Jack Welch, the Man Who Broke Capitalism (2022)
96 comments
·July 2, 2025crowcroft
snapcaster
Lights Out is another great book on the process of financialization that killed GE
rschiavone
I can't recommend enough *Jack Welch Is Why You Got Laid Off | Behind the Bastards* (https://www.youtube.com/watch?v=YZv7wc7USQE)
exiguus
I see some parallels to Curtis Yarvin and the Boys that follow his philosophy. The funny part, with all this boys is, that they do not recognise, that there utopia e.g. new society/state, does not work without the current society that sponsors them.
Basically, the same with some global corporations, which literally suck society dry (infrastructure, resources, education, labour, health system) and give almost nothing back (except for a few workers and too few taxes). I think the American dream is over. It's an empty shell that's all about making a nice life for yourself at the expense of others.
a4isms
> I think the American dream is over.
“The reason they call it The American Dream is that you have to be asleep to believe it.”
—George Carlin (1937 - 2008)
PicassoCTs
It got real, only because a - at the time seemingly viable alternative reared its head. So, ironically, the system that won the system-competition we call the cold war, only works- when under stress in systemic competition.
xphos
I think we are mixing up timelines here the rent seeking and financializing happens in 1981 onward not starting at 1991 when the USSR dissolves
There is just not any real accountability to the next generation of stock holders its classic optimizing toward the local minimum and is why some many private equity firms annihilate companies and sell them for parts. We use to have unions than Regan eliminate tons of union power and bars the governments union's from arguing. We have structural barriers in existing laws against sector wide unions, so the remaining unions have no incentive to build competitive sectors just competitive wages without respect to economics.
I think companies have just pushed and pushed for labor laws that favor larger companies and players. That hollowing of the rule set has dropped a bomb in companies optimization functions. You cannot choose not to do stock buy backs now because the stock holders complain and leave for a someone more willing to inflate assets. If you want the clearest picture look at Intel they spent tremendously on stock buy backs because it was good for investors and let there RnD budget cratered when compared to its competitors. They basically aren't a respectable company anymore but those stock investors aren't destroyed they moved to Nvidia and Apple.
thmsths
I feel like that makes sense actually. One core tenet of the "free market" is the need for competition, otherwise complacency and rent seeking happen and things get bad. If that apply for corporations, why not economic systems too?
notarobot123
> I think the American dream is over. It's an empty shell that's all about making a nice life for yourself at the expense of others.
At which point in history was it not about exactly that?
ajb
Probably the homesteading era. Although only if you don't count Native Americans...
al_borland
Even then, it wasn’t an easy life, they just had different challenges. That’s why we have the right to pursue happiness, and not happiness itself. One can always pursue it, regardless of circumstance. Some would argue that the pursuit is where the happiness is actually found; it’s not a destination.
geodel
I think 1960 NE (Nostalgic Era) was great.
throwawayoldie
Definitely...as long as you were a white Christian heterosexual man.
geodel
> Basically, the same with some global corporations, which literally suck society dry
Not that I found corporations great, but there is no indication that society was doing really well before global corporations existed.
wahnfrieden
Read more Graeber & Wengrow
FireBeyond
> Curtis Yarvin and the Boys that follow his philosophy
Curtis has done a good job of getting people to forget his white nationalism, though he insists he isn't one, but he's quite comfortable with it.
> It should be obvious that, although I am not a white nationalist, I am not exactly allergic to the stuff.
And though he later wrote articles saying "I'm not a white nationalist", they were largely sympathetic to the "cause" and then just said "but I'm not one."
busyant
The amount of effusive hagiography devoted to Welch in the late 1990s and early 2000s was stupefying.
I grew up in a "GE town" and watched it fall into severe neglect as GE's stock price rose. Watched my mother get laid off and pushed into a service company that she and many others referred to as "the bastard child of GE."
I always felt that there was a lot of smoke-and-mirrors behind Welch & the stock price. And I felt that Welch would depart before the check came due. Immelt got hammered, in part, because of Jack's sins--I don't know if Immelt deserved it because I stopped paying attention to GE in the early 2000s.
My opinion of GE was / is not based on some detailed and thorough analysis. It came from observing the disconnect between what happened to my hometown and the stock price.
