An Open Letter to Professor Scott Galloway

This letter is in response to your comments made on Pivot during the Week of April 19-26 2020. In both shows, you talked about how the American economy needs to get in “fighting shape” and that one of the core competencies of the American economy is the ability to fire people quickly and easily and move on if someone doesn’t work out. The same thing for companies, if a company isn’t successful then it simply fails and society moves onto the next competitor.

I’d like to present a different idea. I’ve had some time to observe how people get treated in the modern workforce and I’ve had my own difficulties and struggles with the modern workforce. I wish I had someone like you to guide my path in college and graduate school. I know that I would have made different decisions. However, like most people, I did not benefit from your advice and I’ve had to struggle along in an economy that often shuts people out for a variety of reasons. The efficiencies and competencies that you see are very damaging to the actual people for whom the economy should actually work. What good can be gained from having an economy that produces $17 Trillion per annum if it only works for those workers and companies that meet the requirements du jour. This idea that firing people and letting companies fail seems like a nice idea on the face of it.

I can see how you might identify that. Obviously, there are plenty of examples of companies that failed to innovate, invest, and most importantly keep their operations efficient. In some cases, these bad companies were propped up by governments for years before finally being allowed to fail. As a car nerd, British Leyland pops to mind and so many other nationalized European companies that eventually had to be let go. However, I think this idea that we just need to let the weak die out is not necessarily what we need right now at this moment.

Imagine if Hank Paulson has saved Lehman in 2008? Much of the crisis could have been avoided or at least managed. When Lehman failed, the whole system went into crisis. This is our “Lehman” moment of this crisis. If we let market forces work their magic without some management, the 26 million people out of work right now will have a terrible time changing their employment status. Commercial real estate, which is already in a crisis, will be further damaged by such a decision. Small business owners who supply larger companies will be impacted as lucrative contracts disappear. Letting the economy essentially fall apart for the sake of efficiency will affect millions of people and their lives, their plans, and more. Hasn’t the country been through enough? Many people never really recovered from the 2008 crisis and now we face another economic downturn. The ranks of the unemployed will rise and workers will feel it the worst. The economy no longer works for the worker.

Its long past time for the economy to start working for actual people. Keeping an economy flexible, innovative, and nimble is certainly what makes modern capitalism thrive. However, there are a variety of knock-on consequences of that. This attitude has brought us the zero-hour contract in the UK, a raft of part-time jobs, and gig work throughout developed economies. The economy might be efficient but it is not working for the people it is meant to serve. An economy should be an efficient way to supply goods and services to willing buyers desiring their purchase and use. It should also provide, through employment and taxes, the needs of people to live and thrive. One of the greatest stories of our modern age is the ability for industrialization to raise much of the world out of subsistence poverty and into better living. Yet, it seems that 150 years later, we are returning to the subsistence that was once common. What is the failure of our economics? The failure is in how the economy is structured. We need to create an economy that doesn’t just “socialize the losses” of bad company decisions, but also makes survival possible during economic downturns. We need regulation that prevents overly-risky business practices. We need to create an economy that creates containers of success for companies and workers. This calls for a robust social safety net financed through taxes. This also calls for reforms to the labor market that allows people more time off and that mirrors the successes of labor regulation elsewhere in the world.

Now is the time to push for this and now is the time to demonstrate that we understand that the economy is broken and needs repair. Letting companies die off all at once and trying to let the rest of the economy absorb those new workers in some sort of chaotic economy realignment is just not the answer we need right now. We can rebuild the economy in a managed way as we exit this crisis. We should not give in to the temptation of unfettered market forces deciding our economic future post-Covid-19. We can allow market forces to take over and slowly let the economy adjust. It is not for the sake of the companies that we do this but rather for the sake of the workers and what everyone will shortly be going through in our depression-era economic situation.

The world is a harsh, unforgiving place; if civilization is supposed to save us from the natural harshness of the world then lets build an economy that reflects that value.

Thank you,
Cameron Cowan