The Big Con

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.

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. Consultancies as opportunists. The consulting industry has positioned itself as a solution to organizational challenges, but often exploits and exacerbates existing weaknesses. By promoting themselves as experts, consultancies have gained unprecedented access to decision-making processes in both government and business. Rents without risks. Consultancies extract significant economic rents - income far exceeding their actual value contribution - while bearing minimal risks. This skewed risk-reward relationship is at the heart of the consulting industry's business model. When projects fail, it is usually the client organizations and ultimately the public that bear the costs. Systemic impact. The influence of consultancies goes beyond individual contracts, shaping broader trends in governance and business practices: Promoting short-term thinking and quick fixes over long-term capability building Encouraging outsourcing of core functions, leading to loss of institutional knowledge Legitimizing controversial decisions through the veneer of external expertise

Throughout the twentieth century, consultancies would go on to develop and commercialize many ideas and tools, often in collaboration with business schools. Historical roots. The modern consulting industry traces its origins to the early 20th century, with the emergence of scientific management principles and cost accounting methods. Firms like McKinsey & Company grew by promoting these new approaches to business organization. Expanding influence. Consultancies rode successive waves of change in the global economy: Post-WWII reconstruction and expansion of multinational corporations Privatization and deregulation trends of the 1980s and 1990s Digital transformation and e-government initiatives Structural adjustment programs in developing countries Global reach. By the end of the 20th century, major consulting firms had established a presence in nearly every country, shaping business practices and government policies worldwide. This expansion was facilitated by: Growing demand for standardized management practices The spread of Anglo-American business models Consultancies' ability to position themselves as neutral experts in new markets

Prime contracting is paradoxical because where the costs of failure would be great, risk is transferred to the contracting public sector body in order to incentivize third parties to bid on the tender in the first place. Shift in governance models. The "Third Way" policies of the 1990s and 2000s promoted a vision of government that "steers more, rows less," leading to increased outsourcing of public services and decision-making processes. Unintended consequences. This approach has often resulted in: Loss of internal expertise and institutional memory Reduced accountability and transparency…