The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America
New York Times Bestseller
New York Times reporter and “Corner Office” columnist David Gelles reveals legendary GE CEO Jack Welch to be the root of all that’s wrong with capitalism today and offers advice on how we might right those wrongs.
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.
Gelles shows how Welch’s celebrated emphasis on increasing shareholder value by any means necessary (layoffs, outsourcing, offshoring, acquisitions, and buybacks, to name but a few tactics) became the norm in American business generally. He demonstrates how that approach has led to the greatest socioeconomic inequality since the Great Depression and harmed many of the very companies that have embraced it. And he shows how a generation of Welch acolytes radically transformed companies like Boeing, Home Depot, Kraft Heinz, and more. Finally, Gelles chronicles the change that is now afoot in corporate America, highlighting companies and leaders who have abandoned Welchism and are proving that it is still possible to excel in the business world without destroying livelihoods, gutting communities, and spurning regulation.
“A vigorous argument for a more humane capitalism.” –Kirkus Reviews
“An indispensable history of how we wound up with a business culture that believed employees were owed nothing more than yesterday’s paycheck. But David Gelles does not just sound the alarm. He contrasts this warped world view with a new emerging reality — accelerated by the pandemic — that puts the employee experience and well-being at the center of business priorities. A must read for anyone who wants to say goodbye forever to a toxic chapter of American capitalism.” —Arianna Huffington, Founder & CEO, Thrive
“In vivid prose and reporting that lights up each page, Gelles probes how Jack Welch influenced a generation of business leaders to ignore the feelings of employees and the malign impact of corporate mergers, and how decisions made today might strangle a company’s long-term health. This powerful book shows why GE and so many companies run by Welch’s disciples have badly stumbled, along with Welch’s reputation.” —Ken Auletta, author of Hollywood Ending
“A compelling indictment of short-termism that offers an urgent call for business leaders at all levels to be responsible and care. Gelles clearly makes the case that business is more than for profit and that it is by doing good that you can do well, and provides us a roadmap for the way forward. An indispensable read for our time.” —Hubert Joly, former Chairman and CEO Best Buy, author The Heart of Business
“Jack Welch is one of the more important political and business leaders in modern American history. His strategies destroyed a once-great company, and more broadly, he helped pave the way for the destruction of the American middle class and the erosion of American democracy. For years, the business press has lauded Welch’s visionary spirit, but few reporters have ever asked what that vision was. With The Man Who Broke Capitalism, David Gelles has delivered a book that explains what we can learn from a man like Welch, as we try to restore the shattered society he left behind.” —Matt Stoller, author of Goliath: The 100-Year War Between Monopoly Power and Democracy
“A robust and necessary portrait of a complex figure. A lesson in shareholder value vs. stakeholder value that will only become more relevant in the coming years.” —Scott Galloway, New York Times bestselling author and serial entrepreneur
“A provocative page-turner that exposes the dark truths about Jack Welch, America’s first celebrity CEO. After building a sprawling global empire through unmanageable mergers, shady accounting, and heartless downsizing, with undue veneration, and countless imitators, it’s good to see Welch finally cut down to size.” —Jennifer Taub, author of Big Dirty Money
About the Author:
David Gelles is the “Corner Office” columnist and a business reporter for the New York Times. Since joining the Times in 2013, he has written about CEOs, finance, technology, media, and more. He was part of the team that covered the fallout from the crashes of two Boeing 737 Max jets, work that won the 2020 Gerald Loeb Award for Breaking News Reporting. A student of Buddhism and a meditator for more than twenty years, David is an authority on the intersection of mindfulness and the business world. His 2015 book, Mindful Work: How Meditation is Changing Business from the Inside Out, was published by Houghton Mifflin Harcourt. Before joining the Times, he was a reporter for the Financial Times