In Canada this is a huge scam. The government advertizes that it's funding incubators. Great, right?

The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation.

The cover is that the government doesn't know tech so it will give money to trusted partners and they will choose who to give the money to because they've been doing such a great job innovating in Canada. Surprise: they gave the money to themselves!

You might have wondered why all these incubators in the crypto era were desperate to get you to go to their office. You might have also wondered: what fool is paying for this nice office in downtown Toronto where the prices are crazy-high? The taxpayer.

All of that money was completely wasted and worse, little of it went to actual start ups.

• nathanhammond

  today at 11:56 AM

  If you can read it, here's the same story happening in Hong Kong, but with outright fraud on the recipients' end.

  https://thecollectivehk.com/%e7%a7%91%e6%8a%80%e5%88%b8%e8%a...

• bboygravity

  today at 6:09 PM

  Canadian fraud is on another level. When I worked for a Dutch company my boss forced me to take a sales pitch from some Canadian startup. They claimed to have some new magic wireless electricity technology using new unreleased quantum physics principles or whatever and had actually managed to get a significant contract from some part of the Canadian government (that was the only part of the pitch that was not a lie). The website was screaming scam with: crypto AI quantum compute, etc. The sales pitch was an actual live videocall where they just told us a bunch of lies straight to our face.

  First and last time I ran into something so blatant. We didn't fall for it btw.

• throwitaway222

  today at 5:27 PM

  Governments should really get out of it's free money crap everywhere. Only people that care should be giving out money so that they can look at their investments and make sure they want to keep spending.

  • Wowfunhappy

    today at 6:06 PM

    Why can't we, like, hire good people to oversee this stuff? Pay them competitive wages. If they're corrupt, prosecute the corruption?

    I feel like these discussions always devolve into "government is doing a thing badly" > "governments always do things badly" > "governments should stop doing things". But governments are basically the only party that can act with the well being of citizens, as opposed to shareholders, in mind.

    So, I would much prefer "government is doing a thing badly" > "here are ways we could fix it", which just should be perfectly achievable. Of course no bureaucracy, public or private, will ever be perfectly efficient, but that doesn't mean it can't be better or can't be net good.

    Also, I do think people tend to miss all the successful things governments fund, like science research.

  • kubb

    today at 5:48 PM

    But all those VC projects are crap too.

• fidotron

  today at 11:31 AM

  > The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation.

  And the big accounting firms.

  It's incredible how efficiently they divert all activity and attention from the core task, and then wonder why things don't take off.

  • cogman10

    today at 1:46 PM

    This is the crux of why neoliberal policies don't work.

    Public-private partnerships are a breeding ground for corruption. The government either needs to own what it owns or completely give up and leave it to a well regulated private market.

    That's not to say one off contacts need to be eliminated. But when it comes to things like building and maintain roads, these private contacts end up being huge sinkholes for public funds.

    • rayiner

      today at 2:53 PM

      Public-private partnerships work very well in Asia. But the government has more oversight over the private entity and a heavier hand with policing results.

      A big problem in the Anglosphere in particular is that the government is too focused on politics and catering to internal stakeholders and not enough on measurable results.

      • xhkkffbf

        today at 3:15 PM

        I've heard horror stories about some parts of Asia. There are huge cities built because some bureaucrat wanted to build it, not because anyone wanted to live there. And the buildings are largely empty. Those are the most visible examples.

        That being said, there are some good examples too. And even a few good examples might be better than the partnerships in Canada.

        • dwater

          today at 4:53 PM

          Let's not forget 1MDB, where $4.5B of government money was looted under the pretense of investment.

          https://en.wikipedia.org/wiki/1MDB_scandal

• Scoundreller

  today at 1:56 PM

  Meanwhile they haven’t raised the HST/GST threshold to start collecting from the $30k in sales it was since the tax was launched in the early 90s.

  You know, just something that could provide a little leg up to every small business until they’re not small anymore. But no, inflation doesn’t exist!

• chollida1

  today at 2:04 PM

  I'd never heard of this. Can you provide a link?

  I'd be very interested in reading about this fraud.

• franze

  today at 11:10 AM

  Sounds like Europe....

  • tverbeure

    today at 3:28 PM

    Yeah, I used to work for a large-ish company that participated in projects like this.

    The company has a project manager with a large spreadsheet to keep track of everything so that no employee would accidentally be officially double booked because that could be detected as fraud.

    Some real work was done, but the meetings with other partners were a farce. You had these tiny companies whose only existence was to feed off the European money.

    One day our manager asked if the architecture document of a 100kbps modem that I had worked on could be repurposed for a 1 Mbps modem project that was European funded…

  • cs02rm0

    today at 11:31 AM

    https://www.plexal.com/our-partners/

  • cubefox

    today at 11:52 AM

    Yes, I remember someone explaining that a similar thing happens with all kinds of research grants in the EU. Some companies specialize in writing very complex grant proposals in just such a way that they are likely accepted, and then produce some useless bullshit reports. Actual specialized companies with expertise in the matters the grant is about don't have the knowledge of how to fill out grant proposals in a way that gets them accepted by bureaucrats because they don't know how the decision process works. Depressing.

    • timkam

      today at 2:01 PM

      Indeed. Also, companies with a genuine and socially at least somewhat useful business model prefer focusing on customers buying their actual products as the main revenue source. The state- and EU-driven funding ecosystem is so convoluted that one either mostly ignores it in favor of value-creating work, or specializes in exploiting it, unfortunately.

  • elzbardico

    today at 1:19 PM

    Sounds like Brazil...

  • jijijijij

    today at 4:55 PM

    German here, can confirm. Although, I don't think it's honest incompetence, but intentional corruption. Eg. public calls for bids tend to be a little too specific and politicians tend to get jobs where they funneled public money.

    However, things are changing... As of this current government, nobody is scheming anymore. The corruption and wealth extraction happens openly. They are really testing the waters in what they can get away with. It's almost US level audacity, tho not yet as undignified. The sad part is, although people here are universally frustrated about it, they flock to the one party evidently more corrupt and incompetent than the CDU: The AfD.

    Honestly, despite political disagreement, all my life I considered myself lucky to live here, but for the first time it makes me sick thinking about Germany's future, working here and paying taxes. And the base motives showing as reactionary malice by my fellow citizens disgust me. It's shameful to admit, but this country is truly ill and deeply corrupt.

  • pbhjpbhj

    today at 12:09 PM

    People want more government control, but when governments take more control the press tells the people that it's bad and the people acquiesce.

    In local forums, so often you see (paraphrasing a pattern) "why are the government interfering with landlords, they should stop so many barbers opening instead". That is, why are the gov interfering in property markets, instead they should interfere in property markets AND plan the economy (where economy here means 'financial system').

    The people promoting planned economy without realising it are always 'right wing' 'all Communists should be shot'-types. It's fascinating.

    • Xirdus

      today at 12:32 PM

      I know a lot of left win Europeans who promote planned economy without realising it. So there's that.

      I think a better way to look at it is people demanding the government to intervene whenever intervention is beneficial to them personally, while demanding the government leave things alone whenever intervention is detrimental to them personally. Which is just a long winded way to describe the basics of democracy - people voting in their own interest.

      • Nevermark

        today at 1:36 PM

        > people voting in their own interest.

        There are some people who care about policy, care about a generally healthy environment. Which has a strong self-interest aspect, as it should, but not narrow.

        Few people manage to vote for their own narrow interests in a reliable coherent way. Even the rich and powerful reliably foot gun themselves.

        I believe the vast majority, the vast majority of the time, reliably and enthusiastically vote for their group's shibboleths. Regardless of what they might say or believe their own motivations are. Even seemingly sophisticated and principled thinkers. It shows via the reliable, trivial to resolve, but reflection impervious group-coded "misunderstandings" that even "serious" people defend and nurture. The group reinforced, often meme-reflex deflected, unthinkables. Across the political spectrum.

        People vote for brands.

      • nickff

        today at 4:39 PM

        “The state is that great fiction by which everyone tries to live at the expense of everyone else.” ― Frederic Bastiat

        https://www.goodreads.com/quotes/70896-the-state-is-that-gre...

    • today at 1:00 PM

    • nekusar

      today at 12:48 PM

      Properly planning the economy, ala the Chinese tier system, is a good thing.

      They have 3 tiers. Its called 新基建 - *Xīn Jījiàn

      Top tier is for essentials like food, electricity, internet/comms, water, sewer. Heavily controlled, usually state owned companies.

      Middle tier is stuff that's integrated into essential tier.

      Lower tier is forefront of tech, and not at all critical for life.

      And a reminder that even fucks like Nestle said that water is not a human right. But every capitalist would do their damndest to put a sale price on anything they could. They'd charge breathing if possible.

      • consensus1

        today at 2:57 PM

        This is not that dissimilar to the US. The government either controls directly or is very heavily involved in all those things you listed in the top tier.

        • today at 4:00 PM

        • fakedang

          today at 5:07 PM

          The fact that PG&E exists is a clear contradiction to your statement.

          In most countries, water, electricity, waste management and public transport are government controlled through and through, even if the government might sell shares to the public markets or induce competitive bidding. Except in dysfunctional countries of course.

      • kingleopold

        today at 1:00 PM

        Every non capitalist would force you to work in random job they assign or force you to obey some rule or law they wrote for their own interest. you don't want to do the job? or dont want to follow the law and rules? fine! go to gulag and enjoy it there.

        alternatively, non capitalist eras had real famines and lead to millions starving and dead. but sure putting a price for product/service after risking lots of capital is the real enemy, lmao. why biggest famines mostly happened in non capitalist places is real historical detail with lots of facts.

        • triceratops

          today at 2:11 PM

          The irony of defending capitalism's record on human rights with that username...and I'm speaking as someone who likes capitalism.

          • KellyCriterion

            today at 3:51 PM

            So you are from Europe, then? :-D

        • cogman10

          today at 2:06 PM

          > Every non capitalist would force you to work in random job they assign

          Nope. Most non-capitalist systems have a competitive school environment. Students compete for education slots for the careers they want to work in. The only people who end up assigned work are those who have basically no aptitude for higher careers.

          > force you to obey some rule or law they wrote for their own interest.

          There is no society, capitalist or otherwise, that isn't governed by some set of arbitrary laws, usually for the interest of the state but not always. See, for example, the MJ ban in the US.

          > you don't want to do the job? or dont want to follow the law and rules? fine! go to gulag and enjoy it there.

          What happens if you don't want to work in a capitalist society or you don't follow the laws? We have a gulag in the US that people are being sent to. Utah just recently criminalized homelessness.

          > alternatively, non capitalist eras had real famines and lead to millions starving and dead.

          Non-capitalist eras? I don't think there has ever been a true non-capitalist era. Even under the feudal system, that was still capitalism just at it's extreme "might makes right" era. Serfs were forced to do their work because of contracts they signed with their lords for protection. They had to work the fields, in exchange for housing.

          There's also plenty of famines caused directly by capitalism. The most infamous one being the Irish potato famine. Ireland is extremely fertile and at the peak of the famine they had bumper crops. The reason the famine happened is because poor irish citizens relied heavily on growing crops for personal sustenance in small gardens. Potatoes being one of the most calorie dense foods for a small patch of land. When blight hit the potatoes, there was not an alternative crop these citizens could get the calories from their small land plots.

          Meanwhile, they'd be working giant grain fields and maintained cattle herds which were already sold to english markets.

          This famine was entirely from capitalism. The land and the people grew plenty of food, but the capitalists cared a lot more about the wheat and cattle and not the people so the Irish starved.

          > putting a price for product/service after risking lots of capital is the real enemy

          Yup, in the Irish market that was literally the real problem. The price was higher than the Irish wages.

          > why biggest famines mostly happened in non capitalist places is real historical detail with lots of facts.

          I think you are mostly just unaware of famines. Not all, for certain, have been caused by capitalism. A decent chunk have been.

          • nekusar

            today at 2:24 PM

            > There's also plenty of famines caused directly by capitalism. The most infamous one being the Irish potato famine. Ireland is extremely fertile and at the peak of the famine they had bumper crops. The reason the famine happened is because poor irish citizens relied heavily on growing crops for personal sustenance in small gardens. Potatoes being one of the most calorie dense foods for a small patch of land. When blight hit the potatoes, there was not an alternative crop these citizens could get the calories from their small land plots.

            Unfortunately thats only a portion of the story. They had LOTS of crops and meat. The Irish were not *permitted* to eat any of it on threat of death by the English.

            Ireland was an occupied country since Elizabeth met with Pirate Queen Grace O'Malley in 1593 up to 1921, where half the country won their freedom. Northern Ireland still is a territory of England.

            Prior to that, during The Famine, the Irish were forced to ship all "good" food to England. That left them to eat predominantly potatoes. We all know about the monoculture, and the potato blight.

            As a corollary, Irish are to Potatoes, as Black Americans are to chicken and watermelon. Its a massive racial insult, and similar in magnitude.

            But no, it was the predominant capitalist country of that age that systematically drained all wealth from Ireland. As is the story of capitalism everywhere.

            • irishcoffee

              today at 6:05 PM

              > As a corollary, Irish are to Potatoes, as Black Americans are to chicken and watermelon. Its a massive racial insult, and similar in magnitude.

              This is not accurate. We really need to stop getting offended on behalf of other people. Black people like fried chicken and watermelon, irish people like potatoes. In fact, black people like potatoes and irish people like watermelon and fried chicken.

              Nothing about that is racist or offensive.

            • molybd3num

              today at 5:56 PM

              isn't that what he said?

              > Meanwhile, they'd be working giant grain fields and maintained cattle herds which were already sold to english markets.

              > This famine was entirely from capitalism. The land and the people grew plenty of food, but the capitalists cared a lot more about the wheat and cattle and not the people so the Irish starved.

        • nekusar

          today at 1:28 PM

          And in my experience, the capitalists are SUPER OBSESSED with tallying exact numbers of dead by Communist countries.

          Of course in the USA, "Nobody dies due to capitalism!" It's always a 'personal decision'.

          Medicines gatekept? Talk to a doctor (state-controlled monopoly)

          Go to the doctor? Cant afford it? Go die! :)

          Have a nasty disease that will kill you, but pills purge it? $80k please. And insurance wont pay. Hope you can afford it. Solvaldi says hi.

          Cant afford housing? There's an underpass or park for that!

          Oh you're homeless now? Well, we criminalized that.

          OH, so you're in jail? Enjoy substandard living conditions, lack of effective medical, poor food, and slavery. And die in prison? Not a life sentence? Fuck you, you deserved to anyways!

