Sam Bankman-Fried and the moral abyss of the market

“There will probably never be anything I can do to make my lifetime impact net positive”, Sam Bankman-Fried wrote in his diary after the collapse of his cryptocurrency company FTX. His high-profile criminal trial for corporate fraud is giving us another glimpse into capitalism’s moral abyss.

In a few short years, Bankman-Fried rapidly amassed a vast fortune from cryptocurrency, becoming the 60th richest person in the world with a net worth of US$26 billion. As CEO of hedge fund Alameda Research, he secretly and illegally funnelled US$10bn from his second company, FTX, to pay lenders and shareholders. When the value of cryptocurrencies plummeted last year and investors tried to withdraw their funds from FTX, the fraud was exposed. Both companies filed for bankruptcy in one of the biggest financial frauds in US history.

It’s classic billionaire behaviour. But Bankman-Fried was supposed to be different. He was a convert to “effective altruism” before he set about making money. Effective altruism is “a programme for rationalising charitable giving, positioning individuals to do the ‘most good’ per expenditure of money or time”, in the words of critical philosopher Alice Crary. So, as a young undergraduate in 2012, Bankman-Fried made the decision to maximise his utility: he was going to make a fortune and then give it away.

With dull predictability, he did not do this. Trial proceedings have detailed a fortune not only fraudulently shifted between companies, but one that Bankman-Fried lavished on himself and his ambitions: an enormous Bahamas mansion in which to live with friends and associates (most of whom are now selling him down the river to save their own skins); millions on crypto-friendly politicians from both the Democrats and the Republicans; private jet trips to Washington, DC, for wheeling and dealing.

It wasn’t meant to be like this. Effective altruism calls on everyone to give what they can, and to give it where it will do the most good. As the graphs and statistics on the official website effectivealtruism.org make clear, the focus is on clear-cut results backed by cold, hard data—not moral codes, worthy intentions or “warm and fuzzies”. Or, as Bankman-Fried explained on a podcast episode of Conversations with Tyler: “In the end, you turn things into numbers and you decide which number is biggest”.

The greatest good for the greatest number—who could argue with that? Advocates point, with appropriate horror, at the millions who starve each year from economically induced famines, or the children dying from preventable diseases such as malaria. Even a small donation could help to save a life, they say: so why don’t you give?

Yet from its outset in the early writings of Peter Singer, the effective altruist movement firmly denied that capitalism was the cause of poverty. Governments and the rich might have greater means to give, but all individuals had a responsibility to donate to charity, and all shared the blame for global suffering. “Most of the major evils—poverty, overpopulation, pollution—are problems in which everyone is almost equally involved”, Singer wrote in a 1972 essay, “Famine, affluence and morality”. To call for systemic change instead of individualist charity was simply “an excuse for inactivity”.

From these sanctimonious beginnings, effective altruism has transformed into a multibillion-dollar money pot, the latest cult of benevolent self-image among the world’s richest elite. Almost every billionaire, from Microsoft’s Bill Gates to Facebook’s Dustin Moskovitz, has a pet philanthropy project to save the world—and to reduce their taxes. Even the cartoonish megalomaniac Elon Musk, mostly moved by the plight of the unpeopled surface of Mars, wrote on X (formerly Twitter) that effective altruism “is a close match for my philosophy”.

The Centre for Effective Altruism (CEA) was established in 2011, but capitalist philanthropy is nothing new. Ever since the industrial revolution threw millions into lives of eternal poverty, squalor and toil, the rich reaping the profits have used charity to self-style themselves as benefactors.

In his 1844 work The Condition of the Working Class in England, revolutionary socialist Friedrich Engels made this point blisteringly clear. The capitalist, he wrote, “conceals [his egotism] under the vilest hypocrisy. As though you rendered the workers a service in first sucking out their very life-blood ... and then give back to the plundered victims the hundredth part of what belongs to them”.

Effective altruism eschews the sentimentalism of nineteenth century philanthropy for a more hard-nosed rationalism. Good deeds are calculated and optimised with the operations of private enterprise and market exchange. Scottish philosophy professor and co-founder of the CEA Will MacAskill recalls with pleasure the moment he proved to his mentor that the money he committed to curing blindness could be better spent.

“My first big win was convincing him about deworming charities”, he told the New Yorker. “When measured in ‘quality-adjusted life years’, [deworming] would be a hundred times more cost-effective than a sight-saving eye operation.”

For liberal moral philosophy, our desire to do good slips frictionlessly into the individualised consumer economy. In the market, a certain number of dollars can be made the equivalent of a human life. Four thousand dollars, to be precise: according to hedge fund analysts at Bridgewater Associates, a donation of this size to Against Malaria is the most efficient way of all to save a life.

