Olúfẹ́mi O Táíwò and Joshua Stein
The Guardian, Nov. 16, 2022
‘Earn to give’ appeals to those who have successfully chased high-risk investments like crypto.”
Sam Bankman-Fried’s recent alleged fraud raises familiar questions about the reliability and regulation of cryptocurrency. But it also calls into question “effective altruism”, an intellectual movement in philanthropy. If the movement doesn’t change course, one of the most ambitious charitable drives in recent history will end up like so many others: a lab and playground for wealthy donors.
Bankman-Fried was a junior at MIT when he first encountered William MacAskill, a founder of effective altruism. MacAskill pitched him about the “earning to give” strategy – trying to make as much money as one can in order to maximize one’s charitable donations. On MacAskill’s advice, Bankman-Fried began his career trading securities before being hired by the Center for Effective Altruism. Afterwards, he began FTX, an international crypto exchange. Alongside it were the FTX Future Fund and the FTX Foundation, philanthropic organizations committed to effective altruism and staffed by prominent effective altruists, including MacAskill.
The public image of Bankman-Fried’s effective altruism commitments helped attract investment. It also likely helped distract from Bankman-Fried’s description of his crypto approach, which sounded rather like a Ponzi scheme to industry insiders. His personal fortune of $16bn (£13.5bn) made him the wealthiest person in the effective altruism movement by far – until the revelation Bankman-Fried was secretly leveraging client’s funds to cover his own trades, leading to the collapse of his exchange and personal wealth.
‘Earn to give’ appeals to those who have successfully chased high-risk investments like crypto
What supposedly makes effective altruism different from regular charity is its embrace of statistical reasoning and metrics of efficiency to judge charity’s effectiveness. This focus led effective altruists to meaningful improvements on charity’s status quo: focus on unconditional cash transfers to poor people through campaigns like GiveDirectly, and global health including pandemic preparedness.
Nevertheless, the Bankman-Fried fraud illustrates they’ve built a political culture that practically invites the most egregious forms of capture by the rich. Source