          Groceries gouging on food (like meat or eggs or whatever)? Thats a capitalism correction.

          Industry polluting your area and causing life expectancy to drop and massive reproductive harm? SHoulda chose a better neighborhood.

          Even with Solvaldi, a hepatitis cure costs $84k. But it costs $300 to synthesize at home. And over 6 million people have needlessly died because the cure was capitalistically priced above their legal means. But they will all be labeled as "poor life choices", and not the correct capitalist death. https://kolektiva.media/w/uvD1wWTRoh7HEto8zeSswr - Four Thieves Vinegar Collective video in synthesizing your own pharmaceuticals to bypass capitalist deaths.

          The key to capitalism is the magic word "externality". If it's external to what you're doing, you can make others suffer and die and keep your hands clean. And all of this then get shoved on the individual for "Poor Life Choices". In reality, these too are capitalist deaths, but you will *NEVER* see them marked as such.

          • kingleopold

            today at 2:24 PM

            Inside non capitalist places, those solutions dont even get to EXIST. Nobody even cares about nasty disease solution and funding. They don't get invented or they are not allowed for your use, by design. This is a very narrow view and what a word salad.

            Now tell me name of the great "Communist countries" that exist today and they are big and have lots of great things to pursue humankind and human lifespan.

            I will wait for the name of those counties :)

            • cogman10

              today at 3:55 PM

              > Nobody even cares about nasty disease solution and funding.

              This is just silly.

              The US has such a large lead in research output because of direct government intervention and funding since about the 1950s. That is a big part of why up until the Trump admin the US has been a powerhouse in medicine.

              China is very likely going to be the next world leader in medicine. They've been investing heavily in biomedical research and they are sucking up all the talent that the US is defunding.

              > They don't get invented or they are not allowed for your use, by design. This is a very narrow view and what a word salad.

              That's a wild conspiracy. Governments want healthy citizens because healthy citizens power a government's economy. But further, governments are made of people and most people realize that general medical research is beneficial to all.

              > Now tell me name of the great "Communist countries" that exist today and they are big and have lots of great things to pursue humankind and human lifespan.

              China is the best example. Few communist countries have been able to be successful because it's been US policy to undermine them at every turn. Cuba is perhaps one of the best examples of this. And also, remarkably, even with the trade embargo of the US, cuba has a relatively decent healthcare system. The number one thing holding it back is they can't import what they need. Ironically enough, because the capitalists have decided to forgo profit because hurting a communist nation is more important than making money.

              China got it's special status because for whatever reason Nixon fell in love with them.

              • irishcoffee

                today at 6:08 PM

                > China is very likely going to be the next world leader in medicine. They've been investing heavily in biomedical research and they are sucking up all the talent that the US is defunding.

                They sure have. They created a global pandemic! And convinced the world it was from bat shit. Incredible.

              • nekusar

                today at 4:04 PM

                Yep. One big pattern you will see with capititalist countries is they will carry on that "competition is amazing and wonderful"....

                But when communism wants to compete with capitalism, suddenly competition is evil and you're godless and all the slurs capitalists use.

                And we see with mild socialists like Mamdani, its easy to see the hate and slurs.

                Like, do you or do you not like competition?

• mannanj

  today at 5:30 PM

  This happens in the US, too. Maybe with different drivers, though certainly money moves to people close to the problem.

  Now wouldn't it be interesting to dive into how old the extortion tactic of creating the problem you solve goes?

• ransom1538

  today at 5:12 PM

  Canada has the same GDP as Texas (well worse). It is a 2nd world economy. You are better off getting a job in El Paso.

• stellamariesays

  today at 2:12 PM

  [flagged]

As a junior software engineer, I worked at a large UK bank.

Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise.

One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider. The provider must have added a substantial markup despite supplying the same engineer back to the same team, without having incurred any procurement costs.

I once asked a more senior colleague how this made any sense. His answer stuck with me:

"You can’t stop people from doing their jobs. If someone thinks their job is to deliver X, they’ll find a way to deliver X. Sometimes that means working around processes and incentives in ways that look very strange from the outside."

• throwaway2037

  today at 8:09 AM

  Most large corporations treat these categories of employment as different budget line items with different rules and limitations: (1) full-time employees, (2) individual contractors, and (3) large contractor "body-shops" or outsourcing providers. Many times in my career, I have seen layoff a few from (1) then way over spend on (2) or (3). The mid-level manager who makes the decision gets to "claim" that expenses were reduced in (1) and "win" at year-end reviews. Yes, I know: This is total non-sense, but I have seen it many, many times at mega-corps.

  • pjc50

    today at 10:45 AM

    Related to this, the massive advantage of AWS is that it allows staff to buy infrastructure without having to raise purchase orders. If you ask permission for spending, it's a very onerous and frustrating process. If you just deploy stuff and get billed for it, it's much easier! Even if that's more expensive than having your own cloud. Worse, if you have on-prem, you have to have staff. They might even be permanent. Businesses hate having to have important staff.

    Not coincidentally, this results in massive overspend until someone notices and has to painstakingly go round checking what all your instances are for. And AWS is very profitable (well, margin rather than accounting profit).

    Now, look at the billing model of AI, especially once flat rate goes away. People can spend millions on tokens without ever having to ask a manager! Obviously this is going to rake in money hand over fist, because it will be years before anyone catches up to ask "are we actually getting value for money here?" rather than "quick spend more tokens".

    • lscharen

      today at 11:50 AM

      > If you ask permission for spending, it's a very onerous and frustrating process. If you just deploy stuff and get billed for it, it's much easier!

      This point is underappreciated as it appears in many forms and can really help reconcile things that seems obviously wasteful (they may actually be wasteful, but sometimes financial structure makes this hard to determine in an honest capacity).

      Capital costs and operational costs are a similar dichotomy. When I was in graduate school, the university was breaking ground on new buildings at the same time that staff layoffs were underway. On its face this seems grossly unreasonable, but staff salaries were paid from one funding bucket and capital improvements (new buildings) were funded by a completely independent state-level allocation process and those buildings that were breaking ground had essentially been locked in 5 to 10 years prior.

    • consensus1

      today at 3:14 PM

      There are only a handful of companies in the world that AWS would be more expensive than having your own cloud. Just the baseline costs of having 24/7 availability requires minimum 5 full time engineers (3 shifts + cover for sick / vacation). So that's $1 million a year right there, and we're already well over the cloud spend of the vast majority of companies. If you want multi region that's now $2 million. And we're still just covering the cost of the people who have to be on call to deal with hardware issues. Now how much is it going to cost to develop the software tooling required to manage the whole thing from your office?

      • wrqvrwvq

        today at 3:37 PM

        I agree with the basic premise and math here but getting to true 24/7 uptime in the cloud will require a minimum of 2 full time cloud engineers or infra people. If you're spending another 500K in usage costs you're almost at a million. For most, the cloud is the right option because maintaining servers is a pain and modern clouds offer a lot of additional features that may be useful, but it doesn't mean it's a massive win for the bottom line. There are lots of small and large companies that could run servers on prem or in their own datacenter and it would make financial sense, but they'd have to attract the talent to build and operate, which is harder than just paying enough.

      • rcxdude

        today at 5:22 PM

        This is apples and oranges, though. AWS does not manage your whole product. Are you going to have 24/7 on call for the parts that you manage? If not, why do you need it for the parts AWS manages? The reality is that most smaller companies do not need this level (and frankly I think most people significantly overestimate the overhead of running your own box. A heck of a lot of cloud deployments could be two servers in a co-location with one of them being a warm spare, and have equivalent service levels for their product in practice).

      • treis

        today at 5:26 PM

        Eh this is true but in practice "my RAM stick went bad" is 0% of our downtime. It's almost always that we screwed up something in the app layer. And my company of ~100 does have 5 engineers on call 24/7. It's baked into our salary to do that.

  • Sankozi

    today at 10:55 AM

    (1) is considered a cost while (2) and (3) might be called an investment. Company can lie to investors that (2) and (3) costs could be removed at any time without interrupting any important business processes.

  • today at 2:19 PM

• shoo

  today at 12:53 AM

  when i worked for an australian bank, one co-worker in a nearby team had been working on the the banks systems as a sysadmin for over a decade.

  the bank would go through cycles of "we need to reduce our headcount and outsource everything" and then 4 years later "we need to reduce spend on contractors and retain more knowledge and expertise in house". he'd survived multiple waves of it, switching back and forth between being an employee or a contractor through some external agency, as management trends changed, while essentially doing the same job.

  • W3zzy

    today at 6:15 AM

    I want through the same processen three times already.

    I work in civil service but in a very specific job that needs certain degrees by law.

    I've heard they were going to outsource my job (because civil servant are expensive) and registered a company that delivers the requested services. I entered a public procurement and upped my price a little because I knew there aren't many people with the right certifications. I won the public procurement and went from a civil servant to a self employed expert with a company car and all the perks.

    Near the end of my contract they thought about hiring their own expert again because... money.

    I applied for the job and went through an external hiring process and got selected. Because legislation changed my job went from middle management to a senior management position with extra benefits. Had to drop the car though...

    A few months ago my colleagues were doing prekilinary budget talks and considered on finding an external company to do my job and getting me another position. I had to point out the cycle they fell into and somehow they forgot about it.

    • 21asdffdsa12

      today at 8:25 AM

      I love this, reminds me of a automation engineer, i got to see on quite a few projects, who always came in wearing the company t-shirt or jacket of the sending company. Its so funny, when its always the same guy coming in for different companies.

      • today at 8:37 AM

    • IshKebab

      today at 8:02 AM

      That's actual genius. You should write this up in detail!

      • GJim

        today at 9:16 AM

        It's hardly complicated!

        OP is simply describing what is common throughout government in the UK. This is known as the Revolving Door.

        Private Eye magazine wrote a special report on it some years back as, frankly, it is scandalous https://www.private-eye.co.uk/pictures/special_reports/revol... [PDF]

        • tsimionescu

          today at 10:26 AM

          The revolving door is a completely different phenomenon, and it is a problem for a completely different reason. It's about politicians in positions of power over an industry later becoming business leaders or highly paid consultants in said industry. This is a huge problem because it works as a long-term bribe: instead of paying for the politician today and inviting inquiries and problems, you make an implicit promise to employ them when they get out of power as a future reward for preferential treatment today. This is an issue of corruption and excessive business influence of public policy.

          In contrast, the issue with civil servants being let go and re-hired as contractors is a simple issue of inefficiency. The same person doing the same job has the same incentives, they're not being corrupted. However, our public resources are being spent inefficiently to hire the same person to do the same job for more money, with an added bonus of spending resources on the acquisition process itself.

          • bluGill

            today at 2:23 PM

            Not to take away from your point, but the revolving door is also good because the experts should be the ones who make the rules. There are too many details about every niche that smart non-experts will get wrong and so we need experts.

            Good luck reconciling these two conflicting points.

            • tsimionescu

              today at 5:26 PM

              I don't think that's hard to reconcile - that only involves people in industry moving to government, which is far less problematic.

              • michaelt

                today at 6:21 PM

                What happens after the job they were hired to do is complete?

        • IshKebab

          today at 10:16 AM

          I didn't say it is complicated. It is unusual for individuals not at the top of the ladder to set up their own companies and get exactly the same job twice. That's not what the "revolving door" is typically talking about.

        • vitorfblima

          today at 1:44 PM

          Prompted and delivered!

  • jfengel

    today at 2:18 AM

    Managers love the idea that contractors can be fired more easily than employees. Except that this flexibility comes at a cost; people insist on being paid more to have an insecure job.

    The uncertainty never goes away. You can pay someone else to suffer it, but it will always cost more than dealing with it yourself.

    And that can be ok. Just don't fool yourself into thinking you're getting a bargain.

    • vintermann

      today at 5:21 AM

      > Managers love the idea that contractors can be fired more easily than employees. Except that this flexibility comes at a cost; people insist on being paid more to have an insecure job.

      This is true, but it's not the whole of it. In some cases the manager goes to a cabin in the woods to drunkenly shoot at moose with the head of the contracting company.

      It's a saying that "the purpose of a system is what it does". I think it's a pretty dumb saying. But it is often worth talking a look at a system and see if the "mistakes" it makes (such as wasting money on contacting companies) aren't in fact desired by some people in the system.

      • conductr

        today at 11:44 AM

        There’s a tricky variable called trust. As an employee hiring consultants, how do I build trust that you and your consultancy is going go deliver and make me look good? It usually involves building a relationship, activities like hunting or golf are classic examples of these activities.

      • consensus1

        today at 3:20 PM

        This doesn't happen nearly as often as people think. I'm involved in multiple single digit million contracts with vendors, and not once has anyone at our company even met the vendor AMs in person. If I choose a vendor that is twice as expensive as a competitor I am going to have to justify that to the VP I report to and "we had fun on the golf course" is just not going to cut it.

      • xorcist

        today at 10:33 AM

        > if the "mistakes" it makes [...] aren't in fact desired by some people in the system

        This process goes both ways. The people in the system align to the process. So maybe the "mistake" wasn't desired to begin with, but once it's there someone things: if that's the way they want it let's change our ways to fit. That's why these things seem to dumb from the outside.

      • t43562

        today at 6:55 AM

        There's always going to be a slight mismatch between the supposed aim of any organisation and the incentives of the management and every single employee unless they're all shareholders and even then...

    • jasonkester

      today at 7:20 AM

      > Managers love the idea that contractors can be fired more easily than employees. Except that this flexibility comes at a cost;

      I noticed this early, and spent the first half of my career leaning into it. If you negotiate every gig as a contract, you get to double (or more) your salary. And the only thing you're trading away is job security which, if you pay attention, you'll notice doesn't actually exist for your salaried counterparts either.

      To nitpick, you also have to pay for your own health insurance. So subtract $200/month from that extra $15,000/month for the sort of catastrophic coverage plan that a 27 year old needs.

      • zingar

        today at 2:19 PM

        What happened that made you switch away from contracting?

        • jasonkester

          today at 3:35 PM

          The problem was that every time I stopped contracting for somebody, they stopped sending me money. Building software products fixed that:

          https://expatsoftware.com/articles/guy-on-the-beach-with-a-l...

          • HeyLaughingBoy

            today at 5:14 PM

            I remember your blogabond posts from way back when on HN. I think you were the first to really popularize the "coding while traveling" idea.

            • jasonkester

              today at 5:22 PM

              I didn’t get to use any of the cool terms for what I was doing though. FIRE and Digital Nomadding hadn’t been invented yet.

    • marcus_holmes

      today at 3:30 AM

      I've seen this happen because of accounting/corporate finance policy.

