Apple vs. the Trump Administration, CEO compensation broke records during COVID, and Friend of Pivot Caleb Scharf on space exploration 8:18

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Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: So, Scott, how's it going? How'd you have a good weekend?

Scott Galloway: Yeah, a nice weekend. I was with the boys at a water park, which provides perspective because it makes you appreciate that 99% of the world is not a water park. So you walk away very grateful, sunburned and grateful and caring.

Kara Swisher: I hate water parks. Oh, my gosh. They're rough. That is rough. I just say Giardia or whatever you call it.

Scott Galloway: Oh, gosh. They're rough, Kara. Kids love them, though.

Kara Swisher: I know. I know. They love them. I had to stay at a hotel once. It had a whole, like, lazy river.

Scott Galloway: Oh, Jesus.

Kara Swisher: Yeah. It was just that. Just bring me to the Four Seasons immediately and deliver my body up. Anyway, in any case, I'm glad you're back from your experience. There is so much that's happened since you left. You missed the fact that a bidder paid $28 million to join Jeff Bezos for his upcoming trip to space. 7,600 people from 159 countries competed for the seat on Blue Origin. The bid money will go to Blue Origin's nonprofit whose mission is to encourage children to pursue careers in STEM and gain interest in space exploration. No, seriously, $28 million is a lot of money. What do you think about that? Because you thought it would be $2.9 million.

Scott Galloway: A man worth $150 billion that gets a $10 billion bailout for a space company and pays no taxes, but auctions off a seat for $28 million. That pretty much sums up America to me. Here's an idea. Pay your fucking taxes.

Kara Swisher: Yeah. Pay your fucking—this whole thing is—Americans don't get this money, by the way. It goes to a charity that he runs. It goes to some sort of charity for STEM. That $10 billion payout he got from the government for Blue Origin would pay for a lot of STEM. I find this whole space thing weird. I think Elon Musk has the most viable company for hauling things into space, which is important and profitable work. But you know which company is going to have the most impact on society?

Scott Galloway: Who?

Kara Swisher: It's not space. It's not electrifying the world. It's The Boring Company. If Elon Musk can drill tunnels from the most congested areas in the world to others, he will unlock millions of hours that people can spend with their families and self-care. Not sending people on a one-way journey to Mars. Anyway, I find this whole space thing weird.

Scott Galloway: I would like him just to do a transporter machine, like on Star Trek.

Kara Swisher: Teleporter?

Scott Galloway: Teleporter, yeah.

Kara Swisher: Like Star Trek? Go where no man has come before. Oh, no, okay, that's enough. You know what? I'm staying away from Target. The G7 wrapped up on Sunday with a pledge to send a billion COVID vaccine doses. Let's focus on something you think was important. The U.S. will provide half those doses, 500 million doses. The caveat here is the World Health Organization said 11 billion doses are needed to vaccinate at least 70% of the world's population. But this is a nice dent in it, a billion. What do you think?

Scott Galloway: In a word, this is wonderful. We've been talking about this for a long time. A lot of people say it should be more, but this is a start. And America's back at the table. There were some wonderful things accomplished at that G7 meeting, just the dialogue. So I think it's fantastic.

Kara Swisher: I think it's wonderful. I think it's important. I think everybody getting vaccinated brings us back to—just this weekend, D.C.'s got a very high, I think, near herd immunity, if not past it. People are able to do things again. They're able to return and have some fun and enjoy themselves. I live in a neighborhood that's quite a party neighborhood, and it's loud all night. Usually I get irritated, but now I was like, yay, parties. Clara went to three parties this weekend. So it was nice. I think the whole world needs to be vaccinated. We should give away as many as possible, up to 11 billion doses, whatever it takes. But this is a good move in the right direction. And you had suggested that it was a good idea.

Kara Swisher: By the way, last Friday, a group of bipartisan House members proposed a package of five antitrust bills. They're all around the same things we always talk about, which are aimed at limiting big tech's monopolistic and anti-competitive behavior. The only one with real possibility of passing is the law to raise the merger fees that will give more money to antitrust regulators. That's the only one that has already passed in the Senate. The others are tough. One is to limit mergers. The other is not to gatekeep or not to get into businesses. They're all real hard. And the tech companies are going to come back hard on these things.

Scott Galloway: Yeah, but I think—I'm as good as anybody at seeing the glass half empty—I think some wonderful things have happened in the last week. We're pushing back against organizations that have overrun our government. We've re-embraced our brothers and sisters overseas and the greatest alliance in history. We've talked about setting new carbon goals. We talked about a huge initiative to invest in developing nations and infrastructure. We talked about the billion vaccines for the developing world. And then we have a pushback on antitrust. I can't get over how good things are going.

Kara Swisher: Well, what's important about this is it's Ken Buck and David Cicilline together discussing it, not arguing over conservative bias. The Republicans keep getting wrapped around that axle. The first bill is a self-preferencing bill, which directs existing users to a complementary service like Apple's App Store and music. The other seeks to prohibit dominant platforms from acquiring smaller firms that pose a competitive risk. That one's by Buck. The first one is Cicilline and GOP Lance Gooden. The second one is Buck and Hakeem Jeffries. Buck certainly mentioned censoring speech and controlling how we see and understand the world. But it's pretty remarkable that he's in on this bill. The third and fourth bills are aimed at tactics that big tech uses to prevent smaller firms from entering the market. They would ban platforms from engaging in business where conflicts of interest exist. And then the last one is close to what Amy Klobuchar talked about, giving them more money. So yeah, there's a lot going on here. Cutting them up like this is a great idea. It's just going to be hard to get some of the more important ones past the changes of our antitrust laws. That's the critical part. And what have you sensed as a vibe among the big tech community? Is it resignation, like "let's get on with it and make sure we're represented"? Or is it "line up the troops at the border and fight to the death"?

Scott Galloway: We're going to pare it down. They're going to try to pare it down, especially the ones that prevent them from doing purchases or getting into other businesses. They're going to try to say it's anti-business. You can't stop innovation. You can't stop the beat, the innovation beat. I think that's going to be their argument. And I think they're going to let certain of them pass. They're going to put up with some of it, but they're going to try to shave down the edges.

