you need to relax, recharge or carry on working lie flat private suites, fast wi fi, hours of entertainment, delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for business can always be a pleasure. Support for the show comes from Square. Lots of people dream about starting their own business, but no one dreams about fighting to get their register or payment processing software or online store to work. If there's one thing that can ruin a customer's day, it's a slow and frustrating checkout experience. Square can help. Square's Point of Sale system is not only user friendly, but also highly intuitive. It supports all major credit cards and payment methods, including contactless options like Apple Pay and Google Pay, making checkout fast and easy for your customers. And if you're expanding online, Square makes it simple to set up a store in just a few minutes. Whether you're just getting started or looking to grow, Square gives you all the tools you need without making things more complicated than they need to be. It brings everything together in one simple platform so you can stay organized, sell anywhere and keep things moving. So anyone who's tried to grab coffee in New York has interfaced with Square. And I have, generally speaking, from a consumer standpoint, find it pretty seamless and pretty easy. Square keeps up so you don't have to slow down. Get everything you need to run and grow your business without any long term commitments. And why wait? Right now you can get up to $200 off square hardware at square square.com go profg that's sq U-A-R-E.com go profg run your business smarter with Square. Get started today. Support for PRPG comes from Betterment. When investing your money starts to feel like a second job, Betterment steps in with a little work Life Balance. It's the automated investing and savings app that handles the work so you don't have to to while they build and manage your portfolio. You build and manage your weekend plans. While they make it easy to invest for what matters, you get to enjoy what matters. Their automated tools simplify the complex and they put your money to work optimizing day after day and again and again. So go ahead, take your time, rest and recharge. Because while your money doesn't need a work life balance, you do make your money hustle with betterment. Get started@betterment.com that's B E T T E R ment.com investing involves risk performance not guaranteed. We're back with more from Anne Applebaum. I just want to move to the business of Ann Applebaum. My sense is you're having this extraordinary moment and I imagine it's been a lot of success is I love the statement, after working my ass off for 30 years, I'm an overnight success. I see you everywhere. And by the way, I think it's wonderful. How are you? I don't want to say taking advantage of, but how do you think about this moment for you and how do you try and get your message out there? Are you trying to write more, get better at social media, trying to hire people to manage your social media? Tell me about like Ann Applebaum Inc. How do you manage to scale your message such that it can have as much impact as it can given this, quite frankly, this moment in time where your work has real resonance.

Scott Galloway (55:01)

So I'm not sure that I think about myself as a business that needs to be managed. But and for better or for worse, I mean, I think it is, you can, it's fair to say that I have changed some of what I do. So I did spend, I don't know, the 90s and 2000s and into the 2010s. A lot of what I was doing was writing history books. You know, I wrote histories of the Soviet Gulag, the Ukrainian famine and so on. And it was really for me that there was a big turning point in 2015 when first in Poland and in Hungary and then in the UK in the US I saw, you know, I felt, I suddenly realized that I was watching a very big change. I was under, there was a, there was an intellectual shift going on around me, particularly among, because I was kind of part of a, I was an anti communist and I knew a lot of conservatives and a lot of my friends were in the conservative world. And I saw this conservative world begin to split and part of it begin to radicalize. And then I, I wrote a book about that and then I wrote another short book and you are right that I do now think more about how to find ways of telling the stories that I studied and describing the bad ends that I know from history and warning Americans not to go down those roads. And I don't know, I'm not sure that I do do it systematically or well, but I do it through. I, I talk a lot more than I used to. I mean, I do podcasts. I, I didn't used to do any television partly because I didn't want to, and now I do it. If you ask me if I, if I have time, you know, I understand that there are different ways to reach people, that not everybody's going to read my 500 page history, the Gulag. And so if I, if I have to talk about what a concentration camp is, which by the way, they, those concentration camps in Guatemala, I mean in El Salvador are. That's what they are.

Anne Applebaum (56:56)

And the definition is a site that's not subject to the laws of the country sending people to that site. Is that the right definition?

