How the Consulting Industry Weakens our Economies and Harms Democracy | Mariana Mazzucato

Join us for a ground-breaking investigation into how the consulting industry has made its way to the heart of our economies, weakening businesses and infantilising governments.
Professor Mariana Mazzucato is no ordinary economist.
Author of 3 blockbuster books, winner of the Leontief Prize for Advancing the Frontiers of Economic Thought, and heralded as one of the ‘3 most important thinkers about innovation’ (New Republic), ‘one of the 50 most creative peoplein business’ (Fast Company), and one of the ‘25 leaders shaping the future of capitalism’ (WIRED), she has the ear of policymakers from the WHO to the UN and far beyond.
Now she returns to How To Academy, alongside her brilliant PhD student and political economist Rosie Collington, with a ground-breaking investigation into how the consulting industry stunts innovation, obfuscates corporate and political accountability and impedes our collective mission of halting climate breakdown.
The ‘Big Con’ is possible in today’s economies because of the unique power that consultancies wield through extensive contracts and networks - as advisors, legitimators and outsourcers - and the illusion that they are objective sources of expertise and capacity.
In conversation with former Editorial Director of BBC News, Kamal Ahmed, Mariana and Rosie will expertly debunk the myth that consultancies always add value to the economy. Presenting a wealth of original research, they will argue brilliantly for investment and collective intelligence within all organizations and communities, and for a new system in which public and private sectors work innovatively for the common good.
Praise for Mariana Mazzucato and Rosie Collington’s The Big Con:
‘A powerful indictment of a dubious industry. This book should be read around the globe, and kickstart a debate that’s long overdue: Do we really need all those consultants?’ Rutger Bregman, author of Utopia for Realists and Humankind
‘The power of government is crucial for driving the economy forward. But only if it retains capacity. Mazzucato and Collington have written a brilliant book that exposes the dangerous consequences of outsourcing state capacity to the consulting industry-and how to build it back. A fascinating look at the biggest players in the game and why this matters for all of us.’ Stephanie Kelton, author of The Deficit Myth
Mariana Mazzucato is Professor in the Economics of Innovation and Public Value at University College London, where she is Founding Director of the Institute for Innovation & Public Purpose (IIPP). Her previous books include The Entrepreneurial State: Debunking Public vs. Private Sector Myths, The Value of Everything: Making and Taking in the Global Economy and Mission Economy: A Moonshot Guide to Changing Capitalism.
Rosie Collington is a PhD candidate at IIPP whose writing has been published in the Guardian, OpenDemocracy and the Independent. Her academic research Economics, United Kingdom, Great Britain has been published by New Political Economy and the Institute for New Economic Thinking.
Kamal Ahmed is co-founder and Editor-in-Chief of The News Movement, a new media business focused on social media channels, new audiences and digital consumption. Between 2018 and 2021, Kamal was Editorial Director of BBC News, working across news strategy, daily news and planning, commissioning, analysis, visual and audio journalism and new forms of digital content.

[@robertjohnstone718]

Government has an incentive to choose a consultant who will say the preferred policy is correct. Consultants have an incentive to tell government what it wants to hear.

[@TheMagicofJava]

Before I got pushed out the industry over 10 years ago, due to the monopolistic pressures that are now all too apparent in every sector of the economy. By the time I left that's all that it had become. There was no actual consultancy, simply endorsement of already agreed policies. Maybe that's the other reason I got pushed out as I was always very slow in picking up the true agenda? I have in my own mind explained this all by the psychopathic assumptions which now pervade business, government and local government.

[@Sauronthedeciever_]

Not government; organizations. It’s the same in the private sector.

[@josealejandroramirez4954]

@@Sauronthedeciever_ But then the company is less profitable, I don´t think a company wants to be less profitable.

[@Rob-fx2dw]

Absolutely correct. If as a consultant you disagree with what the politicains decide is a popular vote getting policy or is aleady pushing as a policy you will not get consulted again.

