With Justin Trudeau’s popularity in the dumps, unable to provide any meaningful relief to ordinary workers in the face of out of control inflation and increased interest rates, the latest revelation that the government has spent heavily on outside consultants has provided fodder to the right-wing Pierre Poilievre’s Conservatives, always frothing at the mouth when Liberal scandal emerges.
This time, getting all the attention is the Trudeau government’s use of McKinsey & Company, the world’s largest consulting company. Recent findings have found that since coming to office in 2015, the federal government has spent 116.8-million in fees for McKinsey services. For what is unclear, since McKinsey is notorious for keeping the nature of its services secret. What is known about McKinsey, however, suggests it is likely all evil.
The worst people in the room
McKinsey pitches itself as a “moral” company, a destination for “elite” college graduates who don’t want to go to Wall Street. It claims to provide solutions to organizational problems and sells its expert services to companies and governments wanting outside opinions about how to improve what they do. The trail of “good deeds” and “moral” advice, however, shows a company that cares most about advancing the interests of the ruling class and that has encouraged the worsening of working class lives.
The company’s role in fixing bread prices in Canada and a state capture corruption scandal in South Africa have brought new and negative attention to McKinsey, but Walt Bogdanich and Michael Forsythe’s When McKinsey Comes To Town meticulously shows that this behaviour has been par for the course since its inception in 1926.
McKinsey & Company has shown it has no compunction when it comes to choosing clients. It represented the tobacco industry as it was trying to obfuscate the carcinogenic nature of its product. It offered strategies to increase sales of OxyContin to pharmaceutical giant Purdue Pharma as well as strategies on how to downplay negative criticisms of the painkiller. Fossil fuel and mining companies have retained McKinsey services to assist massive carbon producing projects (all while McKinsey tells its employees that fighting climate change is at the forefront of its concern). It used the language of “finding efficiencies” when encouraging huge companies like Disney and US Steel to reduce its workforce and erode safety standards.
And while they are a favourite of Liberals and Democrats in the United States, McKinsey has not hesitated to provide advice to conservative forces, including the Trump administration on immigration. McKinsey encouraged ICE to reduce spending on food and care for those held in captivity in hopes of dissuading migrants from entering the US. They also were key advisors to Republican state government efforts to privatize Medicaid services.
McKinsey often secures these lucrative contracts through lifelong relationships with alumni, staff who have gone to work for large companies and government. Although the players always deny that these ties play any role in contract procurement, these claims are incredulous. Take for example Dominic Barton, who served as Global Managing Partner of McKinsey from 2009 to 2018. While in that role, Liberal Finance Minister Bill Morneau appointed Barton to serve as a chair of an economic growth advisory committee. He also provided advice to massive natural resources company Teck Resource Ltd., using that connection as Chairman of Natural Resources for Teck, only to jump into government as Canadian Ambassador of China, an incredibly important position for influencing economic relationships with China. The easy jumping from McKinsey, to corporate McKinsey client, to powerful positions within governments is all too common.
What’s so wrong?
McKinsey keeps its client lists confidential (or has tried to) and its advice secret. However, leaks have shown the kind of suggestions they provide their clients. Driven by advancing company profits, McKinsey has espoused rhetoric of improving efficiency and corporate reorganization to downsize workforces. They have encouraged government agencies to privatize service delivery (often to the benefit of private companies they also advise).
With health care privatization on the agenda and environmental policies taken now greatly impacting our survival as a species, what kind of advice is McKinsey giving? Are they telling Trudeau not to push back against Ford allowing for-profit health care providers to perform services? Are they shaping carbon reduction policies that undermine our goals to keep temperature increases below 1.5 degrees Celsius?
McKinsey may say that they aren’t interested in the policy end of government, only the execution of policies, but even that distinction is meaningless when they see their role as advancing their clients’ policies no matter how disreputable they may be. McKinsey and other consultant firms’ track record affirms that whatever advice they are providing, it is likely in the interest of the ruling class, corporations, and the wealthy.