Scott Galloway (57:03)

A concentration camp is a camp where people are sent who are neither prisoners of war nor necessarily convicted criminals. It's somehow outside the law. It's people who are being sentenced not for necessarily what they've done, but for who they are. And certainly that defines some of the people who we've been sent. So, yeah, I feel obligated to, to talk and speak more, but I don't know if there were something that I could do to get the message through more effectively and to more people, I would do it. I don't come from a show business world or really a television world. I'm somebody who writes books and articles figuring out how to make what I studied and what I do, how to make it clear and simple and to transmit it in a way that people understand. I mean, I do spend time thinking about how to do that. I guess that's the best way to put it.

Anne Applebaum (58:02)

So we entered college the exact same year. You at Yale, me at ucla. You're now, I think, a senior fellow at Johns Hopkins. Is that right?

Scott Galloway (58:12)

Yeah, there's something called the Agora Institute there. And I'm fellow there.

Anne Applebaum (58:16)

I'm curious. Well, I'll put forward a thesis that at universities our inclinations are democrats, almost similar to Democrats. Our inclinations are correct, our heart's in the right place, we take things too far and we invite an overcorrection. How would you, what role, if any, do you think universities have played in inspiring an overcorrection? If you believe that's true? And two, what role do you Think university leadership has to play in an attempt to push back on this autocracy.

Scott Galloway (58:47)

So when you're talking about universities, it's actually a really fraught subject, because the truth about what actually happens at universities and what was written about universities and what people think about universities can sometimes be quite separate. And this was true both during the cancel culture moment of a few years ago, and it was very true of the Gaza protests, for example, last spring. I'll just give you an example of what I mean. I did a lecture at Northwestern University last year, and it was right at the height of the protest movement, and there were a lot of protest movements there. And I talked to a group of journalists who. Student journalists who were. Who were. It was a class I spoke to before the lecture, and I asked them to tell me about how many people on the campus, which is about 20,000 people or 22,000 people at Northwestern. How many people actually cared about these protests? What. What number did they guess? And they said, well, there's probably about a thousand people who care, who know about it, who follow it. Okay, how many people have actually been to a protest? Maybe 500. How many people go regularly, live in tents, care about it intimately? That was certainly no more than 50, and sometimes it was just a couple dozen. So out of 22,000 people, there were a few dozen who were making the news. Then we started talking about the slogans that were used at the protest. And these were kids. I mean, they were sort of in their early 20s. They'd never done journalism before. They were editors and they worked on the student newspaper. And one of them said to me, you know, the thing that had been most shocking for him was to learn that every time, whatever was the most extreme slogan, whether it was anti Semitic or anti Muslim, you know, whatever was the most extreme thing, if someone took a picture of that on a given day, that slogan was the one that would be in the Chicago Tribune the next morning. And so you had, I don't know, 21,500 students on this campus who were not involved in this. You had 22, 25 kids who were very angry. One of them made a poster, and that was the news story. There were stereotypes and exaggerations about what students were up to and what they did that I think became very unfair. So I think it's also become the case that because of the nature of social media and the way that news spreads, one incident, one crazy person at Yale or at UCLA or at wherever University of Colorado can do something crazy or make a statement or disrupt A lecture or post a blog or do something that suddenly will make him or her the focus of a kind of frenzy of one kind or another. And I don't think that was ever very representative of everybody's life on a university campus. And I've had kids who've been through university since then, and I teach a little bit, so I know kids that age, and I mostly found them in. They were wary of this kind of extreme politics on both sides. They were mostly pretty moderate. Most of them did their homework and went to their lacrosse matches and weren't engaged in the kind of bitter campus wars that you read about in the newspaper. And so I think a lot of. And then, of course, the campus wars became important to conservatives and to some on the left as a way of fighting about other things. And so I think the campuses were really bad. Service was done to them. Having said that, there were plenty of university professors in particular, but also university presidents who weren't clear enough about what should have been the basic rules for any university. Free speech, tolerance of views, due process for people accused of things, whether they were accused of political crimes or sexual assault. The presidents and the faculty also became caught up in these various frenzies and in some cases became afraid of these institutions, also became afraid of becoming the subject of attack. And so we had a long and ugly moment that actually I think we were beginning to recover from until the Trump administration came to office and decided that what it really wanted to do was destroy the universities altogether, which I do believe is their goal. I think their goal is not just about correcting some kind of lefty excesses on campus. I think they see universities much as, again, Orban did, or indeed, almost any authoritarian did. The Chinese apparently are very interested in what's going on in the US because they see echoes in their own history, the Cultural Revolution. You know, they see them as places where, you know, people exchange ideas, where they. They seek for truth. They try to establish facts, whether those are scientific facts or historical facts. And, and, and those are the kinds of people who've been taught critical thinking and who've been taught to ask questions that are a problem for. For a president who wants people to accept his lies. This is a president who lies every day, several times a day. He lies about the price of gas. He lies about his tariff policy. He lies about everything, and he doesn't want people to question him, and they want their movement to be accepted and not questioned. And they see universities as the source of a kind of. It's not even of Political opposition. It's the source of intellectual and moral opposition. And I think that's why they want to destroy them. So although there was a case for university presidents to be braver, for university faculty to be less political, and by the way, keeping in mind that it was always a small percentage on any given campus, and certainly when looked at the thousands of universities across the country, there was a. Certainly that you could make that case. But. But it seems to me that what's happening now isn't even an overcorrection. It's a different project. It's a much more extreme project.

