History won’t be kind to Elon Musk’s Department of Government Efficiency (Doge). As failed, expensive experiments go, it’s up there with HS2 or “Tay,” Microsoft’s much-hyped AI chatbot that, within hours of launching in 2016, morphed spectacularly into a racist troll.
Doge initially pledged to slice $2 trillion from federal spending — a bravado-fuelled ambition that was swiftly halved and then repeatedly whittled down until landing at a relatively underwhelming $150 billion. Even this revised sum relies on some fairly questionable assumptions and shaky accounting. Some independent commentators suggest the real savings hover close to zero, especially once the anticipated tsunami of lawsuits — or the burden of haphazardly dismantled departments limping on dysfunctionally — are factored in. The Department of Government Efficiency will, ironically, be remembered for its inefficiency.
Yet, oddly enough, I remain rather enamoured with the concept. Just as high-speed rail doesn’t have to degenerate into a bloated money pit bereft of trains, and AI chatbots needn’t transform into spiteful bigots, the basic idea behind Musk’s ill-fated initiative holds merit. The execution may have flopped, but the underlying model of applying a private sector mindset to government spending and bureaucracy deserves resurrection.
History is full of promising ideas that tanked the first time around. Bubble Wrap, for example, originally intended as textured wallpaper, languished unsold until IBM adopted it in the 1960s for protecting computer components. The billions of Post-it Notes sold annually began life inauspiciously in 1968 as a glue deemed too weak for aerospace engineering, only to find new purpose in the 1980s.
One of Doge’s many glaring oddities was that, despite being overseen by one of the world’s most successful corporate CEOs, its cost-cutting approach was remarkably un-corporate. Most jobs — even those which are poorly performed, vulnerable to automation, or submerged in bureaucratic sludge —were originally created for a valid reason. This explains why corporate belt-tightening almost always ends rather than begins with job cuts.
CEOs and CFOs typically look at expenses before wielding the axe, scrutinising discretionary spending first — travel, events, equipment — and cutting back hours or trimming temporary hires. Full-time roles are usually the last domino to fall. Musk flipped that sequence, firing up the chainsaw without any evident due diligence or sober analysis. This wasn’t the sort of disruption or iconoclastic thinking for which Silicon Valley has become famed, just muddled recklessness.
Over here, taxpayers’ money continues to be splurged on an array of baffling pursuits. This year, these have included a £99 million initiative devoted to teaching overseas families to “cook with electricity”, including in places where basic infrastructure — and electrical cooking appliances — are lacking.
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Then there’s the £1 million grant to the Open University, which made the news last month, funding a two-year project to encourage students to “touch as a mole” and feel “like a bee”. Given the same amount would pay for 20 police constables for a year, I’m fairly certain that wastefulness could be identified without requiring a Musk-style wrecking ball approach.
Right now, injecting disciplined private-sector thinking into governmental budgeting feels not just sensible, but necessary. Rachel Reeves’s recent spending review has dramatically opened the purse strings, with departmental budgets growing by 2.3 per cent — the neck end of an additional £200 billion allocated to daily public-sector operations. I don’t find the spending itself inherently problematic.
Rather, I worry about who within the current government has earned genuine credibility managing substantial sums prudently or, indeed, could be trusted to implement rigorous cost controls to offset the increased largesse.
In this regard, I believe there are plenty of highly talented figures from the world of business, with proven track records, who would bring more experience, expertise and, in all likelihood, results than the government could muster.
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How about someone like Sir Terry Leahy, who streamlined Tesco? His brand of operational efficiency relied heavily on automation, data analytics, and smart technology as well as lean logistics. Or Sir Stuart Rose, under whose leadership M&S developed more prudent supply chain management, stricter inventory controls and a better ability to negotiate more favourable terms with suppliers? Perhaps once Dame Carolyn McCall steps down from ITV? Diplomatic and a good communicator, she has credentials in turning around, and modernising, businesses in the public eye.
Musk might have inadvertently given efficiency a bad name but his version of Doge should be regarded as a flawed prototype rather than proof of a dud concept. Having had a helpful case study of “how not to do it”, perhaps it’s time for someone to do it properly.
Seema Shah is chief global strategist at Principal Asset Management