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The Man Who Broke Capitalism
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The Man Who Broke Capitalism

How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy

David Gelles
Simon & Schuster, 2022
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Editorial Rating

8

Qualities

  • Eye Opening
  • Background
  • Concrete Examples

Recommendation

Jack Welch’s tenure at General Electric during the 1980s and 1990s coincided with a sharp turn in America’s economy, as factory jobs moved overseas and employment for life gave way to the ever-looming threat of layoffs. But Welch didn’t just reflect the free-market ethos of the time, journalist David Gelles argues; Welch actively promoted it, in no small way through the many GE alumni who led rounds of cost-cutting and union-busting at major corporations. It might seem a stretch to blame just one CEO for America’s current wealth inequality, but Gelles makes a compelling case that Welch played an outsized role in creating today’s economic inequities.

Summary

Jack Welch spurred a shift in the way US companies treated workers, regulators and government.

In the decades after World War II, US employers, employees and the government settled into a détente. Corporate workers got a fair share of their employers’ profits, and generous wages expanded the American middle class. Corporations didn’t try to dodge their taxes, and they accepted government oversight as a necessary part of doing business. But in the 1970s, a new mind-set began to take hold. Economists like Milton Friedman argued that the path to true prosperity required that private sector operators drive the hardest possible bargain with workers and the public sector. Friedman preached a gospel of shareholder power.

Jack Welch, who personified Friedman’s economic vision, became chairman and chief executive of General Electric in 1981. At the time, GE was worth $14 billion, and it might have been recognizable to its founder, Thomas Edison. By the time of Welch’s retirement in 2001, GE’s value had rocketed to $600 billion. It was the world’s most valuable company, as well as an unwieldy conglomerate that had spread...

About the Author

David Gelles is the Corner Office columnist and a business reporter for The New York Times. 

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