But the illusion of consumer morality hides an important truth about power and capitalism. Small amounts of money can’t shift the overbearing weight of exploitative class structures. Yet money enough to solve a problem becomes the problem. It becomes capital: grease for the wheels of industry, which only turn one way—grinding down workers’ wages, squeezing wealth from the poorest countries and people, racing to secure fossil fuels, military hardware and vaccine patents. Even the most honest or “efficient” charity cannot keep up with the suffering that capitalism produces daily, hourly, with every transaction and investment.

To take one of the most celebrated initiatives as an example. The Against Malaria foundation has provided insecticide-treated bed nets to millions of people in Africa. And cases of and deaths from malaria fell between 2000 and 2015, attributable in part to these nets. Since then, the World Health Organization reports that cases and deaths are on the rise again in at least thirteen countries.

“Escalating costs due to the global financial crisis is [sic] making the cost of delivering malaria interventions much more expensive”, the WHO noted in an August 2023 report. “Climate change including increased flooding and cyclones are [sic] affecting vector distribution and malaria transmission.”

By 2020, almost every sub-Saharan African country was spending more—up to seven times more—on debt repayments to international financiers than on public health. Citigroup, one of the world’s largest banks, is an official sponsor of Against Malaria. It is also an official adviser to the Kenyan government—“helping” it to cut public services to repay the predatory debts. The rich giveth and the rich taketh away. But they taketh with considerable interest.

Promoters of charity smear political radicals, accusing them of “folding their arms when something could be done right now”. But their best efforts often become PR for global kingmakers of poverty and pain. Indeed, in the past decade or so, the commitment of Effective Altruists™ to status quo economic power has produced several philosophical “breakthroughs”.

First was “earning to give”. If money can do good, then more money can do better. Just when Occupy Wall Street protesters were squaring the blame on the 1 percent, Will MacAskill was aggressively campaigning to anyone with a guilty conscience to get as rich as they possibly could. Advocates were convinced to quit their comfortable jobs as lawyers and engineers—the kind of people who can already afford to donate in conspicuously virtuous quantities—to become cutthroat traders on Wall Street.

Habiba Islam was head of Amnesty International at Oxford University. “I know people who were committed to climate change as their thing—a pretty good guess for what’s important—before getting involved in EA”, she told the New Yorker. Now she works as a consultant for PwC.

It was a few months later when MacAskill met Sam Bankman-Fried, an ambitious undergraduate at the Massachusetts Institute of Technology and the child of two Stanford law professors. MacAskill convinced him to “earn to give”. After Bankman-Fried had amassed a fortune of billions, he appointed the professor as his Future Fund adviser.

After “earning to give” came “longtermism”. Bankman-Fried was not interested in the humdrum ills of starvation and malaria. “[He] considered neartermist causes—global health and poverty—to be more emotionally driven”, said MacAskill. Eliminating malaria may save a few million people here and there, but if a pandemic or artificial intelligence were to wipe out the entire human race, then potentially trillions or quadrillions of future lives would be snuffed out before they even existed.

The marginal utility of investment into AI or biosecurity is potentially many thousands of times greater than donating to combat malaria. Such is the conclusion of MacAskill’s latest publication, What We Owe the Future. In a staggering coincidence, altruistic and egoistic capitalists alike, short-term profiteers and long-term architects of the future, have all converged on the next tech frontier to make mega-profits—or save the world, take your pick.

Singer and MacAskill have disavowed Bankman-Fried, but it is too late for that. Effective altruism has come full circle: from morally cajoling individuals to make better choices with their money, to embracing the market as a mechanism for virtuous people to gain the power to make change, and finally to a fully fledged philosophical justification for billionaires to make the money and fund the projects that make the world so unjust in the first place.

That all this wealth could, or even should, be under the democratic control of billions, not the enlightened whims of billionaires, never occurs to these moral professors. Singer, MacAskill and their acolytes take entirely for granted that elites will always rule society and are the only ones with power to change.

“[MacAskill’s] practical morality leads him to ally with the powerful entities that could change at least some things in our current historical moment”, James Kent and Michael Lazarus write in a recent piece for Logos journal. “But of course, this change would be conditional on things staying the same. Ethics ... is reduced to a form of personal administration: who to vote for, which charity to donate to, and which billionaire to root for.”

The effective altruists and all sorts of “pragmatists” hold radical critics of capitalism in haughty contempt. Unlike the purist revolutionaries, they are willing to get their hands dirty and get results. Their hands are very dirty, I’ll give them that. But the results?

An end to suffering and injustice will take collective action and political struggles against the class that profits from misery and poverty. The global poor do not need our charity, because they will not benefit from it. It is our solidarity and fellow participation in strikes, protests and revolts that they need: our determination to demand the wealth, to take it back without asking and not to wait for the mythical “better nature” of the rich and powerful. There is no shorter path to solving the world’s ills than a radical reconstruction of society from the bottom up.