Kara Swisher: Yeah, that makes sense. But five of them. They can't hit them all.

Scott Galloway: Yeah.

Kara Swisher: And do you think it's a decade-long process?

Scott Galloway: Oh, yeah. Changing antitrust law—it changed once in the past hundred some years. It had the first one, which was much more robust. Then there was the Borkian of it, the Borking of it, and then this now. So it'll take a long time. And that's all in tech's favor.

Kara Swisher: In any case, it's time to get to the big story. A probe by the Trump administration caused Apple to unknowingly hand over phone data from two Democratic congressmen. The New York Times reported in February 2018, Apple received a grand jury subpoena. It was part of an investigation by the Trump administration into information leaks. We're just hearing about this now because the gag order expired and they could tell people that they handed over the stuff. The congressmen included Adam Schiff and Eric Swalwell. Both were involved in the committee looking into Trump's connections to Russia. Apple said it was subjected to an NDA that had no information regarding the nature of the investigation. And then there was one with Don McGahn. This is not a good look for Apple in that they've turned over so much stuff. But they also don't have a choice. So it's kind of an interesting problem they have. But also that the Trump administration was doing—people look for leaked stuff all the time. But they had already done this with New York Times reporters and others. So what do you think of this?

Scott Galloway: This is not good. I think this is really discouraging. And I think when Biden rolls in to meet with Putin, what moral authority does he have to tell Russia what to do when our DOJ has been weaponized? I initially thought, well, I don't get it. Apple refuses to unlock the phone of a terrorist, but it complies with this. I initially had questions around Apple's behavior. And then I spoke to a lawyer who said, well, they're different because they were asking Apple to do something to engineer a backdoor into the phone. Whereas subpoenas for information are very common. So I think Apple—I think it rose from a couple hundred to a thousand. There's so many they're getting. Most of them are just basic crimes like child pornography or whatever. But this was more sinister. It felt more sinister. But how do you go in with any moral authority in any negotiation when you have a country where the richest people don't pay taxes and the president can weaponize his Department of Justice to go after their political enemies? And the sad thing is this isn't just a ding on the Trump brand. It's an incredible ding on the brand of the U.S. because we're supposed to have checks and balances in place that endure administrations.

Kara Swisher: Well, all these people said they didn't sign off on these subpoenas. So how did they get them? Who signed the subpoena? They're all trying to say they didn't say it. But on something big like that, when it's Congress people, shouldn't someone very high up sign it? I don't even understand.

Scott Galloway: Right, right, right.

Kara Swisher: Or the attorney general. And then also in 2018, the DOJ subpoenaed Apple for info on former White House counsel Don McGahn. So Trump was investigating his own people.

Scott Galloway: This feels—it makes Nixon look cuddly. I mean, this is just sort of—and again, the damage done during that four years, I think we won't even begin to register some of the impact of that damage.

Kara Swisher: Right. Who signed it? I just—who signed it? This is interesting. The Justice Department will bolster its procedures for records from members of Congress. Attorney General Merrick Garland said Monday after an emergency agency during the Trump administration secretly seized data on the communications of Democrats on the House Intelligence Committee. They also did a lot of people who weren't well-known, like all the names of the people who work for them. And so Apple can't check everything. They get so many of these requests.

Scott Galloway: That's right.

Kara Swisher: They have to, when they're served with these subpoenas, I don't know what they could do. I guess they could resist, but I don't think they can in this case. And then Sessions and Barr both said they weren't aware in the leak case which subpoenas were sought for information related to. It's just not clear. So this guy, John Demers, is stepping down, expected departure. But who is the person who signed this?

Scott Galloway: Well, your questions are really important. What were the mechanics and the people involved in getting to the subpoena? But what is just as interesting is, what did they do when they got the data? Who reviewed it? What assumptions did they make? And what actions did they take based on that data? And who did they make those recommendations to? And Apple can't say who they asked for. The minute they could tell the people that had been subpoenaed that they were, they did. That's the only thing they can do here.

Kara Swisher: And not just that, the department notified reporters—The Washington Post, CNN, New York Times—that under the Trump administration had sought and obtained their phone records for 2017. And then Garland said he would no longer seek records of reporters' contexts when investigating government leaks. There is a whole division at the Justice Department for leaks. And so the whole thing is just—the McGahn thing could be related to the Robert Mueller probe. But nonetheless, it shows how much information these companies have on you. That is the key part to understand. And that the government can then use the stuff the companies spy on you to spy on you. So that is just where we are.

Scott Galloway: There's a key point of differentiation. To what extent are we comfortable with these organizations aggregating data on us and then attaching it to an identity? Because if it's one place, it can be hacked by bad actors. But I'm not as worried about that. What I think is more important is that we have thoughtful people deciding when that type of information can be subpoenaed. And there was clearly a breakdown here.

Kara Swisher: Right.

Scott Galloway: Apple has some information on us. Maybe we're not comfortable with it. Maybe we are. But I would argue most people are comfortable with it. They just kind of turn a blind eye to it. What's really disappointing is that we elect people to appoint judges that are supposed to protect our rights. And this broke down in the Department of Justice. I think a lot about brands. I think the DOJ is one of the best brands in the world. The American Department of Justice is a group of people who generally decide they want to serve in the agency of something greater than themselves. They're very skilled and they take a huge cut in pay to work for Uncle Sam. They generally try to do the right thing and they put up with a lot of bureaucracy and a lot of bullshit. But they generally try to be apolitical. And when that system breaks down, it's like, my God, that's just so discouraging. I want to know—who ordered it, who was involved, who signed off on it, and then what did they do with that information? How was that information used? Did they decide PR strategies against Representative Schiff? What did they do with the data once they had it?

Kara Swisher: Yep. Well, that's the thing. The Justice Department spent a broad request in February 2019 as part of its investigation, and it was 73 phone numbers and 36 email addresses. So it just targeted these people looking for this leak. These leak things go on and on and on. Obviously, Trump was obsessed with hunting leaks. That's really the issue—they were hunting these leaks more than they were doing anything else to try to shut people down. But these non-disclosures that Apple could not notify people that their data was subpoenaed until the gag order is lifted. And then it tells them. And then I can't tell them why or what they wanted. And Apple can't know. They can't check. They get thousands and thousands of these. So it's got to be investigated. But most of them, I think, are good ideas.

