The Battle for the Soul of Capitalism: How the Financial System Undermined Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions—and What to Do About It Kindle Edition

by John C. Bogle (Author), Peter G. Peterson (Contributor) Format: Kindle Edition

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The legendary founder of Vanguard “presents an insider’s view of what’s wrong with corporate America and what can be done to improve it” (Burton G. Malkiel, author of A Random Walk Down Wall Street).

New York Times-bestselling author of Enough and The Little Book of Common Sense Investing John Bogle has seen firsthand the innermost workings—and grotesque abuses—of the financial industry, and is renowned as an advocate for the small investor and for the restoration of integrity to the system. He knows that a trustworthy business and financial complex is essential to America’s continuing leadership in the world and to social and economic progress at home.

In this book he reveals what went wrong and how we lost our way—and more importantly, how we can right our course. He argues for a return to a governance structure in which owners’ capital that has been put at risk is used in their interests rather than in the interests of corporate and financial managers. Given that ownership is now consolidated in the hands of relatively few large mutual and pension funds, the specific reforms Bogle details in this book are essential as well as practical—and should be considered by every investor, analyst, Wall Streeter, policy maker, and businessperson.

“Deserves attention in the precincts of power.”—Publishers Weekly

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Editorial Reviews

From the Author

Q: You say that individual investors have paid a heavy price for the abuses that occurred within the corporate, investment and mutual fund communities during the past few years. In what ways?A: Individual investors have incurred high losses by paying excessive costs for executive compensation and purchasing overpriced stocks from option-enriched executives and entrepreneurs. Investors have also sacrificed returns by paying excessive management and marketing fees to funds that have delivered market-inferior returns. These costs can deprive investors of as much as 75 percent of the potential longterm returns available in the stock market simply by owning an S&P 500 Index Fund.Q: Despite the problems you point to in the book, you remain optimistic about the future. What are some of the things that make you hopeful?A: Progressive public policy has begun to move toward the creation of a better world for investors, with laws and regulations designed to enhance the accuracy of financial statements, to increase the responsibilities of directors, and to give owners opportunities to ensure that their interests are served. However, the greatest reforms will come when an even better educated and informed investing public takes action in its own enlightened self interest.Q: If you were to distill your book down to a few key messages, what would those be?A: It is time to abandon the managers’ capitalism that has shaken our society’s belief in the fairness of the system and return to the owners’ capitalism that built our nation. We need to build independent boards of directors who will provide prudent stewardship of the assets of the owners. We need the new controlling stockholders of corporate America—the mutual and pension funds—to act responsibly and solely in the interests of their investors. We need to create far more efficient systems for retirement savings that assure investors and beneficiaries of their fair share of market returns. To begin these tasks, we need to form an independent federal commission to evaluate our new agency society, with a view toward restoring fiduciary duty and trust as its objective. --This text refers to an out of print or unavailable edition of this title.

From Publishers Weekly

Despite its inflated title, this volume is a worthy jeremiad against corporate excess, especially the kind hastened by the mutual fund industry that Bogle, former CEO of low-cost Vanguard, knows well. Among the problems: inflated executive compensation and creative accounting that allows companies to claim profits even when they're in the red. Mutual fund companies, Bogle charges, care more about short-term results than long-term value, and many of them gain profits for larger parent corporations by charging investors unnecessary fees that undermine the funds' net returns. To remedy such problems, Bogle writes, mutual fund owners and their fiduciaries must exercise the corporate responsibility they now shirk, and fund boards must be reshaped to serve the interests of shareholders. He advances in all seriousness Warren Buffett's once-joking idea for a high tax on short-term trading gains and calls for a federal commission to examine the way pension funds are managed, as well as the state of our retirement systems in general. While other recent books, such as David Swensen's Unconventional Success: A Fundamental Approach to Personal Investment, marry similar criticisms with more advice for individual investors, Bogle—a rock-ribbed Republican businessman—still deserves attention in the precincts of power. (Oct.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to an out of print or unavailable edition of this title.

