In The Big Con, Mariana Mazzucato and Rosie Collington claim that our overreliance on the consulting industry has negative consequences for society, inhibiting knowledge transfer and corporate and political accountability. The authors expose how consultancies’ goal of “creating value” may not align with addressing major issues such as climate change, arguing convincingly for greater transparency and a revitalised public sector, writes Ivan Radanović.

The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies. Mariana Mazzucato and Rosie Collington. Penguin Press. 2024 (paperback; 2023 hardback).

In their book The Big Con, Mariana Mazzucato and Rosie Collington warn that relying on consultancies harms the public interest. Asking what happens to the brain of an organisation when it is not learning by doing because someone else is doing the doing, they conclude that societies must return public purpose in centre of attention.

The authors’ thesis is that overreliance on consultancies harms public interest, disables governments, and threatens democracy.

In 2021, the consulting industry was valued at over 900 billion dollars. Its ninefold rise since 1999 is the result of rising reliance of states on consulting agencies. The authors’ thesis is that overreliance on consultancies harms public interest, disables governments, and threatens democracy. They investigate this trend and how to reverse it.

The “Big Con” is the term Mazzucato and Collington use to mark the biggest auditing, accounting, and consulting agencies such as Ernst & Young (EY), KPMG, PwC, Deloitte, McKinsey, Boston Consulting Group (BCG), Accenture and others. The consulting market emerged during early industrialisation, when engineers, periodically recruited by major industrial firms, formalised their work. In the 1920s many consultants, among them James McKinsey, cooperated with American businesses. The popularity of management consultancy rose in 1970 when BCG introduced the matrix for mapping the profitability of business portfolio. After two years, this tool was used (and paid for) by more than 100 enterprises. American firms, on the wings of the Marshall plan and later IT management projects, have spread throughout Europe.

Golden years

The election of the right-wing populists Margaret Thatcher in the UK (1979) and Ronald Reagan in the US (1981) occurred after a decade of economic turmoil, led by the end of the Bretton Woods system and two major oil crises. The opinion that the responsibility for the turmoil lay in how states were run mushroomed. The neoliberal credo was that the only value creators in society are markets, and with Thatcher and Reagan, favour was refocused from the worker to the citizen-taxpayer.

The neoliberal credo was that the only value creators in society are markets, and with Thatcher and Reagan, favour was refocused from the worker to the citizen-taxpayer.

Contrary to the belief that the essence of neoliberalism is to slash public spending, Mazzucato and Collington suggest “it is more precise to describe it as public spending redirection towards the stronger role of the market” (49). In Thatcher’s era (1979-1990) government expenditure rose in real terms by 7.7 percent (43). In Reagan’s (1981-1989) federal spending rose by almost nine percent annually (43). From the US to Australia, thousands of neoliberal reforms such as privatisation, deregulation or outsourcing states had to be implemented, and advised. The authors show us that the annual public spending for consulting in the UK from 1979 to 1990 rose fortyfold – from 7.1 million to 290 million dollars. The 1980s saw the advent of a new management doctrine. In place of earlier stable forms of organisational life emerged the model of flexible “learning organisations” which view instability as an opportunity. The main goal becomes maximising value for shareholders. In the 1990s, that led to the popularisation of storytelling in politics and business. It is no longer a product or brand that is sold, but the story about value, challenges and business success through positive change, peddled by elite consultants or management gurus.

Creating the impression of value

Today, consultants are seen as experts who transfer know-how and utilise advanced management techniques to improve clients’ businesses. The enormous rise of consulting in the last four decades is explained by the “value” they create for states and companies. However, according to the authors, consultants do not always meet expectations and they seldom transfer knowledge. Created “value” is often unclear and depends on the perception of the client. Consultants hustle to create the impression of value.

Created “value” is often unclear and depends on the perception of the client. Consultants hustle to create the impression of value.

There are many examples where engaging consultancies has backfired for states. In developing countries such as Nigeria, Mexico and Angola, hiring consultancies was a condition of their IMF loan agreements (50). The authors focus on wealthy countries, arguing that even if contracting consultants experienced in the implementation of complex macroeconomic programmes could be justified in developing countries, it is less justifiable in developed countries, which should ostensibly have high competency in these areas.

