Scott Galloway on Whether College Is Still Worth It


Photo-Illustration: Intelligencer; Photo: Getty Images

The job of being Scott Galloway is, more often than not, to get people to follow his advice. On his podcasts (including New York’s own Pivot), in his advisory role to corporate America, and as a marketing professor at NYU Stern School of Business, the Galloway Industrial Complex centers on his front-row seat into how companies are dealing with society’s biggest social and economic problems. Sometimes this can take the shape of predictions — seeing a trend emerge before it’s wholly obvious, like hard times for the Patagonia-vest-wearing class of white-collar workers — or in dispelling some anxiety about the future. “When the world predicts a disaster, it doesn’t materialize because we make a concerted effort to prevent it,” he wrote in his newsletter.

Galloway’s forthcoming fifth book, The Algebra of Wealth, is drawn, in large part, from his own life and the lessons he’s learned from his financial and personal mistakes. Among them, finding himself financially insecure when his son was born and being unprepared to weather a divorce. Our conversation focused on his intended readers, people in their 20s and 30s, and the forces shaping their lives and their potential for getting wealthy — from flame-out meme stocks to the detrimental “fetish” of higher education. The interview was edited for length and clarity.

I want to take a second to talk about the generation that’s just graduating or will graduate soon, which seems to be the intended audience for your book. Since the pandemic, universities are finding their enrollment falling, their endowments shrinking, and donors holding them hostage. But how are they doing with the actual job of preparing students for life?

They’re doing as good a job as they ever have, but no better. The issue is, as they raise prices faster than inflation, the return on investment is going down. But there’s some nuance there. The reality is if you get into an elite university, it’s still a really strong ROI. For most of the majors. The contacts, the credentialing, the certification still pays off even as high as the prices are.

What I think a lot of parents are figuring out is the quote-unquote non-prestige schools, quite frankly, just may not provide the return on investment. And also there’s just a certain type of individual who’s not cut out for college. Unfortunately, in the U.S., there’s a Zeitgeist in our society where if your kid doesn’t get a four-year degree, the kid and the parents have failed — not recognizing that two-thirds of our kids don’t end up with traditional four-year degrees.

As the ROI on college has gone down, the compensation for trades jobs has gone up. In the next ten years, there’s going to be five people who leave trades jobs and only two who enter the field. The prospects for many of these jobs that don’t require a college degree are increasing, and all of this adds up to a really interesting and overdue conversation around, Can we stop shaming ourselves if our kid decides not to go to college?

Are universities actually adapting to this?

What I would say is that the unsung heroes of higher education are community colleges. I went to UCLA and Berkeley, and I owe them a great deal. But you could argue that what’s most important to California is the Cal State schools because they’re inexpensive and, to a certain extent, they’re filling the gap. They’re a little bit more nimble. They’re not as focused on the prestige jobs. A kid can come for a year or two years, get some certification or some knowledge around cybersecurity, and go to work. They see that as a victory, whereas at an elite school, they’d call that kid a dropout.

Photo: Penguin Random House

Now, the reality is if you’re going to elite school for four years, and it’s going to cost you a half a million dollars, getting a degree in philosophy or history is sort of a luxury item that most households can’t afford. You could argue that’s a shame, but when you increase the average price for tuition 8 percent a year for the last 30 or 40 years, you force a lot of hard conversations. But the real travesty is families falling into this trope of, You must go to college or you have failed. So a lot of kids who aren’t cut out for college go anyway and then they take on student debt. They go one or two years, and they drop out. They end up without the primary benefit of the certification, but they are still stuck with the student loans.

Those are the real victims of this higher education fetish. You have a generation that includes a lot of people who entered their adulthood with a massive amount of debt hanging over their head. That is the mendacious underbelly of higher ed.

On your Instagram page, you talk about how, if you want to get rich, make rich friends. So if they can get a degree in history or philosophy, isn’t the idea here that they could trade it up for some sort of higher-paying white-collar job?

We need poets. We need people who understand history. There are history and philosophy majors in hedge funds that go on to be presidents, et cetera. The liberal-arts degree is by no means the domain of rich kids. A lot of kids from middle-class households decide, I’m going to take one of these jobs. But increasingly, what we find is if you don’t have rich parents, your parents are quite frankly just a little bit more concerned or apply more pressure and more scrutiny.

I wouldn’t dictate your life around trying to find rich friends. Take your peer group, add them all up together, take the averages, and there tends to be an enormous regression to the mean. You end up weighing a similar amount as your peer group, you end up enjoying the same media, you end up oftentimes with very similar political views, you end up in the same neighborhoods, you end up in the same industries and oftentimes with the same income.

Google did some research and said if we have a product-management position, and we get 200 résumés, we bring in 20, the majority of the time that one person we hire was referred by and championed by an internal employee. So, being really social in your 20s, demonstrating character, making good friendships with other people who are quite frankly successful, is probably the fastest way to opportunity and success. It feels strange to say “Drop your poor friends and make rich friends.” What I would say is, “Try and surround yourself and aspire and pursue friendships with people who are of high character and have strong professional velocity.” It’s just you’re going to be the average of those people.