Review

"This is an important book for the post-Enron era. In his characteristic hard hitting style, one of the legends of the mutual fund industry presents an insider’s view of what’s wrong with corporate America and what can be done to improve it."—Burton G. Malkiel, Princeton University (Burton G. Malkiel )

Simply put, capitalism has too many characters and not enough men of character. When one of the few tells us that the system he loves is ailing, and how he''d fix it, we had best listen."—Cliff Asness Ph.D., Managing and Founding Principal, AQR Capital Management

(Cliff Asness )

"In his characteristic style, Bogle delivers strong medicine for what ails our capital markets and corporate governance framework. Not all will agree with everything that he has written, but they would be wise to take note, as his message is resounding and his proposals go to the heart of crucial debates about management, ownership, and value creation."— Devin Wenig, President, Business Divisions, Reuters Group

(Devin Wenig )

“Jack Bogle has written a brilliant and insightful book that highlights the many ways that our economy has suffered because managers have placed their own economic interests ahead of those of owners and investors. Bogle offers prescriptions that, if enacted, will help prevent a repeat of the scandals that we have witnessed over the past five years.”—Eliot Spitzer, Attorney General, New York

(Eliot Spitzer )

"John Bogle has written an insightful book with great historical and contemporary perspective. His analysis of what has gone wrong and what needs to be done should be required reading for students, financial practitioners, and official policymakers."—Henry Kaufman, President of Henry Kaufman and Company, Inc.

(Henry Kaufman )

"This is a must-read book for anyone interested in how to restore badly needed integrity, and efficiency, to our capital markets."—Honorable Peter G. Peterson

(Honorable Peter G. Peterson )

"Bogle describes the continuous struggle for control of our capitalistic system, the odds being heavily in favor of the managers. Individual investors and beneficiaries remain helpless, intermediaries are passive or conflicted, and boards not yet effective. You owe it to yourself to read this book and reflect on his call for further federal intervention to restore some balance."—Ira Millstein, Senior Partner, Weil, Gotshal & Manges LLP (Ira Millstein )

"A wake-up call to policy makers. Anyone who cares about the future of [America] needs to read [this] book."—Jack Treynor, President of Treynor Capital Management, Inc.

(Jack Treynor )

"Once again Jack Bogle is the clearest and most courageous voice pointing out critical flaws in our governance and financial system but also showing in constructive, brilliant ways how to make the timely repairs. This book presents a rare blend of erudition, experience, and utility. It should be required reading for CEOs, public policy leaders, and MBA students—if not all informed investors."—Jeffrey Sonnenfeld, Yale University

(Jeffrey Sonnenfeld )

"In this tour de force, Bogle subjects corporate America to a forceful critique. Keen insights, rich experience, and moral courage shine throughout. Anyone interested in our corporate system should read this book, and those who do will never see corporate America the same again."—Lucian Bebchuk, Harvard University

(Lucian Bebchuk )

"This superb book should be a required reading for every business student in college. Like a fine surgeon, Jack Bogle dissects what is wrong with the capital markets from an investor’s view, and at the same time provides a well-reasoned cure."—Lynn Turner, Former Chief Accountant of the U.S. Securities and Exchange Commission

(Lynn Turner )

"Jack Bogle has done more to protect corporate shareholders from mounting abuses at the hands of greedy and negligent CEOs, directors, and money managers than anyone in America. The case he makes here is so powerful and well reasoned that our Washington politicians will be hard pressed to ignore it."—Mario Cuomo, 52nd Governor, New York State

(Mario Cuomo )

"John Bogle has done more to help ordinary investors than any other person in America today. He continues his battle on behalf of shareholders with this impassioned new book. Every investor and every policy maker should read his ideas for reform."—Peter Fitzgerald, U.S. Senator for Illinois, Retired (Peter Fitzgerald )

"The American wage earners’ pension and 401(k) savings are now a major source of capital. Incredibly, although the source of capital is democratized, wealth is more concentrated. Jack Bogle finds this contradiction unacceptable and in this book shows us how to democratize the rewards of capitalism."—Ray Carey, author of Democratic Capitalism: The Way to a World of Peace and Plenty

(Ray Carey )

"This book is a gift to the reading and investing public. Bogle uniquely understands mutual funds and everyone needs to listen when he warns of the deceptions that have plagued the industry. Investors will profit if they follow his simple straightforward advice."—Robert A.G. Monks, author of Corporate Governance

(Robert A.G. Monks )

"Jack Bogle’s The Battle for the Soul of Capitalism is arguably the most important treatise on the bubble era. Policymakers, investment fiduciaries and individual investors should read and act upon Bogle’s prescriptions. The stakes are high: our collective financial souls."—Steve Galbraith, Limited Partner, Maverick Capital

(Steve Galbraith )

"Jack Bogle says exactly what needs to be said, and he does it with gusto. His tales and lessons should be required reading for any business leader, plus they offer great insights for smart investors."—Walter Isaacson, The Aspen Institute
(Walter Isaacson )

"Over the past half century, American capitalism nearly lost its soul. One of the few who noticed was Jack Bogle. Now, for the first time, he tells the whole tale as only Jack Bogle can: just what happened, just how it happened, and just how to fix it. This is mandatory reading for anyone with a dollar to invest or an interest in the future of American capitalism."—William Bernstein, author of The Birth of Plenty

(William Bernstein )

"Jack Bogle’s brilliant tour de force provides the first integrated view of how our system of investing often destroys more value than it creates. Bogle clearly understands how the system works and how perverse motivations are undermining value creation. Always a pragmatic, he offers workable and practical solutions of how to get back on track."—William W. George, Former Chairman and CEO of Medtronic, Inc.

