Steelmanning The Case For Consultants, Affirmative Action, and Alcohol

The strongest counterarguments against increasingly popular beliefs

Three ideas have gained remarkable momentum, even becoming consensus in certain circles:

1. Consultants don’t do real work.
2. Affirmative action puts diversity over merit and blocks the most talented candidates.
3. Alcohol is bad for you and you should never drink.

True intellectual rigor demands we seek out the strongest possible counterarguments, even when they challenge beliefs that feel obviously correct. Laying out the strongest arguments for the opposing side ensures that we understand the other side from first-principles. If you can't articulate the strongest possible case against your own beliefs, you don't understand the topic well enough to have strong beliefs about it, and are subject to the public intellectuals and other cult-like individuals who present these ideas.

In this piece, I steelman the case for consultants, affirmative action, and alcohol consumption. Note that this is not what I necessarily believe, but what I believe are the strongest arguments in favor of each.

The Case For Consultants

Zeitgeist belief: Consultants don’t do real work. Consultants may work nominally long hours but do not add any significant value to firms, billing high rates for meaningless PowerPoints.

Steelmanned counterarguments:

1. Consultants enable executives to take unpopular decisions by outsourcing blame to a third party.

Consultants are presented as unbiased third parties who are stewards for the company to increase its bottom line. Improving the bottom line often means cutting costs by laying people off. Executives utilize consultants as a scapegoat in laying people off to deflect the blame and ultimate responsibility for unpopular and difficult actions.

2. Consultants can be more incentive-aligned than internal stakeholders.

Consultants typically bill per hour with milestone goals. Company employees are typically salaried employees who are not conditionally employed for a set of scoped projects. Employees are more incentivized to do the minimum to not get fired while consultants are incentivized to work much harder to extend their contracts. Additionally, it is common for consultants on a project to eventually work for the company down the line, another incentive for the consultant to work hard for potential equity.

3. Consultants are more competent and get things done faster, on average.

Consultants typically come from above-average schools and consist of some of the most elite human capital among the workforce. Furthermore, the ability to fire and hire consultants at a faster rate than the normal hiring pipeline means that companies can cycle through consultants until they find a good fit.

While consultants often speak very cynically about the amount of brainpower their job requires, the obvious things they do and say are very valuable to firms:

“A lot of times all I do is connect people with resources they didn't know exist but sometimes it is a massive execution checklist for ensuring the success of a project from a third party with no ego.”

4. Consultants accelerate institutional learning through pattern recognition, saving executives years of costly decisions.

High-leverage frontier knowledge exists only in the heads of a few key consultants and is treated like a trade secret. This could be knowledge of good advertising agencies, upcoming regulatory changes, or insights from proprietary data.

Consultants only reveal the insights to long-term clients in meeting rooms. The answers are never posted online.

5. Consultants operate as load management for their key employees to be productive.

Consultants are typically part of firms with droves of other consultants ready to work at a moment’s notice. This enables companies to rapidly scale their consultant workforce based on their immediate needs.

Slack is required in the workforce for employees to be most productive. Consultants are the most efficient form of managing slack.

6. Consultants are highly paid and if you believe in even a weak form of the efficient market hypothesis, they have to be doing something.

Decades of empirical compensation evidence indicates that they are being paid to do something. Even if consultants themselves can’t enumerate it, the onus is on outsiders to provide sufficient evidence, rather than subjectively saying “this person isn’t doing any work.”

The Case for Affirmative Action

Zeitgeist belief: Affirmative action puts diversity over merit and blocks the most talented candidates. Whites, Asian-Americans, and other racial groups have been disproportionately harmed by admissions guidelines.

Steelmanned counterarguments:

1. Universities are a search function for high-volatility individuals and affirmative action enables them to better select for high-volatility people.

Universities primarily care about prestige and their endowment. Universities increase their prestige primarily by association with notable alumni. Their endowment is highly correlated with donations from rich alumni. Both are dependent on extreme right tail alumni success.

Universities think of each incoming class as a portfolio and they want to buy options on the highest volatility students. The 1000th Asian kid with a perfect SAT score is likely a lower volatility asset than someone who had a rougher upbringing with worse test metrics across the board.