Scott Galloway: Yeah. I think when people are trafficking in child porn and they want to know what's on their devices, and a thoughtful judge looks at that person's rights and decides to issue a subpoena, I think a society is better off.

Kara Swisher: Yeah. And in this case, it just takes us to a very terrible place. And a lot of people have taken our government for granted and just how exceptional our government was. And all we needed was a really bad government for about 48 months to realize how important government is.

Scott Galloway: Yeah.

Kara Swisher: So this is something Microsoft said, which I think most of the tech companies agree with. "In 2017, Microsoft received a subpoena related to a personal email account. As we've said before, we believe customers have a constitutional right to know when the government requests their email or documents, and we have a right to tell them. In this case, we were prevented from notifying the customer for more than two years because of a gag order. As soon as the gag order expired, we notified the customer who told us they were a congressional staffer. Then we provided a briefing to the representative's staff following the notice. We will continue to aggressively seek reform that imposes reasonable limits on government secrecy in cases like this." Most of the time, these are phishing expeditions, and that's really a problem.

Scott Galloway: Yeah, look, this will play out over the next one or two years. You're going to have the DOJ investigating the DOJ. It's just going to be very strange. Cops investigating cops. That's like a show of Law & Order.

Kara Swisher: Law & Order. Leak unit or whatever. All right, Scott, let's take a quick break. We'll be back to talk about the widening pay gap between workers and CEOs. And friend of Pivot, Caleb Scharf, the director of astrobiology at Columbia University, joins us to talk about space exploration. So you need to behave yourself.

Scott Galloway: Uh-oh.

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Kara Swisher: Scott, we're back. The pay gap between workers and CEOs grew even further during the pandemic, with some executives receiving the largest compensation packages on record. This is just every week. It's something else. The New York Times looked at the survey of the 200 highest paid CEOs of public companies and found that 68% of companies with the largest pay packages had wider gaps between executives and employee pay after the pandemic. In addition, eight of the top earning executives got compensation in 2020 worth more than $100 million. What's more is that DoorDash, Palantir, Open Door all reported net losses, yet the CEOs of these companies made $413 million, $1.1 billion, and $370 million, respectively. Now, this is stock-based, too. This is nothing new. According to the Economic Policy Institute, CEO take-home pay grew by around 1,200% from 1978 to 2019. Meanwhile, the compensation for a typical worker grew by 13.7%. So this is on top of what we talked about last week and the week before. One was about not paying taxes. The other was global corporate tax rates. Scott, what the heck?

Scott Galloway: It comes down to this, and it's the mechanics of it. You have to understand the mechanics to address the solution. In Germany, at least a third, sometimes half of your board of directors has to be representatives of a union or workers. And so they spend a lot of time talking about how they share profits with the people on the factory floor. And what do you know? Income inequality in Germany isn't as frightening as it is here in the U.S. This is what we do on the boards of public corporations in the U.S. Generally speaking, the CEO of any company is the most likable person you're ever going to meet. That's how you become a CEO. They're really hardworking. They're really smart. And guess what? They were chairman of the social committee or the rush chairman at their fraternity or sorority. They are really likable people. And then at the end of the year, the compensation committee that evaluates the CEO's pay and determines the CEO's pay hires Towers Perrin for $120,000 to come in and say, "All right, this is a $5 billion quick service restaurant. CEOs from zero to 100%—100% the highest paid, zero the lowest paid in this category of this size company—made X at 50%." You go, okay, the person at the very center made $7 million. But you go, but Bob or Sally are really nice and they're working really hard and they're doing a good job. We're not going to pay them 50%. We're going to pay them 70% or 80%, even if they're doing just a mediocre job. Because the people at 50% aren't exactly hacks. People in the middle of Fortune 500 companies, CEOs are really good. What does that do? Why is it so crazy? It has an exponential effect. If you're increasing the pay of a CEO 10% every year, that means every seven years it's doubling. And meanwhile, there's no one in the board meeting going, "Fuck that. We got to increase the pay of the people." We talk about supply and demand of people at the worker level. And what amazes me, Kara, is all these conversations in the media where everyone's so surprised that people aren't returning to work. And it's like, how can CEOs that are making this kind of money be shocked that people don't want to come to work for them for $13 an hour? That's the story. You're really surprised? That's really a shocker to you?

Kara Swisher: Yep.

Scott Galloway: And then, by the way, once they get this compensation, the CEO of Palantir, who made $1.1 billion, is now taking shareholder money to invest in other SPACs in exchange for them buying Palantir services. So basically total bullshit, inorganic juicing of my company and my stock. That's an AOL trick.

Kara Swisher: That sounds familiar to Kara. That's right. You wrote a book on it.

Scott Galloway: Yeah. And then I have $1.1 billion. And by the way, I will never pay taxes because I will borrow $25 million a year against that $1 billion at a weak interest rate of 1%, and I will let that $1.1 billion grow rather than cashing out and getting $600 or $700 million. If I grow 8% on $1.1 billion in 30 years or 20 years, I end up with $3 billion and $200 million in margin. That's fine, though. Otherwise, I would have had a billion and a half. So everything here is we have been totally overrun by the shareholder class. And I consider myself part of that class. And it's like, okay, at what point does it stop? Where do we hit a wall here and say, okay, we can only print so much money. We can only charge our grandkids' credit cards so much money. All roads lead to the same place. We're not going to reduce government spending. We've never been able to. It always averages between 21% and 24% of GDP unless there's some sort of crisis. The only cohort, the only place to go is corporations and the super wealthy or some sort of other transaction tax. It's become crazy town. It's so crazy I worry that people aren't that alarmed by it any longer.