      Payroll is an ongoing commitment. Consultancy is a temporary service. Moving people from payroll to consultancy means they can reduce overhead in financial projections. Even though consultancy costs more, and employs the same people, it makes sense to do if it means you can convince shareholders and analysts that Opex will shrink in the future, and therefore profitability increase, and therefore the share price increases.

      • pyuser583

        today at 5:40 AM

        The problem arises when moving someone from payroll to consulting creates the illusion they are not necessary.

        • TheOtherHobbes

          today at 11:33 AM

          That's not Accounting's problem.

          This is one of the many situations where counting beans creates idiocies, because GAAP has no concept of context, and management can play games to make the numbers look good while destroying real value.

          That's Level 1 of the problem.

          Level 2 is conscious fraud, either of investors or by investors. There are always startups that look suspiciously like their only purpose is to extract money from investors based on future promises that are... unlikely.

          You can spot them because the promises keep being delayed, and/or they pivot to some other activity, but keep pretending to be a serious viable business with Exciting Plans™.

          Level 3 is the one described by OP, where startups are cynically used by an incubator to extract fees and other income. This can overlap with genuine investment. It can be a triple win. No IPO? A nice cut of investor money. Unicorn IPO? A nice cut of a different kind of investor money. Successful business? A nice cut of the income stream.

          Level 4 is straightforward investment fraud by banks and brokers. There are many, many variations on this, from "questionable relationship practices" to risk washing, to outright pump 'n dump, and even the occasional classic Ponzi.

          The bottom line is that capitalism is inherently corrupt. There is no free market of rational actors inventing wealth and value for a glorious shared future.

          There's an infestation of opportunists, fraudsters, and hucksters at all levels, and governments regularly have to step in to hide the mess and glue the pieces back together - sometimes because the people involved own parts of the government too, and it's better to make millions of working people poor than to go to jail.

          • devilbunny

            today at 12:59 PM

            > capitalism is inherently corrupt

            People are inherently corrupt. That's just life. The Soviet Union was corrupt as hell.

            If you want to put down capitalism, feel free, but don't blame it for something that isn't unique to it.

      • alistairSH

        today at 9:23 AM

        At a glance, maybe. But we also see this in government. The US has outsourced 10s of thousands of “permanent” jobs over the decades. The entire DC metro economy is based on this.

      • jimnotgym

        today at 6:24 AM

        Also because of corporate policy. I know of a company where the VPs are heavily targeted on headcount reductions. Contractors are not headcount.

      • cwillu

        today at 5:50 AM

        > if it means you can convince shareholders and analysts that Opex will shrink in the future

        Isn't that just fraud?

        • scott_w

          today at 6:28 AM

          No. Fraud is a much higher bar than making a prediction about your plan for the future that may or may not pan out. There’s no deception here, management fully intend to end the contractor relationship in future, whether they’re able to or not.

        • consp

          today at 6:08 AM

          A vague promise which you pretend to beleave and can make believable to other is just business advice unfortunately.

      • hypfer

        today at 6:44 AM

        It doesn't actually make sense tho. It just "makes sense" within the rules of a fundamentally nonsensical system.

        That system however is no law of nature. It's just broken nonsense no one bothers to fix because we haven't yet run out of money.

    • reissbaker

      today at 6:09 AM

      I wonder if this explains why I hear about this more from Europeans than from the SF tech scene. California is at-will employment, so you can fire an employee as easily as a contractor. Ironically this makes companies more willing to hire and retain employees, since they're not worried about getting stuck with a bad one — and most employees aren't bad, and are better for the company than contractors.

      • calgoo

        today at 10:02 AM

        Its not about employees being bad, we have 6 month trial periods over here in the EU where you can be fired quite easily. Thats the excuse they use to keep at will employment. In reality they want to be able to reduce Opex costs which looks great on their end of year budgets. If you can then offload that cost into a project run under Capex, even at a higher cost, then its budgeted differently and the shareholders get their payout.

    • OccamsMirror

      today at 2:53 AM

      A stable environment with a great culture has lower costs.

      But then they have to hire good managers and for that you need to be a good manager yourself.

    • elzbardico

      today at 1:24 PM

      The cynical me believes that there's not way kickbacks are not involved. A lot of times a third company acts as an intermediate on hiring those contractors, and their fees and markup easily make the same worker costs sometimes 2x their original salary.

      The usual excuse for that is that labor is classified as OPEX, while hiring consulting companies can be classified as CAPEX, and the stock market likes when companies lower their labor costs to "invest" more.

  • orochimaaru

    today at 2:45 AM

    Have y'all hit the "can genai do his job?" phase yet...

    Early on I used to try to explain that things don't work as advertised. There are a lot of advantages but you need a human reviewing and directing.

    These days I don't even bother. Call it being desensitized to the bullshit, but I'm waiting for some fancy AI agent to take out stuff in a way that no one can do anything. Past that I don't see a way for C suite to wake up.

    • ffsm8

      today at 4:49 AM

      > Past that I don't see a way for C suite to wake up.

      Didn't you mean to temporarily realign? I mean give it 2 years and another manager to show up, ready to get their bonus for the next attempt at it.

      That's our reality and how we've structured our markets

      • 47282847

        today at 5:43 AM

        I honestly don’t get why anyone would give up their mental health like that and work for such places. In my reality there are plenty of honest and decent places to work at. I’m seen dark places yes but only as visitor - why would I want to be in hell for more than a day or two.

        • t43562

          today at 6:43 AM

          There's the thought that all places are potentially s** in one way or another. This isn't entirely true but there's a significant possibility that any move could be just as bad or worse.

          You look at your monthly outgoings and think about how long you have to look before your cash runs out.

          I stuck it out too long several times. The most recent one left me unemployed for quite a long time and I was lucky to be in a position for it not to matter.

          Now I'm in a job that's a step down - in a sense it's humiliating. On the other hand it more than pays the bills, it's low stress, I've lost 13 kg and I don't wake up in the middle of the night and instantly start thinking of the terrible things that happened in the week so that I can't sleep again.

          Now I spend my spare time working in the garden instead of desperately trying to build the new feature on time. I'm digging a driveway. Perhaps this won't last but I realise how much I was killing myself by trying to stay in something bad.

          Places are bad essentially because of bad people - it only takes a couple of idiots and it's impossible to fully judge that from an interview. You always get bad vibes from someone or other but you're trying to convince yourself it's ok because you need a job.

          • somenameforme

            today at 8:24 AM

            I don't see why that'd be humiliating by any sense of the word. We don't live long, and there's pretty much nobody who at the end of their life bemoans 'I sure regret not having spent even more time at the office.' More humiliating, at least from my perspective, is the person who works their life away, trying to find contentment from the accumulating of things which, of course, never succeeds. It's like society is full of people playing out what used to be the comical trope of a man in a mid-life crisis, and his new yellow convertible.

        • today at 9:18 AM

        • pegasus

          today at 6:06 AM

          > I honestly don’t get why anyone would give up their mental health like that and work for such places.

          Mostly for money, of course. And all the attendant improvements that can bring to one's life. Some people need it more than others, e.g. a H1B worker who is attempting to pull a whole family out of poverty.

          I bet many go in thinking they will do it temporarily, until they pay their college debt, to give one example. But money is very addictive.

        • dalvasorsali

          today at 6:16 AM

          I agree with you, but I feel like leaving is much harder in reality for most people.

          Life gets in the way, you don't have the energy to apply, you're afraid of rejection, you are afraid you might end up in a worse environment, you justify it to yourself in any number of ways.

          Inertia, herd mentality and self-deception are much more powerful IRL than most people online seem to think (or at least write).

          • calgoo

            today at 9:56 AM

            Add having a family to the mix and it gets worse. Being a sole provider for a family is scary when you go job hunting, especially if you live in an environment that is very expensive (where the jobs that pay decent are located normally).

            • npodbielski

              today at 10:42 AM

              Yep, I left one project because I think I was underpaid there. I could not find another job for like 3 months. I finally found one and I was also very stressful. No it is better, at the same project and I think I make more money than I would ever be able in a project I left. But on the other hand it was very stressful for my family. Was it worth it in the end? I do not know because even if money is better and company is bigger I could damage my kids development by being angry, sad and depressed for two years.

        • alistairSH

          today at 9:20 AM

          Because companies tend to enshittify over time. Especially if they get acquired. Doubly so if the buying company is PE.

          Really small “lifestyle” companies might be fairly immune, but it doesn’t take much for them to fail, there’s a different risk profile.

        • joe_mamba

          today at 10:40 AM

          > In my reality there are plenty of honest and decent places to work at.

          Like wich? In my experience all workplaces have something that's gonna be wrong with them, and you just need to compromise if what's wrong with THAT ONE is acceptable to you.

          Like for example honest and decent places to work at tend to also come with lower pay, or pigeon-holing career-limiting type of work, discriminatory gatekeeping, or other such compromises. There's no free lunch where you can have your cake and eat it too, unless you're very lucky.

        • LtWorf

          today at 9:35 AM

          Many times places change because a manager changed and then you have the boiling frog thing where it doesn't become awful all at once.

        • falsemyrmidon

          today at 10:10 AM

          At some point I just work here man, and my job is to do whatever dumb shit management wants me to do this quarter, no matter how dumb it is.

      • Sam6late

        today at 6:45 AM

        I think it is that cycle where old projects will eventually seem less important with huge budgets for new projects by a new manager, that will have bigger allocations, and the bonuses will follow along with the brownie points to that genius.

      • ozim

        today at 6:14 AM

        This is what I do believe will happen.

        I still have new „business„ guys joining org who try to make „cloud migration”.

        We are cloud as a SaaS, we are running on VPS with virtual networks. But they come in and think „to be professional” we should be in „real cloud” like Azure or AWS.

    • arkh

      today at 6:58 AM

      Just got my morning coffee and read "genai" like some elusive Japanese person's name.

      So, can Genai san do his job?

      • redwall_hp

        today at 2:30 PM

        That's a pet peeve of mine with improper capitalization surrounding this. AI = Artificial Intelligence. Ai = a Japanese name. ai = "love" in Japanese.

        Also, "jenai" (which sounds like an uncapitalized "genai") means "not."

      • esseph

        today at 7:35 AM

        > So, can Genai san do his job?

        If not, will become Genai Sans job.

        • pjio

          today at 9:33 AM

          Oh stop it.

          • esseph

            today at 2:24 PM

            In my defense, it was Father's Day and I had to.

  • Npovview

    today at 10:28 AM

    Sir Humphrey explains the role of a civil servant

    https://www.youtube.com/watch?v=wKDdLWAdcbM

    "Bernard, I have served eleven governments in the past thirty years. If I had believed in all their policies, I would have been passionately committed to keeping out of the Common Market, and passionately committed to going into it. I would have been utterly convinced of the rightness of nationalising steel. And of denationalising it and renationalising it. On capital punishment, I'd have been a fervent retentionist and an ardent abolitionist. I would've been a Keynesian and a Friedmanite, a grammar school preserver and destroyer, a nationalisation freak and a privatisation maniac; but above all, I would have been a stark, staring, raving schizophrenic."

  • sekh60

    today at 1:31 AM

    I hope he was able to get a paybump each switch!

    • somat

      today at 2:50 AM

      Sometimes(most of the time?) that is the only way to get a pay bump.

  • ErroneousBosh

    today at 11:45 AM

    I know a large public sector organisation that had two extremely experience engineers take an early retirement package because there was a big restructure and they were getting 20 grand under private market rates. Six months later, they're hired back in for a year at 20 grand *over* market as contractors.

    And they wonder why they're pissing out money like a drunk in a bus stop.

    • davsti4

      today at 1:28 PM

      Did that include the ~40% of employee overhead?

  • cryo32

    today at 8:05 AM

    This is what I do.

    I love watching them cringe when they see my new daily rate.

  • aksss

    today at 6:28 AM

    Something I hated about working in corporate America was surviving multiple leadership regimes, watching the same lessons being learned over and over, having to recount history to new regimes, it got really tiring, and particularly dealing with the attitudes and self regard of some.

    • t43562

      today at 6:58 AM

      I have often thought this - a wave of people learn something and on come the next wave to relearn it all. They can read books but they don't really "get" what the books say and have to learn it all from personal experience all over again. It's not just America.

• OptionOfT

  today at 12:04 AM

  I've seen that in a large management consultancy company. Part of their risk management procedures (both for the company and in terms of some EU law) meant they couldn't keep contractors for longer than x years. They'd have to convert to employee or separate for 12 months.

  Bit that doesn't really work in knowledge systems. Even with the best documentation people will build up knowledge that no one has, and their departure is costly.

  Equally at the end of their contract a lot of time will need to be spend on a handover which slows down others even more.

  So what happened? The contractor went via another middle man, which checked the correct boxes on the form, and everybody was happy.

  • selcuka

    today at 1:41 AM

    > Even with the best documentation people will build up knowledge that no one has

    I think that's the part management teams are missing. They assume that employees are just human resources and they can replace a senior engineer with a 100% equivalent one when needed.

    • annzabelle

      today at 2:08 AM

      I worked for a large US bank that has a 10% biannual attrition target at all levels across the company. Twice a year they PIP 10-15% of staff, most of whom take a substantial buyout. Institutional knowledge is constantly being lost and experienced staff are being replaced with fresh cohorts of new grads, who then get replaced themselves right as they start becoming useful.

      I knew multiple people there who made more in signing bonus, pay during training, and severance than they made for work actually performed.

      The CEO is convinced that this is the path to "top tech talent."

      • jimnotgym

        today at 6:30 AM

        That sounds like Enron. It breeds a culture of short termism, arse covering, and often... bending the numbers a bit

        If we called it by the literal term, decimation, you would get a good sense of the effect. "I have a new policy, I'm going to decimate my own company"

      • MyHonestOpinon

        today at 1:15 PM

        Oh, I think I know who is this. The CEO is fantastic (he is very technology oriented) but he is super convinced this is the right way. It has all kinds of perverse consequences. The constant loss of experience shows everywhere. Cliques are formed as means of protection. People focus on being seen, rather than in doing a great job, etc.

      • ako

        today at 8:31 AM

        I assume management thinks this will lead to better documentation practices and standardized processes so it becomes easier and cheaper to introduce new employees. In practice the opposite happens, employees get scared for their jobs, hire bad new employees so it's the new people that will get PIP-ed.

      • pyuser583

        today at 5:41 AM

        Does the approach apply to senior management?

        • arethuza

          today at 7:57 AM

          Senior leaders in large companies I've worked at always had a fairly high turnover just because they all tend to be hyper competitive and engaged in their own Game of Thrones type competitions - which someone has to lose.

