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Friday, September 30, 2022

Book Review: “The Man Who Broke Capitalism,” by David Gelles

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As a maniacal deal maker, Welch oversaw the acquisition, on average, of one $130 million company every week for 20 years, and sold off a business every two weeks. And, man, did he financialize, instead of inventing or producing better products pleasing Wall Street and increasing G.E.’s stock price, period. This was the one area in which he made sure G.E. continued innovating — by reducing costs with his “rank-and-yank” regime, and turning G.E. into “essentially a giant, unregulated bank” that used more and more of its profits to buy up its own stock.

Welch (who died in 2020) was “quick-witted, and coiled with energy,” “a cursing, kinetic tornado of a man” who “wore jeans and rolled-up shirt sleeves whenever he could get away with it.” And also, no surprise, a jerk — “heavy on yelling and short on empathy.”

But while Gelles’s basic takes are all correct, they’re also relentlessly basic, in the new, pejorative sense: unsurprising, unoriginal, conventional wisdom conventionally expressed, passable in thousand-word pieces of journalism but not at book length. All his clichéd and colorful prose bits — “empires of yore,” “risible assertion,” “gilded lifestyle,” helicopter pilot with supermodel looks,” “pinstriped conquistador with the spoils to prove it” — might be forgivable if accompanied by fresh ideas or by deep, revelatory reporting.

Welch himself comes across as a stick figure. For instance, exactly how does the son of a union railroad conductor who “preferred chatting up machinists to sitting in a boardroom and deliberating with directors” become such an enthusiastic generalissimo in the class war? No explanation. Likewise, Gelles mentions Welch’s 2012 tweet alleging that a decline in the unemployment rate was a fiction constructed by Barack Obama’s Labor Department to help him win re-election, which Fox News and The New York Post and Donald Trump instantly repeated. But again, no explanation of how and why this reality-based engineering Ph.D. and C.E.O. had suddenly become an alternative-facts conspiracy nut.

Gelles’s portrait of Welch is derived from previously published biographies, which he credits. Being derivative is no crime, but while he acknowledges “Evil Geniuses” once (as his source for a 1968 survey), other unsourced passages struck me as uncomfortably familiar, such as his discussion of Milton Friedman and Lewis Powell’s role in the hypercapitalist paradigm shift. For instance, Gelles writes that a 1970 Times Magazine essay by Friedman “was a capitalist cri de coeur” that “would endure as the most influential piece of economic writing for generations.” In “Evil Geniuses,” I call Friedman’s essay “a cri de coeur” that “became the modern founding text … of corporate management.”

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