Kara Swisher: Well, it's just like once again, it's sort of a troika here. You've got the corporate tax rates, which need to be reformed. You've got people not paying taxes, and then you have this compensation of which you can't get taxes out of. So they're richer than ever without paying more than ever, and then the corporations don't pay. Someone at some point who is making money has to pay for things. That fact has been lost in our society. And again, it's the number for a typical worker, 13% in those years, while the other is 1,200%. Anyone, you don't need to be a math expert to understand what that means. And it's all stock-based compensation, by the way, in this case, I'm guessing. But at the same time, it just doesn't make any sense. And I think anybody—more populism is what's going to happen. And of course, the lack of strength of unions is another thing. But someone is going to have to stop paying themselves quite so much and pretending that the center of innovation rests with them because it doesn't. It just doesn't. It's got to be fairly mandated because if you put yourself in the shoes of a CEO—like we talked previously—"oh, we don't want to be told what to do by government."

Scott Galloway: Well, but the thing is, a lot of CEOs will say, "All right, I'm going to become philanthropic." But what do you end up with? You end up with basically people deciding what government and public policy is based on rich people's priorities. And by the way, rich people have not had the same experience and American experience as a lot of America. So they're not the ones that should be deciding. It's the people we elect.

Kara Swisher: Yeah. But the notion, though, it's just naive to think that this will happen unless there is government action. And this is going to be my fail. We keep on the far left.

Scott Galloway: Don't do it yet.

Kara Swisher: I'm sorry. Don't do it yet. I'm sorry. But these are all tech companies too, by the way. A lot of them are tech companies that are the most degree.

Scott Galloway: Well, they've experienced their greatest wealth. Wherever there's incredible stock-based increase in compensation, you're going to find absolutely extraordinary CEO level and executive level compensation. And it's all a racket. The directors get stock-based compensation and it's all sort of go along, get along. And there's no representation of the frontline worker on these boards. And that's, I think, actually, the German model is really interesting. What if we put—I think things start at the board level—what if we put two or three or just one person and said, "Okay, this person represents. They're a fiduciary for your lowest paid employees." That's what they're there for.

Kara Swisher: Yep. Yep. Agreed. Agreed with Scott Galloway. All right, Scott. And we're going to have—what's going to happen next week? Let's see. We have corporate taxes, no taxes. They get paid too much. They're going to start hunting people, right?

Scott Galloway: I think that's right.

Kara Swisher: Yeah, drinking the blood of kids or something. And they're getting $28 million for putting a seat in space that we gave them kind of money for. Okay, got it. All right.

Scott Galloway: And also, we invented the internet. Taxpayers invented the internet.

Kara Swisher: Okay, then. All right, then.

Scott Galloway: And he's taking his family members. He's taking his brother.

Kara Swisher: That's okay. He can take his brother. Whatever. I don't mind about that. Although, I didn't like the whole scene between them. It felt like I was in a Kardashian reality show.

Scott Galloway: When they were hugging?

Scott Galloway: It just was like, oh, no, no, no, no. I think they're very sensitive people. I think we should get more tax cuts. No. They're nice people. His brother looked pretty good, though, I have to say.

Kara Swisher: His brother's handsome.

Scott Galloway: He is. He looks like he hasn't...

Kara Swisher: Yeah. He got the look. Jeff got the $150 billion.

Scott Galloway: I'll take Bezos.

Kara Swisher: Yeah. I'll take Bezos. He looks sweet. Anyway, let's bring on our friend of Pivot. We are joined by Caleb Scharf. Caleb is the director of astrobiology at Columbia University and author of *The Ascent of Information: Books, Bits, Genes, Machines, and Life's Unending Algorithm*. Oh, goodness, Caleb. Professor Scharf, thank you for coming on to the show. We have talked before. How are you doing?

Caleb Scharf: Pretty good. How are you?

Kara Swisher: Good. So much activity in the space race going on since we last talked. We talked about living on Mars sucking, essentially. Why don't you fill Scott in on our last discussion about how we really aren't going to live on Mars, then we'll get to where we are today.

Caleb Scharf: Well, I guess our last discussion was about the difficulty of putting humans on a planet like Mars and the incredible hardships that you're going to encounter both getting there and when you're trying to set up shop on the surface. There's a lot of stuff that wants to kill you, whether it's radiation, the lack of atmosphere, the low gravity, et cetera. And I think we also talked about how we just don't know what that's going to do to us, but all the signs point towards it being unbelievably difficult, no matter what anyone says.

Kara Swisher: You basically said we'd have to live underground, right? Or else we're going to get stupid and what?

Caleb Scharf: Yeah, so you're going to have to—

Kara Swisher: Our bones are going to break, essentially, right?

Caleb Scharf: You have to put yourself underground to try to protect yourself from radiation. And that means putting yourself pretty deep underground, because you're in a completely different environment on Mars than you are here on Earth. There's evidence that long-term radiation damage to our neurons literally damages our cognitive abilities. That's going to happen on the way to Mars unless you shield yourself unbelievably well, and it's going to happen when you're on Mars. So it's a double whammy. You not only have to try to sustain yourself on another planet, you're getting stupider as you're trying to do that. So it's not an easy task.

Kara Swisher: All right, so now give us the state of play. So that's basically Scott on any given weekend. Anyway, given the state of play.

Scott Galloway: So basically you're saying going to Mars is like being in a water park. That's how they're going to train the Martians. They're going to make them be in a water park. Jupiter and Otter and everything.

Kara Swisher: All right. Let's talk about where we are right now with space travel because there's so much activity now. It feels like there's a lot of rocket testing. And some of the misconceptions about space travel are living on alternate planets. Where are we right now in this cycle, would you say?

Caleb Scharf: Well, I think we're in a really interesting place. For the first time ever, we now have alternate launch systems, such as SpaceX, such as stuff that Bezos is developing, that are getting to be really good. NASA is obviously paying attention to that and handing out massive contracts to some elements of that group. So we're in this interesting place where we went from this massively accelerated development back in the 1960s—the space race, the excitement, the competition between the Soviet Union and the Western world—and then it kind of petered out. It kept going with commercial launches for telecommunications, but we've never really seen this kind of explosive growth in launch capability of putting mass into space.

I think we're getting to a really interesting place where the cost is less about getting from the ground into space and more about the things you build to put into space. That's a transition point because now we can, for science, begin to think about more and more interesting scientific missions. But it also opens up the possibility of extended human presence in space, as well as extended exploration with robotics and looking for resources in our solar system. So it feels like we're on the cusp of something big. But exactly what that is, I hesitate to say.