        • annzabelle

          today at 5:43 AM

          There's some level where it stops, but that's after you've got 100+ reports.

          I don't know that I interacted with anybody senior enough to avoid this process in the time I worked there.

    • teravor

      today at 7:58 AM

          >  They assume that employees are just human resources and they can replace a senior engineer with a 100% equivalent one when needed.
      

      they don't assume that, they make it happen by doing this regularly.

    • today at 2:12 AM

• b800h

  today at 7:32 AM

  It's very possible that this occurred during the IR35 shake-up - HMRC moved the liability for unpaid income tax (in a situation where a contractor was determined to be a de-facto employee) from limited company contractors themselves onto the client (the bank, in this case).

  Banks had a very low risk appetite and so had to let these people go. What was going on in a lot of places was that vital staff who had to be dumped were intermediated by outsourcing providers. These companies either then paid the staff a very high salary and sold them in as temp labour, or took on the risk themselves and hired them as contractors for the same purpose.

  This all made sense, but for a lot of contractors at the time, it felt like the apocalypse. The net effect was that HMRC exchanged flexibility in the labour market for immediate tax take. This may not have been a sensible decision.

• thomashabets2

  today at 9:51 AM

  > One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider. The provider must have added a substantial markup despite supplying the same engineer back to the same team, without having incurred any procurement costs.

  When I worked (well, was a contractor at) a very large company, they'd kicked out all their small contracting providers only to get the same people back via a single big one. I was told this was part of a vendor consolidation move, because maintaining their existing direct relationship with literally hundreds of thousands of vendors had a huge cost in itself.

  I doubt they were dumb enough to think there was no markup, but going direct isn't free either. There ain't no such thing as a free lunch.

  Now, was it a net good move? That's both above my pay grade and not my expertise. But from the fact it took me a month of billed time to buy a license of that same company's own product[1], I wouldn't have called it an efficient bureaucracy.

  [1] all purchases of own-company product had to be done through the 99% internal billing discount program.

• nostrademons

  today at 1:46 AM

  I have a friend who left BigCo and then rejoined it as a contractor, plus some additional employees that he manages now. He cynically says "My job is to convert OpEx to CapEx when the finance department tells some director they can't have more headcount."

  • cdavid

    today at 2:19 AM

    The same way cloud is about doing the exact opposite.

    Understanding a bit of accounting / corporate finance opened my eyes to many things.

  • jimnotgym

    today at 6:35 AM

    How is hiring a contractor Capex?

    >the finance department tells some director...

    Don't shoot the messenger. The finance department is implementing the board's policy.

    • Foobar8568

      today at 12:45 PM

      Because they will work on new projects, which are considered as CAPEX.

      Basically big4 and accounting firms fucked worldwide organizations.

• rr808

  yesterday at 11:44 PM

  > Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise.

  I dont think they're baffled, they just trying to show they're attempting to keep costs under control.

  • etothepii

    today at 3:40 AM

    Lots of shouting on one particular occasion left me with the impression that they genuinely had not anticipated this consequence of simultaneously pulling the "no contractors to be renewed" lever and the "any MD can sign contracts up to $1m with approved suppliers" lever.

    The people involved weren’t stupid. They were trying to achieve one outcome and got a different one because the rest of the organisation adapted to the incentives in front of them.

    • necovek

      today at 5:46 AM

      How do you call when someone repeatedly does the same thing expecting a different outcome each time?

• betaby

  today at 12:01 AM

  > One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider.

  That's 'normal' in Canada and France.

• guhcampos

  today at 1:22 AM

  I think I have a simpler answer: quarterly results.

  Management just really needs to make the next earnings look like what it should look. Next quarter is next quarter's problem.

• jdw64

  today at 5:11 AM

  In my experience, it's probably due to differences in budget line items. Usually, regular labor costs and outsourcing costs are budgeted separately. Some teams may not have the authority to hire an additional full-time employee, but they do have the authority to use external contractors. On top of that, the internal political landscape differs as well. When it comes to office politics, increasing headcount in a particular department means increasing that department's influence. There are also additional benefits and administrative costs that come with hiring permanent staff. Moreover, standard contracts usually come with overhead for contract management personnel and procedural costs, and these are often handled by the vendor side. In other words, direct employment comes with long-term responsibilities for performance and benefits, but when you outsource, most of that liability shifts to the external vendor.

  • today at 4:46 PM

• mrweasel

  today at 11:01 AM

  I've told this story before, but I worked for an ISP that was obsessed with things like CAPEX vs. OPEX and staffing vs. outsourcing (they always mixed those two for some reason, even if I'd say that buying consultants and salaries are both OPEX). In any case, it resulted in outsourcing 50% of development to a another company, at twice the cost, then keeping those consultants on for a decade. The saving, had they hired instead would have been massive. The reasoning was: Well we can fire the consultants in within two weeks... sure but you can fire staff within a month or two. Six months at the most. Right now you're just announcing that you suck at long term planning.

  At one point they were convinced that the operations team was horrible inefficient and outsourcing would be cheaper (they'd already pulled operations back from IBM, because IBM is expensive and incompetent). Luckily someone decides to get some other consultants involved and actually measure the inefficiencies, before taking action, so the savings made from outsourcing the team (again) would be more clear. They didn't expect to be told that they had one of the speediest, leanest and most efficient operations teams in the country.

  Same company handed out 20% raises one year and the next we were apparently almost broke. Then no on wanted to work there, because there were no prospects of a raise in the future, so they started hiring new people at MUCH higher starting salaries. They'd start people out on the salary levels you'd expect to reach after 5-8 years, so they would avoid having to budget in raises.

  At some point companies just get top heavy with incompetent business types, who doesn't tend to stick around, at least not in the same role for to long. They forget the past and start their playbook, which always happens to be the reverse of what happened two years ago.

• jojobas

  today at 12:15 AM

  This doesn't seem to answer why an engineer is let go and gets rehired through an outsourcer.

  • shoo

    today at 1:37 AM

    In some cases it could be driven by the shape of the work & where the funding is allocated:

    If there isn't enough guaranteed recurring work, it might not make sense to have a full time position, particularly in a country where its difficult to lay people off & if employees have additional overhead (pensions, employer funded heathcare or insurance, etc) vs contractors.

    But, if there's funding allocated for some key project that's framed as a 6-12 month project, there might be a good business case to hire a contractor. Maybe the funding comes out of the project bucket, not the core funding for legacy product X bucket.

    If the contractor is someone who was recently let go & has a good reputation within the company as someone who gets stuff done and is easy to work with, it's probably a no-brainer to re-engage them as a contractor vs rolling the dice on an unknown quantity.

    Whoever is managing the budget of their old team gets a win as they were able to reduce headcount to fit in their budget

    Whoever is managing the new project gets a win as they find a great contractor for their key project

    The former employee returning as a contractor probably gets a win, as they get paid at a better daily rate while the project is rolling, provided they're able to line up more projects or land a new permie job once the project is completed.

    If there's an outsourcer involved, they win by taking a cut. The former employee might also win by having the outsourcer involved if the company has some baroque process for engaging contractors with many compliance hoops to jump through -- in extreme cases (think banks, or public companies that need to demonstrate they don't do business with suppliers engaged in slavery, or so on) it could save the worker months of paperwork and tens of thousands in legal expenses to set up their own one-person agency and go through the compliance process to be able to work for their former employer, so they might not be able to win the contract work without piggybacking on an outsourcer who already has the contracts & compliance stuff sorted out.

  • liveoneggs

    today at 2:04 PM

    At one of my old jobs contractors just cost what they cost.

    Benefits are the obvious one but there were also Corporate Costs which were calculated based on headcount - Exec salary, office space rental, laptop costs, etc all were line-items based on department headcount.

    The ratio ended up being 1/3 employee and 2/3 contractors so plenty of desk-sharing, "war rooms", etc.

  • jijji

    today at 12:53 AM

    most large companies have a 2-year limit on contractor employment so what they tend to do is they'll hire the same guy through a different contractor with another two-year agreement..... that's to get around the situation where if someone is working as a contractor for more than 2 years they can legally claim that they're actually an employee....see Vizcaino v. Microsoft Corp., 120 F.3d 1006 (9th Cir. 1997) [0]...

    this is just a guess by the way but it seems like a plausible one, as I've seen it happen in Fortune 500 a lot, where the same guy comes back through a different vendor 2 years later if he was really good and they needed him to come back....

    [0] https://law.justia.com/cases/federal/appellate-courts/F3/120...

• stackghost

  today at 12:58 AM

  The military is like this. Higher Headquarters decides to contract out maintenance and logistical support for $aircraft_fleet. Uniformed maintainers go home in Friday and show up Monday making a lot more money to do the same job but without risk of getting posted or deployed.

  Contractor fees come out because of a different pot of money, so perverse incentives abound.

  • pjc50

    today at 10:47 AM

    This is almost formalized in UK trains under TUPE. Train companies like Avanti exist as shells; they don't own track, trains, or stations, and when the franchise shifts to a different company the vast majority of the staff are taken on. Because - guess what - they're the people who can do the job and are in the right place.

    Someone called this form of privatization accounting "playing at shops". It is slowly coming to an end as they are re-nationalized.

  • LPisGood

    today at 1:09 AM

    Don’t those uniformed maintainers get reassigned to other military jobs or are they allowed to work as a contractor while being active military?

    • Jtsummers

      today at 3:24 AM

      Yes, GP's description is incorrect (to be kind, it's just bullshit). If the position is removed (say H-60 maintenance at some base is now contracted out) then the enlisted members doing the work would not switch to contractors over the weekend or even over the span of a few weeks, they'd be moved to another base or another job on the same base.

      Now, the people being hired by the contractors are often former enlisted maintainers, but it won't be the ones doing the job previously because of a switchover like this. Those crews will have PCS'd.

    • stackghost

      today at 2:04 AM

      Sometimes they do but often they quit because the work life balance is much better.

      • lazide

        today at 5:39 AM

        If you’re enlisted (or even commissioned in most cases), you quite literally don’t get to quit.

    • trollbridge

      today at 1:21 AM

      They're dismissed due to a reduction in force.

      • derektank

        today at 1:41 AM

        That’s pretty rare in the USAF. Most servicemembers will be sent to be retrained on a different airframe or even into a different career field unless their date of separation doesn’t make it worth it. Voluntary separation programs do sometimes pop up but they’re not that common.

        It is common to have people separating and coming back immediately as contractors into basically the same job, but that’s usually because there is already a contracted workforce in place and they made connections while serving.

        • jimnotgym

          today at 6:42 AM

          But it is the same affect as what the OP said. In a large organisation, attrition is so high that if you slow recruiting you will soon have a lower headcount. So yes the uniformed deployable military are replaced with civilian 9-5ers. But not the very same people, just the very same roles.

          I don't think this changes how I feel about it.

  • stackghost

    today at 3:06 AM

    s/in Friday/on Friday/g

• chiph

  today at 1:28 AM

  That's because the bankers didn't realize they're not in the banking business anymore - they're in the IT business (which has a focus on tracking money).

  • toomuchtodo

    today at 1:52 AM

    I have made this same argument to a C level person in the US capital markets and told I don’t know what I’m talking about. As long as the check clears, I have no strong feelings on the topic, it’s just a performance on a stage.

• taneq

  today at 3:23 AM

  > Sometimes that means working around processes and incentives in ways that look very strange from the outside.

  At my last performance review, at my last job (this is going back more than a decade now) one of my agreed KPIs was to take the lead on a 3-6 month project, making all the required technical decisions etc. and successfully delivering it on time and on budget.

  I never got the opportunity, and quit that job six months later to start my own business, but still did contract work for them.

  Got a social call a year later from my old boss (who also left, before I did) and got to tell them “so I hit my KPI, you’ll never believe what I had to do to make it happen…” :D

• bandrami

  today at 3:03 AM

  At the risk of injecting recent US politics into this, the shipyard I used to work at had five employees laid off under DOGE and replaced by the exact same individuals (there aren't actually that many naval architects in the US), now working as contractors at a higher base pay. I feel like there's a lot of that out there.

  • eszed

    today at 3:32 AM

    The defense and security-related sector is legendary for this. I had a friend who worked at a three-letter agency ~20 years ago who saw multiple colleagues quit, get hired by contractor firms and sold back to the agency to work on the exact same projects they had been working on as employees. They got a 2-3x pay bump, and the government paid 3-5x for their services. In one instance, my friend said, a guy clocked out on a Friday and came back to his exact same desk on Monday, with a new "employer" and a higher salary.

    • ecshafer

      today at 4:37 AM

      Per a friend, they are told to use more contractors in the government. Its also not clear if the contractor is actually making more money. Government benefits are significantly better than most contractors will give (I will be all of them).

      • vintermann

        today at 4:58 AM

        The contractor has better take home pay. For them, it's maybe a wash whether they get the extra pay or the better benefits, but what they are paid is only a fraction of what the government pays to the contractor's company. For the government, giving those benefits is definitively a much better deal than using a contractor.

        • thaumasiotes

          today at 5:43 PM

          > For the government, giving those benefits is definitively a much better deal than using a contractor.

          This is not necessarily the case. The large part of the benefits are to be paid in the future, and this makes it possible for the government to spend much more than makes sense on whatever the project is that the employee is assigned to. You can get into situations where the employee doesn't pass a cost-benefit test.

          The contractor is less cost-effective; you get less work per dollar spent. But because you have to pay for the contractor at the same time they do the work, you aren't subject to this effect of being trapped by an illusion of cheapness.

    • structural

      today at 4:54 AM

      Who actually pays for what and how is so mangled that if you want to reallocate someone to another project (or even just pay them out of a different pool of funds!) often the easiest approach is to rehire them through a contractor, or a different contractor.

      This is especially useful when projects are wound down. Let's say you've contracted to an org for support or management on a project that you want to kill, you've already obligated some amount of funds, and you don't really want to make that organization angry by ripping millions away from them (the pool of contractors is not large). What to do? Well, you could take Joe and give him a raise by suggesting he work for the contractor instead of you directly. Money's already spent, anyways. So you save your own money that you can use for your pet projects or whatever, Joe gets a raise, the contractor doesn't get a termination that pisses everyone off. Everyone happy, right? Smh.

  • edg5000

    today at 3:23 AM

    This is extremely common at govenments in the Netherlands as well.

I was on a government project where I found out I was being fraudulently billed on my hours. It was towards the end of the year and my manager was trying to use up the budget of the client. Although this is normal in the private sector I told him from the beginning that you can't do this on a government project.

