𝘽𝙤𝙤𝙠 𝙧𝙚𝙘𝙤𝙢𝙢𝙚𝙣𝙙𝙖𝙩𝙞𝙤𝙣: 𝙏𝙝𝙚 𝙢𝙖𝙣 𝙬𝙝𝙤 𝙗𝙧𝙤𝙠𝙚 𝙘𝙖𝙥𝙞𝙩𝙖𝙡𝙞𝙨𝙢

What is the point of a company? Does it exist just to maximize returns for its stock holders or does it have a social responsibility to better the economy, life of its workers, pay taxes etc? We all understand today how the very word capitalism carries with a certain sense of ruthlessness and the antics of profit-minded companies dodging taxes, performing “financial engineering” and other shenanigans (like Double Irish With A Dutch Sandwich) became par for the course. We can probably trace this to the modern management style adopted by CEOs who are heralded by the business press as “professional managers” spearheading the so-called “stakeholder capitalism”

In this book, David Gelles argues that Jack Welch is the apotheosis of everything that is wrong with capitalism over the last 50 years, and that he was the progenitor of an economic system that we are all still living in and reckoning with. He talks of a GE before Jack Welch when in an annual report the company bragging about how much they’re paying in salaries to their workers and how much they’re paying in taxes to the government. This obviously not how many companies operate today.

Jack with his relentless drive to reduce the headcount, implemented many policies like vitality curve (where the employees are ranked and bottom 10% are fired every year), championing risky financial ventures, outsourcing/offshoring to name a few that still live on today. Gelles talks about not only his brash management style and short temper, but also the lasting impact his policies had on GE that went from a company responsible for 1% of the GDP of USA to a shell of its former self. His policies still live on because for many years that management style was considered to be the epitome of capitalism.

If you ever wonder what happened to USA’s manufacturing industry and how does a multi billion corporation like Amazon pays next to nothing in taxes, read this book.