Anne Applebaum (65:18)

So, last question. I've been shocked whenever I meet an actor, one of the. And I talk about kids. They almost universally said, I just would not want my kids to go into this industry. Would you encourage your kids to be authors or write for a magazine or be a historian? Do you think your industry is a good industry for young people to enter?

Scott Galloway (65:41)

So I don't think. I have two kids and neither of them is interested. So we're, you know, I don't have to, I don't have to worry about it. Although it's. Look, I still know a lot of really great journalists. I know people who are dedicated to investigating important stories, who write about crises around the world. I was just corresponding this morning with a photographer who I'm working with, who's in. In Sudan and who's witnessing a horrific moment in that war. There are refugees escaping into Chad. She happens to be there. She's taking pictures. I'm going to write something short. I was there a few weeks ago, and I'm going to write something short to go with her photographs. And I see that people who are. Who believe in this kind of work and who want to do good work are still there and they have interesting careers and great lives. You don't become super wealthy and you don't necessarily become super famous. It depends on maybe you get lucky or maybe you don't. I see that the people in the industry feel they're doing something good. And so, yeah, I would recommend that people do it for the moment. There are still places to write for, some big places, some small ones. If you're interested in doing investigative journalism, if you're interested in writing, reporting, if you like writing, if you want to convey ideas, if you care about ideas, if you want to be engaged in political debate, there is space to do it. I mean, there is a lot of junk out there and a lot of really bad journalism and a lot of video clips that we don't all need to see. But there's a real world and I hope younger people join it.

Anne Applebaum (67:26)

There's still space to do it. Anne Applebaum is a Pulitzer Prize winning historian and staff writer at the Atlantic. She's also a senior fellow at Johns Hopkins. Her books include Gulag A History, Red Famine, Stalin's War on Ukraine, and her latest, Autocracy Inc. She joins us from her home or office or home office in Washington D.C. and I just love seeing people such as yourself who have gone a million miles deep on a not a fairly narrow topic, but you literally are the autocracy person and it's just very rewarding to see the kind of recognition and influence you're having. You're forceful yet dignified. And you're one of the few people that and this is one of my many flaws. I fall in love with my own ideas and look for reasons to validate them. But whenever you sit down you something, it isn't congruent with my current thinking, I stop and I question my own beliefs. And I think that's really important. So really appreciate your good work.

Scott Galloway (68:25)

That is a really kind thing to say. Thank you very much. You know, I'm a listener and a follower and and I look forward to hearing what you have to say in the future too.

