Ethics aside, what, if anything, does philosophy have to do with the collapse of the cryptocurrency exchange FTX? This opinion piece ties Silicon Valley's favorite philanthropic philosophy, "effective altruism," to Sam Bankman-Fried's approach to FTX:
"Effective altruists claim they strive to use reason and evidence to do the most good possible for the most people. Influenced by utilitarian ethics, they’re fond of crunching numbers to determine sometimes counterintuitive ideas for maximizing a philanthropic act’s effects by focusing on “expected value,” which they believe can be calculated by multiplying the value of an outcome by the probability of it occurring.SBF belonged to the “longtermist” sect of effective altruism, which focuses on events that could pose a long-term existential threat to humanity, like pandemics or the rise of runaway artificial intelligence. The reasoning for this focus is that more people will exist in the future than exist today, and thus the potential to do more good for more people is greater. He also adopted one of the movement’s signature strategies for effecting social change called “earning to give,” in which generating high income is more important than what kind of job one takes, because it enables people to give away more money for philanthropy. As a college student, SBF had lunch with William MacAskill, the most prominent intellectual advocate for effective altruism in the world, and then reportedly went into finance, and then crypto, based on the idea that it would allow him to donate more money. ...
"In online conversation with the reporter, SBF referred to his bids in the past to appear regulator-friendly as 'just PR,' and he disavowed some of his previous statements about ethics. There’s some ambiguity in this part and other parts of SBF’s exchange with the reporter, but broadly speaking, one can interpret the meaning of his responses in two ways. The first possibility is that he’s confessing that his entire set of ethical commitments — including effective altruism — is a ruse. ... The second possibility is that he’s saying that he’s extremely committed to effective altruism, and that he would be willing to do anything — including unsavory things — in order to get to what he saw as the greatest good. ... Remarkably, both scenarios are plausible — and damning. ... While these two scenarios reflect different outlooks on the world, both expose something alarming about effective altruism. It is a belief system that bad faith actors can hijack with tremendous ease and one that can lead true believers to horrifying ends-justify-the-means extremist logic. The core reason that effective altruism is a natural vehicle for bad behavior is that its cardinal demands do not require adherents to shun systems of exploitation or to change them; instead, it incentivizes turbo-charging them. ... The value proposition of this community is to think of morality through the prism of investment, using expected value calculations and cost-effectiveness criteria to funnel as much money as possible toward the endpoint of perceived good causes. It's an outlook that breeds a bizarre blend of elitism, insularity and apathy to root causes of problems. This is a movement that encourages quant-focused intellectual snobbery and a distaste for people who are skeptical of suspending moral intuition and considerations of the real world. ... This is a movement in which promising young people are talked out of pursuing government jobs and talked into lucrative private sector jobs because of the importance of 'earning to give.'"
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