Introducing No Mercy/No Malice: Scott Galloway’s musings on the week.
Benjamin Button Economy
The more moving passages of F. Scott Fitzgerald’s “The Curious Case of Benjamin Button” are about the efforts of a father, heartbroken after losing his son to war, to design a clock that would reverse time and bring his son back. The protagonist is a man who ages in reverse — Benjamin. I believe we’re moving to a Benjamin Button Economy.
Stay with me… Only 13 companies in the S&P 500 have outperformed the index average 5 years in a row. On the surface, this reflects a winner-take-all economy and the dominance of tech. However, the attribute unique to these firms is that they age in reverse — their products become more valuable with use. Yesterday’s economic titans (Ford, P&G, Caterpillar) produce things that decline in value with use.
When you turn on Waze, google something, or ask Alexa a question, that product becomes more valuable to others. The media refers to this phenomenon as AI, agility, and network effects. Suspending the natural order, and reversing aging, is difficult. It requires genius technology, a 10x better product, and a shit-ton of cheap capital to build enough receptors and users to conceive self-propagating products. Waze gets a little better the moment you tap on the app, and Google gets one three-billionth more insightful with each search.
The other group is firms caring for the aged — outsourcing firms. They help old-economy firms cut costs. Our economy’s winners — the best firms to work for or invest in — are bifurcating into two groups: companies that age in reverse, and companies that care for the dying.
21-Mile Strip of Water
My dad likes to remind me that a 21-mile strip of water, the English Channel, saved my life. My mom — I talk about her a lot, she would have liked that — was 4, a Jew, and living in London when WWll broke out. Before she was moved to the British countryside, along with the other kids in central London, she and her family would sleep in the Tube — a makeshift bomb shelter where they passed out gas masks. The kids’ masks had duck bills and funny ears to make them less scary.
Had Britain not been an island, Panzer tanks likely would have rolled into the UK, as they did in Poland and France. My mom’s story would have ended with a train ride. My dad also reminds me, when we speak on Sunday nights, that it’s unfair to compare our current leadership with Hitler or Mussolini (Hitler light). They had their own police forces and enacted genocide. However, mocking the disabled, turning away refugees, nationalism, alliances with brutal dictators, encouraging violence at rallies, intimidating the media, and placing a white supremacist in a position to influence the world’s largest military, all sound disturbingly similar to Hitler and Mussolini’s early work.
So, and I’ve been thinking about this a lot, what is our 21-mile strip of ocean? What ensures these cells of intolerance and ignorance don’t metastasize? Is it the Constitution? Maybe, but I don’t know enough to accurately assess if and how it really protects us. Is it the Democratic leadership? Doubtful. I’d call them pussies, but that also sounds misogynist, so I’ll settle for flaccid dicks. Is it the “goodness” of the American people? I don’t think so. The last few months it’s been shocking how strong the undercurrents of racism and misogyny are in this country. We try to mask it with the (real) struggle of the middle class. However, the character of a nation is how it behaves under stress, and I believe we’ve shown a remarkable lack of character.
It’s been heartening to see some of our tech leaders wave the middle finger at the White House, after being his bitches for several photo ops. I hope this may be their moment to etch something other than “iPhone” or “Alexa” on their tombstone. I’ve landed on the (hopeful) notion our democracy can make terrible mistakes, and then correct them. It’s been sort of comforting to think about 2018 and 2020. If you have ideas for candidates that are decent people, and also ruthless motherfuckers, please forward their names — I’d like to support them.
A strip of ocean saved my mom. What saved the world was brains, brawn, and blood. I trust we’ll summon all of them.
Life is so rich,
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