(William W. George )

"Bogle . . . makes clear what went wrong and who is to blame."—Paul B. Brown, New York Times

(Paul B. Brown New York Times )

“[Bogle’s] book is yet another important contribution in an illustrious career.”

(Jeff Madrick New York Times Book Review ) --This text refers to an out of print or unavailable edition of this title.

About the Author

John C. Bogle is founder and former CEO of Vanguard mutual funds. In 2004, Time magazine named him one of the most influential people in the world. In 1999, Fortune magazine named him one of the four investment giants of the twentieth century. --This text refers to an out of print or unavailable edition of this title.

ASIN ‏ : ‎ B002CJM12M
Publisher ‏ : ‎ Yale University Press (November 1, 2005)
Publication date ‏ : ‎ November 1, 2005
Language ‏ : ‎ English
File size ‏ : ‎ 2618 KB
Text-to-Speech ‏ : ‎ Enabled
Screen Reader ‏ : ‎ Supported
Enhanced typesetting ‏ : ‎ Enabled
X-Ray ‏ : ‎ Not Enabled
Word Wise ‏ : ‎ Enabled
Print length ‏ : ‎ 345 pages
Lending ‏ : ‎ Enabled

Best Sellers Rank: #199,284 in Kindle Store (See Top 100 in Kindle Store)
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- #47 in Investing Portfolio Management
- #53 in Free Enterprise

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John C. Bogle

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John C. Bogle (Bryn Mawr, PA) is Founder of The Vanguard Group, Inc., and President of the Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as Chairman and Chief Executive Officer until 1996 and Senior Chairman until 2000. He had been associated with a predecessor company since 1951, immediately following his graduation from Princeton University, magna cum laude in Economics. The Vanguard Group is one of the two largest mutual fund organizations in the world. Headquartered in Malvern, Pennsylvania, Vanguard comprises more than 100 mutual funds with current assets totaling about $742 billion. Vanguard 500 Index Fund, the largest fund in the group, was founded by Mr. Bogle in 1975. In 2004, TIME magazine named Mr. Bogle as one of the world's 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award. In 1999, FORTUNE designated him as one of the investment industry's four "Giants of the 20th Century." In the same year, he received the Woodrow Wilson Award from Princeton University for distinguished achievement in the nation's service."

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James Charnock

About What We Investors Don't Know

Reviewed in the United States on December 23, 2007

Verified Purchase

The first half of Bogle's volume gives a detailed explanation of the problems with our stock market; the second half gives his solution proposals. And if John Bogle doesn't know what is going on both openly and behind closed doors (read his qualifications), then no one does.

This book describes how stock (mutual fund and corporate) managers are not "honest, competent and fair-minded...[or] doing the right thing." (p. 89) And just how the "managers' interest [are placed] ahead of the owners' interest." (p. 90) The recurrent theme is that corporate America has moved from owners' capitalism to managers' capitalism.

Bogle describes "the pervasive...'happy conspiracy' among corporate managers, CEOs, CFOs, directors, auditors, lawyers, Wall Street investment brokers, sell-side security analysts, buy-side portfolio managers, and indeed investors themselves--individual and institutional alike." (p. 98)

"More than one-fifth of...growth returns...during the past two decades has been siphoned off by fund managers.... More than three-fourths of the cumulative financial wealth produced...over an investment lifetime will be consumed by fund managers, leaving less than 25 percent for the investors. Yet it is the [95 million] investors ['individuals of modest means--often via retirement plans'] who put up 100 percent of the capital and assume 100 percent of the risk." (p.xxii)

Not only does the author write about the "Captains of Industry" (or robber barons)--Rockefeller, J.P. Morgan and Carnegie--he deals with the current "casino mentality of so many institutional investors..." (p. 98) Yes, you will read of "the conspiracy between corporate money managers and institutional money managers. [We have] a gambler's market instead of an investor's market," declares Bogle. (p. 118)

Bogle explains why "institutional investors [should] move away from their present obsession with short-term earnings of dubious validity and towards a new obsession focused on the creation of intrinsic value over the long term." (p. 114)

Finally, Bogle does not let we individual investors off easy, either, by explaining "the failure of investment America to exercise its ownership rights over corporate America.

