Summary of David Gelles' The Man Who Broke Capitalism

By IRB Media

Get the Summary of David Gelles' The Man Who Broke Capitalism in 20 minutes. Please note: This is a summary & not the original book. Original book introduction: In 1981, Jack Welch took over General Electric and quickly rose to fame as the first celebrity CEO. He golfed with presidents, mingled with movie stars, and was idolized for growing GE into the most valuable company in the world. But Welch’s achievements didn’t stem from some greater intelligence or business prowess. Rather, they were the result of a sustained effort to push GE’s stock price ever higher, often at the expense of workers, consumers, and innovation. In this captivating, revelatory book, David Gelles argues that Welch single-handedly ushered in a new, cutthroat era of American capitalism that continues to this day.

Gelles chronicles Welch’s campaign to vaporize hundreds of thousands of jobs in a bid to boost profits, eviscerating the country’s manufacturing base and destabilizing the middle class. Welch’s obsession with downsizing—he eliminated 10% of employees every year—fundamentally altered GE and inspired generations of imitators who have employed his strategies at other companies around the globe. In his day, Welch was corporate America’s leading proponent of mergers and acquisitions, using deals to gobble up competitors and giving rise to an economy that is more concentrated and less dynamic. And Welch pioneered the dark arts of “financialization,” transforming GE from an admired industrial manufacturer into what was effectively an unregulated bank. The finance business was hugely profitable in the short term and helped Welch keep GE’s stock price ticking up. But ultimately, financialization undermined GE and dozens of other Fortune 500 companies.

• Language: English
• Publisher: IRB Media
• Release date: Dec 31, 2022
• ISBN: 9798350063189

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

Book preview

Summary of David Gelles’ The Man Who Broke Capitalism

Contents

Overview

The Welch Worldview

The Most Valuable Company in the World

The New CEO

Neutron Jack

The Pac-Man Scheme

Jack’s Cathedral

CEO Race

Rotten Apples

Bad Trades

Negative Externalities

Max Consequences

Trump

Stakeholder Capitalism

Change Can Start Now

Beyond Welchism

About The Author

Overview

In The Man Who Broke Capitalism (2022), journalist David Gelles chronicles how legendary CEO Jack Welch turned General Electric into the most valuable company in the world at the expense of workers, consumers, and innovation. Welch’s short-sighted tactics and obsession with downsizing, outsourcing, dealmaking, and shareholder primacy single-handedly destabilized the middle class. Yet he has influenced generations of CEOs with similar short-sighted ambitions who continue to destroy livelihoods and increase inequality to this day.

The Welch Worldview

To understand a civilization, look at the people they celebrate. Our heroes reflect our collective aspirations and continue to influence events long after they are gone. In America, bosses are worshiped. Chief executives, entrepreneurs, and venture capitalists are hailed as the most brilliant minds, and increased shareholder value is celebrated as if it were a major medical breakthrough.

One CEO in particular has been revered as the greatest of all time: Jack Welch. From 1981 to 2001, Welch led General Electric. The changes he made at GE turned it from a respected industrial giant into a huge international conglomerate.

Welch was hungry for power and money. His goal was maximizing profits even if that meant cutting jobs, playing fast and loose with accounting rules, or acquiring and selling companies for parts. His three primary principles were