The project was $1M+ which was enough for prison time. He had gone into our billing software and edited my entries - it wasn't as if he was submitting the fraudulent totals only - he was changing what I was entering.

I gathered as much documentation as I cloud and went to a law firm. They told me I had two options - report it to the Government Accounting Office or report it to the head of the project, an academic.

So I simultaneously resigned and reported it to the professor. I covered my butt. I'm pretty sure the professor hid the fraudulent billing but I didn't look into afterwards because basically that was what I was hoping he'd do so I wouldn't have to go to court and defend that my reported hours weren't really mine.

The full project was eventually awarded to another academic group.

• bandrami

  today at 3:06 AM

  That's particularly egregious because there's a time-honored way to do this legally, namely have you shave yaks for 80 hours a week towards the end of the fiscal year (lot of USG contractors are skipping their vacations this summer for that exact reason).

• talon8635

  yesterday at 11:49 PM

  Okay… do you not feel culpable at some point? Do you feel no obligation to expose these various individuals fleecing the tax payers? Your boss, the academics, and everyone else who participated or knows and remains silent. Obviously, you are now in the later group.

  Yes I know it’s not all that rare, BECAUSE people can’t be bothered to blow the whistle.

  • bawolff

    today at 2:42 AM

    Do people really have a duty to fix every wrong in the world? He reported it to the project head, and resigned. He ensured he wasn't a part of the situation.

    I don't think you have to be a full saint to fulfil your moral obligations. He ensured he wasn't implicitly participating and reported it to someone who had a responsibility to investigate/do something about it. That is a reasonable amount of effort to rectify the situation in my opinion.

    > Yes I know it’s not all that rare, BECAUSE people can’t be bothered to blow the whistle.

    The person you are responding to did "blow the whistle". They reported it to the project head. That is blowing the whistle.

    • pwagland

      today at 12:56 PM

      They didn't blow the whistle though, not really.

      Especially not when gp said that they expected the department head to brush it under the rug. If reporting things "up the chain of command" was really expected to root corruption out, and this fraud is 100% a form of corruption, then whistle blowing simply wouldn't be needed.

      They covered their own ass, which is fine, in that later the head can't say they didn't know about it. But they didn't blow the whistle.

      • mywittyname

        today at 4:35 PM

        Whistleblowers get worse punishments than the criminals they report on.

  • rayiner

    today at 1:47 AM

    If you don’t have a duty to report, you don’t have a duty to report. You can’t predict what government prosecutors will do. If they start investigating and it turns out for whatever reason they can’t pin it on the boss, they could have pinned if on OP.

    Think about it logically. If you’re the prosecutor, the guy whose time is fraudulent is presumptively the criminal. It could very well be that he was actually the one who was engaged in the fraud, but went to the authorities to protect himself by making it look like his boss did it.

    • carlosjobim

      today at 1:48 PM

      Yours is unfortunately the attitude which breeds corruption, and also the attitude of the majority of people. "Not my problem", "not my duty", "covering my own ass", "not getting into trouble" and so on. The reptilian minded people like OPs boss love having you guys around, because they can't do their unethical schemes just by themselves, and you won't make a fuss.

      As for the prosecutor; he is first and foremost interested in where the money went. If fraudulent hours didn't give OP an extra paycheck boost, then that money went somewhere else.

    • b40d-48b2-979e

      today at 2:56 AM

      [flagged]

      • bit-anarchist

        today at 3:33 AM

        Having morals doesn't mean you must self-sacrifice. If you have no obligations, you have no obligations.

        • b40d-48b2-979e

          today at 3:42 AM

          He did report, he chose to report to the choice he thought would have no motion. He knew it was wrong, he consulted with what to do, then he chose the action that let him skate by while observing prison-levels of public fraud. His entire monologue is self-serving while trying to maintain a facade of responsibility/ethic.

          • bit-anarchist

            today at 5:15 AM

            What facade of reponsability? Their responsibility was not being complicit in the crime and they accomplished just that. It's not their responsibility to prosecute their employer, specially if it comes with significant risks to their life.

            • b40d-48b2-979e

              today at 1:39 PM

              He was complicit when he knowingly made the choice that would have no accountability.

              • bit-anarchist

                today at 5:10 PM

                That presumes that it's their responsibility to hold them accountable or, at least, that the other option is free. Given that you haven't shown either of those, and the statements point to the contrary, it's fair to say they are not complicit.

                • b40d-48b2-979e

                  today at 5:34 PM

                      or, at least, that the other option is free
                  

                  So morals only matter depending on how easy a decision is to make and how it won't affect you personally? This is coming back full circle to "has no morals".

        • wisty

          today at 6:55 AM

          If you only have morals when it's at no cost to yourself, do you have morals?

          • streetfighter64

            today at 11:27 AM

            That doesn't make sense. Obviously if I refrain from stealing I'm upholding my morals at a cost to myself (the cost being the free stuff I don't get). You seem to expect people to have morals at every cost to themselves, implying that they don't have any morals otherwise. You may as well ask why people aren't donating all of their possessions and living at the minimum subsistence level. Or why haven't you donated one of your kidneys yet? Do you consider it to be too high of a cost to yourself, even though it would be the "moral" thing to do?

  • buildsjets

    today at 2:59 AM

    Absolutely not. Honor does not pay the mortgage. Whistleblowers have no real protection, despite laws saying they should. If you blow that whistle, you will be retaliated against, guaranteed.

  • etothepii

    today at 3:51 AM

    What you know and what you can prove are different things.

    I think most people would blow the whistle if they had evidence of personal-enrichment fraud. Suspecting that incentives are producing strange outcomes is one thing; accusing specific people of criminal conduct is quite another.

    Hilariously, in the one case I heard about where an MD was eventually fired for taking kickbacks from contractors, the department then struggled to recruit competent staff. It turned out he had only been skimming from people who could actually do the job.

  • post-it

    today at 12:39 AM

    Now that you know, do you feel culpable?

    • tzs

      today at 1:04 AM

      He just knows that someone on HN who is not using their real name has described witnessing government fraud at some unspecified point in the past and reporting it to the head of the project. He doesn't have any information about where it occurred other than probably the United States.

      He's not really in a position to act usefully on this information, so had no reason to feel any culpability for not acting. It is only an interesting question when put to people were in a position where they had to make a choice.

      • necovek

        today at 5:55 AM

        He can report the incident to digital crimes unit who can subpoena HN/YC for identity of the poster, and then they can take it from there.

        There is always something you can do — whether you are going to bother is an altogether a different matter.

    • jayd16

      today at 1:26 AM

      I'm supposed to dox this person or something? What are you asking exactly?

  • comrade1234

    yesterday at 11:58 PM

    It was too risky. My boss was scummy and even though I had documentation about my hours being edited he would have fought it and we'd go to court and at that point it'd be a crap shoot. If I remember right, the prison time was five years and there is no parole with federal sentences.

    • Buttons840

      today at 12:26 AM

      To prevent this situation the peons should be given the benefit of the doubt by the courts.

      In this case, either (1) the peon was lying about reported hours, the boss didn't notice, and then the peon reported himself... or (2) everything happened just like you said.

      Aren't there bounties for reporting things like this? At the very least winning should include reimbursement for legal expenses.

      • benjiro29

        today at 1:49 PM

        All your going to end up with this type of cases is:

        * Years of stress

        * Years of financial losses because lawyers are not cheap. And no matter how well you are innocent, not having a lawyer is guaranteed that you will fail.

        * Years of time wasting.

        And for what? The government maybe sentencing a guy for fraud. When its like 90%+ he will strike a sweetheart deal with the prosecutor.

        Even worse in a case like this where its almost your word vs the boss his word. Yea, you can be the guy that ends up living under a bridge while the CEO laughs his way to the bank, being able to pin it on you.

        Its already difficult with some proof... Dealing with this type of fraud case reporting, is easier when your not in the spotlight of the crime, and then reporting it. But if your unwilling part of it, few people want their neck on the line.

      • vkou

        today at 2:29 AM

        They do get the benefit of the doubt, but when you're a defendant in a criminal trial, simply having the benefit of the doubt on your side will not mean that you're going to have a great experience with it.

  • stronglikedan

    today at 2:31 PM

    hell no! CYA and See'ya! You should try to avoid anything to do with government investigations.

  • tokioyoyo

    today at 12:17 AM

    Easier to say than do.

  • vkou

    today at 2:26 AM

    > Okay… do you not feel culpable at some point?

    1. No mens rea.

    2. He did what was expected of him.

    3. You're always free to break into prison if you find yourself in his position, but you might discover yourself sitting in a pool of shit that was not of your own making.

    4. Do you really want the parent poster to face the possibility of criminal prosecution, because his scumbag boss convinces the DOJ that the parent poster were the one fucking with the hours, and tried to pin it on him?

  • jiddert8

    today at 12:29 AM

    [flagged]

    • Der_Einzige

      today at 1:14 AM

      Honestly, having been to high trust places like Singapore for a decent amount of time - it's better to live in a low trust society. Singapore is easily one of the most boring, sad, depressing places on earth despite it being on paper a paradise according to education, health care, etc rates.

      High trust in society correlates strongly with being anti-innovative. Europe is going through another lost decade in a row because it got too addicted to social democracy. The fastest growing parts of Europe are some of the lowest trust (i.e. Poland). Please fleece the tax payer more.

      • rayiner

        today at 1:50 AM

        I love how we’re actively cheerleading third worldism now. Boring is good, bland is good, efficient systems that assume high trust are good. Unless you’re Norway or Denmark, you should try to make your country more like Singapore.

        • qsera

          today at 2:57 AM

          Boring is not good if you are interested in something that is not boring!

          More fun always come with more risk. Everyone has their own threshold. So it is pointless to say that "Boring is good". It might be good for you, but not for everyone.

          • rayiner

            today at 4:50 AM

            Fun fact: America got rich by being boring. America never went through periods of rapid GDP per capita growth like you see with China. Instead, it’s rich because it has grown at a consistent 2% almost continuously for 200 years, minus a couple of blips before/after the civil war and great depression: https://www.aei.org/carpe-diem/theres-one-thing-we-can-alway...

            Boring, high trust societies are conducive to risk taking. High trust reduces transaction costs. And people are more likely to take risks when they can trust the system under their feet is orderly, stable, and trustworthy.

            • Der_Einzige

              today at 2:30 PM

              I just showed above that "high trust societies are conductive to risk taking" is extremely wrong. Every high trust society on earth right now does the exact opposite. It's a lack of risk taking keeping Europe and even Singapore in a slump/relative slump. It's doubly that for Japan and Korea got lucky as hell with its control of the HBM memory industry but without that it'd also be fked for the same reason.

              You need LOW trust for risk taking.

          • fc417fc802

            today at 4:00 AM

            There's no fundamental mechanism (at least that I'm aware) that stops a high trust system from awarding funds to a risky venture. If that's not happening it's a systemic problem (or feature as the case might be) as opposed to some fundamental mechanism dictating covariance.

            I think in practice the conditions that lead to high trust societies forming also tend to lead to culturally valuing predictability which translates to a bias against risk. But that's not an inherent part of high trust rather that's just how things happen to be at a given point in time.

            • Der_Einzige

              today at 2:30 PM

              Just like tyranny isn't an "inherent" part of communism. Right.

      • sitkack

        today at 1:26 AM

        What is your favorite western? Fist full of dollars or GBU ?

• dfedbeef

  today at 1:06 AM

  Someone hasn't heard of qui tam

  • derektank

    today at 1:46 AM

    Qui tam (and the federal false claims act) are brilliant, such an elegant solution to a classic problem in government (corruption).

    • hiAndrewQuinn

      today at 6:10 AM

      The False Claims Act is one of my favorite things in the world, hands down. Who would have guessed that paying whistleblowers a fraction of the proceeds for high stakes financial crime would be so effective? Well, aside from every economist and financier who ever lived, I mean.

  • murphyslaw

    today at 6:01 AM

    Thank you for this tidbit of information!

• idiotsecant

  yesterday at 11:02 PM

  That was your mistake. The grant recipient or department has as much incentive to fully spend the money as your consultant boss does to bill it. It's a implied understanding.

  Spend the budget or next time people will ask why you need all that money when you didn't spend it last time. Expensive projects are important projects. Important projects make careers. That is baked in several layers deep. You'd need to report it to a waste and fraud line, ombudsman, or similar.

  I'm not sure its unusual enough to bother, though.

  • comrade1234

    yesterday at 11:14 PM

    I decided to take the advice of my lawyers who specialized in the topic of government projects. Based on the budget someone could have easily gone to prison and it probably would have been me because it looked like I was billing 80-hours a week when it was just one of many projects and so I was actually billing ~20/wk. The $1M threshold wasn't an anecdote - at the time it really was the limit in project size for prison time.

    • tasty_freeze

      yesterday at 11:47 PM

      Ages ago, my girlfriend at the time worked for a company that routinely got SIBR (small business innovation research) grants. Such grants made up part of her total workload.

      The crazy thing was that if she worked for 10 hours on SBIR stuff, then worked 40 hours on her normal work stuff (so overtime), the SBIR billing would get scaled down to 8 hours (that is, 25% of 40 hours). There would be no way to bill 80 hours.

      The other thing that seemed somewhat crazy is that it was also common to have multiple SBIR contracts going on at the same time. If they bought a $10K tool for SBIR grant #1 and SBIR grant #2 needed it two, they'd have to buy a second one. So the tool would be out, then when switching between work on the grants, the tool would go into a locked cabinet, then the second copy of the tool would get unlocked from a different cabinet. I understand that firewalling like that prevents a company from "borrowing" expensive equipment for their own work, but it lead to waste like I just described.

      • noisy_boy

        today at 2:00 AM

        Why not float a company to buy the tool and then let that company charge money to lease the tool to the using companies for the specific non-overlapping period instead of borrowing? Leasing can't be prohibited too?

    • zulux

      yesterday at 11:25 PM

      You would have been fine: Your pay stubs reflected the correct time and your correct payment.

      • comrade1234

        yesterday at 11:34 PM

        I was salary.

        • carlosjobim

          today at 2:00 PM

          Then why would you bill fraudulent hours if it didn't increase your pay?

        • zulux

          yesterday at 11:36 PM

          Shit. That does make it hard. I suspect you made the right move to protect yourself from drama.

    • dummydummy1234

      today at 3:19 AM

      Wait, did you get paid overtime when he modified your time sheet?

      I guess it may not be normal but I got straight time overtime when I worked for a contractor. Made those weeks I really did do 80 hrs nice. But if they have any system involved the fact you did not get paid for the time would be a big red flag.

