Posts Tagged ‘government’
“Whoever pays the consultant gets pretty much what they want to hear”*…
For as long as there has been business, there have been consultants– outsiders hired hired by organizations to advise (on strategy or marketing or whatever), find opportunities, or fix problems. And like any large class of vendors, it’s been a mixed bag; some of those counselors have been helpful, some less less so, and some, downright harmful. What we come to think of as “management consulting” has grown up over the last century or so.
But over the last four decades consulting has changed in a way analogous (and not altogether unrelated) to the rise of the financial sector over roughly that same period (e.g., from about 5% of GDP in the U.S to nearly 8%; globally, the World Bank estimates that financial services have grown to 20-25% of the world economy). While there are still myriad consulting firms offering an astounding array of services, “consulting” has come to denote an industry dominated by firms like McKinsey & Company, Boston Consulting Group, Bain & Company, PricewaterhouseCoopers, and Deloitte– an industry that has had astonishing growth in recent decades. The worldwide market for consulting services is now worth somewhere between $500 billion and $1 trillion a year.
Mariana Mazzucato and Rosie Collington‘s new book, The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies, traces that growth, and it’s too-often painful consequences…
The authors race through a medley of involvement in misconduct — price gouging vital medicines; corruption in South Africa and Angola; forest destruction from Brazil to Guyana; ICE detention camps; the asset-stripping of public services from health care to railways; brutal economic restructures of struggling economies; mass layoffs; tax-dodging; the 2008 crash; and the Enron scandal, to name a few. One quickly gains the impression that there isn’t a single major act of state or corporate malevolence in our lifetimes free of the big consultancies’ fingerprints.
But despite a roll call of cartoonish villainy, The Big Con is more of an academic intervention than a boilerplate attack on unscrupulous businesses. First, it challenges the consultancies’ fundamental value proposition: that the industry’s success is based on increasing efficiency and profits even in a narrow sense. Second, it interrogates and historicizes consultancies’ success, rooting it in the peculiar history of recent capitals. And finally, it makes a strident call not merely for undermining the power of McKinsey and similar companies, but for reinventing how we produce value in a time of huge challenges…
Collington and Mazzucato focus on several particular forms of business. There are the “Big Three” strategy consultancies; the “Big Four” accounting firms whose profit is today based far more in consultancy than in their original functions; the “outsourcing” firms that claim to offer specific services to government such as IT or security but in practice effectively perform the role of government; and smaller firms based in similar models.
This sector has been at the heart of a decades-long transformation in both business and government. In-house expertise and specialized knowledge have been eroded and replaced by dependence on consultancies and their short-term, one-size-fits-all methods.
Mass privatization is, of course, a far broader phenomenon than consultancies. NATO’s wars in Iraq and Afghanistan saw private military and security contractors explode in size relative to the armed forces, resulting in both huge financial costs and human tragedy…
The privatization doctrine has also been enforced on the developing world, with brutal results. In every case, the public purse assumes most of the risks and the private sector profits most of the rewards.
Twin ideological doctrines have underpinned such a shift. In business, the “managerial revolution” — in which internal expertise is deprioritized, workers are ignored, downsizing solves everything, and all incentives are subordinated to short-term shareholder value — has been comprehensive. Recently the Boeing 737 MAX incident, in which passenger aircraft were effectively programmed to crash themselves, was attributed to the consequences of this revolution.
And in government, the historic experience of state-led innovation from NASA to the UK National Health Service (NHS) has been forgotten, and replaced with the inflexible view that the state is always less efficient than the private sector; public servants cannot be trusted to work for the common good; and where government has to exist it should resemble business…
A powerful– and painful– critique of consultants: Nathan Akehurst on The Big Con: “Consultancies Have Been the Handmaidens of Neoliberalism,” in @jacobin.
See also: “Need a consultant? This book argues hiring one might actually damage your institution” (source of the image above)…
While the modern consulting industry has a history stretching back over a century, Mazzucato and Collington write that the use of consultants really exploded after the 1980s. That’s when proponents of freer markets, like Ronald Reagan and Margaret Thatcher, began dismantling government bureaucracies and regulations. More left-leaning “Third Way” leaders, like Bill Clinton and Tony Blair, continued in their wake. “Public sectors were transformed under the credo of New Public Management — a policy agenda that sought to make governments function more like businesses and diminished faith in the abilities of civil servants,” Mazzucato and Collington write.