You said in your book that what kept you from economic security for much of your life was a stubborn belief that you were exceptional. But the online economy, where most people in their 20s are, is built on the user being exceptional. So what can people do to opt out of that? 

It’s difficult to tell someone not to be online. Social media is mostly people vomiting their items and experience and faux wealth as some sort of poetry. And the reality is that no one is as concerned with your shit as you are. It takes tremendous discipline at a young age. I call it stoicism, but it’s really sort of discipline and character and that is to recognize you are fighting an enemy here. And that enemy is the most talented, deeply resourced companies in the world, who have access to eight to 12 hours a day via your digital devices to try and get you to spend more money on shit you don’t need. You’re just constantly bombarded with amazing opportunities to buy more and spend more money. It is very hard to resist this.

Young people are naturally rebellious. If you want a rebellion, if you want to fight against something, try and fight against the industrial food complex that wants you to be obese. Try and fight against social media that wants you to dislike other Americans. Try and fight against the capitalist America that, at every move, is trying to get you to spend more money on things you don’t need, aren’t going to offer you a great deal of incremental happiness, and are going to probably cost you more in the long run.

Not so easy to do. 

One of my flaws was I always made a lot of money from a very early age, but I assumed that because I was exceptional, at some point I would sell a business for hundreds of millions, or have an amazing investment, or sell a book for $10 million. I came very close to all of those things, but none of them happened, and I wasn’t diversified. I’d always double down on my businesses. Then, the Great Recession hit and I found myself at 42 with my first child, financially insecure, and that is tremendously stressful.

If I’d just shown a little bit greater character in my 20s, not been as focused on buying flashy things, brought more empathy and generosity to my relationships, such that I wouldn’t have gotten divorced — if I had just shown a little bit more character in terms of my ability to save a little bit of money, recognizing time would go fast and compound interest would take over, I would have been at a much better place much earlier. And I would have had a lot less stress. And in addition, it would have freed me up to really focus my energy on the key things in life, specifically my relationships and time with my kids.

Over the last ten years or so, you had the idea of crypto democratizing finance. Now you have AI democratizing talent, like there’s this hack around wealth and around work.

I don’t want to call them get-rich-quick schemes — but the number of people who have made money by buying crypto or buying Nvidia when it was a $10 (now it’s at $800) is small. Even among those few who have managed to do so, a lot give most of it back because they fall under the illusion of thinking it was about skill rather than luck. They double down and start making bigger bets on even riskier assets. The market reminds them in a fairly ugly way that they actually aren’t good. They just got very lucky. I find over the long term, luck is pretty symmetrical. There are people who have made a lot of money in meme stocks; most of them gave it all back because they started conflating luck with talent.

You called GameStop and the meme stocks a “mini-revolution” not that long ago. Do you still think that?

A lot of young people noticed, correctly, that older generations have had more prosperity than they have. And they have artificially constrained the supply of college degrees and housing such that asset prices have gone up, bailing themselves out, bailing their investments out. Naturally, they also don’t want to raise taxes. So young people have less prosperity. For the first time in our nation’s history, a 30-year-old isn’t doing as well as his or her parents were at 30. This is the first time that’s ever happened.

Is that true, though? Compared to millennials at the same age — and I’m taking these numbers from The Economist — Gen Z owns more homes, it’s members spend less money on rent and education, and they have more disposable income. 

So generally speaking, the cost of housing and education have exploded. And the average inflation-adjusted income of young people has gone down. Our grandparents on an inflation-adjusted basis made more money than our parents, and the parents have made more than younger people.

There’s been an uptick among Gen Z because the employment market is strong. And because of a lot of factors, including everything from less immigration to a labor shortage, they’ve seen their wages rise. But on the whole, as you go down in age, you’re seeing a fairly significant, consistent trend around the essentials usually attributed to wealth creation or progress and housing. Specifically, the price of housing and the cost of education have skyrocketed, while on an inflation-adjusted basis, their purchasing power has declined.

As it relates to the meme-stock movement, I think a lot of them felt, Okay, all these hedge funds are shorting this stock; we see an opportunity to go in and drive the stock crazy, and we’re going to make a lot of money. The problem is that it’s like a pyramid scheme. Gravity wins. These companies had terrible underlying businesses. Eventually, gravity took over and people have now lost more money in meme stocks than they made.

Now you have Trump Media, which is a meme stock. 

Unless Trump Media becomes an outlier, every meme stock — whether it was Bed, Bath & Beyond, GameStop, or AMC — eventually returned to its fundamentals. The fundamentals are gravity. Trump Media is a $4 million business trading 1,000 times revenue. It’s off 70 percent from its highs. This stock should be a single-digit stock fairly soon. It makes absolutely no sense. Now, are we in a different era, where instead of political contributions people buy the stock? Maybe. But every time there’s a new stock like this, people want to come up with new reasons why this time it’s different.

But to your point, this is the memeiest meme stock in Memeville, which says to me that it will, in fact, be single digits soon and then probably be in the low-single digits. Eventually, gravity wins.

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