    • idiotsecant

      today at 3:54 AM

      If you were salary and not benefitting from it, there's literally no chance you would have gone to jail. This was the equivalent of panicking about running a yellow light in terms of overreaction. The only thing you had to do was write an email, cc your personal email, and tell your boss you think the punches are messed up and that they reflect more than you worked. Your boss would tell you not to worry about it and you're done.

      • wavemode

        today at 12:49 PM

        The person you're talking to literally spoke to lawyers and followed their advice. If you know better, maybe you should work in government law.

      • N_Lens

        today at 5:16 AM

        Your faith in the criminal justice system amuses me.

        • bigstrat2003

          today at 7:36 AM

          Abuses happen. But they are the exception, not the rule. There's no need to be so cynical and mocking about it.

      • mightyham

        today at 11:19 AM

        I love when people on the internet think they know better than lawyers about a situation they are barely familiar with.

        • idiotsecant

          today at 2:16 PM

          If I call a lawyer and ask them whether I should jaywalk or not the lawyer will advise me not to jaywalk.

  • fyredge

    yesterday at 11:41 PM

    > Spend the budget or next time people will ask why you need all that money when you didn't spend it last time.

    I've always heard of this nugget of wisdom but never really understood it. By punishing those who underspend (by making the next application harder), wouldn't you incentivise inflated research costs, or worse, fraud. Seems like a quick path to a positive feedback loop towards the degradation of trust in academic spending, leading to "poor government efficiency".

    • Paracompact

      today at 1:02 AM

      It makes zero sense to me either, yet it is an omnipresent influence in who gets tasked to what in my work. At my level, I do not know anyone who endorses it, they merely react to it.

      • somat

        today at 7:56 AM

        That's the paradox that causes the problem, perhaps paradox is not the correct term, conflicting view points?.

        From above(the manager of the program) the job is to budget the funds thriftily and fairly, each project getting the amount it needs.

        From below(the team working on the project) this feels like you are punished if you are able to save money and rewarded when you waste money.

        I suspect this is probably the major problem with having a more command orientated economy. While it should be fairer(free market economies are notoriously unfair). The inversion in incentive hurts performance.

      • spwack

        today at 1:11 AM

        Think of it the other way: If you have been given a $1 million budget, as a manager, your job is to purchase $1 million of Useful Stuff.

        The rank above you has decided "we need $1 million of software, go buy that." They don't know exactly how much stuff costs, so they use a dollar value as a rough proxy.

        If, as manager, you cut corners to save money, you're doing the wrong thing. They want the software! They don't to keep want the money, that's why it was allocated in the budget. Go buy us more Useful Stuff!

        • em-bee

          today at 2:22 AM

          i think anther scenario is more likely: you say you need a 1 million budget to run the IT department, but you only spend part of it, then next year if you ask for 1 million again, they will say, but last year you only spent 700k, so we are going to give you only that much.

          but the problem here is how budgets are assigned. instead of a fixed number it should have a lower and an upper bound. at least X, but no more than Y. the closer to you get the better, but next year the budget will be the same range. only if you drop below X you run into the above problem, but then it's much less likely and if you really spend that little something else is wrong or the budget really was to high.

          • jimnotgym

            today at 7:08 AM

            Or certain project related items in the overall budget have their own budget. If (when) the project slips into a future accounting period then so does the budget.

  • charcircuit

    today at 12:10 AM

    But if someone doesn't need a big budget it makes sense to decrease it. It reduces efficiency if you force yourself to spend the whole budget.

    • yCombLinks

      today at 12:48 AM

      But what if you need to save up to buy something that you can't afford in one year? Or you're trying to reduce cost in one place enough to hire a team to do some other project?

      • christophilus

        today at 4:40 AM

        You buy it with financing in that case. And you fit your reductions and hires into the same fiscal year.

      • charcircuit

        today at 3:17 AM

        Then you can argue why you still need the budget. It May make sense to temporarily allocate a bigger budget immediately to do those things instead of delaying, trying to save.

        • idiotsecant

          today at 3:49 AM

          Congratulations. Your budget is now permanently smaller because your appeals are completely irrelevant to the machine and you get to do less. Forever. Maybe you have to fire some people.

          • charcircuit

            today at 5:36 AM

            If you don't need a big budget then yes you should continue onwards with a smaller budget. That's not a surprising conclusion.

            • IIsi50MHz

              today at 5:52 PM

              I believe the intended meaning was "Now, regardless of any future considerations, your budget is permanently smaller.".

  • SecretDreams

    yesterday at 11:11 PM

    This is all simultaneously true and simultaneously disappointing. It requires a certain forfeiture of morality to be a part of this status quo. But, especially on grants between academia and the government, this very much seems to be the status quo.

    • hsbauauvhabzb

      yesterday at 11:24 PM

      Is it actually true, or just a trope? Anyone in a position to manage hundreds of millions worth of projects is smart enough to know that some projects will run under budget.

      • Paracompact

        today at 1:07 AM

        I work as a federal contractor. It's very true (epistemic status: my managers and project leads tell me as much and I act accordingly, I don't deal with it directly nor understand the bureaucratic larger picture). You will not get funding from Department X again if you ask for more money on a project than you wind up spending. Now, is that the sin of overquoting, or the virtue of overdelivering? For some reason, every agency treats it as the former, and I haven't the foggiest idea why. My coworkers acknowledge how stupid and perverse of an incentive it is, yet treat it like a fundamental force of nature.

        Most solutions to this problem are essentially what the OP recognized as nakedly illegal---that is, exaggerating productive hours---but most contractors are savvy enough to do it in less auditable and more positively regarded ways, such as stretching out timelines (four 20-hour work weeks raise fewer flags than one 80-hour week), adding more chefs than the kitchen calls for, or funding unnecessary little side projects. Straight-up tampering with timecards is an impatient and dangerous way of achieving (IMO) the same wasteful evil as happens everywhere else in the public and private sector.

      • pet_the_bird

        today at 12:00 AM

        The Dutch University of Delft systematically 'maximized' grants and shuffled the money between projects, according to investigative journalists of the NRC[1].

        1 https://www.nrc.nl/nieuws/2024/02/15/het-subsidiepotje-moet-...

      • sokoloff

        today at 12:24 AM

        I work with people who are well smart enough to know that.

        It’s also still a reasonable question to ask “well, last year we budgeted $15M and you got acceptable results while spending only $14M; perhaps you only need $14M/yr…” And despite its reasonableness, many people would prefer to oversee a $15M/yr budget.

        • jaredsohn

          today at 12:44 AM

          I think a reason for this is suppose the next year you run into some difficulties so it requires 14.2M. Now you have to fight to request an extra 0.2M added to your budget that you wouldn't have to worry about if you had 15M.

          • sokoloff

            today at 12:56 AM

            Totally! And it drives me crazy to get very few questions and mostly positive ones if I underspend by 5-10% but going over by 1-2% is a massive problem.

            It’s little surprise what happens under such a system: logical people over-reserve.

I worked for Advanced Network and Services, which operated the NSFNET and was later acquired by America Online. Then one day the company was acquired by WorldCom. A few years later the CEO was sentenced to 25 years in prison for a ~$10 billion fraud. As a systems administrator I knew nothing about any of that, but I could tell that the new management included a lot of players and empire builders. That's the signal that told me to quit a few months after the acquisition. Employees were invited to invest their retirement savings in a mutual fund that contained only WorldCom stock. Many of them lost everything. Pay attention to those signals.

• sokoloff

  today at 12:26 AM

  I feel like Worldcom got a modest amount of press coverage at the time but probably would have gotten a lot more if it hadn’t been front-run by the Enron scandal.

  • adastra22

    today at 12:52 AM

    Why are these always one letter off from what they actually are? Worldcom-> World-con. Madoff -> Made-off

    • inigyou

      today at 1:40 AM

      Scam Bankrun-Fraud

    • hyperadvanced

      today at 4:22 AM

      Normative determinism is the term for that

      • pinkmuffinere

        today at 4:43 AM

        *Nominative Determinism. Named after John Nominative, who first proposed the effect.

    • N_Lens

      today at 5:10 AM

      Palantir are upfront!

• GJim

  today at 9:29 AM

  > Employees were invited to invest their retirement savings in a mutual fund that contained only WorldCom stock.

  Investing in your own employer is an idiotic risk..... If the company goes titsup, then you lose your job and your savings. This happened to many people during the dotcom crash.

  • siskiyou

    today at 10:28 AM

    For decades after my WorldCom experience, I cashed out all equity grants immediately and invested the money elsewhere. Even if the company appears solid and is not run by criminals, it's still sound risk management. Bad things can happen to good companies as well.

• Npovview

  today at 11:17 AM

  One more example to know if Company is about to go under is when the finance folks who have access to accounting books are leaving the company.

At least you didn't work for an online gambling company....or assist with manipulating the political views of billions of people to their detriment...or work on better ways of killing people...

Also, who hasn't worked at a company that produced a product and then abandoned it? I feel like that has happened often to me - many years of effort for nothing. It's not fraud exactly but it represents almost the same thing other than the intention.

• worldthruword

  today at 11:21 AM

  > Also, who hasn't worked at a company that produced a product and then abandoned it? I feel like that has happened often to me - many years of effort for nothing. It's not fraud exactly but it represents almost the same thing other than the intention.

  You can look at it this way. It trained you to be a better developer. So you got paid to learn and solve problems which developed skills will be used somewhere else.

Not commenting specifically on the companies and VC/PE firm discussed there, but this and the comments demonstrate just how many firms exist to do things other than make a profit. I think I understand why people with the big bucks can play these games and why it's tax-efficient for them.

I often reflect on how much I've grown personally in companies that are clearly not going anywhere. Trying to do more with less can lead to... interesting... technical solutions. And in every company I've worked in, I have at one time or another been on a "cloud costs reduction" squad, which normally shortly precedes my deciding to move on from said company.

I've also worked at the opposite end of this scale – companies with so much cash and no desire to turn a profit any time soon - and that's more problematic, as there's just no pressure to actually ship anything and every problem (and I mean _every_ problem) is solved with money or by hiring specialists.

There's sometimes a fine line between a legitimate business pursuing ambitious goals that are ultimately doomed to failure and one that exists to commit fraud. And it's often not possible for an employee (even a fairly high-ranking employee), who often has limited information, to determine which is which.

What's the old saying? "Behind every great fortune lies a great crime."

Most common people throughout history made their living working in the systems owned by aristocrats whose wealth was usually built on both corruption and theft. Guess that hasn't changed much.

• patkai

  today at 6:47 AM

  Behind many, but I sincerely hope not "every". A trivial counterexample is Warren Buffet: he simply saved and invested. Or consider inventors with patents.

  • worldthruword

    today at 11:25 AM

    https://finance.yahoo.com/news/warren-buffett-generated-doub...

    https://x.com/theallinpod/status/2022746722191938017

    Chamath explains Warren Buffett’s secret to success: “Markets thrive when there's information asymmetry”

    “Now I'm gonna get a lot of people really upset with me.”

    “This is an example of Warren Buffet's returns pre- and post-Reg FD. Now what do you see?”

    “His returns were double the market returns when this kind of information sharing was legal.”

    “And the minute that it became illegal and you had to act on the same edge as everybody else, his returns went to the market return. He generated zero alpha. In fact, he probably, on the margins, lost a little bit.”

    “So this is the single best investor in the world. This is what happens when you have information symmetry.”

    “So it's just meant to explain that markets thrive when there's asymmetry. Billions and billions of dollars will be made in asymmetry.”

    “The prediction markets today, unless they are regulated out of existence or shut down, will look like the stock market pre-Reg FD, and there's nothing we can do except choose not to bet it, because otherwise what you're going to have are a ton of sharps taking advantage of a ton of squares.”

    • wavemode

      today at 12:55 PM

      You wrote this whole comment just to demonstrate that Warren Buffett is indeed following the law, like the parent commenter stated.

    • zahlman

      today at 5:03 PM

      What part of this demonstrates corruption, fraud or other crime?

    • mamonster

      today at 11:40 AM

      Buffett should get much more credit for pioneering/mainstreaming the insurance float game which is what minted a lot of the P.E billionaires once they learned the trick.

    • booleandilemma

      today at 1:31 PM

      [dead]

  • n4r9

    today at 10:40 AM

    Buffet is well known for acquisitions that pushed the boundaries of fair competition, and investments in other companies that did the same, or otherwise pursued deeply unethical practices. But he's trodden carefully around the law, so any "crime" would be a moral crime against society rather than a legally criminal act.

  • wavemode

    today at 1:02 PM

    Might as well save your breath. You're not going to convince HackerNews commenters that there is any human being on Earth with net worth over a certain threshold who is not evil. It's just too comfortable of a worldview for people to let go of.

    • francisofascii

      today at 2:56 PM

      I like Warren Buffett, but he can't be the best example. Who is someone the created significant positive value, themselves?

I'm sorry, this sucks. It must be painful to know that you were used to defraud people, and that you worked for years on something which was never intended to be successful.

From my perspective, you're a victim of this fraud too. I think the pursuit of meaningful work is an important way many people find meaning in life, and it sucks that someone took advantage of you. From this piece, I get the impression that you would never have spent so much time and effort on this role if you had known it was just a way to scam investors.

So, don't be hard on yourself. It's normal to feel guilty, but if you didn't have a perspective on the entire company or knowledge of the fraud, I don't know what you could have done.

Nearly two decades ago I worked briefly for a "startup" in the DC metro which (in retrospect, for me) existed only to show activity toward using an IP that was the subject of a lawsuit. The expected payout from the lawsuit would have rendered the cost of running the ~20 person startup meaningless, had they won. I suppose the lawsuit didn't go well, since the startup folded 4-6 months after I started, with paychecks being late, then stopping, and employees progressively not showing up. Fun times.

I have been in fairly senior roles at large corporates. The amount of money that is squandered without serious evaluation for something managers „want“ is mind boggling. I have often wondered whether corporate budgets are actually investor fraud in disguise.

Fraud aside, I think a more common thought among developers is

> Did my old job only exist because the Product Owners didn't realize we didn't have product-market fit?

• nitwit005

  today at 6:30 PM

  That's just innate. Often you don't know until you try.

• julianeon

  today at 12:50 AM

  That's the job: experiment until you find product-market fit... or die trying.

• raincole

  yesterday at 11:04 PM

  And there is absolutely nothing wrong with that. It's what a healthy economy looks like.

