Apologies for not blogging about Ole Sohn (if the reader presses me, I might give it a try), but an intriguing comment by Niels Lunde on Politiken.dk caught my attention.
The thing is that following Karsten Dybvad’s move to the Confederation of Danish Industries (in itself a fascinating story as Dybvad has a past in the labour movement), the permanent secretary in the Finance Ministry Christian Kettel Thomsen was immediately moved to the position as permanent secretary in the Prime Minister’s Office. That left a vacancy in the Finance Ministry which had to be filled in a hurry, not just because we are in the early stages of negotiations about the 2011 Budget, but because – well, because the Finance Ministry is the #2 in the ministerial hierarchy.
(Many members of Finance Ministry staff would deplore this state of things by the way, remembering the 1990s when it was said that “Poul Nyrup is the prime minister in Mogens Lykketoft’s government”)
As usual, there were speculations, which in the end turned out to be wrong as the government chose David Helleman, a 39-year-old partner in McKinsey & Co. (LinkedIn profile here) as the new permanent secretary.
Helleman’s career is interesting because although he has a background in the Finance Ministry (and by definition knows the political process and in particular the budget process very well), he has also moved between the central civil service, state corporations and the private consulting business. Traditionally, careers in the Danish civil service were very much in a closed circuit – you could leave, but your chances of coming back very minimal.
Anyway, back to Niels Lunde’s discussion of Helleman. We are told that he is smart, brutal and creative (in the Danish civil service, the latter is in fact a questionable property), which is how 100% of senior managers in the business world and an even higher share of McKinsey & Co. partners would describe themselves.
Lunde doesn’t dig deeper into this but the McKinsey link is interesting: In organisational theory and policy studies, one line of research have focused on myths as an important element in the formulation and implementation of policies. In later decades what we might call “the McKinsey myth” has become, if not dominant then extremely widespread, and as new ideas – to the degree that anything coming out of McKinsey can be called new ideas – come with new people, recruiting a McKinsey partner also means attempting or intensifying attempts to McKinseyite the civil service.
One line of argument in Lunde’s comment is the creation of a parallel between private companies and the civil service (note the successful CEOs, Lunde is namedropping). This follows the traditional complaint from business managers that the state isn’t run as a (i.e. their) company.1 A certain Mr. Krugman has debunked this myth of the-state-as-business a long time ago, but then again Krugman is an academic and business leaders have no time for such people in their very busy schedules. Especially if the academics say kind words about a certain Mr. Keynes.
It gets better – or worse, depending on your point of view: Lunde admiringly tells us that Helleman has the temperament of a hedge fund. Focus is on realising the goals in the sort term following leveraged buy-outs and budgets will be slashed and employees sacked without mercy. Helleman used to be the CFO of DR which has seen quite a bit of slashing and sacking, so the description of Helleman’s management style is probably correct. He appears to be the kind of person you would never ever invite to dinner unless you yourself had a distinct purpose with the arrangement.
But: The state as hedge fund? I’m troubled by Lunde’s image for many reasons. As a political scientist I will argue with Max Weber that the state’s first and main goal isn’t to deliver a profit to whomever the owners might be; it is to maintain a legal order and the monopoly on the use of violence. And even if we shouldn’t assume that the State of Denmark will exist until the end of mankind, chopping it up and selling the various bits and pieces would in fact amount to treason. Finally, even economists have been concerned about the increasing tendencies to short-termism in capitalism brought about by fickle investors and in the political world, the criticism that politicians only have the next election as their horizon is more than well-known.
So I hope that Lunde will realise that his image is an unfortunate one. There are many reasons why Denmark could use a better system of controlling the state budget (maybe a trip to Stockholm could be useful: The Swedes learnt their lesson following the crash of the 1990s and made thorough reforms of the entire budget process) but running the place like a hedge fund manager looks more like a recipe for disaster.