[@orrbifold]

and they often come from the same Ivy leagues where their relatives just paid for their degrees or high GPA, the entire decision making process of this country at all levels has been hijacked by nepotism and greed

[@davidalexanderlourie4371]

There is a revolving door between billionaire funded think tanks and global consultancy firms and local and central governments. Consultancy firms encourage senior staff to take senior management positions in local and central governments to reform policies and management structures that weave consultancy firms into management structures. The business model is to capture the income streams of local and central governments. Local and central governments become brokers that manage tenders for contracts for contracts the governments lack the capacity to have practical experience to understand what is being tendered for contract. The institutional memory of the aspects of the roles of government has been transferred to private contractors and consultants so how can a government manage the roles of government if the government does not understand the details of its role. Consultants have other clients that can benefit from the activities of consultancy firms. Public private oartnerships are protected from public scrutiny by commercial sensitivity. Yes the whole thing is a complete con job.

[@waynemcmillan5970]

We need a new narrative about public sector value and public administration. Mazzucato is on the right track in developing a new narrative for public administration. Governments across the world need to listen to Mazzucato and not consulting agencies.

[@jimbojimbo6873]

The narrative is irrelevant, real change needs to be made not headlines. The government needs to pay more to attract talent

[@roderickoates4627]

@@jimbojimbo6873 How much do you think they already pay consulting companies?

[@luxuryvagrant6496]

Yes, let's narrate and listen.

[@Rob-fx2dw]

Yeah - Oh Sure !! For example if someone wants to build a newly developed method of constructing buildings or building ships or aircraft they should ask Mazzucato or a government politician if it is justified and workable based on her or their economic "knowledge" . How would that work ? Or what about her success in public administration? What actual success of hers would that be based on ? Rhetoric?

[@waynemcmillan5970]

@@Rob-fx2dw Rob, There is a role for the private sector and the public sector. If the private sector hasn’t or won’t take up new research and development in an area that needs urgent attention, then the public sector needs to step in. Here in Australia our government owned CSIRO did marvellous research and development in the 1950’s to 1970’s. The private sector took their research and then invested in bringing into the market the goods or services that were needed. Excellent entrepreneurship can emanate from either the public or private sector. Before neoliberalism (which by the way emanated from the USA and the UK ) struck Australia, in the 1980’s, we had a vibrant and capable public sector. Strawman arguments from neoliberals that had a vested interest in helping their greedy mates in the private sector secure lucrative contracts to deliver second rate public sector services was the flavour of the month. It then reduced our public sector via spending cuts to a shadow of its former self, whereby it couldn’t deliver effective and timely services and the call for the need for privatisation was heard by successive governments . The empirical evidence from across the world indicates that contracting out government services and privatisation has been a dismal failure.

[@RanmaSyaoranSaotome]

It was a pity to listen to this talk and not hear that the blame doesn't lie solely with the consultancies, instead the blame lies partially with the Tory government giving backhanded deals to cronies at the big four.

[@yunyunherbert6136]

Ignorance of the Law is not acceptable defence. Government is democratically elected to carry out the mandatory duty of government. They can try and blame consultancies but they hire the consultants to do what they're elected to do, what exactly do they do in office all day, everyday. On the other hand, if consultants fail to deliver as contracted, why let them get away with it?

[@gazesalso645]

Governments the world over get blasted for incompetence, inefficiency and ineffectiveness. So you won't have to look to far to find criticism of your particular government. What Mazucato shows, however, is that the idea that consultancies always add value to the economy is a myth. In my own country we essentially had collision between government and some of the big names - McKinsey, Bain, pwc etc. . And these consultancies were happy to pay bribes, partner with dodgy contractors and so on thereby getting lots of money and in return government got to legitimize their own criminality because of the credibility the consultants brought. But even as my government is rightly ciriticised for this, working at these firms is still seen as prestigious. They got off scot free, their global reputation unblemished. Indeed, they have hampered efforts to investigate the hollowing out of state institutions which they played a role in. I look forward to reading Mazucato's research on how this plays out.

[@SameAsAnyOtherStranger]

Instead of creating expertise from within organizations that adds value to the people that already make a living from those organizations, outsource that expertise by adding another layer of bureaucracy. The managerial class must think that the people they manage only know what's going on if they tell them.

[@michaelwallden7261]

All organizzations and problem to solve it is not the same. What do we want to achive and how to get the best investigation makes the way forward.

