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Comment by Maarten88 | Hacker News Reader

Saying the compliance department exists to make sure the company adheres to the law is like saying the HR department is there for employees. That is what they say, but in reality it's the other way around: Compliance acts to protect the company against the law. This has clearly failed at WV.

Also the post assumes a big organisation operates as a whole. My experience is that management high up are either competent and evil, or ambitious and ignorant. That mix lends itself to all kinds of random organisational behaviour. I know nothing about WV, but I assume many people knew this but did not think too much of it (everyone cheats), thought it would help their career (hit that target), or wanted their company become the largest car manufacturer in the world.

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> Saying the compliance department exists to make sure the company adheres to the law is like saying the HR department is there for employees.

No, it is explicitly meant to convey the message that the compliance department exists to protect the company from liability. I will update the post to make this more clear.

Seems like you are saying the same thing, if the law is to be considered a liability.

Jesus, that is a cynical way to look at the people who work in an organization. Is any non engineer not evil or amoral in your worldview?

Very few people really think of themselves as evil.

But in my worldview most people (including engineers) cheat a little bit and then rationalize it so they don't have to feel bad about themselves. Big corporations and complex economical systems lend themselves very well for rationalizing your part in something evil away, especially for upper management.

Watch this video. It changed my view on the world: https://www.youtube.com/watch?v=XBmJay_qdNc

p.s. It has been shown that the psychological profile of top-criminals and CEO's are remarkably alike.

> But in my worldview most people (including engineers) cheat a little bit and then rationalize it so they don't have to feel bad about themselves.

So, if we assume that is 100% accurate then maybe a company the size of VW should have a department that checks up on these sneaky cheating engineers to make sure they don't expose the company to liability.

The whole idea is that the company avoids - given the size of the penalties involved - to be caught cheating, especially not at this scale.

Then there is the matter that the ethical rules for engineers specifically state that an engineer will never assist or cause a company they work for to break the law. (For some this sort of an oath may hold more strength than for others, but it must have been very clear to the people involved they were doing this to break the law and they would have definitely wanted at a minimum indemnification from higher ups about the possible consequences of this if they didn't actually blew the whistle internally.)

This is the sort of thing that Germans tend to be big on and it is one of the reasons 'made in Germany' was seen as a source of trust and quality.

VW management is throwing all these values under the bus as if 60 years of brand creation are utterly worthless.

> This is the sort of thing that Germans tend to be big on and it is one of the reasons 'made in Germany' was seen as a source of trust and quality.

And this is a huge part of why I will never buy a Volkswagon, and possibly never buy a German car. Not even used, because that contributes to the predicted resale value of new.

Volkswagon has made great effort to position themselves as environmentally conscious, with lighthearted ukulele music, kids running through clean air, flowers and lots of white backgrounds. They said a specific thing, while they were doing an exactly opposite thing. A thing that is deadly in the small and in the large.

I bought a used car just before the scandal hit. I'm old enough to remember when American cars were seen as piles of junk. I was trying to be open while walking the lot, and I did sit in some American cars. But due to my prejudice, I ended up thinking "Japanese or German, Japanese or German, ..." while walking the lot. And the next time I buy a car, that chant will be much shorter.

If we are discrediting nation by a single incident, are you sure about the Japanese? The 2009–11 Toyota vehicle recalls didn't really help to keep the trust, did they?

In anyway, this kind of thinking is really harmful to the global economy and welfare. Please evaluate the companies on their own.

Well, it's a personal decision to be sure. The difference between the Toyota issues and the Volkswagon issues is that Toyota did not (as far as we know) engineer a part of their car to do something that they asserted it did not do, and didn't cheat on testing. They likely foot-dragged the investigation.

Volkswagon did exactly that, with malice aforethought. It was on purpose, by design.

Volkswagon owns other brands. Not all, but others.

I have read that the German auto industry as a whole has has been successfully heavy handed in influencing emission standards in Europe.

EDIT: And this refusal to buy is the only leverage I have in influencing corporate conduct. At the least, it's a personal decision not to award actual or suspected behavior. The German auto industry as a whole has been tainted, and this may be their chance to clean up their act and really be what they say they are. Rather than merely any set of corporations that happens to make cars instead of breakfast cereal.

