Scott Galloway Describes the Tough Future Facing Gen Z | WSJ News

Let's just dive right in on the war on youth. Like your contention is that society is treating young people very badly. My kids love this idea like expound.

So uh first off, most of my stats are about America. I apologize, but I, I would argue most of these trends are pretty similar in Europe and in the UK in the US for the first time in our 275 year history, a 30 year old man or woman isn't doing as well as his or her parents economically. And that may not sound like a big deal, but I think that's essentially the social compact breaking and it creates rage and shame.

I mean, what, what do you want? You want to play by the rules, you want to work hard and then the ultimate outcome is your kids are gonna do as well or better than you. And when that doesn't happen, um it creates just tremendous dissatisfaction with everything.

Um The average 70 year old is 72% wealthier than they were 40 years ago. The average person under the age of 40 is 24% less wealthy. And if you think, I believe that almost every major economic policy in the US is nothing but a thinly veiled transfer of wealth from young to old from the entrance to the incumbents, two biggest tax deductions, capital gains and mortgage interest who own stocks and homes, people my age who makes their money from current income and uh rents young people, social security, which you're not supposed to talk about.

As uh is this third rail is I see it as just a $1. 4 trillion transfer of wealth from young people to the wealthiest generation in the history of the planet. I'm not suggesting social security is a bad idea, but let's call it senior security.

Um because I think that type of transfer of wealth should be based on need, not on whether or not you have a, have a catheter. So I think it's outrageous. What is going on and what do you know we have?

Oh, and then the ultimate intergenerational wealth transfer in the history of the planet was I have an idea under the auspices of a virus. Let's, you know, a million people would be bad, dying would be bad. But what would be tragic is that boomers got less wealthy.

So let's come in and flood the market with 5 to $7 trillion in stimulus, 60 to 80% of it, depending on which survey you look at was not spent, it was saved, it wasn't spent on food or medication, it was saved, people didn't need it. So what happened to that money? It went into the market and you saw real estate prices go from an average of 290,000 to 410 in the US.

And then when you couple that with interest rates, the average mortgage has gone from 1100 to 2200. Meaning that, whereas two thirds of Americans could have formed a home. Now it's one third.

So if you owned a home, champagne and cocaine, look at what's happened to the stock market, look what's happened to the stock market. It's screamed, right? So it's great if you own stocks.

So the entrants have essentially been screwed to keep the incumbents rich and who's gonna have to pay for the stimulus that benefits me the entrance, it's debt, it's all been debt fueled. And then my industry is speedball it. Higher education.

We and my colleagues and I, I apologize for the word salad. I'll wrap up here every morning, me and my colleagues in higher education and to a certain extent the incumbents um who in my opinion, have got incredible regulatory capture. We wake up and we look in the mirror and we ask ourselves one question every day, how do I increase my compensation while decreasing my accountability?

And we managed to do this with this amazing strategy in higher education, which is still the primary upper lubricant for talented kids on rampant in the middle class, wealthy homes. We've adopted an LV MA strategy. Let's artificially constrain supply, artificially constrained supply.

Let me get this. The endowment of Harvard is up 4000% in the last 40 years and they've increased the freshman seats by 4%. They could admit 15,000 people every year.

Instead they admit 1500. What a good Starbucks does. So we can all feel really just awesome about how amazing we are and the people who already have a degree, the Boomers, the incumbents, the value of their degree goes up and then once, but do you think it would be better to have twice as many Harvard graduates?

10 times as many, 10 times as many, they could have 15,000 kids and have absolutely no decrease in the quality of their freshman class. And all this anger over de I is an incredible misdirect and unnecessary because it's not about who gets in. It's about how many, you know, where there's no arguments over de I the great community colleges because it's just, do you want to come in or do you want to pursue a better life then come here when I applied to UCL A, the admissions rate was 76%.

I didn't mean to sound angry at you. I'm just angry when I applied to UCL A. The admissions rate was 76%.

I was installing shelving in the Inland Empire in um Los Angeles. The highlight of my day is, I used to get ridiculously high with my coworkers and then take to the highways of southern California. And I've been rejected at a college that had a 76% admissions rate.