As governments lost the faith and capacity to do things themselves, they increasingly turned to consultants to help them accomplish tasks. Governments began using consultants for seemingly everything, from devising new tax rules to advising armies to overseeing the privatization of state industries to administering IT departments to devising strategies on how to cut carbon emissions.
At the same time, private corporations also increasingly turned to consultants to help them become more profitable. And here, Mazzucato and Collington portray consultancies as opportunistically surfing wave after wave of destructive capitalism. McKinsey & Company, for example, was involved in the Enron scandal and profited from the opioid crisis, helping Purdue Pharma “turbocharge” sales of its OxyContin painkiller.
“The Big Con is of course not responsible for all the ills of modern capitalism, but it thrives on its dysfunctionalities — from speculative finance to the short-termist business sector and the risk-averse public sector,” Mazzucato and Collington write…
@NPR
* Matthew Stewart (an author and philosopher who worked in consulting for seven years before turning away)
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As we look askance at avaricious advice, we might recall that it was on this date in 1767, in a letter to Frederick II of Prussia, that Voltaire wrote “Doubt is an uncomfortable condition, but certainty is a ridiculous one.”
“Darkness cannot drive out darkness, only light can do that”*…
Noah Smith‘s sobering reflection on the rise of authoritarianism and illiberalism…
[This week] is the 20-year anniversary of the U.S. invasion of Iraq — a multi-decade debacle that would see hundreds of thousands of innocents killed, trillions of dollars flushed down the drain, America’s image in the Middle East destroyed, and the acceleration of the end of U.S. hegemony.
[This week] is also the [time] of the summit between Xi Jinping and Vladimir Putin, in which the leaders of the two authoritarian great powers reiterate their de facto alliance. With one of those powers actively engaged in a war of conquest against a peaceful neighbor, and the other threatening to do the same, the world is in danger of plunging back into the horrors of the early 20th century.
So this is the perfect [time] to repost a fairly melodramatic post that I wrote two years ago, about the rise of authoritarianism and illiberalism. I don’t apologize for the over-the-top language, since I think it’s difficult to overstate the danger; we humans have a strong tendency to stick our heads in the sand until it’s too late, and we need to wake up.
But we also need to remember a crucial piece of this story: It was American folly that began this baleful trend. Our victories in World War 2 and Cold War 1 gave the U.S. the unique opportunity to build a world where countries don’t invade other countries; when we invaded Iraq without cause or provocation, we threw away that opportunity. We brought back the principle of “the strong do what they can, and the weak suffer what they must”. We opened the gates, and allowed the Darkness back into our world. Now it’s our responsibility to help fix what we broke…
Illiberalism is on the march, all over the world- thoughts on what’s happening, why, and what we can do about it: “The Darkness,” from @Noahpinion. Eminently worth reading in full.
* Martin Luther King Jr.
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As we face the future, we might recall that it was on this date in 1933 that Germany opened its first concentration camp, Dachau. Initially intended to intern Hitler’s political opponents (communists, social democrats, and other dissidents), it’s “mission” was enlarged to include forced labor, and, eventually, the imprisonment of Jews, Romani, German and Austrian criminals, and, finally, foreign nationals from countries that Germany occupied or invaded. There were 32,000 documented deaths at the camp, and thousands that are undocumented. Approximately 10,000 of the 30,000 prisoners were sick at the time of liberation by U.S. forces in April of 1945.
“No man is an island, entire of itself; every man is a piece of the continent, a part of the main”*…
But in what does the “continent”– our community– consist? Further to yesterday’s piece on Epicureanism, Noah Smith argues that the internet has changed what “community” means…
… I think the kind of communities we inhabit has simply changed. In the past, our communities were primarily horizontal — they were simply the people we lived close to on the surface of the Earth. Increasingly, though, new technology has enabled us to construct communities that I’ve decided to call vertical — groups of people united by identities, interests, and values rather than by physical proximity… for most of history, most of the people you interacted with most of the time were the people who lived near to you — your horizontal community.
