site banner

Scott Alexander on Sam Bankman-Fried, FTX and Effective Altruism

astralcodexten.substack.com

I made this a top level post because I think people here might want to discuss it but you can remove it if it doesn't meet your standards.

Edit: removed my opinion of Scott from the body

15
Jump in the discussion.

No email address required.

Some people are asking whether people who accepted FTX money should have “seen the red flags” or “done more due diligence”.

I find this stuff really obnoxious. Since when has it ever been the job of charities to investigate the businesses of the people donating them money? EA or not, what charity does this? It would be a ridiculous waste of time and money, it's not their job and specialization exists for a reason. People are talking like it's some deep failing that they didn't find him suspicious and refuse his money, but just how many legitimate donors should they be willing to refuse as "suspicious" for the sake of avoiding a criminal? Not that it would have been practical anyway, EA-endorsed charities are not some unified group and a lot of his "EA" donations were stuff like directly supporting political candidates who promised to do something about pandemic preparedness

We're not talking about Sequoia Capital, the venture-capital firm that has now written down $214 million in FTX equity, had access to internal information, and actually had a duty to their investors to try to avoid this sort of thing. Similarly we're not talking about their other institutional investors like Blackrock, the Ontario Teacher's Pension Plan, Tiger Global Management, Softbank Group, Lightspeed Venture Partners, and Temasek. We're not talking about the state of Miami selling them the naming rights to a stadium for $125 million dollars, giving them a lot more advertising than some blog posts saying "this billionaire supports EA, great!". Somehow EA is held to a much higher standard than any of these, even though it seems obvious to me that accepting donations should be held to dramatically lower standards than investing teacher's retirement money. EA should focus on effective charity, that is already a sufficiently-ambitious specialty, it shouldn't focus on doing 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.

We're not talking about the state of Miami selling them the naming rights to a stadium for $125 million dollars

This seems more like the charities than the others. There isn't really some fiduciary duty to investigate people giving you money in your legitimate business. If I sell books and some weirdo buys 10000 of my books, there's no reason for me to investigate why the weirdo is a book enthusiast who wants 10000 copies of "The Underpants Gnome"

Yes, I don't actually think it would be good if states selling stadium naming rights were expected to do that sort of investigation. Leave it for their investors and law enforcement. But I see people making arguments that EA charities accepting FTX's donations gave them advertising/credibility and this reflects EA being naive or short-sighted-utilitarians or whatever. Well a lot more people heard about FTX from the "FTX Arena" than by reading articles about philanthropy, and I'm not seeing articles on how the state of Miami must have been horribly naive to accept FTX's money.