No Mercy / No Malice: Strike

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I'm Scott Galloway, and this is No Mercy, No Malice.

American institutions and our leaders have not stood up to authoritarianism.

But in a consumer economy, the real power isn't in Washington or at headquarters, but in your wallet.

Strike, as read by George Hahn.

Government shutdowns have been been normalized.

Since 1976, we've seen 20 funding gaps, resulting in 10 government shutdowns.

It's a form of economic strike, just not an effective one, as shutdowns create blame but seldom achieve political goals.

The Democrats have been uncharacteristically strategic in this standoff.

Their demands, continued subsidies for healthcare coverage, likely affect more Republican voters.

This focus achieves a messaging trifecta.

It highlights affordability and health care and divides Republicans.

However, that's not what this post is about.

In the U.S., we suffer,

benefit, from an idolatry of the dollar.

Our gods are CEOs who pray at the altar of shareholder value.

Our profits preach growth, while our priests divine meaning meaning from earnings reports.

Every billionaire's origin story, bootstraps and all, is scripture.

Even authoritarians kneel to a higher power, the markets.

In April, when it looked as though nothing could stop Trump's protectionist fever dream, the bond markets rocked, then rolled the president.

The following month, Wall Street had a name for this phenomenon, taco, i.e., Trump Always Chickens Out.

We frame economic power as a contest between capital and labor, but the real star of the American economy is consumer spending, which accounts for 68% of GDP.

The Great Recession saw a 3.4% drop in consumer spending.

At the time, the most severe year-over-year decline since World War II.

The U.S.

economy registered a 9.8% drop in consumer spending during the second quarter of 2020, when COVID shut down the world as we knew it.

In both instances, the U.S.

government responded aggressively, spending hundreds of billions primarily in bailouts to pull us out of the Great Recession and trillions, primarily in direct aid, to get us through the pandemic.

The lesson?

When consumers stop spending, American leaders start listening.

As Gio Husser explained to his YouTube followers at the end of September, this is not seizing the means of production, but seizing the means of consumption,

adding that if every American dropped their consumption on average by 2%,

that would be the most loud and potent form of protest.

Recently, Trump found his red line.

It wasn't Congress Congress or the courts, but a comedian.

After bowing to government threats and suspending late-night host Jimmy Kimmel, the Walt Disney Company, which owns ABC, discovered that a strong man wasn't as scary as a consumer boycott.

One reporter put the number of Disney Plus, Hulu, and ESPN cancellations at 1.7 million subscribers in less than a week.

The outcry from celebrities on the left and a handful of people on the right, including Senator Ted Cruz and Tucker Carlson, pressured Disney's leadership to do the right thing.

But as journalist Lauren Egan wrote in the bulwark, there was no organized campaign against Disney.

The blowback was organic.

Disney CEO Bob Iger needed screenshots of people canceling Disney Plus to help him locate his testicles.

At this point, the Disney CEO is Neville Chamberlain in a cashmere sweater, minus the the dignity.

The boycotters realized they had to inflict financial pain to change Disney's behavior.

But according to Braden King, now a professor at Northwestern University's Kellogg School of Management, who studies social movements and corporate social responsibility, and Sarah A.

Soule, now a professor at Stanford, the typical boycott doesn't have much impact on sales.

In their study of 342 boycotts against U.S.

corporations between 1962 and 1990, they found that boycotts, on average, caused a 1% decline in a company's stock price.

King said in 2017,

the number one predictor of what makes a boycott effective is how much media attention it creates, not how many people sign on to a petition or how many consumers it mobilizes.

Ironically, Trump's inability to shut up likely helped the boycotters by directing attention to their cause.

In the end, it took fewer than 1% of the Mouse's total streaming subscribers to capture America's attention and accomplish what Disney CEO Bob Iger couldn't.

Stand up to an authoritarian.

Consumer boycotts are American.

In the 1760s, American colonists pushed back against unlawful British taxation, not with muskets, but with boycotts known as non-importation agreements.

Participation was uneven and success was ultimately achieved through the revolution, but historians credit the boycotts with demonstrating American resolve, promoting political unity, and encouraging domestic manufacturing.

In the Marketplace of Revolution, How Consumer Politics Shaped American Independence, historian T.

