The swarm: International consultancies

May 29, 2023
Detailed map of the world in all the world's currencies.

Predatory capitalism has become visible across the world as neo-liberalism becomes fully transnational. Consultancies working to authoritarian rules have consumed big business by making executives richer. They may be set to engulf governments and even entire societies.

In the 1920s and 1930s fascist Germany and Italy were the darlings of business across the democratic world. Fascist methods of economic organisation were seen as ‘efficient, low cost, business oriented, anti-union and highly controlled’ – just the type of commercial environment others wanted back home too.

One early US management consultancy, – self termed ‘The Firm’ – was attracted to this way of thinking through links to car-maker Henry Ford. He had modern car plants in America and Germany, where he sought lower costs for higher profits. In fascist Germany intimidated car workers made greater profits than his American workers.

‘The Firm’, privately-held McKinsey, developed management advice which companies clamoured to follow, to gain Ford’s advantages. McKinsey have been assiduous proponents of neo-liberalism, arguing that inequality is a natural consequence of commercial success. They were innovative, hiring the best young US graduates who are moulded to expound a unique credo. Their advice and influence has grown enormously across the decades. Now it influences decisions of companies and governments across the world through its network of consultancies. Consultants who leave McKinsey are avidly sought for major business and civil leadership roles, expanding the network of credo adherents.

Bogdanich and Forsythe in ‘When McKinsey Comes To Town’ detail the anti-social advice advanced by McKinsey to their clients everywhere, and the consequences. Companies are told to maximise profit by cutting workforces, to refuse unionised workplaces, remaining workers will then accept lower wages and working conditions – safety, hours of rest can be curtailed. They recount the long history of McKinsey consultancies in America, well known for corrupt and unethical practices. They undertake any contract with any company, or any government (palatable or not), for huge profit, then use that work for further business with competitors, or contractors alike.

One modern McKinsey advice is ever higher executive reimbursement, which executives endorse. Another gem is advice to governments to replace all administration positions by hired contractors. Both advices re-enforce McKinsey engagement by government and their contractors, each sings their praise. Other business management consultancies, the Big Four: PwC, KPMG, EY and Deloitte, now follow McKinsey’s lead.

Remarkably, these consultancies provide accountancy, and business, and tax compliance services, as well as management and efficiency/profitability advice. Each of these conflicting services is claimed to be independent and provided ethically, with absolutely no cross-over. We see the effects of this swarm-like leadership on modern business ethics. Company loyalty to their workers, to their customers, or to broader society is lacking. Everything is devoted to higher profits and share prices for investors, and higher executive remuneration.

If you look at fascism as set of high sounding ideals, but a very different practical reality – you hear an echo in the ethics and advice behind the modern business consultancy. Well, the public does not hear it, the advice is well hidden behind commercial-in-confidence and strict secrecy contracts – but we feel and see the effects. All manner of government services are now provided by private companies and ‘contractors’, all recommended by the circulating swarm of consultants advising both the government, and their external functionaries.

Since the hollowing of Australia’s public service during the Abbott to Morrison eras, our ministries and their private contractors have become the focus of the big international consultancies. Some $20 billion was paid to consultants for ‘advice’ during just the last year of Morrison’s government, which the public service apparently could not provide. Outrageous profiteering by consulting firms has been the norm for decades – In 2014, PwC advised the Abbot government and the ATO on how to better tax multinationals, while simultaneously advising US multinationals how to avoid these taxes.

This is just the latest international consulting scandal. Check the web for any country – Oil producer Saudi Arabia is a McKinsey client. Twelve months after Russia first attacked the Ukraine, oil supplies are still claimed insufficient to reduce international oil prices. Oil companies and producer nations reap windfall profits suggesting possible coordination between the lucky few to continue the status quo.

We mock third world countries for corruption, but massive institutionalised first world corruption is now revealed too. Business here knows of these practices – it provides potential advantage. All governments also know, despite current outrage at the duplicity. McKinsey of course, and the Big Four are still deeply imbedded in Australian government departments, directing, demanding, even advising ministers.

This litany of world-wide probity scandals suggests something more sinister, more frightening. This interlocking network of advisors provides group-thinking to business and government executives worldwide, the advice is accepted and practiced everywhere. ‘Best practice it seems is ‘make as much money as fast as possible, regardless of consequences. Highly intelligent people run international business, yet they act as if the planet is a Monopoly™ game.

Is there a world government of big business? Probably not, but the big consultancies with such international influence must be candidates, coordinating common attitudes and practices. Where does tax avoidance and tax havens and the growing disparity between the few very rich and the numerous poor of the planet fit with this scenario? – right in the middle of course – with 1 trillion dollars moved annually into tax havens with little international regulation.

As citizens we must wonder – over 50 years of scientific evidence of global warming still strenuously denied, seen in the failure of industry and governments to seriously combat it. Why do so few leaders act to stop all CO2 emissions? Do business consultants provide ethical climate advice to address accelerating emissions? – I fear they don’t. If business and governments have but one view, where then is democracy heading? We must first be rid of their pernicious neo-liberal ideology.

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