Mariana Mazzucato and Rosie Collington [Mariana Mazzucato]

The “zombie” fungus Cordyceps has entered the collec­tive imagination recently thanks to HBO’s hit series The Last of Us. Apocalypse begins as the fungal infection – newly adapted to take over the bodies and minds of its human hosts – spreads planetwide.

Those who are infected forfeit control of their muscles and eventually their brains, until their bodies are rendered a vessel for the self-propagation and dispersal of the parasite.

The metaphor of the parasite is instructive when it comes to under­standing the way the modern management consultancy industry works, an image economist and author Mariana Mazzucato has used herself in relation to the topic of her most recent book The Big Con, written with her PhD student Rosie Collington.

“We talk about [consultancies] having a parasitic role in the economy, because the consultants benefit from weak government and often the rewards big consultancies reap from a contract far outweigh what they create in terms of value,” Ms Mazzucato told the New Journal.

The central thesis of The Big Con, neatly encapsulated in the book’s subtitle, holds “the con­sulting industry weakens our businesses, infantil­ises our governments and warps our economies”.

So what is a management consultancy and what does it do? The short answer is: everything. Gone are the days when the consultant served as the “objective broker of expertise,” giving advice “from the sidelines”.

Consultancies like PwC, Deloitte and McKinsey are now entangled in almost every aspect of public and private life across the globe, working across businesses, government and public institutions.

Today, consultancies are not only “responsible for core tasks” like the development of policy and service provision, but they also run the “darker parts of government – asylum seeker detention centres, prisons, benefits sanctions, border controls”.

Organisations often outsource their work to consultancies because of tight deadlines, squeezed budgets and low confidence in what can be achieved in-house. But this “outsourcing turn” comes at great financial and experiential cost.

“It is simply not the case that relying on consulting firms costs less than relying on internal public sector capacity – of course, once this capacity has been eroded or out­sourced, it can take invest­­ment to build it back up,” Ms Mazzucato said.

A key question guiding The Big Con is: “What happens to the brain of an organisation when it is not learning by doing because someone else is doing the doing?”

The answers are myriad and disturbing: as Ms Mazzucato and Ms Collington write, “the more govern­ments and businesses outsource, the less they know how to do”. Consultancies no longer advise but actually do the work of the government and business.

Over time, the organisation begins to “lose its intelligence”, along with its sense of purpose and direction. As well as depleting in-house skill sets, manage­ment consultancy stunts innovation, reduces risk-taking and encourages “short-termism”, prioritising immediate cost savings and efficiencies over sustained investment.

Conflicts of interest abound, with big consultancies often working “on both sides of the street – advising, for example, both the leading fossil fuel polluters and the government mandated to reduce national emissions”.

Most importantly, consultancies undermine democratic accountability: “consultancies are often used by governments (as well as business) seeking to avoid blame for fail­ures,” the authors write.

But outsourcing blame also means outsourcing learning, with society left to shoulder the broader costs. As the authors write, “it was UK citizens that ultimately faced the health and economic consequences of the government’s decision to outsource to consultancies [like Deloitte] so much of the early Covid-19 response”.

“There is no expertise on test and trace in Deloitte,” Ms Mazzucato said. “The reason the vaccine rollout was successful is that it was done through a decentral­ised network of GP practices: and indeed that too is not surprising given expertise lies there. But are we now funding that NHS system more? No. Is Deloitte getting more contracts? Yes.”

“It is insane but it has been an open secret for a long time in Whitehall and across many public sectors around the world that the use of consultan­cies to carry out critical tasks has grown massively. There is nothing natural about this way of doing government,” she added.

The book offers a brief history of the consulting industry, tracing its roots back to Frederick Taylors’ “scientific management” of the early 19th century, via neoliberalism to its current form that emerged under the stewardship of “Third Way” progressives like Tony Blair and Bill Clinton.

Consultancies have been hugely influential in shaping modern economic policy, designing new contracting models that would smooth the way for private financing, public service outsourcing and austerity.

“The history of modern consulting is, in the end, the history of modern capitalism,” the authors write. Over time, consultan­cies have successfully positioned themselves as “value creators” while government bodies are dismissed as “sluggish and bureaucratic”.

But the authors argue forcefully for a re-evaluation of the contribution of the state, highlighting the role of the NHS in “key break­throughs across medicine”.

There are many things that can be done to help form “a symbiotic or mutualistic relationship between government and the private sector, where all organisations work together to achieve a common goal,” Ms Mazzucato said.

These include recog­nising the civil service as a “value creator” and attracting top-class graduates to government work; encouraging organisations to take accountability and risks; writing “learning by doing” clauses into consulting contracts, so that in-house workers can pick up the skills their departments have un­learned over time; as well as developing transparent, community-focused procurement models.

As the philosopher Byung-Chul Han writes: “Every age has its signature afflictions.” It is arguable that one ailment peculiar to ours is the management consultancy. With the publication of The Big Con, co-authors Mariana Mazzucato and Rosie Collington have given their readers both a diagnosis and a cure.

The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies. By Mariana Mazzucato and Rosie Collington. Published by Penguin