EasyMark
He really had some of the worst ideas for longevity of a company. Valuing short term profits over long term plans and goals for the company is the biggest one. The other is probably his adversarial relationship with his employees. He didn't see them as anything other than "the help" and was constantly talking down to them, assumed they were lazy and looking for the easy path in life, in everything I ever read from him.
allenrb
So, this aged well:
Maybe we’re at that moment in a pendulum's arc where it pauses and starts to begin its trajectory back in the other direction. I hope we're there because we need to reset.
alphawhisky
No way, HN is talking about equitable business? Is this a recession indicator?
specialist
Michael O. Church would just elicit nods of agreement on today's HN.
marssaxman
I am surprised to see, looking at his account just now, that his last post was ten years ago. I hadn't realized it'd been so long.
aklemm
This is an important book with kots of parallels to The Jungle by Upton Sinclair, both good and bad. Ultimately, I think Welch-ian thinking is a dramatic abandonment of following first principles.
flyinghamster
Um, why was someone's perfectly reasonable take downvoted to oblivion? Too much of a newcomer? Too many Welch devotees here?
As far as I'm concerned, Welch turned GE from an industrial behemoth that more than lived up to its name, to a pale shadow of itself that has sold off almost everything. "Outsource Everything" has been an absolute disaster for our economy that will take decades to dig out of, if we even have the will to try.
bit1993
It is easy to look at Globalization in retrospect and conclude that it was a failure but you will miss all the advances it brought with it. Globalization has its place and time, it was the logical next step after the USA industrialization peaked the next step to squeeze out even more from the economy.
pjc50
I'm not really sure how globalization could have been stopped after the invention of the shipping container, which was ""the internet for physical objects"". Especially after the closed Soviet economies failed. I suppose some Americans would have preferred a situation where China stayed Communist or collapsed.
kamaal
>>I suppose some Americans would have preferred a situation where China stayed Communist or collapsed.
The definition of Communism per the west, is something that always fails by default. The way Chinese define communism is doing whatever it takes to win.
When you remove all the abstract words behind this game, a simple philosophy is if you do the right things you win. You can call it capitalism, communism or whatever you want.
camillomiller
We could have had exactly the same and possibly more if it weren’t for people like Welch. They were a hindrance to how globalization could have brought a lot more of shared wealth and less inequality
bit1993
> They were a hindrance to how globalization could have brought a lot more of shared wealth and less inequality
That is not how capitalism works.
palmfacehn
In that regard, Welch optimized for short-term metrics. Most of the diehard adherents to laissez-faire ideology speak at length about time preference. Willingness to forgo present consumption is the underlying source of investment gains.
If we accept the premise that Welch sold the goose that laid the golden egg for short-term "number go up" and immediate shareholder satisfaction, another question arises. Are there other non-market forces (such as easy money policies from the central bank, or an unfriendly domestic regulatory environment) which created this equilibrium? If so, then laying blame at the feet of "capitalist greed" or the trope of monocled Monopoly men in stovepipe hats, may be misplaced.
That said, I'm not sure that, "Jack Welch, the Man Who Optimized For the Corporatist Mixed-Economy" would resonate as well with audiences.
schmidtleonard
> Willingness to forgo present consumption is the underlying source of investment gains.
Squeezing people is an easier source of investment gains. In theory, competition keeps this in check, but competition is for the little guy. If you listen to business pitches or investor relations or take business classes you know the real game is all about avoiding fair competition by hook or by crook, and the biggest companies are the ones who have done this successfully. Two-sided markets, network effects, platform effects, last-mile dynamics, etc, etc, and yes, at the bottom of the the list of anticompetitive forces we have the runt red-headed stepchild of regulatory capture, which is real, but tends to be overstated by people who want blanket deregulation and reverse-engineer their complaints to get what they want.
> Are there other non-market forces which created this equilibrium?
Haha, and here we see the reverse-engineering process in action. Capitalism is never responsible for its own messes! Every mess MUST have come from a market distortion! Deregulation is always the answer!
p_l
The title resonates well with mainstream dogma of capitalism being objectively good, ignoring that it was just one aspect of what made "the good years" and was in fact quite limited by both physical and legal constraints, and sometimes pure ideological bent of some behemoths of industry (i.e. messrs Hewlett and Packard, impact of US military spending, etc).
Welch exploited a combination of events when a lot of those limitations (especially legal) ended, acting in extremely capitalist ways.
fidotron
> Um, why was someone's perfectly reasonable take downvoted to oblivion? Too much of a newcomer? Too many Welch devotees here?
At the risk of a serious tangent, the bots here have become so out of control that there is also a major anti-bot pattern that downvotes anything that remotely looks like a bot.