  • shermantanktop

    yesterday at 11:58 PM

    At a small company, anyone can damage the company prospects. But product people have outsized negative impact when they are wrong. They can tank the whole company in short order.

    Which is maybe as it should be, but it does pit agonized debates over detailed technical work in perspective.

    • pdimitar

      today at 12:35 AM

      All true but every time I tried to help with an outsider's perspective -- and IMO us as engineers with systems thinking _can_ contribute -- I was told to shut up and stay in my lane (more politely than that but still crystal clear what's the underlying message + a clear show of we-will-not-debate-this-again).

      So let them do damage. I do what I am told, I have the strategic thinking but not many have made use of it. OK. It's their right. I still pocket a wage. They could have gotten more for their money but consciously chose not to. Who am I to stop them? (And not like I actually can.)

      • shermantanktop

        today at 2:57 AM

        Same. I’m lucky to have some execs who appreciate that product people have a specific point of view (or agenda) and as a result are willing to at least listen to my views, wrt defect rates, availability, etc., but also about the occasional product idea.

        At the end of the day, if they choose spend their magic beans on shitty features, I’m still getting paid. Then again, I’m at a larger company, not a startup.

      • eudamoniac

        today at 4:55 PM

        That's when I mentally tally my stock options at $0 (if they weren't so already) and assess my new TC situation. If I have lost ability to influence the business in any meaningful way, then why am I being paid in company ownership units?

        Reminds me of when I, as a UI dev at a very small startup, became subordinate to the new designer (who was a big fan of large fonts and huge whitespace margins in our professional tool) regardless of any UX concerns. My opinion on UI/UX was highly valued as long as it completely agreed with the designer's :-) She is, after all, the professional.

    • raincole

      today at 2:34 AM

      A healthy economy permits the companies within it to fail.

      • shermantanktop

        today at 2:59 AM

        Did someone disagree with that?

• fluoridation

  today at 4:30 AM

  One time I worked for a client who entire idea for a product was "it's going to do the same as <specific popular open source dev tool>, except in Go and with GraphQL!" They literally had zero vision beyond duplicating effort for no reason. During the first meeting I sat in, I asked them directly why someone would choose to use their version instead of the existing one, and they didn't have an answer. Something like one or two years went by before they decided to end the contract with us, and I never learned what they hoped to achieve.

• today at 1:47 PM

• kijin

  today at 5:26 AM

  Well, that might be part of the reason why it's your old job and not your current one. :)

I was briefly employed by a robotics company in the US ... robotics is too nice: glorified if/then/else is better.

The owner was the son of an old school magnate out of PA.

Among other things his line has always stuck with me: "A whale that surfaces is soon harpooned."

The company never made money. I think the whole thing was run as a loss on purpose for tax purposes. I became tired of the head manager/engineer combo (big fish in this tiny, tiny world) and left.

Even they knew this company was never really trying to do anything serious. Strange indeed

• cobbzilla

  today at 12:37 AM

  > The owner was the son of an old school magnate out of PA.

  If you have a lot of money it’s fun to LARP the startup life. The experience working for such a company is highly varied and completely depends on the personality of the founder. But even if it’s a healthy place, it’s usually a black hole from a career development POV.

  • jamesfinlayson

    today at 3:08 AM

    I know someone who is an accountant for very wealthy people and quite a few seem to have useless children whose failing businesses they bankroll.

    • GJim

      today at 9:38 AM

      > whose failing businesses they bankroll

      Don't confuse a hobby business with a failing business.

      Plenty of people with independent means run loss making businesses for fun and/or support wives/children doing just that.

      • cobbzilla

        today at 9:46 AM

        Semantics. If the hobby business never makes a profit and is capturing losses for tax benefits, that’s a failing business. It can be failing indefinitely as long as there’s money to support it, but you can’t call it a successful business.

        • KingMachiavelli

          today at 5:46 PM

          Doesn't running consistent losses eventually cause tax issues with the IRS? If the losses are offsetting profit elsewhere, I would assume the IRS would become very interested in challenging the validity of the hobby business?

        • GJim

          today at 9:51 AM

          You appear to be suggesting that fun hobbies which don't make money are a 'failure' rather than a success. Not everything is judged by how much money it makes.

          Have you ever wondered why kids climb trees?

          • williamdclt

            today at 10:16 AM

            It's really not that deep: they're characterising the business, you're characterising the hobby. The owner having a good time doesn't make it a successful business. A failing business can be a successful hobby, sure, that's still a failing business.

      • barrkel

        today at 10:45 AM

        You see a lot of hobby shops in ultra-wealthy areas of major metropolises. Tiny art studios, interior decorators with a handful of items in stock, boutique fashion shops.

    • kijin

      today at 5:24 AM

      Startups are like sports cars nowadays. People think it makes you look cool if you own one.

      It doesn't matter if it costs a lot of money to maintain. Yachts and sports cars do the same. That's actually like the whole point of it, after all.

• itwaswatson

  today at 3:12 AM

  > robotics is too nice: glorified if/then/else is better.

  I have been on the other side of this, building a frontend that connected to an external service robot that we, with a 5 minute script, managed to successfully prove internally was just a if/then/else state machine.

  We got paid to make it, so we didn't care, but we knew someone was losing money.

• cobbzilla

  today at 4:00 AM

  fwiw, you’ve perfectly described the feeling of working for a “tax write-off” and how to recognize those vibes.

  It could’ve been worse, it could’ve been a fraud! But it’s merely a business designed to lose money. It won’t land you in jail but it’s not a place anyone would advance a career.

• Mistletoe

  today at 3:55 AM

  I can't wait for these AI companies to IPO and be harpooned.

  • NavinF

    today at 5:54 AM

    Why wait for IPO? Prediction markets already let non-US persons bet on startup stock prices while the startup is still private. Eg a few weeks ago you could have used a non-US VPN, shorted spacex, and lost all your money :)

https://hannahhowell.com/stuart-frost-drained-14m-from-inves...

• kubb

  today at 6:18 AM

  I wish I could pull this off on a smaller scale and just switch to a fulfilling life afterwards.

  The years I spend on nonsense will never come back.

Why does any of this actually matter? Why were you shaken?

You weren’t committing fraud. You did real work. Now you’re in the US with a family and a career.

Happy Father’s Day.

• wyldfire

  yesterday at 10:42 PM

  You know that feeling when you work on a feature for weeks or months and then something comes along and the feature is no longer needed or the project is cancelled?

  It's a pretty frustrating experience -- was it all for naught? Maybe it's useful to vent about it a bit.

  • jchw

    yesterday at 10:54 PM

    I definitely had this feeling early on in my career, but it did flip around somewhere around halfway through.

    "We're not shipping? Well, that's a bummer, but also, what a relief! If building it that was this hard, I can only imagine how bad shipping it would've been; now we can delete that code and with it all of the maintenance we would've had to commit to for years."

    The personal attachment just had to go eventually. It proved not to be terribly helpful or healthy anyways.

    • denkmoon

      today at 12:42 AM

      look at you you lucky devil, getting to delete code!

  • girvo

    yesterday at 10:58 PM

    > was it all for naught?

    I accepted a long time ago that it is all for naught :)

    Enjoy our time on this earth, do what we can, focus on people and it'll be alright

    • xg15

      yesterday at 11:07 PM

      Ok, but then honestly, spending 40+ hours/week in an office, doing work that's neither enjoyable nor useful doesn't seem like the best way to spend that time.

      It also feels like willfully abandoning the bit of agency you still have if you don't even try to understand why the world around you works like it does.

      • fluoridation

        today at 4:19 AM

        >40+ hours/week in an office, doing work that's neither enjoyable nor useful doesn't seem like the best way to spend that time.

        For almost everyone, working is not the best way to spend their time, it's just how they can afford the stuff they do the rest of the time. Obviously it's preferable if it's useful and/or enjoyable, but they're not necessary qualities.

        >It also feels like willfully abandoning the bit of agency you still have if you don't even try to understand why the world around you works like it does.

        Odd. "Agency" usually refers to the ability to exert will. Understanding would not seem to contribute towards that.

      • alexashka

        yesterday at 11:34 PM

        Many people's enjoyment stems from knowing they do less work for more money than the people they grew up around.

        'Useful' is not even a thought that's ever entered their brain.

      • vkou

        today at 2:33 AM

        > doesn't seem like the best way to spend that time.

        When the world starts paying people for the best use of their time, people will start prioritizing that.

    • cm2012

      today at 12:41 AM

      Yep 90% of companies don't matter and don't affect things. Only 10% of people do. That's just the way the world works. There's no way to know before you start so just live while you can enjoy.

  • mingus88

    yesterday at 11:01 PM

    I worked at a company whose product was truly boneheaded. Without giving too much away, it’s the kind of technology that would have been useful if we lived in a world where smartphones weren’t being carried around by literally everybody.

    I knew this, but took the job because I was burned out and knew I could spend a year or two coasting and padding my resume with some interesting things.

    I came to the conclusion that the company was a grift, but at least they took care of their employees and included them in the profit part of it.

    We had startup perks that were basically paid out in cash when the pandemic hit. The “gym” perk became $500 in cash which could be spent on anything vaguely fitness related, like an Apple Watch. The commuter benefits rolled into our accounts which gave me free tolls for years afterward. Instead of taking all the money, they cut us in.

    So yeah, maybe frustrating if you expected your startup to be successful, but that’s so often outside of the control of any engineer. It’s always a crap shoot. Get your best offer and make the most of it. You can do resume driven development even in the shadiest of firms.

    • cucumber3732842

      today at 12:00 AM

      >but at least they took care of their employees and included them in the profit part of it.

      All good grifts let some "little people" in on it so they go to bat for it.

      • cindyllm

        today at 12:06 AM

        [dead]

  • bartread

    yesterday at 11:01 PM

    So much of what I’ve worked on in my career has proven to be utterly ephemeral. I’ve learned not to dwell on it too much, in part because one of software’s great strengths is its malleability[0].

    However, I was quite surprised a few weeks ago, on a client project, to find in one of their repos a chunk of example code that I’d worked on 22 years ago.

    [0] Being real, a lot of the ephemerality actually stems from questionable commercial decisions, working on the wrong thing, etc. But some at least is a legitimate result of evolving markets and needs.

    • toast0

      today at 2:35 AM

      Same same. I don't expect any of my product code to survive for very long.

      I suspect some of my open source contributions will live a long time. Not my personal projects that I make open source just in case, but the (very small) contributions to fix things in the dark shadows of established projects with longevity. Some of that will become obsolete and hopefully be removed, and some might get refactored eventually, but if the project is older than my career it's may well last beyond me.

  • yesterday at 11:01 PM

  • antisthenes

    today at 12:37 AM

    > You know that feeling when you work on a feature for weeks or months and then something comes along and the feature is no longer needed or the project is cancelled?

    I would have thought most people would grow out of having this kind of feeling after their 1st job. But I also definitely work to live, not live to work, so YMMV.

  • kakacik

    today at 8:05 AM

    Do you get your major feeling of success primarily from work, or is it the rest of life? I don't think I need to spell what is viewed as the proper long term winning strategy here. I know folks who ride the work part, and let me tell you - unless you land a stellar employer and exceptional boss, its recipe for a lot of miserable days and worse, for decades. Its also a symptom of what I would call 'unfulfilled life', but thats my personal take please don't get offended quickly.

    With that mindset (or work-to-live or whatever you can call it), these things are just an afterthought. That after-work climbing session and that weekend meeting with friends or hiking trip in the mountains with kids mean world to me, and I fully indent to keep that mindset till retirement and continue with it further. If it means I won't get into top 1% or whatever I am fine with that, QoL is firmly above that and career rat races are meaningless (and fruitless) ego polishing / insecurities managing exercises.

• uberex

  yesterday at 11:07 PM

  I assume because it turns out it was a actual bullshit job, and they were probably proud of what they had achieved. They probably trusted and may have even got on well with their boss.

I have a serious question for everyone who reading through comments: If you get a great paying position in a business that is clearly managed by too ambitious people and will never succeed, given that you are legally not a part of the potential fraud ring that you can't prove, just an engineer closing issues and merging patches, would you reject it?

• RaSoJo

  today at 8:01 AM

  I would consider your two statements as distinct and separate:

  > "in a business that is clearly managed by too ambitious people and will never succeed"

  > "given that you are legally not a part of the potential fraud ring that you can't prove"

  Consider:

  1/ If it's a biz that's purposely mucking about without success...or a loss making entity for tax breaks: I have no problem in working here (Consider that I am in my 40s, used/abused in various "start-ups" and burnt-out. I need the money, and I'll take it.)

  2/ If it's a company involved in criminal fraud: I'd run away as fast as my feet could take me. The problem with fraud is that eventually the authorities will catch up. If the owner is a criminal, he'll do anything to save his backside...even throwing innocent employees under the bus. You might be exonerated eventually. But that eventually might take years...decades.

  • goodluckchuck

    today at 3:35 PM

    Yeah, if you know the business is a fraud, it doesn't matter that your work isn't fraudulent in and of itself. It's like being hired by bank robbers to be their chauffeur. There's nothing illegal about driving, but if you know they're using you to get away from a crime... you're a getaway driver.

• TomasBM

  today at 11:54 AM

  Your scenario is confusingly formulated, but it ultimately deals with moral risk.

  If you suspect that it's fraud, you should seriously consider whether you want to be a part of it, even if you can't prove the fraud. Examples are companies centered around cryptocurrencies: not all of them end up being rugpulls, but enough of them do, making every new company potentially morally risky for each engineer.

  If you only suspect that it's an overly ambitious project, but not fraud, the moral risk is obviously lower. Sure, it may be economically risky - as all unproven business models are - or you may discover the fraud later (like the author apparently did). Examples are startups like SpaceX in its initial stages: there was nothing ostensibly fraudulent in trying to make and sell better rockets, just very economically risky.

  Obviously, the devil is in the details, but if you're honest with yourself, you should do your due diligence (i.e., does it seem like fraud or not) and determine your moral risk appetite. It's up to the wider society to reduce and punish the unacceptable levels of moral risk, regardless of the appetites of individual engineers.

• lowdude

  today at 7:55 AM

  I don't think I could give an honest reply in the abstract setting without actually being in that situation. But a significant factor would likely also be the actual work and whether it is something I find particularly interesting/exciting to work on.

  Then again, if it is doomed to fail from the start, it is unlikely that I would really enjoy working on it.

• gwbas1c

  today at 1:46 PM

  > is clearly managed by too ambitious people and will never succeed

  I was with a startup for almost a decade. During that time it had four different owners. At one point it was "clearly managed by too ambitious people and will never succeed", but the parent owner and remaining founder saw this and found a legit buyer.

