In defense of McKinsey

One of America’s Most Valuable Exports: Business Consultants: The spread of managerial expertise in the last several decades has made the world a better place by Tyler Cowen. Excerpts:

"The latest institution to take a big whack from the media, with its well-known negative bias, is McKinsey & Co. A recent article in The New York Times shows how much the consulting company has worked for authoritarian and autocratic countries, including China, Saudi Arabia and Russia.

I would instead frame this story in a broader and far more positive reality: One of the biggest, most positive (and most neglected) global trends over the last 30 years has been the spread of managerial and technocratic expertise to what used to be called “third world governments.” In most countries, the central banks, the public health authorities, the treasuries and many other public-sector institutions now collect good data, hire Western-educated advisers, and try to implement good solutions."

"Although there is still a long way to go, this spread of technocracy has helped bring amazing increases in life expectancy and declines in child poverty, while making the world far wealthier and freer."

"To be sure, it is difficult to discern how much of these developments should be attributed to McKinsey, which after all is only one company. Still, these developments are what McKinsey stands for and has tried to accomplish, and any highlighting of the negative should be counterbalanced by this positive trend."

"That said, when I meet entrepreneurs in poorer parts of the world, I am often struck by the fact that they are highly intelligent and conscientious, but they don’t always understand all of the cultural codes of good management. Advice that might appear stupid or trivial to more experienced observers may actually help to build new cultures of business excellence and economic growth."

"In Saudi Arabia, McKinsey has worked on health care, education and development, and says 30 percent of its employees are women.

What about China? Isn’t it rounding up Uighurs into coercive reeducation camps? Yes, but I myself don’t wish to stop visiting China and spending my money there, or for that matter encouraging others to do the same. To provide a simple analogy: If this were the 19th century, and the U.S. was still rounding up, pushing out and killing Native Americans, or enslaving blacks, I would not boycott this country, either. Nor would I have wanted the Europeans (who had their own problems) to give up on America. China remains one of the world’s two most important countries, and the cliché that engagement is better than isolation remains true."

"If you are going to start pointing fingers, how about the American consumers whose spending leads to a yearly trade deficit with China worth about $500 billion? Surely that helps build the Chinese surveillance state far more than any McKinsey consulting contract."