The state and capitalism
In his article for Jacobin Magazine, David Moscrop summarizes the recent scandal and the issues with McKinsey and other private consulting firms being hired by the government. He proposes that:
Rather than growing its reliance on corporate consultancies, the federal government ought to grow the capacity of the public service such that it takes on more work in house. It ought to encourage the growth of participatory democratic institutions at the grassroots level to develop policy and approaches to policy implementation and management. That money could be an investment in state capacity that would pay dividends in the long run, particularly as the complexities of governance continue to grow. It is not outlandish to ask that the government perform its duties without seeking so much outside help.
Although getting companies like McKinsey out of government is commendable, assertions that suggest that corporate influence can be removed (or reduced) merely by removing the likes of McKinsey from the equation fundamentally misunderstand the role of the state in capitalism and the way the state has come to operate in the neoliberal era.
Neoliberal policies are a class project. The furtherance of neoliberal policy inside the government is a two way street. It is not just that McKinsey and other consultant firms push neoliberal policies when they are hired by the government. It is also that various wings of the bureaucracy and elected officials push to hire these firms as a mechanism to further a neoliberal agenda.
Even in the early stages of capitalism, the state emerged designed to advance the needs of capital. In The Communist Manifesto, Marx and Engels described the state as “a committee for managing the affairs of the whole bourgeoisie.” The Russian revolutionary Vladimir Lenin echoed this in his seminal The State and Revolution, stating “the state is an organ of class rule, an organ for the oppression of one class by another; it is the creation of “order”, which legalizes and perpetuates this oppression by moderating the conflict between classes.”
Differing opinions among the socialist or social democratic left have suggested that the state is a neutral body that the working class, through its political parties, could take over and run in the interest of working people. The neutrality may be compromised at times by the power of capital, its money and its agents (such as consultant firms). But at its heart, the state has no inherent loyalty to capitalism and elements that compromise its neutrality can be pushed away for the better.
Multiple reformist experiments, such as the Allende government in Chile in the 1970s, have shown that this neutrality is an illusion. Attempts to use the state to enact mass social transformation and advance reforms have seen state actors (be it bureaucrats, the police or the army) undermine the most earnest social democratic efforts to bring the capitalist state into the hands of the working class. The long history of McKinsey and capitalist industry shows how integrated the ruling class is into the operations of the state. Every ministry, agency, department is filled with or led by those who are loyal to the continuity of capitalism as a system. Removing the tentacles of corporate interest from the policy makers and executors is in all intensive purposes impossible because those interests have long ago metastasized into the operations of the state and government.
This is even more so in the neoliberal era that emerged after the end of the Post-World War Two economic expansion. Even during this “golden age” of capitalism, ruling class agents did their best to limit policies that benefited working people. As the cycle of economic crisis emerged, the reforms working class people were able to win (the development of the welfare state, legal frameworks for collective bargaining, improved material wealth) quickly became expendable and groups like McKinsey shifted gears pretty quickly to advising how best to erode the agencies and programs that working class people had won.
McKinsey is capitalism
The Left should be calling for the end of these consultancy relationships and pointing out that the advice the likes of McKinsey offer will never benefit working people. They are driven by advancing their clients interests, and their clients are the most powerful corporations eager to extract as much profit as possible from capitalism, whether through more exploitative practices toward their work forces or through exploiting to the max natural resources. Pierre Polievre should not be allowed to monopolize the space attacking the Liberal practice of hiring consultants, especially because he will certainly embrace similar players if the Conservative’s form the next government.
That said, wishing away consultants and believing that removing them from the equation will usher in an era of truly democratic government practices creates illusions about the capitalist state, a sense that we can just remove the cancer of McKinsey and that will allow the government to flourish and benefit working people. We only have a capitalist state and that state will always further the interests of the capitalist system. Agents like McKinsey are fundamental to the operation of the system and cannot be removed from its operation without a much larger overturning of the social relations of society, specifically the destruction of the capitalist state.
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