And my mom said, why don't you apply again? And I remember this moment, the g the admissions director called me and said, your son, you're not qualified but your native son of California, we're letting you in and then out of UCLA, I got a 2. 27 GPA for those of you that, no, that's not very good.

And what did the finest public school in the world do? Berkeley? It let me into graduate school and that's the whole point of higher ed is, most of us aren't freakishly remarkable at 18.

The whole point is to give unremarkable people a chance of being remarkable. And this is a flex, but it's relevant here. Last year, I paid $14 million in federal income tax and guess what?

It's worked out for all of us? We're not here. Hi, me and my colleagues aren't here to identify a superclass of rich kids and freakishly remarkable and turn them into billionaires.

We're here to give everyone a shot at being a millionaire. At some point, we have totally lost the script and it's been adopted by America. Once we have a house in America, we get very concerned with traffic and we start showing up at the local review board and we make sure no housing gets built.

There's a million and a half fewer houses in household formation. The result is the incumbents that already own houses have seen the value of their real estate skyrocket. So where does this all end up with youth in America?

More obese, more anxious, more depressed, more angry than any generation in history? The highest suicide rates, the highest self-harm rates? I mean, what is the point of any of this?

If our kids are depressed? Literally, what's the point we talk about GDP, we talk about growth, we talk about who gives a *** if our kids aren't doing well. We have literally lost the script and we keep voting ourselves.

Seniors who vote and have represented, have elected a group of people that is a cross between the golden girls and the walking dead. Keep, keep voting themselves, more money voting themselves, more money in the US. We spend the lowest per capita on Children of any nation in the west.

And what do you know kids aren't doing well? Sorry, back to you. Yeah.

So, so, so what's the, I mean, what's your advice to uh to, I mean, this message resonates like incredibly well online. You're, you've given lectures, TED talks, whatever and you know, everyone I know between the ages of, you know, 25 and 45 know who you are, right? What's your advice to them?

Like they're not gonna change the world and fix all these things? We're not gonna, I mean, overnight. So, like if you're coming up right now, how do you, how do you navigate this?

Well, it sounds very trite but the first thing is vote. But look, we have the power. We, we're the ones that have money and money has basically become more important than votes in DC.

So the question is, and we all see this, we all see kids, friends of our kids, we see, I think something going on. Right. And so I it strikes me that past generations have always made these forward leaning investments and we're no longer doing that.

And I don't know, I don't know if it's an intergenerational selfishness. I don't know. I don't know what it is.

But if we don't adopt and elect people who have, uh I mean, there's a bunch of things we need ranked choice voting. We need to make it such that an organization that has an approval rate of 8% doesn't have a 94% re-election. We need to elect more moderates instead of the crazies on the left and the crazy on the right with ranked choice and final five voting.

We need a younger, elected um a populace of leaders that is closer to the average age of Americans. 38 versus the average age now 62 when Nancy Pelosi had her first child. Uh Mar Fidel Castro had just declared martial law and two thirds of households in the United States did not have color televisions, but she's supposed to understand the challenges.

A 17 year old girl who's 59 £95 getting extreme dieting tips from meta sent to her on her phone. She's supposed to understand that. Right.

Joseph Biden at 81 is supposed to understand the threats of tiktok. And quite frankly, he does someone's advising him. But do these people really understand the challenges facing a 25 year old single mother in the technology?

Do they understand a 23 year old male that has very little opportunities whose prefrontal cortex is not that developed, who has fewer and fewer on ramps to the middle class and is getting notified 200 times 10 times a day, he should bet on this week's football match. Do they really understand what's facing young people? So we have uh we have the wrong elected representatives that are not representative in America.

We have immense regulatory capture by the incumbents, big companies and we are not investing in youth. And we have, and then me and my colleagues are making it worse with this bull rejectionist LV MH strategy. I mean, it's young people vote, but unless we do something, unless we decide we have an obligation to pay it forward a little bit.