Horizontal communities can often be stifling and repressive, because they impose community norms on people with a diverse array of occupations, temperaments, and backgrounds. Sinclair Lewis’ novel Main Street is a great depiction of the ever-present, crushing conformity pressure of small American towns in the 1910s. But that social pressure was nothing compared to the pogroms, inquisitions, and genocides that enforced religious, cultural, and racial homogeneity in many of the world’s horizontal communities — and which still do, in some parts of the world.
When the people around you pressure you to be the same as them, you can use exit, voice, or loyalty — you can knuckle under and conform, you can fight back and rebel, or you can simply leave and find some place that you fit in better. A lot of immigration to the U.S. was driven by misfits looking for communities where they didn’t stick out as much. In the latter half of the 20th century, Americans themselves sorted into different parts of the country in order to create pockets of local political homogeneity.
In fact, our use of the word “community” to describe racial, religious, and sexuality groups is probably a relic of an ugly pattern of history, in which minorities were forced to live in circumscribed, segregated areas — Chinatowns, ghettos, the Castro in San Francisco — either by law, or by mass violence that made them unwelcome elsewhere…
But then the internet came along, and everything changed. Suddenly we stopped being isolated and started being social again, through the windows of our laptop screens and phone screens. There was a whole world of human interaction waiting there for us — forums, social media feeds, chat apps, online games, and so on. Suddenly we were surrounded by people all the time — or at least, their written words, and perhaps once in a while their pictures or videos or voices.
Constant internet usage allowed us to organize a far greater percentage of our human interaction around vertical communities. It let us find the people we identified with and interact with them, rather than being forced to interact with whoever was close to us on the map. We could surround ourselves with other anime fans, or other Muslims, or other economists, or other trans people — and we did. What were once notional bonds of connection that existed mostly in our minds became Facebook groups and subreddits and loose networks of Twitter contacts. And those spaces developed their own norms, rules, customs, and institutions, because now, thanks to the internet, it was easy to do that…
The identity-based “communities” that people talk about are thus no longer simply shorthand for a notion of cultural or political affinity with distant people, or for a fading memory of segregated neighborhoods. They’re thriving online verticals — archipelagos of online spaces where people can go to talk about what it means to be gay, or Jewish, or Pakistani. And like the small towns of Sinclair Lewis’ day, these vertical communities have the ability to use social ostracism to punish those who deviate from consensus norms and political objectives.
At the same time, horizontal communities didn’t completely vanish. We still educate our children in physical space (more or less), meaning we still have to deal with other children’s parents in a local community. Local government policies rule many of the aspects of our lives that are still offline — food, public safety, housing, transport — and this means we have to go to city planning meetings and school board meetings and various other community forums to hash out our differences with people who don’t share our interests or our identities. We now live in a world where our communities exist in three dimensions — the familiar hodgepodge of local humanity in two dimensions, and our self-sorted online spaces in a third.
And this dichotomy presents an enormous challenge to our institutions… for now and for the foreseeable future, our public goods are provided locally, but our social interaction happens in the cloud. In theory, this could be a dangerous recipe…
Eminently worth reading in full: “Vertical Communities” from @Noahpinion.
* John Donne
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As we find our folks, we might recall that it was on this date in 1933 that The Lone Ranger debuted on Detroit’s WXYZ radio station. Created and written by station-owner George Trendle and Fran Striker (who went on to create the Green Hornet and Sgt. Preston of the Yukon), they aimed create an American version of Zorro. Though (or perhaps because) they worked with no real knowledge of Texas in the period, their creation became an American icon, succeeding on radio, television, in comic books, film shorts, feature films, books, and newspaper strips.
“Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation”*…
An opportunity to learn from one of the best: Pirkko Lindberg on Finalnd’s public libraries…
Library services are the most used cultural services in Finland, 50 % of all citizens use the library at least once a month and 20 % use it weekly. A national user inquiry from 2013 showed that experiences of the users according the benefits of the library are remarkable. Nine out of ten respondents told that libraries have made their life better. Finnish people are also heavy library users, last year my library, Tampere City Library, had 22.5 lends/inhabitant. Lending is not decreasing, for example children´s loans went up 6 % last year!