[@pequodexpress]

I find it hard to believe that "bribery" and "kickbacks" are not significant factors at play, yet those two words and their derivations don't appear at all in the book.

[@IshtarNike]

We have to fight this war on multiple fronts. You go in alone guns blazing and you'll get knifed in the back before you know what hit you. You go in with a team and take up different positions before they realise you're the enemy. Her position is correct just doesn't go far enough and that's good because she'd never get the platform if she went all out. It's up to others to build on this work. Build and build until the evidence and movement is so overwhelming it cannot be ignored.

[@pequodexpress]

​But "corrupt" and "corruption" do appear.

[@sandponics]

Politics and economics looks exactly like what it is. A confidence trick.

[@Guyfawx42]

Great conversation, refreshing.

[@Siddhanet]

Perhaps a grass root narrative of positive peace and civic responsibility may create a consciousness that the individual is both a consumer and citizen requiring a government of by and for the people as the policy creator

[@TAMER.GHANIMA]

And yet she is a consultant

[@davidwilkie9551]

This is a Neuroscience question, to be iterated from First Principle Observation approach. Ie e-Pi-i sync-duration Mathematical Disproof Methodology Philosophy of metastability condensation qa cause-effect, implies Physics of Resonance Bonding Chemistry and QM-TIME flash-fractal recognition real-time is all-ways all-at-once pure-math superposition Completeness. So all authorship is instantaneous interference of logarithmic i-reflection condensation-coordination.. technically speaking, because the fact of e-Pi-i existence is "technique" in conscious awareness.

[@nathanngumi8467]

Word.

[@martinjanecek4950]

Nice.

[@vthilton]

Sharing will save the world.

[@jeffrybradwell9589]

If there was a way to live a good life I've lived off grid for 30 years and I'm learning every second of my life i could help people live better for free i don't want enething in return please be healthy happy and lucky

[@davidwilkie9551]

Ghengis Kahn asked "Consultants" from each religion under his dominion, (after his establishment of a systematic military Law), which way to "Heaven". In the era, as now ,"It's always NOW", so the advice was tailored to suit the believers, and that hasn't changed, consultation leads directly to Privatisation(?). Facts in Evidence are required for appropriate encompassing Social Policy. Because "All is Vibration", and Social Actuality is therefore a perceived state-ment of metastability, all access to Heaven is WYSIWYG, temporal coherence-cohesion substantiation, (by Sciencing Analysis).

[@luxuryvagrant6496]

That word salad is a bit rich, don't you think? I'd put less a lot less cream, maybe take it with a grain of salt.

[@maggieatlas2130]

Keynesian Economics a balance of power worker union & corporate business with Government the leader

[@simonboland]

I have a number of problems with her message. This idea that consultants come and go is not new. Look up Steve Jobs' video on the lack of depth in consulting versus working in a product driven company and owning the scar tissue for your decisions. Unfortunately, there's often this tired old notion of "why can't we build a sizeable public service with people who have grey hair and know the history of how things were done in the past". It feels like that's 50% of her message. My answer to this is that the world is more complex and changes more quickly. As much as I think consultants lack depth, what's the alternative? A staid and out of touch public service? The world doesn't work like this anymore. Also, if the problem is with consultants coming in and pushing ESG metrics then the problem is not only with consultants but people in government gullible enough to want or fall for ESG crap. This is where strong leadership is needed with politicians. The world does not have true politicians in the past like Charles DeGaulle, Richard Nixon, Ronald Reagan, LBJ or Margaret Thatcher (for better or worse and understanding each of their respective flaws). We have technocrats with minimal lived experience.

[@thesquirrel082190]

jesus christ you just named some of the most destructive politicians to our modern lives who have ever lived, and you want more of that?