I don't think any of these changes aren't, aren't more, isn't a greater percentage of the young population going to college. They're not going to Harvard obviously, but they are going to college, more kids are educated. In fact, some people think that kids are over educated, that they're loaded up on student debt, they get skills that they can't use in the workplace where they, you know, they can't pay off the debt and, and, and, you know, it's, it's, they would have been better off being in the workforce with some sort of specific skill, vocational training, something like that.

So I, I find it hard to see how doubling the size of the class at Harvard Yale everywhere is gonna solve the problem in a country of 325 million people. There are three things. So go to solutions.

If we took some of that 750 billion, the Biden earmarked for a student loan bailout, it just makes no sense to bail out. One third of the people who have had the opportunity to go to college on the backs of two thirds. That didn't I just think that policy was flawed.

If you're going to tax people a half a trillion or three quarters of a trillion dollars, it has to be a forward leaning investment that benefits everybody and all that was going to do was shrink the tumor but not cause uh cure the underlying cancer, which is in education. We have raised prices faster than inflation with faster than any sector. With the exception of health care, if we'd taken 500 billion of that and taken our 500 greatest public universities and give them each on a size adjusted basis.

A billion dollars for three things. First increase uh the freshman class by um 6% a year. I do think these amazing public universities are better.

I think they prepare kids. The faculty is better, the experience is better and we have the capacity to massively increase their um their acceptance rates. Uh Because what ends up happening is these kids get arbitraged down to a second tier school that because of this corrupt cartel pricing, we all engage in.

We all magically raise our tuition, the exact same amount each year. What a coincidence. So what happens is a kid trying to get to these aspirational LVMH psychologists gets armed down to a second tier college and ends up paying a Mercedes price for a Hyundai product.

And then the real tragedy, there's more kids in school, but the real tragedy is the number of kids under the following circumstance has gone up 12 fold and that is they go to college because their parents shame them for not going to college. They're not cut out. They, they are there two or three years so there long enough to rack up 100,000 in debt and then they leave school because it's just not for them, they're depressed but they get to hold on to their debt.

You wanna talk about screwing young people, one of the only forms of debt in the United States that is not dischargeable under bankruptcy is the exact debt that should be the most dischargeable. And that's the debt on young people, student loan debt. It haunts you the rest of your life.

And so there's this class, this generation of kids who pay my salary, right? Actually, I've returned all my compensation last 20 years, but pay my colleagues salary and end up with massive debt. And then third thing they should do one grow, freshman class, 6% cut costs 2% a year using technology and scale.

We could do that with no problem. And then what do you get in 10 years? You have double the freshman seats at our elite publics and then you have inflation justice cut the costs in half.

This isn't a radical idea. This is called college in the eighties and nineties. And then the third part is 20% of all certifications and degrees should be vocational.

One, how come we haven't evolved? Think about how much products have evolved everywhere. We still jam everyone through this four year liberal arts construct.

Why wouldn't we have one or two year degrees in specialty, nursing in construction for nuclear power plants, plumbing, installation of soapstone counters. I'm renovating a home. Anyone who's renovating a home knows that if you have these types of skills.

And there's a lot of people, especially young men who are handier. I know that sounds sexist, but they are handier. That's one of the few things we have.

One of the few things we still have and they can make between 90 100 and $30,000 within two years. 11% of linkedin profiles in the UK, say apprentice, 12% in, in Germany, say apprentice in the US, it's 3% because we've, we've decided if you don't go to MIT and end up at Google, you have failed and your parents have failed and you should all feel shame. Meanwhile, there's an absence of tradespeople, five people are gonna leave the trades the next 10 years in the US and only two are gonna enter the place we train these kids is our great public universities.

They have the infrastructure, they have the skills, they have the contacts. So anyways lower costs increase freshman seats and to your point massively increase the amount of vocational certification. Can you?

This sounds like a political movement, right? The youth are gonna, they're getting screwed. They're going to rise up, draw a line between this dissatisfaction and what we're seeing on college campuses right now where students are, you know, encamped, uh you know, against the war in Gaza, demanding divestment, doing things that are making their parents crazy.