Unmet deadlines, spiralling costs

Consultancies often fail to deliver on their promises. In 2010, Sweden started the construction project for a new university hospital in Stockholm which would be the most advanced in Europe. Its operations were to be grounded in “value-based healthcare”, a concept designed by management guru Michael Porter. Costs were initially valued at 1.4 billion euro, with the project set to be completed in 2015. City authorities opted for a public-private partnership which contracted consultants from PwC and EY who claimed they would ”maximise the value and keep the costs under control” (145). Representatives from the construction company Skanska stated that this model would “transfer the risk from the state and taxpayers to the private sector” (145). However, the costs immediately surpassed the projections because vital equipment had not been included in the budget The project, beset by problems, was passed to BCG, who had nine consultants working on its implementation while earning a monthly salary of almost 70,000 euros over six years. Another consultancy, Nordic Interim AB was then contracted for an additional 12 million euro, and when the hospital was eventually finished in 2018, costs a billion euros higher than the original estimate.

Absence of accountability

It is not all about money. Consultancies contribute to many undemocratic practices, maintaining what Acemoglu and Robinson named as extractive institutions. Often, they act as a mechanism for public wealth extraction, whereby states recruit consultants when they want to “hedge” the political risk of unpopular economic measures. The states maintain legitimacy, and consultants get their share of political influence. Authors emphasise the example of Puerto Rico, which faced bankruptcy in 2016. Then-President Obama initiated the creation of an Oversight Board to supervise the bankruptcy process. Keeping reputational risk low, Washington ensured that the majority of members of the Board were of Puerto Rican heritage. The Board did not hire a large staff, to avoid looking like it was setting up a parallel government. Instead, it brought in consultants. Instead of the state, McKinsey engaged in the privatisation of public enterprises, healthcare reforms “based on value”, slashing public spending and restructuring debt. Moreover, McKinsey owned $20 million of Puerto Rico’s bonds: consultants were set to profit from the very same debt they were helping to restructure.

Regaining control

Even though consultancies did not cause the maladies of neoliberal capitalism, they have profited from them. Without transparency and democratic permission, they erode the capabilities of states and enterprises. Because knowledge is not cultivated within state workforces and institutions, a dependency on the “expertise” of consultancies spirals.

[Consultancies] erode the capabilities of states and enterprises. Because knowledge is not cultivated within state workforces and institutions, a dependency on the “expertise” of consultancies spirals.

The last section of the book is about “climate consulting”. Omnipresent and long-term, climate change is ideal ground for consultants. Competition is fierce; consultancies’ “websites are replete with beautifully designed free reports on sustainability issues for every sector, from oil and gas to healthcare” (190). They promise solutions, pitching themselves as an avant-garde of change.

The key takeaway, according to Mazzucato and Collington, is that we must challenge the predominance of consultancies. With their ultimate goal of “creating value”, they advise both the fossil polluters and the governments mandated to reduce emissions. Moreover, states are catalysts of technological change for public good, while the private sector only invests in fundamental research when it becomes enticingly profitable.

Putting aside the authors’ techno-optimistic view – which holds that climate change mitigation is mostly a technical issue regarding innovations for green transition, which is being debunked – their final suggestions are valid. A new narrative and vision for the role of the state, recovering public capacities, embedding knowledge transfer into consulting contracts’ evaluation and mandating transparency are, undoubtedly, desirable. The book’s importance lies in how it reveals the political implications of the consulting industry. Whether we choose “green growth” or abandon the growth imperative, one thing is certain: democratically elected governments are key actors. Only they can mobilise the resources required for achieving “moonshot” missions, the most urgent of which is climate change.

Note: This interview gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.

Image credit: Alena Veasey on Shutterstock.

In Late Fascism: Race, Capitalism and the Politics of Crisis, Alberto Toscano unpacks the rise of contemporary far-right movements that have emerged amid capitalist crises and appropriated liberal freedoms while perpetuating systemic forms of violence. According to Dimitri Vouros, Toscano’s penetrating, theoretically grounded analysis is an essential resource for understanding and confronting the resurgence of reactionary ideologies.

Late Fascism: Race, Capitalism and the Politics of Crisis. Alberto Toscano. Verso. 2023. 

Observing the leftwing populism that emerged after the 2007 financial crash, a perceptive critical theorist may have predicted that this hope-inspiring movement would quickly be reintegrated into the neoliberal order. They might further have predicted that a counter-revolution would arise in the vacuum left by the failed leftist movement and as a reaction to continuing economic difficulties. Indeed, in the last decade the rise of the populist right has been both steady and near universal.

