Review of David Gelles's book "The Man Who Destroyed Capitalism" published in Przewita Publishing House.
Are ethics and social work inactive crucial in the modern business world, dominated by the pursuit of profit? David Gelles in "The Man Who Destroyed Capitalism" analyses Jack Welch's career, legendary CEO General Electric, and his influence on contemporary capitalism. The author exposes "welchism" – a management model based on short-term profits, which has led to negative social and economical consequences.
"The man who destroyed capitalism" becomes a summary of Welch's long-term career and an effort to measure his character and the consequences of his actions. The author of this book is David Gelles, an experienced fresh York Times writer who specializes in business and management. Gelles portrays the communicative of Jack Welch, the most celebrated CEO of General Electric, a company founded by Thomas Edison. Jack Welch was a kid of his time. He came to include the company in the boom of neoliberal reasoning about the economy. During his 20 years of reign, the company's value increased from $12 to $600 billion, and the management kind of the company by its president for a long time was set as a model for American managers. After his retirement, Welch continued his career by publishing the bestselling book “Winning Means Winning”, which became a basic reading for years at business conferences and seminars.
The book shows well how modern American society tends to glorify corporate leaders, assigning them the position of heroes and moral authorities. Their influence goes beyond the business sphere, shaping public debate and influencing the perception of success that is identified with financial achievements. The revolutionary management methods introduced by Welch, characterized by absolute competition and focus on short-term profits, had a crucial impact on business culture. “Welchism” became the dominant model, imitated by successive generations of managers. The business strategies applied by Welch, although yielding short-term success, in the long word led to a weakening of General Electric's position on the market. Welch's philosophy, focused on maximizing profits for shareholders, contributed to negative socio-economic trends specified as middle-class erosion, increased inequality and decreased assurance in institutions.
The author shows how focusing on maximising profits, especially at the expense of employees, can lead to short-term financial successes, but in the long word threatens the stableness and improvement of businesses. Although Welch is the main character, the book besides describes the stories of his successors, who tried to apply Welsh practice besides in another American companies. Analyzing their experiences, Gelles shows how profoundly “great” he has rooted in business culture. Most frequently with akin effect. The following pages bring the reader closer to a planet where the stock rate and profit for investors prevail over the human business side and investment in innovation.
Minus
It should be noted, however, that in the book the critical attitude of the author to Jack Welch is felt, which frequently affects the objectivity of narrative. The author cites anecdotes and examples to show Welch's controversial behavior, but it may sometimes be felt that they are chosen in a biased way.
Jan Zygmuntowski, in a conversation on the "Horizony of Markets" channel, notes that the book's title may be a bit exaggerated. Welch did not "destroy" capitalism so much as effectively exploited its weaknesses[1]. It is besides worth remembering that the book describes the reality of the American labour market, which differs from the European level of protection of workers' rights, among others. Furthermore, the author does not full explain the thought behind Welch's activity. Only a fewer statements are limited to the fact that acquisitions, mergers and simplification of employment increase the value of companies' shares managed by the managers described. This may origin confusion among those who do not have adequate cognition of economics or business activities.
Summary
Although the book focuses on Jack Welch's activities and résumés, as well as any of his followers, it primarily shows how then reasoning about business and ruthlessness in the management of the then class of CEOs of listed companies led to a breach of the existing social contract, the division of earnings, the impoverishment of the mediate class and the collapse of the American industry. Gelles' book goes beyond economical analysis, sheds light on the social and political consequences of "welschism". The author shows how the negative effects of this management model have contributed to expanding public dissatisfaction with the elite and radicalization of attitudes in the United States, as can be seen from Donald Trump's electoral successes. "The man who destroyed capitalism", despite any shortcomings, is surely a prominent position for those curious in both economics and politics, showing complex relations between business, society and the state.
[1] marketplace horizons, About the man who destroyed capitalism, https://www.youtube.com/embed/cLNioUDPr_w&ab_channel=HorizonesRynk%C3%B3w