Anne Applebaum (68:34)

Thanks. Oswer of Happiness. This notion of autocracy, kleptocracy and I brought up the notion of cachistocracy with Ann and what I would argue the difference between, you know, a lot of individuals who are really talented make good livings, but the reason they don't make exceptional livings and maybe that's not their goal, maybe they just want to do their thing and make a good living. There's nothing wrong with that. But I would argue if you want to make a great living, obviously you have to be talented. And I can't figure out if raw talent is 51 or 49% of the whole package of making a really exceptional living. I've managed to make an exceptional living. I think I'm talented. I'm not humble. But hands down, the secret sauce of my success is two things. One, an ability to endure rejection and never get afraid to ask investors to invest in me. Ask talented people to come to work for me, ask clients to be my client. I was never no, never held me back. I've gotten a lot more no's than yeses. And that's the key to yes. There's a lot of no's and the willingness to endure it. But two, I have always understood from a Very young age. That greatness is in the agency of others. I've always invested a lot in people and constantly I am thinking about, I think more about. What do I think more about than clients or expenses or the product, whatever it is I'm offering. Of the companies I've been running, I think about who is really good and how do I make sure they stay. Because the cost of replacing someone really good is just genuinely going to be a lot more than the cost of trying to keep someone. And the way you keep them is one, first and foremost, you pay them well. I want to make it really difficult for anyone to leave, especially anyone who's really good. And that comes down to compensation strategy. And you don't like to say this at all Hands, but I generally believe there's a small group of people that drive the majority of the value at medium and big firms. At a small firm, you can be kind of a seal team. You can pick mostly or have mostly really outstanding performers. Your ratio of A performers to B performers can be like 50, 50. It's never going to be 90 10, because the really best performers, no matter how profitable you are, it is very hard to pay everyone really, really well. But most big firms, it's usually 10, 90. And that is 10% of the people drive 120% of the value and the other 90% are of 20. And you have to have B players to scale a business because A players want a lot of compensation and equity or they want to go start their own businesses. And you have to convince them better than doing your own thing or going to Salesforce or Google, you're going to do really well here. So you have to give them a lot of equity, a lot of compensation. But I've now gotten to the point where I get a lot of joy and I'm rounding third. I'm monetizing a lot of the brand equity and work that I've invested over the first four decades of my career or the last four decades, hopefully. And trying to overcompensate people not only financially, but I've got a good manager in place. I think about kids, I send them on vacations, I try to invite them to cool stuff, try to give them a little bit of, I don't know, some of that Riz or fame in terms of speaking gigs or whatever it is. But loyalty is a function of appreciation. And loyalty is absolutely a function of shareholder value or shareholder value is a function of loyalty. So then how do you get to loyalty? It's appreciation. You pay them well. I try to overcompensate them. And you try to make their job rewarding or somewhat cool. Also, what do you do? You hold people accountable. And that is on a regular basis, you let people go. And that's not what you hear at All Hands meetings. But it's important because everybody at a firm needs to be able to look left and right and say, maybe I don't love this person, but I get why they're here. And if they're looking at someone who's not very good or not working very hard or not as committed to it reduces their commitment. Or they start thinking, maybe I should go somewhere else where I'm compensated for my additional commitment. In sum, if you have a lot of talent, you'll make a good living. But if you want to make a great living, you have to understand how to build an organization. And recognizing that greatness is in the agency of others is paramount. It's the difference between a practice and an enterprise. It's the difference between making a good living and making a great living. It's the difference between having a voice and having an enormous impact. This episode was produced by Jennifer Sanchez. Our intern is Dan Shalon. Drew Burrows is our Technical director. Thank you for listening to the Prophecy Pod from the Vox Media Podcast Network. We will catch you on Saturday for no Mercy, no Malice as read by George Hahn. And please follow our Prophecy Markets pod wherever you get your pods for new episodes every Monday and Thursday.

Scott Galloway (73:18)

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