Fuck 'em.

Why exactly is the German auto-industry as a whole been tainted? I can understand avoiding the entire Volkswagen group (including non-German Seat, Skoda, Bugatti, Bentley, Ducati), but I don't see why this situation should give you a similar distrust for Mercedes or BMW.

Similarly, Chrysler was German-owned (through Daimler) between 1998 and 2007. Are Chrysler, Jeep and Dodge models from those years now tainted as well? What about the years after 2007?

Again, personal choice, there are an infinite number of choices on how to spend my time and money. I also don't watch Tom Cruise movies, because Scientology.

As for the German car industry as a whole, as I said, I've read that the industry has been successful at influencing emission standard and limiting testing. Volkswagon is part of that group, and everyone else in the group is part of that group.

I'm pretty sure Germany is not overly concerned about me. But they may be concerned about Volkswagon's 24% drop in sales in America in November, and as I speculated above, that may get enough of the industry's attention that they may feel compelled to execute in a way that shows without ambiguity that they are far and away the most honest companies in the world. I'd buy cars from that group.

Meantime, there's Japan, America, Britain, Sweden, France, Italy, and probably some that I haven't mentioned. You have to choose, so choose according to what you want to reward or change.

Fair choice. As for me, I don't go out to watch movies at all, because Hollywood.

But then I would guess your aversion against the car industry to be more general, and that the recent revelations about emissions cheating have done little to sway your opinion. You're basically using the actions of a single actor to reinforce your biases against an entire group.

I do hope you are aware enough not to use that same line of reasoning against racial, ethnic or religious groups though.

I don't know how VW gets audited but in US, when a company is audited by their accounting firm, one of the sections is a "Process Audit" - checking to make sure that regular business practices are followed.

In a perfect world, audits would catch these things, however, because there is a lot of pressure on accounting firms, usually, this step isn't given a lot of consideration.

In the event a company is caught, the accounting firm takes a hit on their reputation and have to go back, re-audit, and change their designation of company policy.

Source: my wife works at one of the big 4 accounting firms and recently explained how an unrelated company had similar issues in failed business practices etc. etc.

Sure, and sometimes these audits are people asking the managers "do you do this?". That is all they do. They don't sit in and watch people.

>sometimes these audits are people asking the managers "do you do this?".

I work for one of the large pro services firms that does internal audit, compliance/risk projects, strategy consulting, etc.

I'd argue that unless there are explicit sets of controls that HAVE to be tested as part of the project scope (which is usually defined by regulatory requirements), most audits are just people asking questions and ticking off boxes on a checklist. Most of the bigger firms even staff these projects with fresh graduates that often know absolutely nothing about what they're auditing.

Conducting an audit doesn't necessarily mean that you check everything. Often, auditing is looking for evidence as to whether a particular procedure was followed or not.

For example, say you're auditing a large company for compliance against a information security management system under ISO 27001, and you're checking to see whether the organisation you're auditing actually does keep its operating systems patched and its anti-virus software up to date.

You'll certainly ask questions about whether, how and how often the updates are done but you're probably not going to check every single server, desktop and laptop because that would be too expensive. What you'll probably do is check a sample, and if all the devices in the sample are all up to date, you'll tick that box and move on.

If, on the other hand, you find that half the desktops you check haven't been updated, then that's evidence that the updates policy isn't being followed, and would trigger further investigation, and probably a failure on that specific audit point.

The equivalvent check in the VW case would be to run a test of the engine's emissions. It's not unreasonable for the methodology used to be based on that used by the regulatory body, in which case, it would have passed the audit.

Nothing you're saying is wrong or theoretically unsound. But in practice, 'looking for evidence'-type activities are frequently glossed over, even by very reputable audit firms.

I think you hit the nail on the head with something that I've been wondering about for a while. I do audits (TDD) for a living and I actually take my job serious. I invest a lot of time into gathering all the information available on the company and try hard to figure out what the main issues facing a company are before I even go there. That means that when I go and look at a company I really look at it. This has two possible outcomes: the first is that the company is actually flattered that someone would take them - and their investors - serious enough to spend the time to make sure everything works and works well. They'll be proud to show someone that spent the time and effort to get to know their company and product how good they are at their jobs and how well their product is put together. If stuff surfaces that is not 'ok' they either know about it and have a plan of mitigation but simply not enough time or other resources and if they didn't know about it they're grateful for the sincere feedback and will fix things as soon as possible.