I know we aren't supposed to ever say HN is in decline, but LLMs really do look like they've killed it.
flyinghamster
At the rate things are going, LLMs are going to kill the entire web. I'm starting to think that's by design.
tuesdaynight
The rate is what is scaring me, honestly. I was expecting that the web would move even more to closed silos because of bots, but I was not expecting it to happen so soon. Maybe I'm too old for the rate of change of internet trends.
code_for_monkey
the culture on this site is a combination of reddit tech bro and linkedIn ceo-poster. Everyone here thinks they are the next great founder. You will toe the line of capital expansion over all or get downvoted.
kevin_thibedeau
I remember being downvoted for pointing out Musk's narcissism years ago when he was a saint on this site. The HN hive mind has it's own panoply of topics that are taboo to the tribe. On the plus side, I have noticed fewer unfair downvotes in the past few years. I rarely have to vouch for someone who makes a reasoned statement that offends the local snowflakes.
code_for_monkey
I get downvoted every time I point out that generative AI is at this point mostly a bad faith tech used by scammers and over confident CEO's desperate to lay people off.
mizzao
> The book covers 80 years—from the moments right after World War II and the way companies were behaving back then. This was the “golden age of capitalism” all the way to the highly unequal society we live in today.
Can someone summarize how companies were behaving in this golden age, or what characterized them?
bawana
By his logic, he would replace most humans w machines and ai. Can you see a world of ‘bezos,musks,trumps’ types protected and provided with their machines while they despoil the flora and fauna of the earth. Economies of scale fail when scale becomes very large.
roxolotl
As a typical American teenage boy I had a bout of libertarianism in high school. Atypically however it ended with my reading of Atlas Shrugged. Somehow my take away from the book was that clearly there are limits to selfishness and there’s a point at which everyone is dependent upon the systems they live in. Real selfishness is largely selfless. It just felt so much like a childish fantasy that I took away something I suspect Rand would be upset about.
Regardless I say that to say it bewilders me how easily we, well mostly Americans, fell into this trap of believing that most humans are unnecessary and all that matters is skill at amassing capital. After a certain point not only does the economy of scale break down the whole system collapses in on itself. I’m sure they’ll have a great time pontificating and self aggrandizing in the Gulch while everyone else is doing the real work of rebuilding.
9rx
> I say that to say it bewilders me how easily we, well mostly Americans, fell into this trap of believing that most humans are unnecessary
I suppose in hindsight they have a point. So much human effort is merely discovery that, if perfect information existed, really would have been pointless and unnecessary. Those who land into the right information, even if only by dumb luck, end up amassing capital as a natural consequence, so to the outside observer such people appear to be the "chosen ones" who have it all figured out.
This doesn't end with economics. In general, those who are deemed to not have the right information tend to be ostracized. To be wrong is the greatest sin a person, at least an American person, can make. This was particularly apparent during the high tensions of the COVID pandemic, where great friendships were lost when the parties involved couldn't agree on who had the right information.
The flaw in all that, of course, is that perfect information doesn't exist. I suspect the idea that it does was fuelled heavily by the college marketing campaigns of a several decades ago — that which also brought us the idea if you don't get a degree, you'll be forever stricken to flipping burgers at McDonald's — selling the idea that perfect information is available if only you choose to accept it. But, before you get your panties in a knot, let it be emphasized that my suspicions could be wrong and that's okay. Perfect information doesn't exist.
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al_borland
How did Trump get lumped in with Bezos and Musk? Trump was arguing to keep coal plants open for the jobs, and before politics was mostly in the luxury service industry where a robot server would be rejected outright.
Did I miss where he was pushing for the robots to take over?
bigfishrunning
I think you missed orange man bad, bad rich people all same bad, BAD!
Jack's greatest sin was transforming a manufacturing company into a financial institute. Similar to a family that takes on debt to appear wealthy it looks good in the short term but the debt always comes due eventually.
It never came due in Jack's time and he looked like an absolute genius. His successor should have been able to defuse the debt bomb over time, but because of the expectations of success that Jack left behind (and some glaring failures of the new CEO) the bomb was left in place and debt continued to pile up.
Of course the bomb went off eventually and the rest is history, GE is not a company anymore.
Aside from the moral issues of Jack's approach (layoffs etc) the true sin is the over financialization of everything in America which I think Jack really set the tone for.
I would highly recommend the book Power Failure with William Cohan. https://www.amazon.ca/Power-Failure-Rise-Fall-American/dp/05...