What the U.S. Can Learn from Canada's Safety Net + The Real Cost of Private Schools and Clubs
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What is the purpose of the new Office Hours format and how can listeners submit questions?
Welcome to Office Hours with Prop G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to office hours at propgmedia.com. Again, that's office hours at propgmedia.com or Post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. Question number one.
Hi Scott, I'm Betty from Edmonton, Canada. At the Toronto Pivot Live event, Scott said that innovation basically stops the Canadian border. My daughter, who now lives in the US, argues that Canada's stronger social safety net kills ambition and makes people less hungry to innovate. My question is: how would you strengthen the US social safety net without dampening the country's innovation engine? or ambitious culture. And second, do you think the US could adopt any parts of Canada's safety net without losing what makes its economy dynamic in the first place? Thanks.
Okay, so just some data. The US and Canada spend about the same share of their economies on social programs. But they do it very differently. Canada mostly uses public benefits. The US leans heavily on private ones, including employer health, insurance, and pensions. On average, a family gets about $21,000 a year in support from Canadian provinces compared to about $12,000 from US state programs. When it comes to startups, the US massively outperforms Canada at almost any scale. Canada needs about 55% more investment to produce a single big startup success. Over the last decade, US venture capital exits totaled $2.6 trillion. in the US compared to just fifty-six billion in Canada. And while well some of that is misleading because of the population, it still on any level dwarfs uh what happens in Canada.
And the US produced more than 4,000 exits over 10 million. Canada had fewer than 200. The trade-off is security versus upside. Canada offers a stronger safety net that isn't tied to having a job. In the US, healthcare benefits are often tied to work, so losing a job or a startup can mean losing coverage too. In some, America delivers bigger wins, Canada delivers more protection. So Let's take a step back. Why do we do startups? Why do we want economic growth and exits? Um, economic security is a wonderful thing, but if you look at happiness in where people are the happiest. It's not only it's not typically the countries that have the most upside. It's countries that oftentimes have a decent amount of upside.
and less real harsh downside. In other words, happiness not only a function of what you can get or what you have, it's a function of an absence of anxiety of what can be taken from you. I think four or six of the ten happiest countries are in northern Europe. Well, there's still capitalism and upside opportunity, but there's some dignity knowing you're not gonna be homeless or lose your house or be able to, you know, find health care for For your kid. I would argue that in the US, uh, we believe in winners and losers. And if you wanna enter into kind of the Thunderdome of unlimited upside that is America. That we have actively decided to have a lower safety net. The question is when that safety net is just a cement floor and it ends up being economically damaging and just inhuman.
Um, there's just no reason that people should feel like they risk bankruptcy if their wife is diagnosed with lung cancer. Um, no child. One in five households with children are food insecure. Uh we have we now spend more money on ice than we spend on children. Uh we have Um a health care system that results in extraordinary additional health care costs because of a lack of preventive care. we end up uh spending more on the uh homeless or the mentally ill because we don't have, I would argue, kind of a social safety net that is just Not only empathetic, but it's just not smart in terms of preventing uh more expensive downstream solutions, whether it's incarceration or hospitalization. So I think that beyond the basic humanity and kind of the social safety net, I think America has entered into an environment where we're just not making investments that would pay off
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