Um And is there, is there a connection there? I think it's an incendiary port on everything that turns any cut into an opportunistic infection. It makes everyone old meaning every time it makes, it makes all situations, potentially you could get pneumonia and die, everything gets becomes worse because young people are just naturally enraged.

One of the problems I think that young people are having with this movement on campus, whether you agree with it or not is how many spokespeople have really emerged. The premier spokesperson that's gone viral for the protests on campus was demanding that, that the revolution be catered. If you think about most effective movements, it's been they have matured a really powerful spokesperson who can articulate a strong message.

The message I'm getting mostly from students on campus is, you know what? We're just pissed off, we're just pissed off. Now.

There's also a bit of a misnomer there. It's a bit misleading because if you look at Colombia, which is kind of the flashpoint, it's less than 1% of the students. They just elected an Israeli girl as their president.

I was just on Ny U's campus. The majority 99 plus percent of the kids are just going to class and doing their thing. You know, they claim somewhere between 40 60% of the protesters on campus aren't even students anyways.

I think it takes everything. Every, every movement that has, you know, justification. It's great that young people uh uh challenge the status quo.

They're smart, they weaponize new mediums. But I think it turns every minor problem or anything we could have a civil discourse around just into rage. If people are angry, it's like being in a relationship when most of the times when your, your spouse, your partner gets really angry you and blows up at you.

It's not about the situation at hand. It's about the atmosphere and they're upset about something more broadly. So, is this a manifestation of specifically campus right now?

I think it's three things. One, me and my colleagues again have created this orthodoxy of oppressed and oppressor, oppressors over there, oppressed over here. You're one or the other, right?

And unfortunately, I think that young people conflate the civil rights movement with the resident. What's happening to the residents of Gaza and the easiest way to identify an oppressor is how rich and how white they are and fairly or unfairly. I think Jews in Israel are seen as ground zero for the ultimate rich and whiteness.

Um I think the the absolute, the statistics are overwhelming that this makes no sense. I've said this very publicly, you know, 2200 service people die at Pearl Harbor. We go on to kill 3.

5 million Japanese including 100,000 in one night, 2800 Americans die in 911. We go on to kill 400,000 people in Iraq and Afghanistan. I mean, it's just, it's just the numbers and the responses and the response on campus don't fit to actual history in terms of what people seem to be outraged about.

I generally think that bottom line is Jews aren't allowed to win a war. We're just not allowed to win a war. Right.

It's everyone else who's attacked is allowed to come back and win a war except for Israel and Jews. So I believe that they are also quite frankly, Israel has not draped itself in glory. It has, uh, Netanyahu, in my opinion, is diabolical.

Has cut a deal with the devil with the far right extremist sect of his country has put bigots in the knesset and the overs settlements and treatment of people in Gaza has been terrible. We've gone, when I say we, I have family in Israel. We've gone from being the David to the Goliath.

So the atmospherics are terrible and you also have a, uh you know, in my opinion, a situation where, um and I know this sounds paranoid doesn't mean I'm wrong if I were the CCP and I controlled the most effective propaganda tool in history where the majority of people under the age of 25 would prefer to have tiktok than all other media combined. I would put my thumb on the scale of things that divide America. We can't beat you kinetically, we can't beat you economically.

So I got it. We got the perfect strategy. We're gonna get you to hate each other.

That's what we would do. We have a division that does this, it's called psy ops in the army. It's exactly what we would do.

And so now on tiktok, there are 52 Pro Hamas videos serve for everyone pro Israel video and actually more young people under the age of 25 support Israel than don't. So with something going on, you think? Well, Scott, you're being paranoid.

These kids know how to use this medium. They're just using it. Well, ok, but if you go on the control group, if you go on Instagram reels, there's 600 times as many videos being served on uighur genocide or free Tibet.

Is that just a coincidence? If you want to understand the ratios of video being served on CCP when they're dramatically out of line from public opinion, just go, what would the CCP want? Interesting and we, we're almost out of time.

So I just wanna give a chance for questions in the audience right here. First row. Hi, Scott.