[Toscano] sets out to explain why the spectre of the extreme right is not merely haunting us, but gaining political purchase across the globe

In Late Fascism, Alberto Toscano, who has been instrumental in the resurgence of Marxist and materialist sociocultural analysis over the past twenty years, offers an important theory of fascism for our current historical juncture. He sets out to explain why the spectre of the extreme right is not merely haunting us, but gaining political purchase across the globe. The measured, lapidary style of Toscano’s argument, which draws on the 20th century’s “rich archives” of antifascist thought (155), most of it Marxist or marxisant, treats the deep, structural aspects of the political often ignored by other analyses. He does this by leaning on a style of literary-philosophical excavation and elucidation more often found in classical critical theory like that of Theodor Adorno and Walter Benjamin.

One of the marks of fascism is to amalgamate seemingly incompatible positions. Indeed, it is a complex phenomenon, “scavenging the ideological terrain for usable materials”, including many currents on the left (155). Toscano does not follow mainstream political theory in conflating fascism with totalitarianism, command economies, and brute force. He argues that late fascism is “disanalogous” with historical fascisms. Instead, he focuses on the implicit forms of violence and repression – colonial, racial, sexual, and gender-based – that inform late fascism. This kind of hidden violence becomes especially noticeable, and acute, when capitalism faces financial and other crises.

As well as developing the idea that reactionary ideologies emerge out of capitalist crisis, notably as the co-option of working-class movements by the right as soon as the opportunity arises, Toscano notes the role capitalist exchange relations play in the epistemological foundation of fascist-adjacent ideologies. Yet the most original thesis in the book is that the touted freedoms of liberalism and free-market capitalism are also appropriated by late fascism. In fact, late fascism is only nominally attached to liberal ideals such as “individual action” and “free speech”. Its claim to be on the side of the individual and their political agency is clearly false, its objective really being to reproduce prior forms of subjection and create new forms of subjugation. Jessica Whyte has also suggested a similar dissimulation in the neoliberal support for human rights.

The rapid rise of this ideology may also be tied to online culture, although Toscano avoids elaborating on the political ramifications of this development. Instead, he gives a historical outline of classical Marxist arguments against reactionary thought and movements. As the subtitle of his book indicates, understanding the ideology of the far right must include a theory of the systemic reproduction of colonialism, racism and sexism. Toscano writes, “Whoever is not willing to talk about anti-capitalism should also keep quiet about anti-fascism” (158). Yet understanding fascism as a tendency within capitalism that merely continues what critical theory calls “identity thinking” is part of a critical venture “inseparable from the collective forging of ways of living that can undo lethal romances of identity, hierarchy and domination that capitalist crisis throws up with grim regularity” (158).

Understanding the ideology of the far right must include a theory of the systemic reproduction of colonialism, racism and sexism

Four key ideas explain late fascism. Firstly, it “cannot be understood without the “fascisms before fascism” that accompanied the imperialist consolidation of a capitalist world-system”, namely, the political and economic domination of the world by Europe, peaking in the 18th and 19th centuries, made possible by the material exploitation of its various colonial strongholds. Secondly, it can only be understood “across axes of race, gender and sexuality”. Thirdly, it includes the “desire for ethnonational rebirth or revanche stoked by the imminence of a threat projected as civilizational, demographic and existential”. Lastly, it involves “the production of identifications and subjectivities, desires and forms of life, which do not simply demand obedience to despotic power but draw on a sui generis idea of freedom” (156-57). These four aspects of late fascism are developed in some detail with a breadth that will satisfy anyone interested in the history of antifascist thought and resistance.

Each chapter provides a different window onto the ideology of fascism and explains why understanding it is imperative. The first chapter looks at the temporally destabilising aspects of fascist ideology, with its archaisms, anachronisms, and wrong-headed projections of majestic, uncorrupted futures. The second focuses on the dynamics of capitalism and race, mainly how the Black liberation struggles of the 1960s provide a template for understanding the racial nature of capitalism, with its continuing repression of minorities and punitive carceral system. The third chapter provides an overview of how the populist right appropriates the classical liberal understanding of individual freedom and toleration for its own purposes. It inverts such individualism, supporting the dominant narrative of equality; namely, the freedom to accumulate property and social power (the latter being skewed along racial and sexual lines, ie, white, male or heteronormative).

