Macron and the consulting firms scandal

1 April, 2022

Consultancy scandal: Macron at a McKinsey seminar in 2016
Consultancy scandal: Macron at a McKinsey seminar in 2016

A few days before the first round of a presidential election turned into a war rage contest, the “consulting firms scandal” seems to be consolidating as the big election campaign issue. On March 17, the French Senate published a report denouncing the massive use of consulting firms -especially the US firm McKinsey- during the 5 years of Macron’s government.

Table of Contents

What is the consulting firms scandal all about?

Le Monde cartoon on the consulting firms scandal
Le Monde cartoon on the consulting firms scandal

The Senate report reveals the existence of a gigantic machinery that invoiced up to 1 billion euros a year, merged its cadres into the hierarchical structure of the public institutions, shaped state policies through more than 1,600 “missions” and, to further offend the “republican spirit”, evaded paying taxes on what it collected.

But tax dodging is just the top of a wastefully nailed coffin. Two examples of McKinsey’s work:

  • The National Old Age Insurance Fund (CRAV) commissioned the U.S. consulting firm to lead its “adequacy” to the pension reform being promoted by the Macron government. The outcome: €957,000 for a PowerPoint and a 50-page booklet that were never implemented (thank goodness!).
  • The French Covid vaccination campaign… that “success”.

Where is the class struggle?

Macron with Norman local elected officials in the 'great national debate'
Macron with Norman local elected officials in the “great national debate” whose proposals led to a direct attack on the state bureaucracy.

The consulting firms scandal hides a cadavre exquis: that of the French state bureaucracy, displaced and cornered by the cubs of business schools like that of Toulouse, which Nobel Prize in Economics at the helm, participated in the piñata of public budgets under McKinsey’s umbrella.

For the bureaucrats, this is not Macron’s first assault. Starting with the yellow vests, the president had tried to redirect the plebeian anger of the petty bourgeoisie against them. And in fact he presented the closing of the “high schools” and the “national bodies” – centers of reproduction of the state bureaucracy – as a “democratic” concession to the protests.

Macron is the “idol of the consultants” -from whose state-paid jobs he has drawn much of his program– because he represents the assault of the state by the corporate bourgeoisie, its program and its methods.

A standard of precarizing management manufactured in business schools that we the workers know well and even the academy begins to chart: “flexibilizing” contracts, wages, reducing costs and quality and inflating the accounting of companies at the cost of fragilizing them with debt and “just in time”. A model that requires the state to provide legal cover for its precarizing projects, public contracts and the privatization of state services among the monopolies.

The interests of the bureaucracy are not directly opposed to those of the corporate bourgeoisie, but they will not fail to defend themselves when all these monopolistic liberals get excited and undermine their own power, weakening the state’s ability to maintain social cohesion and capturing its niches.

To summarize: we are in a battle for control of decision-making spaces in the state between two factions of the ruling class. One naturally conservative – the bureaucracy – sees its opposite as a reckless gang liable in its “excesses” to raise the specter of class struggle, as happened to Macron with “the yellow vests”. The others, with the president at the head, see the bureaucracy as an obstacle, a remnant of a past to be overcome in order to consolidate the “modernization” (=recapitalization) that national capital needs to remain globally competitive.

Why does this power struggle emerge politically as a scandal?

Macron addresses the French to communicate to them the general lockdown, except for going to work, in March 2020. The subsequent vaccination strategy would be given to the American consulting firm McKinsey.
Macron addresses the French to communicate to them the general lockdown, except for going to work, in March 2020. The subsequent vaccination strategy would be handed over to the U.S. consulting firm McKinsey.

The old French bureaucracy has been getting weaker over the last twenty years. The story of its collapse and of the dynamiting role played by socialists and neo-Gaullists in the process has been glossed over by a good collection of political cinema and some rather good series. This shows that it is still a present actor with the capacity to generate ideology at its service. That is why, although relatively slow and lazy, the Republican press has been kicking against Macron.

First there was the scandal of the privatization of nursing homes: profits for capital funds of 30% on the basis of cronyism with politicians who ensured the income, a savage precarization of workers and a criminal abandonment of the elderly who lived under a regime of terror and misery while their life expectancy was immediately reduced when they entered the centers. A textbook example of the effects of Macronite policies. But by the same token relatively “dangerous” or at least uncomfortable for the bourgeoisie as a whole. The scandal emerged but the state backed down and everything was quickly covered up. It is not even an electoral issue.

However, consulting firms are different: we are not talking here about tens of thousands of working class retirees dying miserably to make investment funds profitable –a “sacrifice” of the most acceptable kind for them as we have seen all over the world with Covid-, but about something much more “sensitive” and important for our ruling class: the solidity of the state which ensures that the bourgeoisie keep their businesses without contestation and with sufficient support in the face of the competition.