2. Affirmative action serves as a hedge against an indefinite future of elite formation.

Universities can’t predict the geographies, industries, or racial groups that will experience a rise in status, so they select top prospective students from each demographic. This enables them to take a balanced portfolio approach against an indefinite future.

This gives universities the highest likelihood of an alumni going to their university, both increasing their future prestige and endowment. This prevents association only with a narrow elite that may become obsolete in the future, and allows them to co-opt the most ambitious potential dissidents into the establishment.

3. Affirmative action reinforces exclusivity by serving as a luxury status symbol for elite universities, while baiting lower-tier institutions into adopting policies that ultimately undermine their own competitiveness.

Affirmative action initially served to publicly demonstrate ethical superiority, distinguishing institutions that adopted it from those that did not. Elite universities led this trend, and lower-tier institutions soon followed.

Elite institutions knew that the lower-tier institutions would follow and would disproportionately hurt their long-term prestige and endowment more than their own. Elite institutions have the institutional capital to select from an applicant pool with extreme right tail potential that can cover for any weaknesses in the affirmative action cohort.

Lower-tier institutions do not enjoy this luxury. By adopting the same policies, they admitted weaker classes and suffered lower graduation rates, eroding both their prestige and their endowment over time.

Elite universities are where the majority of social and technical innovation occurs and affirmative action enables them to continue their lineage of prestige to maximize their ability to enact positive change on the world.

The Case for Alcohol Consumption

Zeitgeist belief: Alcohol is bad for you and you should never drink. Alcohol is a Class 1 carcinogen, and even one drink a day raises the risk of breast and colorectal cancer. It also reduces sleep quality and shrinks brain volume over time.

In this section, I provide steelmanned counterarguments for micro (why you should drink) and macro arguments (why society should continue drinking).

Why you should drink

1. It’s a critical social lubricant that signals positive attributes about yourself.

Humanity exists because people typically got drunk and had sex. It’s one of the most Lindy signals that you are willing to participate in things that harm your body to show how healthy you are to potential mates.

The ability to drink moderately signals important traits to your peer group: self-control, social awareness, and risk management. Completely abstaining signals risk aversion that limits opportunities or lack of social sophistication. Moderate drinkers demonstrate they can navigate complex social situations and manage potentially harmful substances responsibly.

2. It’s an accelerant to meet and trust new people.

Drinking lowers people’s inhibitions, causing their true selves and character to be revealed sooner. In the same way as people who respond faster are seen as more trustworthy, drinking with someone accelerates friendship formation and decreases the amount of time it takes to trust someone.

3. It might actually have some health benefits.

While heavy drinking is long-term harmful for one’s body, intermittent and moderate drinking (< 20% ABV) is probably okay. Though the mechanisms are not widely understood or agreed on, moderate alcohol consumption may upregulate NRF2/FOXO stress-response pathways. Furthermore, some degree of sleep disruption/sleep restriction (congruent with social alcohol consumption) on rare occasions is efficacious treatment in anhedonic depression.

There is empirical evidence that there are substantial numbers of people with long healthspans and lifespans who consume low ABV alcohol regularly. This may not even be from the alcohol itself but rather the social interactions that typically are associated with drinking.

In moderation, drinking probably isn’t the reason why you are going to die.

Why society should continue drinking

1. Alcohol generates massive positive economic externalities.

The alcohol industry supports millions of jobs across agriculture, manufacturing, hospitality, and retail. Wine regions drive tourism, breweries anchor local economies, and restaurants depend on alcohol sales for profitability. The tax revenue funds public services.

2. Driverless cars are coming, so we can actually start saving all the drunk driving lives a year in short order.

In 2023, approximately 12,500 people died from drunk driving in the US, one person every 42 minutes. These are no longer preventable deaths only in theory but also in practice.

Waymo is now available in multiple cities across the US and rapidly expanding. Pending regulation, self-driving cars will be the rational economic decision and will bring driver-induced drunk driving down to zero.

3. Alcohol has a slower dependence curve and we understand the mechanisms for treatment better than alternatives.

If people stop drinking alcohol, they will find other avenues as a form of escapism. The other drugs that have gotten more popular are typically much more addictive than alcohol.

Alcohol often takes months to years of heavy, regular drinking for dependence to develop. Nicotine, cocaine, opioids, and other drugs have much shorter dependence timelines, often within days to weeks.

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