Hi, how are you? Good, good. Um Sid Wilson, I'm president and CEO of the Hispanic Association on corporate responsibility in Washington DC here in London.

Good to see you. Um Michael is the head of the Hispanic in London. Yeah.

Well, no, no, I'm just here. I'm just saying that we're in DC but I'm actually here. The issues that I address are us.

You are not a simulation. Yes. Yes.

Um Can you talk a little more? You mentioned it briefly? But can you talk a little more about um what's been the real driver of this anti D I backlash that started with the Supreme Court?

Decision last year that culminated into, um you know, this energy that has um that has tried to redefine um um what, what diversity equity and inclusion is and, and given the fact that you have such a strong market back in mythology for many, many years and is, is um is what, what, what do you think is going on? Is, is your thoughts on the, on the roots on this? Um I, I think it started from a great place and unfortunately, it's progressed to a point where it's eating its own tail.

So in 1960 there were 12 blacks at Princeton Yale and Harvard combined. Right? That's a problem.

Affirmative race-based, affirmative action made sense. Back then, the academic gap between black and white was double what it was between rich and poor 60 years on. And this is a wonderful thing, a wonderful thing.

51% of Harvard's freshman class is nonwhite, but here's the pro 20% of those come from dual income parent homes. They are an above average income home. So letting in the Taiwanese daughter of a private equity billionaire is not diversity.

And this is another sign of our progress in America today, you'd rather be born nonwhite or *** than poor. So I think we need to recognize our victory and our progress, but then figure out a way to come together because D I is causing a lot of problems because what has happened with DE I people of color deserve advantage. They've been treated really poorly.

Right. Well, also the Japanese, we interned the Japanese in concentration camps. What about them?

What about women? Think about all the shit women have taken. What about *** people for God's sakes?

They've been persecuted and we ended up with a construct, an expensive construct that has huge apparatus in people that can never be fired. You can never question it or you're called a racist. If you ever question de efforts, right?

Where we're purposely advantaging 76% of the population, the only people who are not advantaging are the 24% of people in America applying to college that are white and male. So when you are have an apparatus trying to advantage 76% you're not advantaging them, you're discriminating against the 24%. So what's the solution?

Affirmative action is an amazing thing. Republicans and Democrats all believe there are certain people with winds in their face that could use a hand up. The key is and the thing that causes all the agita is a misdirect.

It's around OK, who qualifies the affirmative action should be based on color and that color should be green. And by the way, this isn't new. The University of California since 1997 did away with race-based affirmative action and bases it on an adversity score.

I'm the beneficiary of affirmative action. I was raised by a single immigrant mother who lived and died as secretary, my household income was never about $40,000. So they gave me something called Pell Grants.

I couldn't have gone to college without affirmative action. And I think that's the model right now. Any visible characteristics we use for affirmative action creates a lot more problems than it solves.

It creates resentment at and at universities. By the way, under the auspices of decrease my accountability and increase my compensation. Leadership, ethics, sustainability D I, it is all that is nothing but student debt.

We have decided that we are no longer centers of excellence, but we're agents of an orthodoxy that we're social engineers, how arrogant we're here to give you the skills. So you can go do amazing research and create economic value and security for you and your family. But no, let's create these huge departments called leadership.

I'm gonna teach a kid how to be a leader or to be more ethical. I can't get my 13 year old to make his bed, but I'm supposed to help a 27 year old become more ethical. But here's the great thing about these, there's no measurable outcomes so they never get fired.

Let's bring in these pips formally important people pay them 3 to $400,000 for benefits and they'll teach leadership and they basically get on stage and just talk about their war stories about how amazing they are and all it is is student debt on young people get rid of all this bull. You wanna have affirmative action, take all that money and let in more kids, let in more *** kids, let in more trans kids, let in more black kids, let in more single mothers, let in more white kids from red states who happen to be Republican. 98% of Harvard's faculty is democratic.

That's diversity. So, affirmative action is amazing. It should just be based on need and adversity, not these physical observable characteristics that create a lot more problems than they solve.

And instead of talking about who gets in, we should be talking about how many?