Scott Galloway: I'm curious about your thoughts on this as a business. I try to get to sort of B2B or launch capacity to get satellites and things into space. To me, that seems like it would be a good business. Expensive, hard, and kind of almost like a military-industrial complex. There'll be a small number of very profitable companies. Then there's exploration and then there's tourism. I find the last two would be—and I want you to push back or tell me where you agree—terrible businesses that we're trying to pretend might be good businesses. The idea that people have spent a quarter of a million dollars to do an 11-minute ride in space? There's a market, but I bet we're going to rip through that market really quickly. And one unfortunate incident is going to put a real chill on all that. And then space exploration, what you've been talking about, it's just incredibly hard, incredibly far, and incredibly expensive. It strikes me that there's one component of these businesses that work, and the rest are not commercial businesses. Long-winded question. I would love your thoughts.

Caleb Scharf: Yeah. I mean, obviously, I'm a scientist, not a business person, so it's harder for me to comment. But look, tourism—like we talked about with Mars—you can make it sound like it's going to be easy, but it's not. Just putting people up on a regular basis is going to involve failures. Right now, rocket launches—there's no getting around the fact that it's an explosive thing. You have this massive tower of high-energy compounds combusting in a few minutes to push yourself into space. Stuff is going to go wrong. Even if it's one in a hundred, one in two hundred times, something goes catastrophically wrong. The first time that happens and you kill a family of people on their way to low Earth orbit or to the moon, it's going to change people's perception of this. It is way, way more risky than getting on a plane or crossing the street. I think tourism, I just don't see how that's going to play out.

But things like exploration—perhaps part of exploration is this idea of looking for resources in the solar system. There are asteroids out there filled with platinum and rare earth elements. But think about the infrastructure necessary to do something useful with that. You just have to look here on Earth at a strip mine or any kind of large refinery. These are not trivial, small enterprises. And it's not like the asteroid is just sitting there saying, "Here's a piece of platinum, please come and take it and bring it back to Earth." There's enormous infrastructure necessary there, and I'm not sure we know how to do that.

If you add up the total amount of mass that we've actually lofted into space in the entire history of space exploration, it's not much. I often use a comparison of a supertanker. A supertanker is a significant piece of industrial hardware. That's the scale of stuff you need to make an impact on a global economy. What we've lofted into space, if you add up absolutely everything, is like the set of lifeboats that go with that supertanker. So not much.

Kara Swisher: No, it's not. And resource exploration, it's interesting. Scientists love it because we like to figure out how things are made. What's an asteroid made of? But there's also the question of if you succeed. Suppose you find your quadrillion-dollar platinum asteroid. Now you have this thing that stands to completely disrupt the market. Platinum is no longer a rare element.

Caleb Scharf: Right.

Kara Swisher: So when you think about that idea of spending that much money, obviously the people who are here on Earth are like, we have lots of things to do on Earth. Obviously it's being dominated by private interests at this point. Not that it wasn't before, but it's much more so than ever. You have essentially three people—I would count Richard Branson as much less so—but two trying to really do significant things, whether it's a moon base or whatever. Is it good to have these private people doing this, or is it something the government should be doing? A moon base would seem like something a global government should be doing together, not Elon and Jeff, essentially.

Caleb Scharf: Yeah, it kind of feels like the development of the technology and the infrastructure does benefit from commercial involvement. You have that competition, people trying to make things more efficient. But as soon as you get to anything that has a potential geopolitical impact, it feels incredibly dangerous to start having individuals or companies—

Kara Swisher: Making decisions.

Caleb Scharf: Right. China and the US have tensions already around the possibility of exploiting the lunar environment. Setting up a base in the South Lunar Pole—who's going to get there first? There are certain areas there that you want to be at because they divide the line between areas of permanent darkness and sunlight. You don't want to be in permanent darkness, but you kind of want to be on the edge of that because in the areas of permanent darkness are where resources like water might be on the moon. So there's a relatively narrow geographical area on the moon that's going to be of intense interest to nations.

Kara Swisher: Yes.

Caleb Scharf: So what happens if Jeff Bezos goes and plonks down a package sorting facility on the moon in a place that's going to make a lot of people very uncomfortable in terms of geopolitics? I feel there has to be encouragement for the development of the technology and the hardware because that seems to work really well when you hand some of that over. Although, of course, it's based on a lot of experience coming out of government-funded work around the world.

Kara Swisher: But it's always the government leading versus these guys.

Caleb Scharf: Yeah, the government does the hard, dirty work where it looks like they didn't really do so well. "Oh, they only got to the moon once." But of course, they figured it out. They figured out the fundamentals. Then you can come back and be innovative on top of that. It's everything to them, actually.

Kara Swisher: So I'm going to move on to another thing. You told NBC News that UFOs—this is another thing—that all this stuff is getting declassified, have a scientific interest, not because we're necessarily thinking we're going to find aliens, but maybe because there's unknown phenomena or a collection of phenomena that are giving rise to some of these sightings. I'm not a UFO person, and I was like, what is that? I want to know what it is. What is that? A broader public interest in space already mean for this? What was your reaction to the Defense Department declassifying these things? And actually, there's going to be even more declassification. I mean, I kind of shrugged.

Caleb Scharf: Yeah, okay. This stuff, we've seen this kind of stuff for years and years. As a scientist, you look at it and go, well, okay, first of all, a lot of it just looks like weird optics. You can analyze it that way. It's anecdotal evidence, and in science, anecdotal evidence is super difficult to deal with because it's uncontrolled. It's very hard to pin down exactly what was going on in a given circumstance.

It strikes me always with the discussion of UFOs that there may be interesting phenomena going on in the atmosphere or in places where there aren't many people. Do I think it's to do with aliens? No, I don't. Part of the reason is that we wouldn't be talking about UFOs and aliens if there weren't this history of science fiction and conspiracy theories over the last many decades. We would just be going, "Oh, that's kind of strange and interesting. Maybe we should investigate that." So I land in that place where I think, not to totally dismiss everything, but we don't have a thorough way of analyzing any of this information. We don't have a coherent approach to this. But there's potentially the opportunity of doing more thorough monitoring of our environment, which we kind of need to do anyway. We want to see what's happening on the planet. So maybe there's room for a coherent scientific effort to put cameras on planes, to look at satellite imagery in a different way, to put ground stations around the world so we can know better what it is.