The second possible outcome is that a lot of stuff surfaces that the people running the company may not even have been aware of and would rather not be aware of.

This all in contrast to the same job being done by larger companies which tend to output super nice and glossy reports that are essentially 50% gray paper, there isn't anything you could do with a report like that except for pretending that you went through the motions of doing your job.

My reports by contrast are usually 20% the size of the competition without any graphs or other distracting elements but are full of actionable advice and clear guide as to whether or not I believe the investment is a good one or not and why. This doesn't make me a whole lot of friends but the results are there and I stand by every word I write.

For the life of me I can't imagine that VW with the budget they have and the amounts of money at stake would not give their compliance department the tools and the authority required to do their jobs. I'm still waiting for the other shoe to drop, someone leaking a mail archive from VW internal correspondence (assuming evidence has not been destroyed, which would make them look even worse) or something to that effect.

This goes way beyond a single arm of VW, it just isn't possible and if it is then it is (counter-intuitively) actually worse for VW because it may mean they are not compliant with a whole bunch of other laws as well.

In that case essentially any VW vehicle would need to be re-certified for all aspects of a road worthiness certification because they have make it plain that their compliance departments are toothless paper tigers. And that might be a much worse path for VW than the one where they simply and openly admit to malice with respect to this one single aspect of their products.

>VW should have a department that checks up on these sneaky cheating engineers to make sure they don't expose the company to liability.

What would eventually happen is that this department would decide to if the liability is greater than the profits generated by the cheat.

Even if that were the case in this case they really messed up.

>p.s. It has been shown that the psychological profile of top-criminals and CEO's are remarkably alike.

For very liberal definitions of "has been shown". It's been shown that CEOs score more highly on a diagnostic of psychopathology than the general public but those diagnostics were designed for use on people with presumed diagnoses of psychopathic disorders, scoring highly on them without a prior probability of having such a disorder is dubious way of finding people who are psychopaths.

Interesting video, but it mistakes legality for morality in the file-sharing bashing section, and it unjustifiably demonizes rationalization.

It's not rationalization itself that is the problem, but the logical mistakes made in the attempt to justify what we need to justify.

OP is looking at people who direct and sustain a capitalist enterprise's internal processes. These people (managers, HR) are hired by the capitalists to optimize internally for profit. The only warm & fuzzy side-effects that these positions provide are the ones that don't get in the way of capital increasing.

It's not even about these individuals being evil or not. I'm sure most of them are torn to pieces (before they become numb) when they make decisions against the wellbeing of the workforce. The point is that the managers would not be in these positions if they could not fulfill these roles — they would be replaced. These positions self-select for "evil."

The people who optimize externally for profit focus not on squeezing the workforce, they focus on squeezing the public. These are the lawyers, the salespeople, the accountants, the marketers, the compliance experts. There's no point debating the evilness of the individuals, but their roles are necessarily evil. These roles tend to grow more and more evil as the capitalist enterprise grows. The enemy here, then, is capital, not these poor workers who fill necessary capitalist roles.

It's a good thing that states and state-owned enterprises always optimize for the well-being of their citizens and customers - after all, that's what they're supposed to do! It never happens that, being largely unaccountable, people working for the state and its enterprises act to maximize their own well-being and minimize their own effort at the expense of the citizens and customers.

This is why the enemy is capital, not human nature. All you need is employ people in properly-named organizations with properly stated lofty goals (the constitution of Stalin-era USSR is a good source of inspiration), and none of their bad traits will ever rear their ugly heads!

So towards the end of your post, I began to get the impression the tongue was somewhere in the cheek. But up to that point I was thinking there was some good insight there. The dichotomy of business vs the state. The roles of each: A business to make money; the state to look after her citizens, and the ongoing struggle for dominance between each - firmly skewered by the citation of the USSR, where "it was tried before". Poor businesses fail, whereas a poorly run state will limp along, but at the end of the day it is the businesses that fail into the state, and if a business is badly run it is the state (and her constituents) that have to pick up the pieces.

