Parsing the Pandemic
Scott Galloway’s analysis is by turns brilliant, entertaining, and blinkered.
Post Corona: From Crisis to Opportunity, by Scott Galloway (Portfolio, 256 pp., $25)
It’s a bold move to write a book about a major historical event while it’s still playing out. New York University business school professor Scott Galloway is nothing if not confident in his knowledge about the world and where it is going. His new book is called Post Corona: From Crisis to Opportunity, though at least two-thirds of it have nothing to do with the pandemic. This may turn out to be a smart strategy, because Galloway’s arguments against big tech and capitalism will fuel center-left discourse long after the pandemic is over.
Post Corona features prominently many platitudes uttered by center-left public intellectuals: the assumption that broad public outrage exists over tech firms’ use of personal data in exchange for free or cheap goods and services; the assertion that the U.S. health-care system is terrible, and that people use emergency rooms too much; the frequent use of the expression “capitalism on the way up, socialism on the way down”; and some self-flagellation about white-male privilege.
Yet Post Corona also has some great insights and moments of brilliance, especially when Galloway sticks to what he knows: marketing. He’s also at the top of his game when he delivers on the book’s promise to explain how the pandemic will accelerate current economic trends. One of the best, albeit brief, sections details the pitfalls of firms using social justice as a marketing strategy in the age of Covid. I’d like to read a whole book on that. Galloway’s discussion of his so-called T algorithm—or ways to identify firms that have a chance at a trillion-dollar valuation, even if it provides little novel value—was fascinating and useful.
Post Corona’s chapter on how the pandemic will change higher education is also interesting and provocative, with well-reasoned, data-driven arguments. I disagree with his conclusion that the market will devolve to the point that only a relative handful of top brands, like MIT, will provide online classes to thousands of students. An elite college education, with all its signaling aspects, still provides much value to its customers, and the pandemic has made the value of socialization all the more apparent. And Galloway’s argument about rising costs would have been stronger if he contended with economist William J. Baumol’s cost disease—in which salaries rise in jobs where little or no productivity gains have been made. In fact, the whole book would have been great if he had grappled with any economic argument other than those featured on the New York Times editorial page.
Galloway’s rant against big tech will be familiar to his fan base, but it feels like a missed opportunity at a time when all of us should be revisiting our priors. Galloway might have acknowledged, for example, that while big tech firms do hold a disturbing amount of market power, their scale and efficiency also made it possible to endure long periods of isolation and lockdown this year. One can make many legitimate criticisms of Amazon—and Galloway makes them—but one should also concede that the ability to keep the world so well stocked was a modern miracle and a triumph of big tech. Galloway offers no such concession. Also, the breakout stars of the pandemic, Zoom and Peleton, might prove that competition is not dead after all.
The book’s arguments on capitalism’s flaws are often confusing or contradictory. Galloway inveighs against shareholder primacy and share buybacks, but he’s also angry that tech firms aren’t profitable, still get so much capital, and make wasteful investments. I’d like to know why he thinks limited partners invest in these firms. Why are they so unconcerned about risk? He chalks up our problems to unfettered capitalism run amok, but one could just as easily blame the maze of regulations and accounting standards that give pension funds little incentive to account for risk in pursuit of high returns.
Rather than complain about past bailouts, like when the Fed arranged for Long Term Capital Management to get capital from large private banks 22 years ago, it would have been more useful for Galloway to examine the details of the CARES act and the Fed’s interference in corporate bond markets to illustrate why corporations never experience any downside from government intervention, while the rest of us navigate lots of risk with little protection. A naïve reader of Post Corona might think that America has no social safety net. Galloway might have explained how the safety net has failed over the last few months, and why unemployment benefits and $1,200 checks aren’t enough.
Despite these issues, however, Galloway is a colorful and entertaining writer, and he’s right in his core contention that the pandemic has reinforced our economic dynamics, widened inequalities, and exposed weaknesses in the safety net. These issues all deserve more thoughtful treatment, though that’s a tall order right now, since history’s muse is still taking notes.
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