Kara Swisher: Well, we know what it is. It's Bigfoot.

Scott Galloway: Yeah.

Kara Swisher: Well, just to say that. I mean, come on. Stuff happens. I'm not a conspiracy theorist, but I've seen some crazy shit, said Kara Swisher.

Scott Galloway: Yeah. Yeah, right.

Kara Swisher: Well, I don't know what it is. Like, what is it? It must be a UFO. Professor Scharf.

Caleb Scharf: Well, it's not "must be," but what was—if you looked at what they released, what did you think it was? Most of it looked like optical effects to me. Things to do with cameras on gimbals, tracking objects, infrared imaging. Infrared images look different than images in visible light. So if you have the exhaust from a distant plane on the horizon, you'll pick that up in your infrared camera and you'll just see this weird blob. And if you have a gimbaled camera on a plane, it'll lock into that and track it, so it will look like it's moving.

Kara Swisher: So it's a bad camera.

Caleb Scharf: Well, yeah, undoubtedly a lot of it is.

Kara Swisher: Just call Ghostbusters.

Scott Galloway: I have a question, Professor. What aspect of a tremendous amount of capital being allocated to loosely, broadly explained space? I love the way you said that there's been a trough, that it's sort of petered out. There's renewed vigor, which has resulted in a tremendous amount of capital and IQ going into space. Where do you think the capital would be best spent? Is it trying to figure out alternative means of energy production? Is it in mining? Is it to map the Earth? Is it different research around biotechnology and zero-gravity environments? If you could say, "Guys, gals—" Well, no, it's guys. Let's be honest. It's all these guys.

Kara Swisher: Well, there's one gal. Actually, increasingly, there are many, many women engineers heavily involved. I meant the guys going up into space.

Scott Galloway: Oh, yeah. Anyways.

Kara Swisher: This is a woman who runs SpaceX. She's sort of the most senior person in space, isn't she?

Scott Galloway: Yep, she is. And there's some fairly—there's some—anyways, I'm backpedaling now. Senior women at NASA. What would you advocate for in terms of a focus of capital around space?

Caleb Scharf: Ooh, that's a good question. I think it may sound a little strange, but Earth monitoring is such an important thing. Our understanding of the functioning of our own planet has been transformed by being able to study it from space. That began in the 60s with the first weather satellites. A lot of what we could do in terms of monitoring exquisite details—not just about the state of the natural planetary environment, but about human activity—we do that from space. Things like the Landsat series of satellites have transformed our understanding of land use. You can see what some farmer in sub-Saharan Africa is planting that year. I mean, talk about data. Unbelievable.

But a lot of that has been kind of gutted in recent years. The launch of new monitoring systems by NASA and other agencies around the world, because of political inclination to deny what's going on with the planet, some of that has been put on permanent hold. And that's terrible.

Kara Swisher: And actually, Google is doing that. Google and others are doing that more.

Caleb Scharf: Right, right. And keeping it for themselves.

Kara Swisher: Exactly.

Caleb Scharf: So that would be really high on my list. If I got to make this list, that would be really high up there. As a scientist who's interested in the universe beyond the Earth, I'd also say there's a tremendous amount we can learn by looking outwards. But in terms of things like performing experiments in microgravity, I think there are some things you can definitely do in space. We know that the capacity to grow things like protein crystals in zero-g or microgravity has some distinct advantages. I've never yet seen the kind of killer app, if you will, for that sort of work. It's the kind of work done on the International Space Station, and nothing has really been that compelling for me.

Kara Swisher: After Tang, it was all things downhill from there, I guess.

Caleb Scharf: Yeah, yeah.

Kara Swisher: Yeah, so Gwynne Shotwell is the president of SpaceX, just so you know. She runs it, and she's a very good executive. So let me ask about your book, *The Ascent of Information*. It explores how our relationship with data will affect ongoing evolution as a species. Can you expand on that for us? Why should we be concerned about how it relates to our evolution? This is a topic near and dear to Scott's heart.

Caleb Scharf: Yeah, so thank you. My book focuses on a very big and kind of strange and provocative idea: that if we look at us as a species, what is so interesting about us is that we generate and utilize and propagate all of this information that's not encoded in our DNA, but it follows us through time. It's this other thing that we coexist with. In the book, I try to make an argument for calling it the "data-ome," just like a genome or even a microbiome.

Kara Swisher: Data-ome. I like that.

Caleb Scharf: There really is this externalized information that the more you look at it, the more you expect it from different directions, the more it looks like an alternate living system here on Earth. That's a pretty outrageous statement to make. In my book, I go to a lot of lengths to draw together the arguments to support that hypothesis. But what's interesting is that when you start to look at the world this way—that we coexist with this entity, this data-ome, and we're reliant on it just as it is reliant on us—we're in a symbiotic relationship with it, a deeply symbiotic relationship.

By drawing parallels to what we see in biological life, it begins to explain a lot of what's going on for us. Because when you have symbiotic organisms, their interests are not always aligned. There'll be times when what one thing does is detrimental to what the other thing does and vice versa. But in the overall span of things, it kind of works out as a balance.

I'll give you a cheeky example. Let's look at Facebook.

Kara Swisher: No less.

Caleb Scharf: I would say Facebook is something that has emerged out of this human data-ome symbiosis. It's pretty apparent that there are a lot of aspects to what goes on with Facebook that are detrimental to humans. Fake information, endless pictures of your lunchtime sandwich or your cat. A lot of stuff is generated that doesn't seem to have real meaning for us as a species. It's not going to aid our survival. But from the point of view of the data-ome, it's fantastic. Because the data-ome does what everything does under the umbrella of Darwinian evolution: it persists into the future, it expands, it fills in new niches, it just takes over. Darwinian evolution is not thinking, it just is. If something works and continues to work into the future, it will persist.

So we may look at Facebook and go, "Oh, isn't it doing all these awful things to us?" But in this bigger picture, from a higher platform, you can see it as part of this extraordinary symbiosis that's been going on between us and our externalized information. No other species on the planet does it like this or to this extent. The book is really an exploration of that basic idea, and it digs deep into information theory, into evolutionary biology, and into the physics of information.

