Did Sam Bankman-Fried corrupt effective altruism, or did effective altruism corrupt Sam Bankman-Fried? EricLevitz writes
with the effective altruist Robert Wiblin last April, SBF argued that EA investors should have a higher tolerance for risk than ordinary rich people. After all, for an individual human being, money has diminishing marginal value. Seeing your net worth grow from $0 to $1 million will do more for your quality of life than seeing your net worth rise $14 billion to $14.1 billion. At a certain point then, the hedonistic billionaire is better off safeguarding their fortune than gambling with it.
Here, Bankman-Fried is referring to an expected-value equation, a rough heuristic for determining the potential value of a given course of action, which is popular among effective altruists. Basically, you take the probability that a given action will be successful, multiply it by the amount of good that action would accomplish if successful, and the product is the “expected value” of that action.
In other words, according to their own public statements, Bankman-Fried and Ellison both believed that they had a moral obligation to make “double-or-nothing” financial bets over and over again — even though this would almost certainly lead to financial ruin eventually — because there was a small chance that they would just keep winning such bets, and thereby save humanity.It seems unfair to attribute SBF’s bizarre financial philosophy to effective altruism writ large.
Ultimately, effective altruists bear little responsibility for SBF’s apparent theft of customer money. As mentioned above, the movement’s archetypical example of something that one shouldn’t do for the sake of generating philanthropic funds was financial fraud. And if Bankman-Fried’s investors and business partners failed to sniff out his alleged corruption, there is little reason to have expected MacAskill & Co. to discern it.
Effective altruists couldn’t have known that SBF was describing how his own business apparently worked. But if all they did was merely listen to what SBF had said on podcasts and what his firm advertised during the Super Bowl, they would have gleaned that Bankman-Fried was encouraging amateur investors to put their money into crypto, even if they didn’t understand it, despite the fact that he believed much of the crypto world to consist of Ponzi schemes.
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