OVER the past two weeks, Sam Bankman-Fried has lost an estimated $34 billion, most of it belonging to other people. It’s the latest and loudest crash in the cryptocurrency business; but what makes it interesting is that, right up until the disappearance of the money, Mr. Bankman-Fried was held up as a moral example, and not just by himself. As recently as September, Sequoia Capital, a reputable Silicon Valley venture capital firm, released a profile of him that opened with the news that he “lives his life based on an altruistic impact calculus.”
It opens with the story of the hero’s quest: SBF, as he is known, was an innocuous MIT physics graduate when he was recruited as a trader by an elite Wall Street firm. By the age of 25, he had made his first billion by “crashing the kimchi premium,” that is, by exploiting a marginal difference between the price of bitcoin traded in Korea and the rest of the world.
“SBF has amassed more wealth in a shorter period of time than anyone, ever,” continues Thorn Sequoia. “The 2022 Forbes Billionaires List pegs SBF’s net worth at $24 billion. He’s 30 now.”
And all of this was done for altruistic reasons. Even before being interned on Wall Street, SBF had met philosopher William MacAskill in a Cambridge bar and had an epiphany. “Over lunch at Au Bon Pain off Harvard Square, MacAskill expounded on the principles of Effective Altruism (EA). The math, MacAskill argued, means that if one’s goal is to optimize one’s life to do good, often the greatest good can be done by choosing to earn as much money as possible, in order to give it all away. “Earn to give,” MacAskill insisted.
“MacAskill could not have wished for a better recruit. . . right there, between a bright yellow parasol and the crumb-strewn red brick floor, was established the purpose of SBF’s life: he was going to become filthy rich, for heaven’s sake. Everything else was just execution risk.
And that’s how our hero ended up in a penthouse in the Bahamas, living with nine of his friends and employees in a “polycule” (a polycule is a molecule of polygamous atoms, which selflessly bond together – and, of course, efficient – possible). While it lasted, the SBF racket was incredibly respectable and influential. Bill Clinton and Tony Blair showed up for a conference that SBF hosted in its Bahamas den this fall.
The Sequoia Capital story I’m quoting from has disappeared from the company’s website nearly as completely as the $34 billion SBF empire was supposed to be worth. There were approximately 130 related companies in his organization, all ultimately dependent on a cryptocurrency invented by SBF.
When one of its rivals undercut the price of this cryptocurrency – which, of course, had no intrinsic value and nothing to back it up except the trust of its backers – the entire pyramid collapsed within a week. There is nothing left now. Even the SBF itself, currently on the run, may not be worth more than a billion dollars or so. Anyone who believed in him now has nothing to show for their investment.
Against this, the £6.6 million that Christ Church, Oxford has spent in its attempts to get rid of Dr Martyn Percy, seems like the kind of oversight anyone could make. It hardly counts as altruism.
The really amazing thing about effective altruism isn’t that it wonders how a charity can best spend its money. Outside of Christ Church, most charities wonder how their spending will improve the world. It’s the belief that truly effective altruists should spend their money the way that most benefits people who don’t exist and may never: the perfectly imaginary billions of future lives. This concern for the future of (non-existent) humanity is combined with a firm belief in the rightness of abortion, because “the loss of the life of an actual child – a life in which many parental and social resources have been invested – is much more consequential loss of a potential life, in utero.
The most morally grown-up bit of the whole fiasco came from Stephen Bush in Financial Times, who took seriously the idea that actual altruists were trying to do good, but chastised them for assuming they could—and should—reduce moral choice to something that would fit on a spreadsheet. “A little more focus on what we know works, rather than what we think might work, is almost always a good thing,” Bush wrote.
The other ethical pole is not to consider the consequences at all, but only to follow the commandments. James Runcie had a really moving excerpt from his book about his late wife in Telegraph Magazine, in which he mentioned that, when the couple first fell in love in the early 1980s, “my father was Archbishop of Canterbury and the idea of marrying a woman 11 years older, a divorced single parent, would have sent my parents in a rotation.” I’m sure he would have sent the right-wing press into a tailspin, but what about his parents?