Scott Galloway: Professor, I don't know if you read any Jeffrey Mitchell, but we talk a lot about the externalities of that. I agree with you that the durability or the ability to inherit information such that it becomes part of your instinct—you know when to plant the crops, you know to take care of children, certain things just become known. We have decided that storytellers that increase that ability should have a greater selection set of mates. That's why rock stars are so popular. I wonder if our fetishization of these tech leaders is wired into us to say that that advance in our evolutionary capability is so powerful, and that we're just drawn to these people because they enhance that ability. We talk a lot about whether that's unhealthy or not, that we're so drawn to them, and you're connecting it to our ability to prosper as a species.

Caleb Scharf: Yeah, and I think that's a really interesting point. You could say that the data-ome is making us do that, in effect. It's creating that sense of awe and hero worship for all these people because that is advantageous to it in the long run. Which is, again, kind of an outrageous way to think about this, but the more you look at it, the more I think it makes absolute sense to look at the world this way.

A corollary to this is that people talk about future transcendence, the singularity. We're on some path to some extraordinary transformation. I would argue that actually that's all wrong. It already happened 200,000 years ago when Homo sapiens popped out and started generating this externalized information, started producing this data-ome. And it's not always a healthy relationship, because in any symbiosis there are these competing interests.

Kara Swisher: So what happens to the data-ome? What does that do? The externalized information owns us eventually, or we just become, we evolve?

Caleb Scharf: Well, it's an interesting question. Where does this go? Any kind of symbiotic relationship has a risk of severe dysfunction. In the Darwinian picture, nothing's a guarantee. Nothing says for sure, "Oh, you're going to be here in a thousand years' time." There's always fluctuation. I think we're in the middle of fluctuation right now. We see exponential growth in externalized data, actually in the energy that we devote to supporting all of that externalized information. And at the same time, we see deterioration of our planetary environment that produced us, squishy, warm, biological things. It's not clear whether that's a stable equilibrium or not.

But one ray of hope—and I talk about it in the book—is that humans are novelty engines. If there's one thing we can do, it's produce endless novelty. We are remarkably creative. In computation, there's this problem of open-endedness. Nobody has yet solved the question of open-endedness in machine learning and AI and robotics. Machines that can continually produce novelty and not only solve problems, but figure out the next problem to solve—whereas humans can do that. So there may be an advantage for the data-ome to keep us around.

Kara Swisher: Creativity.

Caleb Scharf: Yeah, as these engines of novelty and creativity, which is kind of lovely.

Kara Swisher: You know, Elon Musk called us house cats, getting back to him. He said we're going to be like house cats. They're not going to kill us, we're just amusing to them and possibly novel. Which is interesting. I just have one last quick question, then we got to go. And Scott may have one more. You recently wrote a piece titled "A Wrinkle in Nature Could Lead to Alien Life." Can you just very briefly say what you mean by that? The idea that we could make alien life from this wrinkle in nature?

Caleb Scharf: What that piece was really about was trying to extend our ideas of alien. I'm an astrobiologist. I'm interested in looking for life elsewhere in the universe, but we tend to use the template of what we understand of life today. Of course, what we understand of life is very limited, and that's also why the data-ome is interesting.

In that piece, I looked at the fact that the universe has not always been the way it is today. If you turn the clock back four or five billion years, we were at a period of time in the universe's history where its fundamental behavior was different. Right now, the universe is expanding. That expansion is now accelerating. Back a few billion years ago, that wasn't the case. The universe was kind of coasting at that point, and something changed that we don't yet fully understand.

It turns out if you were a species seven billion years ago, your outlook on the universe would have been very different. You could literally access more of the universe during your existence than you can today, because as the universe accelerates its expansion, it gets harder and harder to access. So there's a fundamental difference between early life, if it existed in the universe, and life now.

But you can also extend that to the real wrinkle, which is that we don't know for sure that all of the fundamental parameters describing physical reality have been constant throughout the last 13.8 billion years or into the future. There's the possibility that things that determine, for example, how strongly molecules are bound together—there's a possibility that fundamental aspects of the universe change a little bit over time, tiny amounts. So one of the things I speculated on is, what if back in the past or in the future, another species exists in almost an alternate universe, even though it's our universe, because things have drifted, things have changed? How alien would that be? So it's very speculative, kind of crazy stuff.

Kara Swisher: Alternate universe. Multiverse!

Caleb Scharf: That's right.

Kara Swisher: If space never ends, everything has already happened. I learned that from *Modern Family*.

Scott Galloway: I learned that from *Modern Family*, my source of all good science.

Kara Swisher: Now you're going to mess us up here, Professor Scharf.

Scott Galloway: *Harry and the Hendersons*.

Kara Swisher: Sorry, go ahead. Anyway, this is all really fascinating. Can I ask you, last time I asked you, would you go to Mars? And you said no, right? Is that correct?

Caleb Scharf: I believe that was my response.

Kara Swisher: And now? Would you have paid $28 million to go with Jeff Bezos in near—wherever Earth he's going to? For that ride?

Caleb Scharf: No. I mean, that's the worst cost to mileage ratio managed.

Kara Swisher: Scott wanted to go with it. They did. And Mars, no, I like existing too much to go to Mars.

Caleb Scharf: You're going to go with this whole life thing? You're going to keep this whole non-suffering, non-torturous atmosphere with the right amount of gravity and oxygen thing going for a little while? You're going to see how that plays out?

Kara Swisher: Yeah, I think so. What the heck? What the heck? All right. Caleb Scharf is always a delight. This is so fascinating. My head is hurting. Thank you, Professor. He's a director of astrobiology at Columbia University. And the book you should read is *The Ascent of Information: Books, Bits, Genes, Machines, and Life's Unending Algorithm*. In other words, it's going to keep going. Keep reaching for the stars, Prof. Keep reaching for the stars. Anyway, Professor Scharf, thank you so much. We appreciate it. Take care.

Caleb Scharf: My pleasure.

Kara Swisher: Okay. We'll be back for Wins and Fails.