As stated earlier, Bogle has solutions which you will read about in the second half of the book.

10 people found this helpful

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Barbara newman

The case for index investing

Reviewed in the United States on June 27, 2014

Verified Purchase

This book is worth your time. It outlines how there have been philosophical changes in American Business in the last 50 years at the corporate, investor, and mutual fund levels. Owners of business and investors in mutual funds have less control over their outcome and the managers have more control. The central thesis of the book is that the managers have more self interest in the bottom line and manage only for short term gain. This contrasts to ownership control which result in a focus on long term welfare of the business and quality of the product. The last part of the book focus's on the mutual fund industry and shows how managerial greed has skimmed off a lot of profits that should go to the investors (public owners). The case for index investing becomes more apparant and this seems logical since John Bogle the founder of Vanguard wrote it. It got a 4 because I felt that Bogle at times was too repititious and could have used more concrete examples in the book, but I learned a lot.

4 people found this helpful

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dietmar Henning

The best from the best

Reviewed in the United States on February 13, 2021

Verified Purchase

Bogle is precise, honest and trustworthy. The book should be updated.

One person found this helpful

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Allan S. Roth

A Battle That Must Be Won

Reviewed in the United States on October 18, 2005

Verified Purchase

John Bogle points out what should have been obvious to me - that the ultimate owners of investment capital have virtually no influence on how their own capital is used. Instead the agents of the owners control the capital and act in a very self-interested incestuous manner. In short, they have stolen the soul of capitalism and robbed investors of trillions of dollars.

This book could only have been written by John Bogle, the man that has saved the common investor billions of dollars annually by refusing to operate in a status quo manner. This book eloquently explains what went wrong, why it went wrong, and most importantly, what we can do to fix it. I was steaming mad as I again realized how our trusted fiduciaries violated their duties of loyalty and prudence. The big question for me is will I stay mad enough to actually do something about it?

I highly recommend this book. It may be the first major shot in a long battle for capitalists to take back control of our own capital.

40 people found this helpful

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Mark Mensack

"Rules cannot substitute for character."

Reviewed in the United States on November 26, 2009

Verified Purchase

This is a must read for all investors and anyone working in the financial services industry. Written in 2005, Mr. Bogle outlines many of the underlying issues that have made headlines these past two years: corporate greed, neglect of the individual client's interests, the lack of personal responsibility, and the quibbling over what is right vs. what is legal.

Mr. Bogle discusses capitalism from the virtuous potential described by Adam Smith and the Founding Fathers, to the "giant scam" the investment business has become. Four years before President Obama called for a fiduciary standard for broker-dealers, Mr. Bogle argues why the fiduciary standard is a necessity.

If you have any question whether or not acting with honor and integrity, and serving the best interests of your clients ultimately leads to business success, then this book ought to be at the top of your list.

7 people found this helpful

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Geoffrey Williams

The Battle for the Soul of Capitalism

Reviewed in the United States on February 20, 2006

Verified Purchase

This should be required reading for anyone who ever invested for their future or plans on doing so. The grim picture that Bogle paints of our elected officials being overwhelmed by the investment institutions community should alarm every citizen. The casino mentality that is driving our investment practices is well described and easy to grasp for lay people as well as strong medicine for institutional investors who are critical to the survival of shareholder capitalism.

3 people found this helpful

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@iamserda

It is a fantastic read.

Reviewed in the United States on May 24, 2014

Verified Purchase

Mr. Bogle plainly lays out the problem with capitalism, but more importantly, he gives us the solution that will return capitalism to its owners and value creation. It is a fantastic read.

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C. Wallace

Open your eyes

Reviewed in the United States on November 20, 2018

Verified Purchase

Great insight into how 401k investments aren’t the best. Do your due diligence.

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Dr.Anil

HIGHLY RECOMMENDED, a very bold book from father of vanguard ...

Reviewed in India on August 19, 2014

Verified Purchase

HIGHLY RECOMMENDED , a very bold book from father of vanguard group JHON C. BOGLE who invented the first vanguard 500 INDEX FUND IN 1976 ,which is now the largest fund and vanguard the largest fund house in the world.

Rudolf T. Sonderegger

Ein Markstein der Finanzgeschichte

Reviewed in Germany on March 23, 2014

Verified Purchase

Hier schreibt ein Kenner der Materie, aus jahrzehntelanger Erfahrung und aus Überzeugung. Leider werden die Verantwortlichen nicht auf ihn hören. Schade!

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