“Timing the market is not my thing,” Peter Thiel told me a few days ago. “But if the consulting business was a stock, I’d be shorting it right now.”

I’d seen a short clip of the Palantir co-founder criticizing the consulting industry during a lecture he gave at Oxford in 2023, so I got him on the phone to hear more. Back in the 1980s, he told me, consulting firms were useful. Thanks to the corporate raiders of that era and the loosening of antitrust laws during the Reagan administration, acquisitions became the hot new trend, as big companies began acquiring other big companies. That meant that employees were going to be fired. Integrating two company cultures into one was likely to be difficult. And the CEOs of the merged companies would need to show shareholders that they could create business efficiencies, just as they had promised.

Who was going to do all that?

Consultants, that’s who! Firms like McKinsey & Company, Bain & Company, Deloitte, and PricewaterhouseCoopers had hundreds—nay thousands—of employees who could move into these newly merged corporations and figure out what had to be done. They could do the dirty work of firing redundant workers, so that the CEO wouldn’t have to. And they could come up with the strategies that would make the combined businesses more efficient and more profitable. Back then, said Thiel, “The consulting industry added value.”

But by the early 1990s, their utility had diminished. As corporations became lean and mean, there weren’t many ways left to squeeze more efficiencies out of the businesses...