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Kara Swisher: Okay, Scott. Wins and fails. What are your—you said I stopped you. I stifled you. Tell me what your fail is.

Scott Galloway: Well, it's not easy to be angry and depressed this week. I'll manage. I'll get through it. But there's some really wonderful things happening. Government is—the immunity response has kicked in, and they've decided antitrust and regulation. And the G7 getting together and talking about important things, wealthy countries sharing their vaccines, coming up with infrastructure investment, carbon goals. It's just wonderful to see that our species has decided to re-embrace its superpower, and that's cooperation.

Scott Galloway: And I'm really excited about – I was really proud, I should say, to hear about – I don't know if you saw – I'm sure you saw us. The Justice Department found and recovered the majority of the payment that Colonial sent to the dark side.

Kara Swisher: Yes, yes, I did see that. That was great.

Scott Galloway: Originally, Colonial paid 75 bitcoins around $4 million to Darkside and federal investigators tracked the ransom as it moved literally through a maze of about a couple dozen different electronic accounts before landing in one that a federal judge allowed them to break into and get this care. The project was used to intercept over 20 million messages in 45 languages and resulted in the arrest of 800-plus people. The operations conducted in the past days in 16 countries led to 700 house searches, a seizure of tons of drugs, 250 firearms, 55 electric vehicles, and 50 million in currencies and crypto.

Scott Galloway: And what I would ask is, who else could do this but the U.S. government? That's right. Netflix can't do this. Them's right. Them's true. And so I think this has been a great – I think it's been a great week despite the – obviously the DOJ stuff for the good old USFA.

Scott Galloway: And then my fail is defund the police. And on the far left – and we gave the shit – we gave shit to progressives for wanting to defund the police. And the far right – or when you think about poor people or you think about long-income neighborhoods, they have more crime. And we talk about police and then there's this ridiculous argument over defunding the police. And then you also have crime in high-income neighborhoods, but it's a different type of crime. And that is it's usually white-collar crime. And that crime is policed by the IRS.

Scott Galloway: And just as the left is hapless and comes up with stupid ideas and never get any traction, i.e. defund the police, what's more insidious and dangerous is the far right comes up with more effective but equally insidious ideas to defund the police, specifically to defund the IRS, which they have done slowly but surely over the last 20 years. And what we have is one in three IRS investigators has left. So essentially, the police force that polices financial crime has been reduced by a third while they get more and more sophisticated.

Scott Galloway: So defund the police is a bad idea on both sides of the spectrum. And we need to acknowledge that defunding the IRS over the last 20 years has led to a level of overrun. And we no longer have the money now to pay for our police in places where we need it and places where it can be effective. So my loss is this ridiculous notion of defunding the police from both the far left and the far right who have been more effective at defunding the police in the form of the IRS.

Kara Swisher: I love that. That's a big thinking thing. That's a thinky thing. That's the prof. It's Prof Caleb. I have Prof Caleb. He's so much smarter than both of us.

Scott Galloway: Oh my gosh, isn't he? Like he's thinking about like different lives that I don't even understand.

Kara Swisher: Like I just want like an alien guy in a little a little fast moving vehicle that's all.

Scott Galloway: I love your conspiracy thing.

Kara Swisher: Well I don't know, I've seen some crazy shit. I don't know. I want—I've seen some crazy stuff. China doing it or we're doing it. I just want to know what it is. What is it? Is it the camera? Then tell me it's the camera. Just let me see some proof.

Kara Swisher: Okay, so I have just one. I thought I know this was PR flexing, but Google, Facebook, Amazon, and others, Intel, urged the SEC to mandate regular climate reports from companies. And Salesforce was involved, eBay, Facebook. Even though they're flexing because they do it, and they've been vocal on climate issues, I like that they are sort of asking, requiring business to regularly disclose climate-related matters to their shareholders. I like that trend. I like that trend a lot.

Scott Galloway: Yeah, why not? I mean, it's a PR flex, but whatever.

Kara Swisher: Yeah, as long as the leads against virtue signaling, but there's nothing wrong with virtue signaling. This is a good one, and what they're doing in that area. I think companies will be judged by this over time, and they should be, and so I like that. I'm giving that a good thing.

Kara Swisher: Fail, I just, this Apple thing is just really disturbing. Like, the power, we're already worried about these companies having so much power, and the government using it badly is really, it's, you know, Not surprised in any way whatsoever, but still disturbing. You know, you're like, oh, they did it. And so that was, it was like, oh, they're going to, of course they're going to do it. And once we get another power like that, we have to do something to stop it. I don't think we can. I don't actually think we can. So that is my fail.

Scott Galloway: Nice.

Kara Swisher: Okay. Scott, that's the smart, brainy show we've had here. There's lots of stuff for you to chew on. By the way, I've been listening to our shows on drives. I've been doing a lot of drives.

Scott Galloway: Let me guess. You love us.

Kara Swisher: I love us.

Scott Galloway: You love us. We're really good.

Kara Swisher: We're really good. Yeah, sometimes. I'm enjoying listening to us. And I don't, you know, I'm just saying.

Scott Galloway: I focus on the bad bits. I'm like, oh, I can't believe I said that.

Kara Swisher: Oh, I don't. Well, sometimes I can't believe you said that. Anyway, that is the show. We'll be back on Friday for more. Getting starts after the show. You're not going to space with Jeff Bezos. You're not dating Jeff Bezos. Anything else. And try to read this cleanly. Go to nymag.com slash pivot to submit your question for the Pivot podcast. The link is also in our show notes. Read us out, Scott.

Scott Galloway: Today's show was produced by Caroline Shagrin. Ernie Andrew Todd engineered this episode. Thanks also to Drew Burrows. Make sure you subscribe to the show on Apple Podcasts. If you're an Android user, check us out on Spotify. Frankly, wherever you listen to podcasts. If you liked our show, please recommend it to a friend. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business.

Kara Swisher: What was that? It must be a UFO.

Scott Galloway: Yeah, right, Kara.

Kara Swisher: Yeah, there we go. You know what? There we go. When they come for you, you're going to say, Kara was right.

Scott Galloway: That is right.

Kara Swisher: Christ, I hope so.