Monday, Sept. 25, 2023|
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After growing up amid upper-middle-class affluence in Silicon Valley as the children of two Stanford Law School professors, as a super-smart kid who got into MIT to study physics, Sam Bankman-Fried decided in those teen years that he wanted to save the world in the worst way.
Which is what he did.
The young Bankman-Fried fatefully attended a college lecture where he learned about and came to embrace an idea called “effective altruism” — that rising geniuses like him won’t improve humankind through mundane drudgery like organizing the peasants. No, they should use their brainpower and some math calculations to maximize the amount of money they earn in the free-for-all of modern capitalism, and then give their millions or maybe billions of dollars away to their favorite social causes.
“If what you’re trying to do is donate, you should make as much as you can and give as much as you can,” said Bankman-Fried, whose mission became his calling card to the point where there’s a podcast episode called “Sam Bankman-Fried Wants to Save the World.”
Bankman-Fried became effective altruism’s best disciple, because he went to Wall Street and turned out to be very, very good as the “make as much as you can” part of all this. He used a trading trick in the new frontier of cryptocurrency to get rich and — still in his 20s — launch a small empire based around his crypto exchange, FTX. But while his net worth ballooned to an estimated $16 billion at the peak, Bankman-Fried hadn’t gotten very far on the “give as much as you can” part — perhaps a couple hundred million dollars — before his Jenga empire tumbled down.
It turns out you can’t be a very effective altruist if your money disappears, which started happening this spring in tandem with a worldwide cryptocurrency crash. It may take investigators months or years to untangle the mess at FTX, but by his own admission Bankman-Fried engaged in risky and unethical practices to prop up one arm of his crypto empire — including tapping the accounts of FTX customers. Those duped investors may have lost as much as $8 billion.
Messianic billionaires — and we all know who they are … Elon Musk, Jeff Bezos, Howard Schultz, Bill Gates and even arguably MBS over in Saudi Arabia — have emerged as the ultimate winners in a winner-take-all economy that has exacerbated income inequality to levels beyond the notorious Gilded Age. And they are now spending a lot of those billions on what they think is making the world better — yet often marred by the same sociopathy that made them so rich in the first place.
Indeed, the Bankman-Fried saga is probably not getting all the attention it normally would because journalists and various self-anointed thought leaders are busy obsessing on a different billionaire, Musk, and his $44 billion project — seemingly rooted in personal obsession with the social media site Twitter which he now owns — that has the blue bird gasping for breath in a matter of days.
The erratic, mercurial leadership of Musk — the electric car and space mogul and still the world’s richest man, although his Twitter travails have knocked his net worth down to a mere $189 billion — has brought a site that seemed to be surviving OK before his purchase to the brink of the abyss. Problems around a spike in unmoderated hate speech or weird changes in verification had Twitter users, its beleaguered employees and puzzled advertisers racing each other for the exits — and that was before Musk’s reprehensible decision on Saturday night to undo Donald Trump’s lifetime ban for using Twitter to promote his violent coup attempt on Jan. 6, 2021.
Fittingly, it was Trump — who dipped into his own overstated wealth as a maybe-maybe-not-billionaire in 2016 for arguably the worst vanity project of them all, electing himself American president — who laid down the mantra of this billionaire boys’ clubs (and it’s almost all boys) when he declared, “I alone can fix it.”
Indeed, the world’s currently richest people — for all their differences in style or subject matter — seem to share a strikingly similar philosophy. It goes something like this: “Let’s maintain this status quo where I get to run my business in the ways that maximize my own wealth — including historically low taxes and underpaying my workers — and I swear I will use that wealth to better the world. The catch? I alone decide what that better world is, and how to get there.”
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