Finland is one of the few countries in the world that has own Library Act, the law that defines tasks and official guidelines to public library`s work. The first Finnish Library Act was published 1928 and it has been renewed several times during decades. The Act must live and develop with the society and it has to reflect surrounding environment and changes in the society. Digitization, economic crises and the changes in the municipalities requires authorities to update the Library Act in Finland…
The new act enhances in the new way libraries’ tasks in the society. The act´ s goal is to promote among other things citizen´s equal possibilities to civilization and culture, possibilities to lifelong learning, active citizenship and democracy. To implement these goals the baselines are commonality, diversity and multiculturalism…
License to cure – the new Finnish Library Act gives a mandate for better citizenship: “New Library Act and New Strategy for Finnish Public Libraries from @IFLA.
See also: “Light and enlightenment: libraries in Finnish cultural identity” (source of the image– the third-floor reading room in the Helsinki Library– above)
* Walter Cronkite
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As we check it out, we might recall that it was on this date in 1836 that disaster befell a very specialized “library”: a fire destroyed the U.S. Patent Office (which shared quarters in Blodget’s Hotel with the Post Office). All records of nearly 10,000 patents issued over 46 years– all the patents issued to that date– were lost, most forever, along with around 7,000 patent models filed with them. All patents from prior to the fire were listed later as X-Patents by the office (having been reconstructed by getting copies of the approved applications from inventors).
In response to the fire, Congress made the Patent Office (which had been part of the Post Office) its own organization under the United States Department of State. Henry Leavitt Ellsworth, its first Commissioner, immediately began construction of a new fire-proof building, that was not completed until 1864. But a fire in 1877 destroyed the west and north wing of the new building and caused even more damage.
Blodget’s Hotel with stagecoach parked in front, in around 1800s—before 1836 Great Fire (source)
“Nothing is more wonderful than the art of being free, but nothing is harder to learn how to use than freedom”*…
Lynn Hunt on Alexis de Tocqueville, who left France to study the American prison system and returned with the material that would become Democracy in America…
Alexis de Tocqueville was a study in contradictions: a French aristocrat of proud heritage who trumpeted the inevitable, salutary rise of democracy, using the United States as his exemplar; a cosmopolitan with an English wife and many friends in the Anglo-American world who brandished a fervent French nationalism; an antislavery advocate who felt no discomfort in supporting the French colonization of Algeria and hired as his main assistant Arthur de Gobineau, who later published one of the founding texts of white supremacy; and finally a man of delicate constitution who undertook an arduous trip on horseback into the wilderness of northern Michigan in order to see Native Americans and new settler communities for himself. Such inconsistencies make for a fascinating story, and in The Man Who Understood Democracy, Olivier Zunz, a French-educated historian who has taught US history for decades at the University of Virginia, shows that he is ideally suited to tell it.
Tocqueville’s Democracy in America, published in two volumes in 1835 and 1840, became an instant classic and has remained one to this day. On its hundredth anniversary in 1935, the French government presented a bust of the author to Franklin D. Roosevelt, and an article at the time referred to the book as “perhaps the greatest, most lucid, and most impartial commentary that free institutions in general, and American self-government in particular, had ever received.” Democracy in America served as a kind of textbook for US students for many generations, but it is now more often cited than read. That dutiful disregard may be the fate of all such masterworks, especially one that runs about eight hundred pages, but Zunz has succeeded in restoring its appeal, first by vividly retracing its origins and then by skillfully evoking the enduring excitement and relevance of its analysis…
Alexis de Tocqueville, the Frenchman who unpacked the tension between freedom and equality in the United States: “‘A Great Democratic Revolution’.”
* Alexis de Tocqueville– who went on to observe that “Americans are so enamored of equality, they would rather be equal in slavery than unequal in freedom.”
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As we dedicate ourselves to democracy, we might note that today is Fibonacci Day, as today’s date is often rendered 11/23, and the Fibonacci sequence (also here and here) begins 1, 1, 2, 3…
Five Ways to Celebrate Fibonacci Day.
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