Miguel
But a good question is how do you tackle something that is hard earned truths?
Like utopian visions ending up to corrupt all of its founders and the people who believed in it (communism in Russia, China or Cambodia)? Are we always going to leave open ends and keep inquiring even if we have basically tried to repeat the same errors that even have caused massive hurt, deaths and suffering as a civilization?
I see a trend now in fraud that we just as a society is very vulnerable to it—is it really to complex for us? or is it a but that we have in our cognitive ability and only few can understand significant effects of small deceptive actions that aggregates like snowballs growing to avalanches of suffering?
I would appreciate your comment on this Habryka. Thank you.
Given that I have been encouraging lots of people to write more about the FTX situation, I want to clarify that I have a dispreference for posts like this. I don’t think they are terrible, but the kind of writing that I am interested in is people sharing observations and hypotheses and trying to do collective sense-making, and not public statements like this, which seem to only communicate information that helps people orient incidentally to their more social-reality based core content.
I agree with this criticism. I will do my best to reduce my inherent bias to my real world experiences and be on an inquisitive mode moving forward. Thanks Habryka.
okay, I found an earlier comment.
so the choice of words was the problem. hmmm. sorry for that I guess. At least we are on the same page as to where should we place our view on fraudulent behavior.
It is very weird that this comment got downvoted so much even though that this was my experience in the business world. I’m getting the impression that many do not understand fraud and that is why it keeps on repeating like a pattern that affects so many people negatively.
I would appreciate proper criticisms so I can explain further why fraud is unacceptable at all levels especially in organizational or business setting.
Thanks Linch, Probably I phrased it wrongly. But what my thought process was lying to save jews because the Gestapos where following a wrong worldview is not lying for me—that is doing the morally correct thing, prevent people from dying.
Money either can make or break anyone—it multiplies who we really are as a person. Thank you as well for recognizing that I am zeroing in at the fraud, internal controls and governance issues but these concepts will never get implemented properly if we do not agree with the basic notion of what is truthful in this community. This is why I am trying to ask questions related to how can the act of lying be justified—I run marathons and there is no way I can do it through without training, same with martial arts where I have to repeat certain front flips or left kicks for a year or two just to get it right or even the daily one hour routine of playing the guitar to get better. I have been to so many positions in life and never have found a use case for lying—ever.
Another thing, this community seems to be ahead of the existential risks research /actions yet got blindsided by SBF. I want to share that it is becoming a trend since we had the ability to increase the reach of our communication through phones, radio, tv, paper or now the internet—bad ideas that affects large swats of the population gets pushed so easily. Scandals like Theranos, FTX, Lehman were somewhat abstraction of post modernism that is an upgrade from the marxist view—I am very worried that the true existential threat is actually that we as a society is not equipped as a whole to understand complex bad ideas creeping into our daily lives. Nuclear weapons, AI misalignment, pandemics, climate catastrophe and etc are actually easier to solve if we get society to band together—yet these major frauds are hitting the us like gut punches and dividing the world more...If I will bet on what is the priority truly—it is totalitarian ideas like what SBF did can floor civilization to its knees.
In my view, the Gestapo is acting in a lie as they are similar to regular policemen in Poland that believed in the Nazi narrative and eventually ended up becoming mercenaries that shoot pregnant women at the back of their head (As described in the book Ordinary Men) - Communism, Nazism and other totalitarian views have the initial goal of saving people and making the best case scenarios and ends up becoming diabolical pursuits as the utopian vision that they are trying to sell to people becomes the source of lies that the average person need to tackle like the example you just describe Habryka.
Unless you can justify that grand narrative that the Gestapos are following is for the common good, I cannot consider the example a correct position to lie—as for me saving people is not lying.
(a place to actually think carefully about when it’s correct to lie, instead of trying to oversimplify the rules of ethics into a something that doesn’t actually end up having to do much with my daily decision making).
You mean you think that there is a position where lying is acceptable? Please explain further..
I’m supporting Dr. Jordan B. Peterson’s cause. He’s online lectures were very helpful for me and I am returning the favor so he can help more people.
My fraud 101 post is very relevant here:
https://forum.effectivealtruism.org/posts/h7gnYAvEpqBxAr3Wr/fraud-101
Fraud defined in this post is in business context—mismanagement, violation of internal controls or collusion, etc. The self defined position you are claiming Habryka for fraud is very different from what is acceptable in governance and internal audit standards that governs large organizations.
Hello there, lying to protect people in danger is actually truthful preservation of life. That is very different from fraud performed to serve one’s own interest. Two different situations..
You might need to read the Gulag archipelago where it accounts the best humans where the ones who have preserved their humanity even in the face of stalin’s communism—as deadly as the situation was for them, they chosed to do things right.
Not all people choose evil to fight evil my friend. There are those who have accepted their capacity to do great evil and controlled it—Jungian Shadow Embodiment.
In my experience as an accountant for 10 plus years, never has any kind of fraud or misappropriation have been accepted. However big or small deception is, it will always and unequivocally be not tolerated.
yey
I wonder what changes gets implemented after this moment of shift in EA? That is worth talking about too in 5 years or 10 years..
Hi Sara,
Thank you. I have created this post for a basic concept on fraud and how it occurs. I will add a post on your suggestion tomorrow outlining the best reading materials out there fraud, internal audit and governance to improve the knowledge base of EA on these areas.
All the best,
Miguel
Most fraudulent activities were done by normal people that rationalized their way when opportunities or gaps presented to them and they happen to need the financial gain.
Based on my read on the level of familiarity of governance within EA, I wouldn’t blame FTX Foundation team too much on not being able to see further and not placing importance on the vulnerability of donors failing to deliver their commitments.
Did anyone at the FTX Foundation or Future Fund, or others in advisory roles, press for this? A side benefit might’ve also been uncovering the fraud earlier and perhaps mitigating it somewhat.
Fraud (as I have discussed in previous posts) is built to deceive, if no controls for detection were installed, one will not be able to like develop an investigative urge and start looking for unusual activities...
Thank you for sharing! A one sentence thought on one of the paragraphs towards the end outlined by a former EA member...
Initially, they appeared to achieve their goal: MacAskill offered to talk to Cremer. She presented him with structural reforms they could make to the community. Among other things, Cremer wanted whistleblowers to have more protection and for there to be more transparency around funding and decisions about whom to invite to conferences. MacAskill responded that he wanted to support more “critical work”. Subsequently, the movement established a criticism contest. Yet when it came to specifics such as the mechanisms for raising and distributing money, he seemed to think the current process was sufficiently rigorous. MacAskill disputes this characterisation and told me he was in favour of “increasing donor diversity”.
I could understand the pursuit for accomplishing critical work and achieve EA objectives, but a structure to safeguard the work and EA brand is vital as well.
Will look into your project Grayden...and sign up. I might be able to help you with this.
I do agree in this post as the likes of Theranos, WeWork and Now FTX is like a pattern of some sorts. It’s like we as a society is unable to have multiple people thinking effectively in the world of money that is why utopian visions easily sweeps the wide swats of the business landscape..
A similar pattern in some sense is how bad ideas in former USSR and Germany where either communism or nazism got easily inserted to the larger community through lies.
Human OS is seemingly ill equipped when promises of a better future is narrated by highly ambitious, but fraudulent individuals. Only few can really see through the future or discover the gaps that will lead to horror.