Dan Davies > Quotes

“the economy would tend not to the frictionless ideal, but to be made up of islands of central planning linked by bridges of price signals.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“In other words, the problem of managing fraud is the problem of management itself.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“If the economy is an information-processing system, does that mean that every corporation is an artificial intelligence? If people are worried about out-of-control AI taking over the world and destroying everything, shouldn’t we have been trying to do something about them at least seventy years ago – and probably more like two hundred?”
― Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind

“One of the reasons why fraud controls were not properly built into the Medicare system, for example, was exactly this issue—nobody wants to say or imply that they don’t trust doctors.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“bankers steal money for the same reason that heroin addicts do. They've been put in a position where they cannot get the money they need by honest means. In an egalitarian society that happens a lot less.”
― Dan Davies

“As we all know, even when carried out entirely legally, the production, use, and disposal of many modern products kills people in large numbers.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“Consider the example of a young person going down a YouTube rabbit hole. There’s a human intelligence taking in the content. There’s also an algorithmic system at work, showing them one video after another. You wouldn’t necessarily call the algorithm an ‘intelligence’, although it does seem to do things with a purpose. But then there’s a third entity in the background – the company that owns YouTube, and the structure of cause and effect that brought the other two things together. There’s no one person, or group of people, making the decision about what videos our hypothetical young person is being shown. In fact, the executives in charge of the parent company are sometimes horrified and distraught at the decisions made – in 2017, there was a scandal at YouTube when it was discovered that people were producing parody cartoons featuring beloved characters burning down houses or undergoing painful dentistry, and that these were being shown more often to innocent children than to the ironic adult consumers that were their intended target market. But somewhere, at some point in time, it’s been decided that ‘engagement’ is the purpose of the system – what it does – and somewhere else, a set of decisions have been made about what methods are going to be used to achieve that purpose.”
― Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind

“That’s the basis of my proposal for a Golden Rule: Anything which is growing unusually quickly needs to be checked out, and it needs to be checked out in a way that it hasn’t been checked before.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of Our World

“various idiots thought that they were much safer than they actually were,”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“Given the prospect of making a lot of money, and the general deregulatory spirit of the 1990s and early 2000s, it was generally agreed that this was close enough for rock and roll.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“It is a sobering thought, for example, that despite employing some of the best and brightest* analysts in the world, the advice given by the US State Department over the last fifty years could comfortably have been outperformed by a parrot that had been trained to repeat the phrase, ‘Don’t start a war.”
― Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind

“The self-organizing tendency of distributed control frauds ties into some very deep ideas about information, incentives, and economics.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The other classic—if you can find it—is Donald Cressey’s Other People’s Money (1953), which introduced the fraud-triangle psychological model. Since this one is out of print and widely stolen from libraries”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The system of profit equations that Jerome Levy wrote down in 1914 anticipated a similar set of equations written down by the Polish economist Michal Kalecki in 1935. And Kalecki’s system is regarded by a lot of people as containing nearly all of what’s useful in J. M. Keynes’ General Theory of Employment, Interest and Money, published in 1936 and widely accepted as one of the greatest works of economics ever. Levy went on to demonstrate that the proverb ‘if you’re so smart, why aren’t you rich?’ was not applicable in this case; aided by his sons, the Levy family went into finance with sufficient success that the Jerome Levy Forecasting Institute they endowed at Bard College continues to promote their approach to economics today. You used to be able to buy a copy of the book Jerome wrote in 1943, Economics Is an Exact Science, from them; I got mine in about 2002. In the introduction to that book, Levy sets out his view of the purpose of capitalism: The working class is the original and fundamental economic class . . . The function of the investing class is to serve the members of the working class by insuring them against loss and by providing them with desired goods. The justification for the existence of the investing class is the service it renders the working class, measured in terms of wages and desired goods. The contrary is not true. The working class does not exist to serve the investing class. The working class has the right to insure itself through organizations composed of its members or through government, thereby eliminating the investing class.”
― Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind

“I have an uneasy feeling, for instance, that if the computer had been around at the time of Copernicus, nobody would have ever bothered with him, because the computers could have handled the Ptolemaic epicycles with perfect ease. Kenneth Boulding, ‘The Economics of Knowledge and the Knowledge of Economics’, 1966”
― Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind

“The easier something is to manage—the more possible it is to take a comprehensive view of all that’s going on, and to check every transaction individually—the more difficult it is to defraud.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“Denial, when you are not part of it, is actually quite a terrifying thing. One watches one’s fellow human beings doing things that will damage themselves, while being wholly unable to help.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of Our World

“John Carreyrou’s Bad Blood (Knopf, 2018) is a solid narrative account of the Theranos affair, but genuinely excellent in its description of how hard life gets for people who start to challenge a fraud.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“And the thing about numbers, of course, is that there are lots of them.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“not wholly rigorous, mainly because it’s wrong.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“They’re cheats, is what they are, and like people who cheat at sports, they spoil the game for the rest of us.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The central structure of the scam is that you take an industry in which a big up-front investment is needed in order to earn rewards at a later date—the crucial dimension of time that defines the commercial fraud as compared to other kinds of theft.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“Readers with a background in geology might note at this stage that when you find gold in rock, it doesn’t come in smooth nuggets.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“most of the information that you would need to plan an economy was “tacit”—embodied in personal experience, spread out across the production units themselves,”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The Brazilian straddle is a portfolio consisting of a load of call options on one side, and on the other side, an air ticket to Brazil. If the market goes up, you collect all the profits on your call options. If the market goes down, you leave the country quickly.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“the claim that Social Security is a Ponzi scheme is itself part of the basis for calls to dismantle it and replace it with something that’s easier for the financial-services industry to charge fees on.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The cost of eliminating dishonesty has much more to do with the amount of legitimate business that never gets done.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“In the run-up to the 2000s financial crisis, we saw the development of what might be called a “distributed” or “self-organizing” control fraud.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The criminologist Michael Levi once wrote that, if you have no convictions or bankruptcies on your record, “everyone gets one free shot at a long firm,” and I’d be lying if I said I’d never daydreamed.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World

“The problem is that spotting frauds is difficult, and for the majority of investors not worth expending the effort on.”
― Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World