The first attack is on the quality and competence of the consulting firms.

The interministerial management repeatedly points out the “juniority” of the consulting firms and the “lack of added value” of the managers brought in by these firms. It is regularly forced to rethink service providers, to request the replacement of certain consultants who are “not up to the task” or to “rework” mission reports that are not very useful.

Consultancy firms, a machine at the heart of the state. Le Monde

But it is clear that the question is not only about whether they are competent or not. It is a question of power. This is politics and the bureaucracy understands it perfectly well: it is losing its capacity to prescribe and condition decisions in favor of agents with a very coherent discourse whose results will undermine it even more. Something that is explicitly pointed out in the Senate report.

The strategy of influence of consulting firms in the public debate (think tanks, publications, etc.) conveys “a certain vision of public action”, often advocating the reduction of spending and taxation. In January, the firm EY proposed “imagining a new ambitious transformation plan for the next five years” that would make it possible, thanks to digital technology, to eliminate 150,000 civil servant posts. When consultants advise the State, they generally propose several “arbitrables”. But most of the time, they prioritize some of them, thus guiding the decision. And the commission concludes that “a proven influence of consulting firms in decision-making”.

Consulting firms, a machine at the heart of the state. Le Monde

The assault of the consulting agencies on the key centers of the state apparatus is then presented as a real coup d’état, an attack on democracy undermined by the “technocratic elite” embodied by Macron.

Not only because we are talking about astronomical sums, coming in duplicate from an administration that we did not realize was undersupplied [of cadres]. But above all because this report reveals the depth of the ideology that for forty years has been taking hold in the state apparatus of Western countries and stripping citizens of their decision-making power, an ideology that assumes high-sounding names to better impose: governance, efficiency, “compliance”.

Neoliberal technocracy, of which Emmanuel Macron and his various governments are the chemically pure incarnation, is characterized by this inflation of private providers who come, with PowerPoint and various notes, to explain how the State must deregulate markets and detach itself from its missions. More technocracy and less State.

The omnipresence of consultancy firms is a democratic scandal, Marianne’s editorial

Will it have any electoral impact?

Survey on candidates and expectations on the purchasing power in case of their triumph
Survey on candidates and expectations on the purchasing power in case of their victory.

This revolt of the bureaucracy against the eagerness of the corporate bourgeoisie to erode its power and gain plots of prescription by entrenching itself -and sucking incomes- in the heart of the state, is not emerging now by chance. We are living the first steps of a war economy, a terrain that the bureaucracy feels as a homecoming and in which, by definition, the autonomy of corporate managers is narrowing in the face of the centralizing needs of national capital.

The corporate bourgeoisie, for its part, is nervous. Macron is one of their own, but he is no stranger to the disenchantment of a part of the classic bourgeoisie which, alongside Bolloré -the main shareholder of Vivendi – has tried to catapult its own candidate: Zemmour, the champion of the “boutades” of the most angry and narrow-minded petty bourgeoisie. The “scandal of the consulting firms” affects him squarely and pushes him to choose between losing the limelight or doubling the bet, although it is probably too late for this already in these elections.

In any case, no “electoral earthquake” is likely to take place. The media have done their job conscientiously to distract the mood of increasingly angry small property owners with war exploits and nationalism. The options representing the “anger” of the petty bourgeoisie are catching up at full speed to the advancing war economy and militaristic development. But the balmy effect both have on these sectors looks like it would be capitalized on by Macron.

They are not exactly boiling over with enthusiasm either. A few days before the democratic ceremony, neither Macron nor Le Pen manage to convince even a third of respondents that, if they win, they will improve their ability to access consumption. 74% say they have lost purchasing power during the Macron mandate. The figure only drops below 77% among voters of the president’s instrumental party (63%) and the Greens (64%), who draw the better-off parts of the corporate petty bourgeoisie.

What does it mean for the workers?

Protests against pension reform in 2020.
Protests against pension reform in 2020.

From the point of view of workers’ interests the alternative between corporate bourgeoisie and bureaucracy which has been depicted as a result of the scandal of the consulting firms has as little to contribute as a duel between Alien and Predator.

Underneath the battle there evidently is nothing else but two sectors of the ruling class, two bourgeois classes, confronting each other in a dogfight for plots of power in the state.

Nothing has been lost to us in that fight. And yet it informs us of what we are facing and of how this gigantic grinder operates and functions, a grinder whose gears are set to destroy more and more lives: whether the bureaucracy regains power or its functions are “outsourced” to consulting firms, and whoever wins this presidential election, its target will once again be the pensions, the real wages and hiring conditions of the workers in France.

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