[@indonesiamenggugat8795]

🌹🌹✍✍

[@sbhatt2895]

It is like Roman became depended on German legions and others . It has gone to an extent I saw in a bbc video an German general deciding who would be the Roman king. Now consultant is taking over every function of the economy

[@RossSpencer176]

You should make a content on how to earn 6 figures in monthly profits cos I've been reading about investors making up as much and I'd really love to know how to such substantial profit in this current market

[@Dubin144]

that requires a fair amount of research and good market timing

[@Fleming115]

I recommend to pick up and read a few books. Peter Lynch is where I was recommended to start. Learn different strategies so that you might develop your own

[@HannahLydia134]

time in the market and your contributions are far more important.. also diversify the hell out of your portfolio (at least 5-7 different asset classes)

[@RossSpencer176]

@Flora Quntinilla who is your financial coach, do you mind hooking me up?

[@RossSpencer176]

@Flora Quntinilla Thanks for sharing. I found him on instagram, will connect with him.

[@lobotlando]

What I´m hearing here, is people just trying to find any other solution to our current problems except the obvious one that is real left socialistic economics. That´s just how I see it. I could of course be wrong.

[@WayneNoorey]

You're absolutely correct. Well meaning folks perhaps, but stunning mental gymnastics to avoid talking about the real necessary change.

[@thomasdealvarado5374]

Well it's clear the problem is the banks and the government working together we as the people don't have a chance..

[@mcgoombs]

It’s up to us ✊🏼

[@csharpe5787]

You are.

[@lobotlando]

@@csharpe5787 well that's a relief

[@Irene-im8xi]

The reason we are in this spiral towards social and political disaster is our low intellect, incompetent and lazy political class. Edit: alternatively the politicians aren't completely incompetent but just corrupt and deriving some personal benefit from using consultants.

[@Heresheis0818]

😢

[@RD-gp1mu]

Create consultants within. Am doing this right now. Just an IT Support person but been in the role for a while so my name got around within the charity that I work for. My mindset is that let me listen first as I may have a solution for them. I'm genuinely interested in the person and what they do so its inevitable I'm going to listen and understand what they do and my trap shut. Curious about why & how they do certain processes. Then can their work be facilitated by themselves up-skilling/ re-thinking their business process(es). I don't do their work because that would just be disrespectful. 'No I don't I know know better' attitude helps. However, my intention is to serve and direct so that maybe I can open some doorways that will help them in their day to day work and ultimately improve their lives, give them a game changer. Result: It's worked every time. Honestly this approach creates such a positive frenzy that I've found staff beavering away at a new tool, new process, new idea at 2:00am when they're on leave! This excitement is infectious and it's saved over +100K in only just 3 months. I'm going keep consulting internally the way I do. Why, because 'I get the business model'; better than the directors and the CEO of the charity. Yeah, I have ego but the good type which allows me to keep going even when I should take time out.. I know what I'm doing is changing lives :)

[@truthaboveall7988]

We can revolt

[@DrEhrfurchtgebietend]

It's pretty embarrassing how even in the introduction he gets so much wrong. He completely forgets about keynesianism and how that took over well before 2008. He also attributes all of the problems to the Chicago school when the Chicago school would not have advised going off of the gold standard in 1971

[@KymHammond]

The warning on this is the repeated claim that it’s not ideological driven - isn’t that the very logic of new labor? Where will the desperately needed reinvestment in government come from if popularist centralist government are themselves ideologically opposed in such investments?

[@temporaryname8905]

What? Taxes are the only funding a government ever needs.

[@trollamos]

The status quo is not idealogicaly driven, it's just the status quo. From spontaneous, miraculous, birth and organic growth.

[@KymHammond]

@@trollamos from inorganic compounds, yes. The rest is just romanticism on your part.

[@IshtarNike]

She's referring to it not being ideologically driven on the part of herself and her colleagues. She's heading off an easy attack line in which she's dismissed as a big government commie who wants the government to do everything and hates the private sector. She's not advocating for political parties to say "this isn't ideologically driven we're just here to make things work." New labour obviously had an ideology they just pretended not to. These are two different arguments. One is about her ideology and whether it affects her analysis of the facts on the ground as an academic, the other is about political parties and what they say to get elected.

[@KymHammond]

@@IshtarNike yes, "New labour obviously had an ideology they just pretended not to." So where will desperately needed reinvestment in government come from if progressive governments are themselves ideologically opposed to such investments when we know that conservative governments already won't do it? Will it be from Green parties determined to bring about a revolution in renewables.