H.

Breen wrote, Only people who had experienced the pleasures and frustrations of so many consumer choices could possibly have come to appreciate how a disruption of that market might be an effective weapon.

American consumers have reached for this weapon throughout history.

Abolitionists deployed the free produce movement to encourage consumers to boycott goods produced with slave labor.

Although the economic impact was negligible and the movement didn't bring about emancipation, it positioned slavery as a moral issue in the daily lives of northern consumers.

As one pamphlet put it, if we purchase the commodity, we participate in the crime.

Zooming out, historian Lawrence Glickman, author of Buying Power, A History of Consumer Activism in America, points to the campaign as the catalyst for centering consumer power in the American system.

The free produce movement offered a radically new conception of causality and morality, one which posited purchasers as the first cause of economic activity and therefore made them the moral guardians of the polity.

Nearly a century later, Civil rights activists, inspired by Rosa Park's refusal to surrender her bus seat to a white rider, organized a one-day boycott of city buses in Montgomery, Alabama.

At the time, more than 70% of the city's bus patrons were black.

Boycott participation was estimated to be 90%.

In the aftermath of that one-day boycott, Organizers, led by Martin Luther King Jr., established a carpooling network with more than 200 cars and 100 pickup locations.

The boycott cost the city an estimated $3,000 per day, $35,000 adjusted for inflation.

After 13 months and a favorable Supreme Court ruling, the boycott organizers successfully integrated Montgomery's bus system.

Their action helped launch the National Civil Rights Movement.

Historically, boycotts have been called weapons of the weak against the strong.

Today, however, I believe consumer boycotts are weapons of the privileged against the powerful.

Two factors account for that change.

First, as Glickman wrote in The American Historian,

through his description of a highly personalized economy made up of specific companies, people, buyers, and investors, rather than an abstract market too big and all-encompassing for anybody to understand, Donald Trump has promoted a worldview, albeit albeit an inverted one, amenable to consumer activism.

Second, concentrated wealth puts a lot of consumer firepower in the hands of relatively few people.

Consumers in the top 10% income bracket account for half of consumer spending.

That cohort leans Democratic 53% to 46%,

but more important, they can afford to not spend.

Setting aside multiplier effects, import leakages, and substitution, I estimate that the top 10% could achieve a 1% decline in GDP with a 3% reduction in spending.

While a general strike is appealing, the tactic has a poor track record in American history.

See the Great Railroad Strike of 1877, the 1919 Seattle general strike, and the 1934 West Coast waterfront strikes.

Each ended in bloodshed and produced minimal gains.

General strikes, whether driven by labor or consumers, are difficult to organize, nearly impossible to sustain, and, by definition, too generalized to articulate a clear demand.

Rather than a general strike, difficult, against authoritarianism, vague.

I believe we need targeted boycotts with clear demands directed at Trump's enablers.

The math is simple.

You have power and they need your money more than you need their product.

So,

will we actually do anything?

Or just complain about how someone should do something?

Here's a place to start.

Pick an enabler, plenty to choose from, from, but it's best to focus on a brand you actually spend money with.

Make noise when you cancel and show receipts on social media.

State a clear demand.

Keep going.

If you believe a company shouldn't let the president dictate its workplace policies, cancel your target card and purchase a Costco membership.

If you're worried that Trump's deal to sell TikTok to his cronies will make the platform 100% MAGA, delete your account.

Here's what I plan to do.

I intend to take a sizable for a professor position in Disney to propose a slate of directors that does not include Iger or call for a no-confidence vote.

Note, I've done this before.

If a law firm capitulates, I won't hire them.

And if UCLA pays Trump $1 billion in blackmail, I'll start giving to Cal State instead.

Bob Dylan said money doesn't talk, it swears.

Well, fucking enough already.

Trump has seized the means of production, a golden share in U.S.

steel, investments in Intel, carving up TikTok for his donors, and weaponizing institutions so firms bend the knee.

Wealthy Americans, who've benefited so much from the pillars Trump is attacking, need to to get our shit together and seize the means of consumption.

Life is so rich

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I love how musicians everywhere can rock out with our guitar strings.

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Rock on, Scott.

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