You got that "cheek" impression towards the end, and it was the USSR bit that did it? Meaning that the first paragraph, states always caring for their citizens, sounds sensible? Now that scares the shit out of me.

what can I say, your post was poorly written.

The State is not the only alternative to capital. Another is individuals.

Corporations (and the State) are mostly useless now that we have software. We're just in transition while we finish building AIs that usefully model the means of production and the body of available contracts.

An individual with a powerful AI partner that can do those two things is no more powerful inside a corporation than out. The AI makes the collaborative structures of public space just as reliable as the collaborative structures within a corporation, so the entire value of the corporation to the worker disappears.

AI is a factor of production, therefore it is a capital good.

The rest is delusional science fiction. "Ethereum contracts will magically grant every individual land, labor and capital goods for self-sufficient production." No.

The enemy here, then, is capital, not these poor workers who fill necessary capitalist roles.

I'm not sure how factors of production (including durable capital goods) can possibly be an "enemy" of anything.

That said, your idea that capitalists act as crude profit maximizers is an oversimplification. In fact, most firms don't do any calculation of prices based on marginal revenues and marginal costs. Instead, they usually administer a markup price based more on internal accounting practices and then do not strongly deviate from the markup, choosing to downsize production when profits are low instead of upsetting the stable price signal they've chosen even if it would be more profitable to do otherwise.

Marketing is often an enemy of markets and more a factor of destruction than of production: functioning markets require informed consumers making rational choices about what to buy; marketing is most often concerned with creating misinformed consumers and convincing them to make irrational choices about what to buy.

>I'm not sure how factors of production (including durable capital goods) can possibly be an "enemy" of anything.

I'm a Marxist. So in the aforementioned sense, capital is only wealth that grows over time through the process of exchange. I am referring to the process, not the assets.

As I mentioned before, I am not interested in analyzing the behaviors of individual employers. I am interested in analyzing the behaviors of the classes. You may call this oversimplification, but I call it cutting through the bullshit.

Do you accept the labor theory of value and the tendency for the rate of profit to fall? If so, then any economic argument you make will be on false premises.

Firms and markup prices are not at all individual employer behaviors. They're industry-wide behaviors that practically define mixed economies and thus, by your own definition, capital (though I think yours is overly vague).

I haven't yet read the last volume of Capital, so I am unprepared to take on the line of discussion in regards to the tendency for the rate of profit to fall.

Nonetheless, I fail to see how the simple arguments I initially made are affected by this diversion, and I fail to see how your analysis of price-setting mechanisms refutes the profit motive.

I don't deny the profit motive.

I deny a) the normative claim of there being some form of malevolence in it, b) the idea that it's the only thing firms maximize for when in fact we clearly observe that firms will sacrifice some profit for both internal equilibrium and sending out consistent signals to consumers and c) that a profit motive will not exist in a hypothetical socialist or communist society.

Whether it's the manorialist collecting rent on land or the bartering farmer balancing their supply of wheat traded to remain at a surplus while keeping a stock of other consumer goods they've bought, there's always a profit motive. The manorialist profits either from use of a land title or the use of land as a factor of production. The farmer profits by having their supply of goods be at a state where the marginal product of each good provides increasing returns for satisfying their ends. In other words, the farmer profits from having a heterogeneous stock over a homogeneous stock because they can use the former to obtain further goods to diversify their portfolio, or trade so as to improve the serviceableness and efficiency of their factors for growing wheat.

I think your point a) about there not being malevolence involved is quite important, and not repeated enough. If you have a world organised around private property and exclusion from what you need, people have no choice but to look at each other as means to their own ends.

Regarding c), I believe a communist would say that in a state-less and money-less society, it is not possible to appropriate wealth in the abstract (there are no means to do it). So it's not the motivation for profit that is abolished, it's the possibility of profit itself.

a) To this end I agree that my simplification is too emotional.

b) I typically regard such actions as means to sustain profit, but I won't deny the exceptions to this rule.

c) I scrutinize the definition of profit here, but I won't disagree with what I believe to be your sentiment.