[@cgfreeandeasy]

You should never introduce a guest as a "best-selling" author. It is not his actual quality when his books sell well.

[@Rob-fx2dw]

Government does not patch things up or fix market failures. They are more likely to and more often do things that cause market failures . People who think they fix market failures are likely the same ones who think problems like the share maket crash of 1929 caused the great depression or the origins of the sub prime loan failures were because of banks of their own choice lending to risky financially unworthy clients which was not the case and can easily be shown to be unless on'e head is stuck in the sand.

[@carsonpaullee]

As if we’ve ever had an authentic democracy in the modern world. the USA isn’t even a republic let alone a democracy… it’s a plutocratic oligarchy which has the word republic mentioned once in it’s constitution and democracy not once, the founding fathers wanted to make a oligarchy through conspiring to revolt against the British monarchy by spreading a conspiracy theory that George the 3rd would enslave them as they were enslaving Africans. Maybe we should have a real democracy though due to technology making it much more practical in recent years.

[@dagwould]

The 2008 credit disaster was not the result of 'capitalism', or more correctly put 'free markets'. It was the result of unfree markets with US government telling lenders to lend to NINJAS: no income, no job or assets. Of course the system, now a 'socially controlled' system failed. Socialism always does so...particularly if it is bolstered by Keynesian dogma.

[@Rob-fx2dw]

Yes. The GFC was not the result of capitalism. It was the result of government interference into the economy in a number of ways. You would think that people would learn from about the failures of Keynesian deficit policy after the Keynesians fought against the US government's proposal for cutting by 50% the previous deficit expenditure and previous levels of deficit budgets. The Kevynsian idea was that expenditure cuts would cause a large recession and unemployment. Never the less government cut spending by 50% and the economy expanded instead of contracting. Nothing of fact seems to change these idiot socialists who still push for larger and larger intrusion into what that fail to understand. They would learn if they were honest about their motives.

[@JasonCunliffe]

We...we wee.. weee we wi whee we WE hmmm

[@ashish714]

#SillyLiberals!

[@ERG173]

What a long drawn out intro,

[@859902]

Turned off at her first mention of Saint Greta 🤦🏻‍♂️

[@estebanfumero3728]

LMAO OFFENDED

[@avillianchillinskrillian]

cringe

[@ozorg]

IPPC = PSYOPS

[@DeathBySlushPuppy]

Mariana should read Steven Koonin's book 'Unsettled' about climate change before she talks about the IPCC reports as gospel. How can she be so smart yet listen to Greta Thurnberg? By her reckoning, the world should have already ended. But a lot of the other parts of this conversation I like.

[@avillianchillinskrillian]

A smart person listens to people and there is more information than the IPCC reports on climate change. You should read a few more books yourself.

[@DeathBySlushPuppy]

@@avillianchillinskrillian Yeah tbf there are some valid criticisms of that book that I have read since. But Greta does sensationalise the problem imo.

[@avillianchillinskrillian]

@@DeathBySlushPuppy fair point.

[@DrEhrfurchtgebietend]

This is very very bad. If you're reading this and nodding in your head, you need to seek a different source of information. This is clearly somebody preaching to the choir. I know it's hard to see from the inside

[@MelissaR784]

This is a con.

[@1merkur]

The guy talks way too much...

[@kgbartellegmail]

Government agencies love consultants. We do all their work for them. The issue is these agencies are pulled in so many directions. Politicians running their boards are capricious and change their objectives frequently. The regulations they are under from Federal to City. The grants they are given have requirements that frequently do not aligning with grant money at hand. Building a bridge is just an outcome of a transportation grant. The real reason the grant exists is to give money to the constituents to build the bridge, labor, consultants etc. I recently heard the concept of the "Gossip Trap" explaining how gossip is an equalizer. All departments in a government entity deal with reputational management and infight between and amongst themselves to curry favor with the ministers or politician that rules their boards. We do not empower the departments to get better because they would become a power center outside of the political class running them. They may actually say "No" to the absurd requests made upon them or they may acquire nondemocratic powers like the New York Port Authority under Robert Moses. Instead leave the real work to consultants who can be fired if you don't like what they are saying and get another one you like better.