Tycoons are susceptible to the misconception that if you know how to make billions you know how to spend them. Sam Bankman-Fried, the “unkempt millennial” (The Wall Street Journal) and founder of the cryptocurrency firm FTX, demonstrated that he knew how to make a fortune that peaked at $26.5 billion. Then he demonstrated that he also knew how to lose it, under circumstances that are now under investigation by the Securities and Exchange Commission and the Justice Department. But what caught my eye was Bankman-Fried’s aspiration to use his billions to save the world through a modish variety of philanthropy especially popular right now among millennial and Gen Z cybernerds called effective altruism.
Effective altruism, or E.A., is a movement created 10 years ago by William MacAskill, a 35-year-old associate professor of philosophy at Oxford. E.A. tries to distinguish itself from routine philanthropy by applying utilitarian reasoning with academic rigor and a youthful sense of urgency. It draws inspiration from “Famine, Affluence, and Morality,” a 1972 paper by the Princeton philosopher Peter Singer that argued the moral obligation to rescue a person starving in what was then East Bengal was no less urgent than the moral obligation to rescue a drowning child. (Singer wrote the essay during the war that established the independent state of Bangladesh.)
The three principal problems effective altruism seeks to solve, MacAskill explained in a 2018 TED talk, are threats to global health, mistreatment of animals in factory farming, and “existential risks” such as the threat of nuclear war. Lately, E.A.-ers have also fretted a lot about the Matrix-like potential dangers that artificial intelligence will eventually pose to homo sapiens. “Once a niche pursuit for earnest vegans and volunteer kidney donors who lived frugally so that they would have more money to give away for cheap medical interventions in developing countries,” quipped Nicholas Kulish last month in The New York Times, E.A. “has emerged as a significant force in philanthropy.”
When MacAskill published his latest book, What We Owe the Future, in August, Elon Musk declared on Twitter, “This is a close match for my philosophy.” Thus the most distinctive characteristic of E.A.: the balletic deftness with which it tiptoes past targets likely to offend billionaires. Indeed, the movement’s two principal donors are billionaires. Bankman-Fried has pledged $160 million through the FTX Future Fund, and Facebook co-founder Dustin Moskovitz has given more than $440 million through a group he funds called Open Philanthropy.
Hard-core utilitarians tend not to concern themselves very much with the problem of economic inequality, so perhaps I shouldn’t be surprised to find little discussion of the topic within the E.A. sphere. I located five economic-inequality posts in an online forum hosted by the Centre for Effective Altruism, which MacAskill co-founded, compared to 39 posts on blockchain technology and 205 on wild animal welfare. “Inequality is a problem for EA and economic growth,” read the title of an essay posted on the E.A. forum last August by Karthik Tadepalli, a doctoral candidate in economics at Berkeley. But Alexander Berger (a global health expert at Open Philanthropy) pointed out an error in Tadepalli’s spreadsheet, so Tadepalli revised his essay with a new title: “Inequality is a (small) problem for EA and economic growth.”
Carla Zoe Cremer, a research scholar at Cambridge’s Future of Humanity Institute, complained to Gideon Lewis-Kraus of The New Yorker last August that Bankman-Fried had been granted too much influence over the E.A. movement. “Now everyone is in the Bahamas,” she said, “and now all of a sudden we have to listen to three-hour podcasts with him, because he’s the one with all the money. He’s good at crypto so he must be good at public policy … what?!”
In fairness, E.A. is hardly the only philanthropy that’s reluctant to address economic inequality. The leader of a prominent liberal think tank once confided to me that the rich people who fund left-leaning nonprofits are no more eager to underwrite research on how to revive the labor movement than the rich people who fund right-leaning nonprofits. Still, it’s hard to reconcile E.A.’s save-the-world intensity, which Bankman-Fried very much shares, with its proximity to the problem of rich people not paying their fair share in taxes.
Bankman-Fried gave the Democrats about $37 million in the 2022 election cycle, more than anybody else except George Soros. But don’t mistake him for a redistributionist. When the Democrats last year proposed a billionaire’s tax, Bankman-Fried advised The New York Times that it “could cause hugely negative collateral damage, significantly reducing the amount of innovation and taxable base in the first place.” In fairness, it wasn’t clear Bankman was talking about himself. If not, though, that was because he happens to reside in the Bahamas, where he moved FTX, almost certainly to avoid U.S. taxes (although he cited other reasons, including the Bahamas’ enlightened regulation of cryptocurrency).
“Especially for someone who’s fortunate to be in the position that I am, it’s incumbent on us to give back,” Bankman-Fried said last December on CNN, “not just for our own sake, and not just for our own legacy or reputation—it’s important to give back to help the world.” But Bankman-Fried wasn’t talking, even theoretically, about paying taxes. He was talking about giving “almost everything that I make” to philanthropy. These comments expressed the callow moral vanity at the core of E.A. Others waste charity on ill-reasoned causes. We spend it to save the world. Except, in Bankman-Fried’s case, his reinvent-the-wheel rhetoric wasn’t used to criticize other private philanthropies; it was used to justify his residing offshore to dodge U.S. taxes. They’d just waste it anyway.
By now, of course, the question of what Bankman-Fried will do with his money has become academic. It’s anybody’s guess how much of FTX’s pledged $160 million, if any, the E.A. movement will ever receive. It may be that E.A. will have to give some or all of it back. On Saturday, MacAskill posted on the Centre for Effective Altruism’s website:
If Sam Bankman-Fried, and other FTX executives, were involved in lying to, or defrauding, customers then they were not acting in accordance with the principles of effective altruism.… Our staff are saddened and angry at the harm that has been done.
The aftermath of FTX’s collapse makes E.A. look even more like two rich people’s vanity project. “Effective altruism is not about a single individual,” MacAskill wrote. A cynic might answer that no, it was about two individuals—Bankman-Fried and Moskovitz—but that one of them has likely dropped out. Musk might make a plausible substitute, but right now he’s got problems of his own.