You may be familiar with Curtis Yarvin's idea that Covid is science's Chernobyl. Just as Chernobyl was Communism's Chernobyl, and Covid was science's Chernobyl, the FTX disaster is rationalism's Chernobyl.
The people at FTX were the best of the best, Ivy League graduates from academic families, yet free-thinking enough to see through the most egregious of the Cathedral's lies. Market natives, most of them met on Wall Street. Much has been made of the SBF-Effective Altruism connection, but these people have no doubt read the sequences too. FTX was a glimmer of hope in a doomed world, a place where the nerds were in charge and had the funding to do what had to be done, social desirability bias be damned.
They blew everything.
It will be said that "they weren't really EA," and you can point to precepts of effective altruism they violated, but by that standard no one is really EA. Everyone violates some of the precepts some of the time. These people were EA/rationalist to the core. They might not have been part of the Berkley polycules, but they sure tried to recreate them in Nassau. Here's CEO of Alameda Capital Caroline Ellison's Tumblr page, filled with rationalist shibboleths. She would have fit right in on The Motte.
That leaves the $10 billion dollar question: How did this happen? Perhaps they were intellectual frauds just as they were financial frauds, adopting the language and opinions of those who are truly intelligent. That would be the personally flattering option. It leaves open the possibility that if only someone actually smart were involved the whole catastrophe would have been avoided. But what if they really were smart? What if they are millennial versions of Ted Kaczynski, taking the maximum expected-value path towards acquiring the capital to do a pivotal act? If humanity's chances of survival really are best measured in log odds, maybe the FTX team are the only ones with their eyes on the prize?
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It is not that the movement was exploited, it is that the organizations around EA were almost entirely funded by this Sam Bankman Fried, who seems to be as true believer as it gets, despite having highly unethical and illegal business practices. It was effectively HIS movement after he bankrolled it and everyone else was a useful idiot who gladly took paychecks from a billionaire.
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Whenever malfeasance is revealed in an organization or institution, I remember Jesus describing the kingdom of God growing from a small mustard seed to a giant tree. The tree is so great that the birds of the air can nest in it. While this sounds lovely, in another parable nearby (and probably delivered in the same occasion), Jesus warns that the birds of the air (the evil one) can steal the farmer’s seeds (seeds of faith/words of God) when he sows them.
Together, these remind me that any institution founded with noble intentions can easily grow to hide all sorts of darkness within its branches. The obvious example was the Roman Catholic Church at its most decadent: powered by tithes-as-tax, colonizing the world, demanding indulgences, and so on.
FTX, with its billions and its devotees donating ten percent of their income sounds like exactly the kind of institution which needed to be more ornithophobic.
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Yeah. I'm not saying they're immoral or degenerate, but they are very into non-traditional modes of living, shall we say, so breaking old taboos around caution in business etc. are also part of the mindset. Scott at least realises the importance of Chesterton's Fence, most of the EA/rationalist overlap think fences are all part of the musty old society that needs to be cleared away for the beauty of the technocratic utopia to flourish.
Well, now they know why that fence about "don't take money out of one account to prop up another failing one" was there, along with the rest of all the financial regulations that red-tape bureaucrats put in place to stop precisely what Sam was doing when it all went belly-up.
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That doesn't quite follow, since the alternative to quokkas is to have virtually nothing but bad actors vying for control.
Whereas in quokka-land the number of bad actors is on average lower, so we'd expect fewer of them to rise through the ranks, in aggregate, and it would be all the more notable when one did because it bucks a trend.
The alternative to "quokkas" are people who are aware that their big pot full of gold will attract bad hombres and take some precautions, people who will not welcome anyone who repeats their lingo as brother.
We are talking about charities accepting donations, they're not the ones providing the gold. We're not talking about Sequoia Capital, the 50-year-old venture-capital firm that gave FTX hundreds of millions of dollars, had access to internal information, and actually had a duty to their investors to try to avoid this sort of thing. We're not talking about any of their other institutional investors like the Ontario Teacher's Pension Plan, Tiger Global Management, Third Point, Altimeter Capital Management, or Softbank. Since when has it been the job of charities to investigate the businesses of the people donating them money? "Failed to do unpaid amateur investment analysis trying to beat institutional investors at their own jobs for the sake of refusing donations that might turn out to be from a criminal" isn't exactly a test of quokkahood, especially if the label isn't being applied to the institutional investors who actually invested and lost enormous sums of money.
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Yes, and in most such communities, there are already "bad hombres" in control, and they spend an excess amount of time combating other bad hombres to stay on top of the pile.
Quokka-land isn't going to be more likely to have bad actors, indeed the whole reason quokkas exist is because they lucked into a habitat where they have no predators. The predators would have to be introduced from outside the community.
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