In a significant development, Sam Bankman-Fried (SBF), the disgraced founder of the now-bankrupt cryptocurrency exchange FTX, has been sentenced to 25 years in prison for orchestrating one of the largest financial frauds in U.S. history. His sentencing marks a major setback for the philosophy of Effective Altruism (EA), which SBF ardently championed. While SBF’s imprisonment may signal the diminishing influence of EA, the ideology continues to permeate the tech industry in Silicon Valley, one of America’s most dynamic and influential sectors.
On the surface, SBF’s downfall bears striking similarities to the infamous Bernie Madoff scandal. Both individuals orchestrated massive pyramid schemes, defrauding investors of billions. However, a key difference lies in the underlying ideology behind their actions. While Madoff’s motives appear to be rooted in simple greed, SBF’s actions were guided by the principles of EA, a philosophy that aims to maximize the net good in the world through rational, evidence-based decision-making.
Utilitarianism, a philosophical foundation of EA, sometimes gets a bad reputation for promoting an “ends-justify-the-means” approach. For example, the utilitarian calculation can suggest that sacrificing one life to save five others produces the greatest good for the greatest number, and therefore is justified. While this is undoubtedly one implication of the philosophy, just because utilitarianism is not perfect does not mean it lacks insights. One positive implication of utilitarianism is its emphasis on considering the welfare of all individuals equally, regardless of their personal characteristics or social status.
The lesson to be learned from the shortcomings of utilitarianism is not that the philosophy should be abandoned, but rather that other values besides maximizing total welfare must also guide behavior. In a similar way, EA has its own drawbacks. Its adherents often fail to live up to the standard of rationality they espouse, and EA seems to attract ethically-challenged individuals who latch onto some of the more extreme aspects of the movement.
Yet, the idea that policy and charitable giving should be evidence-based remains an underrated concept. EA advocates for a data-driven approach to philanthropy, ensuring that resources are allocated to the most effective interventions. Who could argue with that?
Unfortunately, the movement’s leaders, like SBF, have demonstrated a propensity for ethical lapses, embodying the worst stereotypes of utilitarianism’s critics. Not that long ago, SBF was a golden boy in the media, dubbed an autistic boy genius. Like a lot of narratives spun by the media, this one quickly unraveled into a “just so story.”
We recently learned SBF’s rise to prominence was not entirely self-made. Recent revelations from the online media outlet Semafor shed light on the early financial backing SBF received from influential EA figures like Luke Ding and Jaan Tallinn. Their funding gave SBF’s trading firm, Alameda Research, a solid financial footing, which he likely would not have had if he weren’t a die-hard EA proponent. As the article put it, “Without backers inside Effective Altruism, it’s hard to imagine Bankman-Fried, a recent college grad, getting more than $100 million to play with at a crypto trading firm.”
The future of EA remains uncertain in the wake of SBF’s sentencing. His imprisonment could lead to a reevaluation of the movement’s principles and practices, but the allure of EA’s rationalist approach to philanthropy will likely continue to draw adherents.
Likewise, the tech industry’s embrace of EA will shape the direction of innovation policy well into the future. It recently came to light that The Future of Life Institute, a nonprofit with EA connections that advocates for strict artificial intelligence safety rules, received an undisclosed donation of $665.8 million in Shiba Inu cryptocurrency from Ethereum co-founder (and EA sympathizer) Vitalik Buterin in May 2021.
Not only will EA continue to have a major influence on AI regulation, there remains a significant danger some will exploit EA principles for personal gain or otherwise engage in unethical behavior under the guise of altruism. For better and worse, then, this means we have not heard the last of EA.
SBF’s sentencing serves as a stark reminder of the dangers of unchecked adherence to a single philosophy, even one as seemingly benevolent as EA. While his downfall may signal a temporary blow to EA’s influence, it is premature to declare the movement dead. The core tenets of EA still constitute meaningful contributions to the discourse on philanthropy and social impact. The challenge for the movement going forward with be ensuring that the pursuit of doing the most good does not come at the expense of doing what is right.