The fourth chapter, the most difficult, looks at the political subterfuge manifested by the “real abstractions” within a totalised exchange society. The references to Alfred Sohn-Rethel and Henri Lefevbre are especially illuminating. These latter two authors argue that capitalist ideology views everyday social relations upside down, as first pointed out by Marx in his theory of commodity fetishism and alienation. The central point is that the ends of capital and profit are prioritised over labour, the labourer being merely a commodity on the market, and ensuring capital accumulation.

Toscano demonstrates how the ‘scavenger ideology’ of fascism, which draws on Romanticism, political decisionism, a fascination with technology, and even socialism, is a pressing danger.

The fifth chapter deals again with temporality but this time through the philosophical understanding of “repetition”. Toscano singles out and censures Martin Heiddeger’s fundamental ontology”, which is concerned with “being” and the naturalised historical subject, as leading to a reactionary, “counter-revolutionary” politics. Toscano demonstrates how the “scavenger ideology” of fascism, which draws on Romanticism, political decisionism, a fascination with technology, and even socialism, is a pressing danger. This danger is magnified by its ability “to weaponise a kind of structured incoherence in its political and temporal imaginaries, modulating them to enlist and energise different class fractions, thereby capturing, diverting and corrupting popular aspirations” (110).

Based on a reading of the writings of the Italian Germanist and mythologist Furio Jesi, the sixth chapter deals with the far right’s version of the philosophy of religio mortis, a fascination with myth, sacrifice, and death, but updated for a technological (and now digital) era. Drawing on the idea of a “micropolitical antifascist struggle”, as found in the works of Gilles Deleuze, Felix Guattari, and Michel Foucault, the last chapter deals with the ambivalent erotics of fascist ideology, arguing that the libidinal introjection of violence reinforces various forms of social power. Here, Toscano also draws on the feminism of Maria Antonietta Macciocchi, claiming that the Nazi “antipolitical politicization of women” (148) resonates with current modalities of “fascist feminism” that seek “to violently secure and affirm a normative, if not necessarily heteropatriarchal, figure of woman, and which invests desire and libido in its narratives about the imminent threat of the erasure of women and even feminism by ‘gender ideology’ and ‘transness’” (150).

Toscano’s archaeology of 20th-century antifascist theory is an essential springboard for understanding the current political moment. It is a boon for those thinkers and activists interested in human emancipation and the struggle for real, rather than merely abstract, freedom. It alerts them to the threat posed to such projects by that deeply prejudicial ideology that arises alongside capitalism in crisis – late fascism.

This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.

Image credit: Alexandros Michailidis on Shutterstock.

Notes on the style of the present.

In the face of soaring wealth inequality, Ingrid Robeyns‘ Limitarianism: The Case Against Extreme Wealth calls for restrictions on individual fortunes. Robeyns puts forward a strong moral case for imposing wealth caps, though how to navigate the political and practical hurdles involved remains unclear, writes Stewart Lansley.

Watch a YouTube recording of an LSE event where Ingrid Robeyns spoke about the book.

Limitarianism: The Case Against Extreme Wealth. Ingrid Robeyns. Allen Lane. 2023.

Ingrid Robeyns’ Limitarianism is the latest in a long line of critiques – such as Thomas Piketty’s Capital and Branko Milanovic’s Visions of Inequality – of the soaring wealth and income gaps of recent decades. Limitarianism focuses on personal wealth, which is much more unequally distributed than incomes, and is arguably the most urgent of these trends. It draws most closely on the United States, where, according to Forbes, nine of the world’s top 15 billionaires are citizens.

Robeyns argues that given the wider damage from the enrichment of the few, with its negative impact on economic strength and on wider life chances and social resilience, we must now impose a limit on individual wealth holdings. Thinkers have been making the case for this “limitarianism” and the capping of business rewards for centuries. The Classical Greek Philosopher, Plato, argued that political stability required the richest to own no more than four times that of the poorest. The Gilded Age financier, J. P. Morgan – one of the most powerful of American plutocrats of the nineteenth century – maintained that executives should earn no more than twenty times the pay of the lowest paid worker.  In 1942, President Roosevelt proposed a 100 percent top tax rate, stating that “[n]o American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year (about $1m in today’s terms).” “The most forthright and effective way of enhancing equality within the firm would be to specify the maximum range between average and maximum compensation”, wrote the influential American economist J. K. Galbraith in 1973.

