In this episode, Patrick McKenzie (patio11) is joined by Dan Davies, author of Lying for Money, and The Unaccountability Machine. They discuss how cybernetics–the study of control and communication in complex systems–applies to modern organizations and decision-making. Dan and Patrick discuss how organizations change as they grow, financial fraud and its relevance to systems design, and the process of writing nonfiction books. The conversation touches on pathologies like what happens when organizations insulate decisionmakers from communications channels to on-the-ground reality.

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Full transcript available here: https://www.complexsystemspodcast.com/episodes/dan-davies-organizations-fraud/

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Sponsor: This podcast is sponsored by Check, the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.

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Links:

Dan Davies, Lying for Money 

Dan Davies, The Unaccountability Machine: Why Big Systems Make Terrible Decisions — and How the World Lost Its Mind

Dan Davies Substack: https://backofmind.substack.com/

James Gleick, The Information

Malcolm K. Sparrow,  License to Steal: How Fraud Bleeds America's Health Care System

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Twitter:

@patio11

@dsquareddigest

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Timestamps:

(00:00) Intro

(00:26) The Unaccountability Machine

(01:38) History and fundamentals of cybernetics

(08:10) Operations research and its evolution

(12:08) Theory of the Firm, revisited

(15:21) Monopolizing math for fun and profit

(18:38) Sponsor: Check

(19:50) Role of black boxes in systems

(25:11) AI and the future of system management

(30:02) Accountability sinks and organizational issues

(38:44) Optimism about future of organizational design

(43:45) Empowering employees: the CEO’s open door policy

(46:31) Lying for Money

(51:57) Psychology of fraudsters

(01:02:52) Fraudogenic environments

(01:09:49) Journey of becoming a published author

(01:18:13) Effective ways to sell books

(01:22:33) Wrap

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Complex Systems is part of the Turpentine podcast network.