  When this happened, we were wholly owned by a major conservative company but operated independently; the fact that "adults" controlled the purse strings was what made the situation work out well in the end. (For me, that is. Other people who drank the kool-aide were given nice severance packages.)

  ---

  Thus, you really have to know the whole story: Who's the investor? Who has power? Who's controlling the purse strings? If the business has potential, the investors will fire "poker player" leadership in situations like this.

• kakacik

  today at 7:56 AM

  Why? If it isn't illegal, nor amoral, just a moonshot then its basically typical SV startup reaching for stars.

  Sure, 99.9% of startups may not get there but we saw in the past some wild unexpected successes. Plus things may change along the path as markets evolve and if they pivot successfully into new areas they may win the first mover situation, even if original mission won't ever be accomplished.

This is a fantastic outcome - lots of money and U.S citizenship! And your product didn't even hurt anyone unlike working for Meta, in fact no one even used it!

If we can see far, it is because we are standing on the shoulders of tyrants.

• talon8635

  yesterday at 11:54 PM

  The real version is much more applicable, because we can’t see far, because we are depressingly shortsighted.

  In this regard, we aren’t standing on shoulders of giants, we are like an immense asshole of a dad climbing ontop of his young child’s shoulders to win a chicken fight in the pool while his kid drowns below.

I was worried that here in the US it's fraud all the way down, but just yesterday I met somebody who actually makes things, so I guess it's just fraud most of the way down.

Wanna know what the guy is up to now?

Sure enough, he is a founder of an "AI That Knows Why" company.

As someone who 'grew up' my career in Silicon Valley my first exposure to this sort of shenanigans was during the dot com bubble, where general partners at newish VC firms were fleecing limited partners (GP's got a salary to 'manage' the fund, LP's were the source of money for the funds.) They would tell the LPs well only one in ten is a real banger, looks like the fund you invested in wasn't a winner.

It reminded me a lot of the Bill Cosby skit about the game Keno, he used an example of a Keno Card that had two numbers on it, you picked one and took it up to the cashier with your $1 bet, the cashier drew a number and said, "Sorry not your number, try again."

The sad truth was that a lot of people who had become wealthy because they happened to be working at a company that went public and had stock, were not particularly sophisticated when it came to the reality that even people "like you" were not your friends. I spent my Jr High/High School years in Las Vegas and got to see so many 'confidence men' fleece tourists with so many schemes. There is a great book called 'The Confidence Game' by Maria Konnikova. It is excellent and reading it you'll come to understand that not only is it possible for even 'smart' people to be taken, there are lots of people who work on being good at it.

But taking all of that into consideration, if you worked at a company, did your job to the best of your ability, and it turned out that it was a "fake" job because some third party was using it as part of a scam, you aren't part of the scam. Any more than happening to be in a bus when the driver whose been drinking kills a pedestrian. You aren't responsible for that pedestrians death and you're not being on the bus wouldn't have changed anything. So you can let that go.

• naishoya

  today at 4:47 AM

  I like the analogy, but lets stretch it to the situation where workers can see that there is fraud and still do nothing.

  The passengers on the bus are not blameless if they know or have reason to know that the bus driver was drinking before or while they went down a road with pedestrian crossings. They are not blameless if they take no action, but to sit in the seats and wait to see if anyone gets hit or they all get away with it and arrive at the destination.

  Or if they remain in the seats after the first pedestrian and 'hope' it wont happen more.

  And how 'blameless' are the 'non-passengers' along for the ride to perform ongoing maintenance and provide fuel and snacks to the driver while on this imaginary trip to hell.

  So, I'm all out of 'you're not really the asshole' cards as we watch the whole kleptocratic SV system run Theranos' style over the total sum of human creative production.

  Anyone who participates in building the toolchains of tyranny is complicit in the abuse of people with those tools, even if it just a tiny bit.

  Sorry, not sorry, if that pricks the consciences of a few pricks; those that can feel shame are the better for it, and those who feel it not we must all be wary of.

  • ChuckMcM

    today at 6:03 AM

    Its a reasonable extension. At some point if you discover that you are aiding or abetting the harm of others you have to ask yourself what kind of person you are. That said, I get that "but I need a job!" is a powerful thing and it takes someone with a strong sense of personal integrity to leave. A good friend of mine quit their game developer gig because the product manager and management were more interested in addictive behaviors and reselling eyeballs than they were in game development. But they also knew that was probably the last paying gig they were going to have in the 'games' business because it had gone from people making great games, to things on a phone/browser pulling you down.

    So yeah, it is going to test you and you might come up short. I don't judge people who stay when they know, but I do grieve for the damage they do to their souls when they see themselves as someone they no longer recognize.

See:

https://en.wikipedia.org/wiki/Bullshit_Jobs

I've come to realize this: we are all raising money more than we admit. Whether it's from venture capital or donations to fund non-profits, money is more political than I realized because it's all about the idea of value, which is subjectively determined by humans.

What's striking is how long it takes to notice. The incentives to keep believing the job is real — salary, identity, colleagues — are much stronger than the incentive to question the foundation. Sunk cost at the organizational level.

A lot (all?) VCs charge some form of fees (typically capped at 20% of the entire fund, split in various percentages through 4 years investing, 4 divesting period). These fees often are only paid out only based on the actively deployed capital, and are not the only incentive: the main incentive is shares in gains (carry).

The reason they're based on actively deployed capital isn't that the LPs (people who give VCs money to invest) want them to deploy the money in a stupid way, but they definitely don't want VCs to get the fees if the money wasn't invested. Therefore, VCs:

1. Want to raise as much money as possible 2. Want to deploy as much money as possible

Ideally, as quickly as possible.

There's nothing fraudulent about the idea of calculating VCs fees in various scenarios.

There's however the extremely dodgy part of the portfolio companies paying their investor (VC) fees for anything. This is an obvious conflict of interests, and should never happen, but I personally know of multiple VC funds here in Europe (will skip the names to not get sued, lol) who base their entire operational model on funding shitty companies that have 0 chance of success, charging them for the office space and often "shared services" they provide. Unsure if this is a regulatory overlooking, or something that's deliberately legal, but IMHO shouldn't be. Probably they talked their LPs into agreeing to this on paper.

I worked for a company that did opt-in spam email. Their main offices were in Silicon Valley, but they had a startup thing in LA that I worked at. Ostensibly we were building a self-service email campaign app to be bundled with Weblogic Commerce Server (which itself was basically DOA).

It became pretty obvious to me from the get-go that nothing was being built, and the startup was just siphoning money off the parent company. I'm not sure if there was any fraud going on beyond a bunch of people collecting a paycheck.

I think the boss was skimming off of the captive H1Bs, and there was a guy in NYC who never did anything as far as I could tell. I wouldn't be surprised if there was some kind of kickback going on there.

My first day, I went out for sushi with the top devs, who proceeded to tell one horror story after another about the boss. Awesome way to start a job. I lasted 3 months.

I vaguely recall a story about an employee who discovered that their company's sales department was acquiring a lot of new customers to hit some metrics, but rarely actually closing the deal. The employee spent months chasing up incomplete sales orders, and discovered that the sales department's apparent success was illusory.

At the end of the day he wrote some software which sounds legitimate and useful. What management did without his knowledge isn't really his problem.

At the other end of this extreme is if you have a good job in a bad industry, like gambling or boiler room frauds. You should feel responsible even if your job is just maintaining the servers.

Well, you did good and got paid. It all sounds very serendipitous. Isn’t like 99% of all tech fraud?

I look at everything now as a journey not a destination. When connecting one's work carrier with a bank, one must keep in mind that some other people might have joined the organisation because of quite distinct reasons than we did. So yes there might be a fraud ongoing in our company, but it's not our fault

This arrangement is bizarre.

The VC business model is predicated on extreme growth. The last thing you would want to do is siphon dividends out vs reinvesting into growth.

They must have preyed on newbie founders, dangling large valuations. Oh the fees? Well you will make it big and it will be a drop in the bucket!

• advisedwang

  today at 5:21 PM

  I suspect initially the fund was earnestly trying to make some huge exits, and the incubator was really a support for that. But as time went on it looked less and less like a big exit was in the cards. A stream of money to fund a lavish life was right there for the taking, and perhaps it's human nature to shift the priority to keeping the good times going.

I think it doesn't really matter if the fund manager was committing a fraud. The author had fun, met their spouse and just enjoyed life with the information they had at that point.

Sounds straight out of The Producers.

Well that's a blast from the past. When I lived in London I hung out with some of the geniedb team (hey Alaric).

Love that second footnote.

Yes it did, but you are not your job. Your current state may be based on a fraud, but the fraud is not you.

I lived in Silicon Valley for almost a decade, and stuck my fingers in the startup scene for awhile.

One thing I learned is that a some people running startups are "poker players." They run the company to keep up appearances: Their goal is to get more investment and eventually sell the business at a profit. (And then what the purchaser does is their business.)

There's nothing wrong with working for companies like this! You might not realize it going in; or the investors might see through the bluff and replace the leadership, creating a great job for you.

In contrast, you could join a business run by honest people, and they could sell out to a poker player who then ruins it. Or, more typically, the honest people turn out to be so-so business people and the business fails. (This is what happened when I tried to run a startup.)

At the end of the day, working for a startup always involves risk and the leadership structure will always change as the company grows, pivots, or fails.

First, you'll probably never know and this is one of those ouroboros questions that can drive you a little crazy if you let it. I urge you to not let it, because the only actual answer is that if you did work you were proud of and met the mother of your children, it quite literally doesn't matter. We should all be so lucky!

Second, very few things in life are so cut and dry. Legal cases are by nature simplified abstractions that attempt to render a three dimensional situation that unfolded over a long time in a few pages of a graphic novel.

Third, this sort of thing is so incredibly common. Often the only difference between fraud and IPO is whether it worked or not. That's not cynicism, just pragmatism.

If you ever read David Graeber's Bullshit Jobs - and you should - you'll quickly decide that the real fraud is late capitalism writ large.

In these cases I'm always curious who the investors were. I have the bad feeling it was you and me via our 401ks somehow.

• advisedwang

  today at 5:09 AM

  In this particular case I believe it was mostly individual accredited investors, putting in anywhere from tens of thousands to millions of dollars. The case has records of the fund trying to get GE in too, but it doesn't look like they succeeded. Some of those individual investors may have been pretty small fry so I do feel a bit bad for them, but on the other hand if you want to dabble in Venture Capital, you need to be savvy.

One of the many reasons to never actually care about the work you are doing if it is a for-profit endeavor, and you are not the owner. You are there to collect a paycheck so you can survive. If you want a job that you should care about then work in public service, at a non-profit, or for yourself.

• xg15

  yesterday at 11:11 PM

  It's a reasonable stance until the point where most of society is ran by for-profit companies. Then that mindset actively makes the world worse.

  Your bosses might not actually care about the work you do, but your users and customers sure will.

  • pdimitar

    today at 12:39 AM

    Your proposed solution?

    • aurareturn

      today at 1:49 AM

      Work hard, do a good job, earn more money for yourself and family, save money, start your own business?

      Also, when you do a good job, ex-coworkers will often reach out to you to give you better opportunities.

    • stevenhuang

      today at 1:49 AM

      You do what you can to do good within the confines of the parameters available to you.

• mickael-kerjean

  yesterday at 11:54 PM

  > If you want a job that you should care about then work in public service

  I did that in the health sector of my local gov, the whole place was full of consultant who either got contracted directly from Oracle, used to work at Oracle before but moved there or took the Oracle pill early on and never got the idea to see how things get done elsewhere. It was impossible to ship anything that's not made of Oracle technologies and that was not an accident but a deliberate construction.

• analog31

  yesterday at 11:50 PM

  Another option is to do work you care about, in a way that doesn't attract the attention of people who might thwart it. I think plenty of socially or personally redeeming work can be done this way, for instance within very large companies. Enough of this work, in fact, that the net outcome for people and society is actually beneficial.

• the_cat_kittles

  yesterday at 10:57 PM

  basically agree, though if you work for a transparently evil company you should care, and quit

  • Dusseldorf

    yesterday at 11:52 PM

    or stay, and be subtly bad enough at your job to negatively affect the progress of the enterprise.

• amelius

  today at 9:21 AM

  However: work is more fun if you care about it.

• wbl

  today at 1:08 AM

  Do you think people at Merk or Pfizer or Disney don't care about what they work on?

Why don't you ask Twitter, Tesla, or SpaceX employees how they feel about the situation.

I mean, there are far more nefarious things happening in big tech, so if the author feels they were somehow being "used" in an immoral sense, I think they should feel ok about themselves based on the types of knowingly wrong but technically legal things happening in large companies.

I bet those henchmen in Bond movies thought that the volcano base was merely a government-funded secret research facility.

sometimes fraud leads to positive outcomes.

imagine a world where SBF didn’t defraud the crypto world.

in that world anthropic may have not existed.

• NDlurker

  today at 12:04 AM

  What's The link there?

  • nailer

    today at 12:10 AM

    SBF was one of the earliest funders of Anthropic, Solana, Robinhood and Cursor, mostly around 2022.

    • senshan

      today at 1:16 AM

      Is there evidence that no one else would fund Anthropic, Solana, Robinhood and Cursor?

YES

Big tech companies are a scam in themselves. Doing something useful (that would pay itself by definition) while the main revenue is advertising? really?

No Genie finally out of the bottle joke?

I wonder what's even wrong about it. This is how funds normally operate: motivation for investors is upside, motivation for coders is to be able to code and get paid for it, motivation for people who run this circus, is fees.

And yes i can relate to that. In 26 years of career, about half of the money i made and all of the money i saved, came from 3 clients (over the course of less than 5 years), all 3 of them being scams - one swindled investors for a thing he knew can't work, another one did a legit thing but when he realised it failed, exited to a dumb megacorp and ran away (literally vanished) when they started to realise they've been duped, and one more was in crypto field and whole project - which to me, all the way until past release, looked like a legit porn site - had a goal of imitating activity/interest to boost value of a crypto token.

Even before i picked up coding - and i did it when i was in early teens around the fall of Communism - i knew coding as a separate field and a business was invented exactly for that purpose: it's a lot easier to steal money that way because it's a lot easier to inflate costs vs buying physical products.

No surprise the party is over. People can't be duped for too long.

honestly, what's the difference?

if you don't own the capital and have full autonomy, what's the difference on fraud (that you know nothing about), some imoral thing like flock/advertising/surveillance, or some inane thing like animating characters for ads, or mailing spam letters for a small business, etc, etc, etc?

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