The Gilded Age financier, J. P. Morgan […] maintained that executives should earn no more than twenty times the pay of the lowest paid worker.

One of the effects of the 2008 financial crisis was to trigger a debate about the role played by excessive compensation packages in banking. Others have argued that the introduction of guaranteed minimum wages – which limits employer freedom over employees – should come with a maximum too. As wealth inequality has deepened in recent decades, there have been growing calls for measures to reduce this concentration, not least among some members of the global super-rich club. Yet there has been perilously little political action. Each year the world’s mega-rich, facing few constraints, carry on appropriating a larger share of national and global wealth pools.

Robeyns sets out a powerful moral case against today’s wealth divide and asks the all-important question: “how much is too much?”. She calls for setting limits to the size of individual fortunes that would vary across countries. In the case of the Netherlands, where she lives, “we should aim to create a society in which no one has more than €10m. There shouldn’t be any decamillionaires.” This, she argues should be politically imposed. She also adds a second aspirational goal, an appeal to a new voluntary moral code applied by individuals themselves: “I contend that … the ethical limit [on wealth] will be around 1 million pounds, dollars or euros per person.”

Although there are many critics who dismiss the philosophical concept as either unfeasible or undesirable, history suggests the idea is far from utopian. Limits operated pretty effectively among nations – including the UK and the US – in the post-war decades and became an important instrument in the move towards greater equality.

War has long proved a powerful equalising force, and the post-1945 decades brought peak egalitarianism.

War has long proved a powerful equalising force, and the post-1945 decades brought peak egalitarianism. States shifted from their pre-war pro-inequality role to become agents of equality. This brought (albeit temporary) upward pressure on the lowest incomes and downward pressure on the highest. These limits operated in two ways: through regulation and taxation, and changes in cultural norms. Nations imposed highly progressive tax systems, with especially high tax rates at the top – that were sustained in the UK until the 1980s – the expansion of protective welfare states, and a shift in bargaining power from the boardroom to the workforce.

These policies were also enabled by a significant pro-equality cultural shift. This brought a tighter check on top business rewards and the size of fortunes. Until the early 1980s, business behaviour became more restrained, and wealth gaps narrowed. The kind of business appropriation that has become so widespread today would, for the most part, have been unacceptable to public and political opinion then. Gone were the public displays of extravagance and the high living of the inter-war years. Up to the 1970s, and the return of what Edward Heath called the “unacceptable face of capitalism”, executive salaries in the UK were moderated by a kind of hidden “shame gene”, an unwritten social code – similar in some ways to Robeyns’ call for voluntary limits – which acted as a check on greed. It was a code that was largely adhered to, partly because of fear of public outrage towards excessive wealth.

Up to the 1970s, and the return of what Edward Heath called the ‘unacceptable face of capitalism’, executive salaries in the UK were moderated by a kind of hidden ‘shame gene’

Robeyns is making a conceptual case. She doesn’t give much detail of how limitarianism might work in practice, and doesn’t draw lessons from the post-war experience (though this was the product of the particular circumstances of the time). She recognises the hurdles needed to make the politics of limitarianism a reality. There are plenty of questions of detail that would need to be settled. How, as a society, would we determine the appropriate “rich lines” above which is too much? Would the “undeserving rich” whose wealth is achieved by extraction that hurts wider society, be treated differently from the ‘deserving’ who through exceptional skill, effort and risk-taking, create new wealth in ways that benefit others as well as themselves?

The expectation that the tremors of the 2008 meltdown would trigger a shift towards a more progressive governing philosophy that embraced a more equal sharing of wealth has failed to materialise.

The greatest hurdle is political. The expectation that the tremors of the 2008 meltdown would trigger a shift towards a more progressive governing philosophy that embraced a more equal sharing of wealth has failed to materialise. The pro-market, anti-state politics of recent decades are now largely discredited. International Monetary Fund staff, for example, have called neoliberal politics “oversold”. There are widespread calls for the reset of capitalism, with as Robeyns puts it, “a more considerate, values-based economic system”. Although such a system may yet emerge, there are few signs of the kind of value-shift and new cultural norms that would be a pre-condition for a politics of restraint and limitarianism.

This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.

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