You go on to describe the feudal and individual capitalist (I think?) modes of production, which helps to define profit, but this is otherwise divergent from (c). In the communist mode of production, "profit" serves the community (ideally global), not the individual. I'm wondering what your profit analysis of the communist mode of production is.

I presume the communist mode of production is one in a stateless, money-less society where factors of production are cooperatively owned by workers and where the production process is based on some definition of "use" rather than "profit". Profit would be the surplus employed by workers to create more use value. Goods would be traded "in kind" as is without a lubricant of exchange like money.

The canonical argument against this is "Economic Calculation in the Socialist Commonwealth". There's generally been two ways socialist thinkers have tried to get around this: a) calculation in kind, which essentially reverts us back to unscalable barter where there is no reliable unit of account, and b) the Lange model of a Central Planning Board, which immediately brings all the issues of public choice, bureaucracy and "state capitalism" as you derided it earlier.

It's not cynicism: it's the reality of a Compliance group in a regulated organization.

I used to work in the FDA-regulated field of medical devices. Because of my job position, I had frequent interaction with our Regulatory Affairs people. They are extremely conservative. Their job, as he stated, is to protect the company's best interests by making sure the FDA doesn't shut us down.

That may seem cynical, but enlightened self-interest works in everyone's favor here. If there is a perceived problem with a device, the first concern is going to be "is there a Patient Hazard?" because nothing will cause the FDA to show up unannounced faster than that.

The engineers' job is to keep Regulatory Affairs happy; Regulatory Affairs's job is to keep the FDA happy; the FDA's job is to keep patients safe. If everyone does their assigned task, the end result is exactly as desired.

Saying that people look out for their own interests and are not always competent is one of the most salient and truthful properties of the human world.

It's cynical, but true.

A famous sports mantra is: "if you're not cheating, you're not trying". (Mark Grace, 1B, Chicago Cubs)

Corp and individuals cheat all the time. However, in most cases, the cheating are little white lies. In Corp world, their big lies that stay high up - with intention of never seeing the light of day.

Isn't that quote itself just a false rationalisation - 'I cheat but so does everyone else so it's not immoral'.

Personally I never got anything out of winning at sports per se. What gives me a buzz is performing in a way I can be proud of. Sport requires adherence to regulations to work, I follow Kant's (2nd?) imperative in that respect.

(FWIW I'm fond of playing quite a few sports).

People cheat, corporations don't as they are just virtual groupings of people.

> Isn't that quote itself just a false rationalization - 'I cheat but so does everyone else so it's not immoral'.

It could be - Here's a moral question: If you are an athlete who is attempting to get into the professional league...would you use performance enhancing drugs to "break in" if you had a small chance of getting caught? (I don't think this requires an answer - people internalize this differently and it could spur a discourse)

> Personally I never got anything out of winning at sports per se. What gives me a buzz is performing in a way I can be proud of.

I can think of some particular situations in sports (Hand of God - Maradona) when the stakes are high and you'll do anything to win. Technically, he didn't cheat, but he sure as hell didn't come forward either.

> People cheat, corporations don't as they are just virtual groupings of people.

You're right. What would you call a grouping of people with C-Level titles who "cheat" a cabal? Seems too ominous. I used corporation to describe the high level officials who profit most by cheating.

Exhibit A: https://news.ycombinator.com/item?id=10714990

It is naive not to be cynical. You'll be taken advantage of otherwise.

Let's not exclude the customers and the public at large. Does any significant number of people really care about this? In my personal list of the 100 biggest problems in the world today, it's not really a contender.

November Volkswagen sales in the U.S. fall 24%. (vidoe, sorry, but the blurb under the video essentially says what the video says) http://abcnews.go.com/International/wireStory/volkswagen-cor...

It may not be on the 100 biggest problem list, but it must be in people's minds, and there are lots of other brands to buy so it's an easy thing to do.

I've got bad news about the engineers as well...

Ratbert is not a bad guy.

The roughest problems are those that emerge in interfaces between individual tribes within an organization. Information loss can be very easy and very pernicious in those cases.

Interesting that this gets posted at the end of the week when a significant percentage of the readership is stoned ...

Kind of early in the day for me, but you go ahead.

Depends on the timezone. But you know, everything is relative...

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