Effective Altruism: Morally Buy An Island Nation – Crypto Critics' Corner

Bennett and Cas discuss the philosophy of Effective Altruism, how it influenced Sam Bankman-Fried, and how it contributed to the collapse of FTX and Alameda Research. This episode was recorded on July 27th, 2023.

Cas Piancey and Bennett Tomlin discuss the philosophy of Effective Altruism, how it influenced Sam Bankman-Fried, and how it contributed to the collapse of FTX and Alameda Research.

This episode was recorded on July 27th, 2023.

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Other episodes mentioned in this episode:

• Episode 78 – Pre-Philanthropic Billionaires and Bitcoin (Feat. Mario Gibney)
• Episode 15 – Revisiting Enron with David Z. Morris
• Episode 27 – Evergrande with David Z. Morris
• Episode 118 – How to spot a scam
• Episode 122 – Justin Sun Owns TrueUSD
• FTX Playlist

Other resources mentioned in this episode:

• David Z. Morris discussing effective altruism power-brokers
• Time reporting on William MacAskill
• Coverage of EA and Alameda Research founding
• Coverage of Leverage Research
• Protos coverage of Lifeboat
• FTX and Nauru

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English Transcript:

00:00:05:04 - 00:00:11:23
Cas Piancey
Welcome back, everyone. I am Cas Piancey. I'm joined, as usual by my partner in crime, Mr. Bennett Tomlin. How are you?

00:00:11:26 - 00:00:13:02
Bennett Tomlin
I'm doing pretty well. How are you?

00:00:13:07 - 00:00:48:06
Cas Piancey
Yes, fine. Annoyed today, particularly annoyed by unhinged conspiracy theorists and racists. So we have discussed both of these types before. We don't need to get into that. But today we're going to talk about something that we haven't discussed in a really long time. We actually discussed this over a year ago. I guess something like that. We discussed it with a friend of the show, Mario Gibney, who came on to talk about a company at the time that he was working for called Ledn.

00:00:48:09 - 00:01:28:29
Cas Piancey
And while we had him on, we also discussed how he felt philosophically about money, and he was a proponent of effective altruism. So we actually discussed before it was even on most people's radar. But I want to talk about it again today, because I noticed the other day that William MacAskill, one of the supposed founders of effective altruism, has kind of quietly returned to Twitter and to doing public talks about EA and public talks about his philosophy without addressing any of the stuff that happened with SBF.

00:01:28:29 - 00:02:03:06
Cas Piancey
If these other effective altruists involved in cryptocurrency and this other stuff and how they've been, the philosophy almost seems to help these scammers and fraudsters do their scams and frauds. They justify their scams and frauds using this philosophy. And William MacAskill has just kind of quietly returned without addressing any of that. So I thought it was a good time for you and me to to discuss that and try to look into why these scammers and fraudsters are so attracted to this kind of cultish philosophy.

00:02:03:07 - 00:02:15:21
Cas Piancey
So, Bennett, do you want to do you want to explain kind of what EA stands for? I know it's arguably arguable and there's different differences in opinion, but maybe you can attempt.

00:02:15:26 - 00:02:44:16
Bennett Tomlin
Yeah. EA or effective altruism is kind of an umbrella term that covers a few different philosophies, most of them that have developed from utilitarianism. For those who don't know, utilitarianism is the collection of moral philosophies that focus on assessing morality, by trying to measure the utility of the specific action. So by weighting the good against the bad, you can tell if a thing is good or bad.

00:02:44:18 - 00:03:08:20
Bennett Tomlin
That's a oversimplification of the different variations of utilitarianism, but it works for our purpose here. Effective altruists take that and basically say if you're going to be giving back in terms of your time, your money, whatever, you morally should be trying to do that in the most effective way possible. And so there's lots of versions of effective altruism that are relatively harmless, right?

00:03:08:26 - 00:03:36:05
Bennett Tomlin
Like someone trying to do some research to assess a couple of different charities and decide which one is going to have like the biggest impact for your dollar and things like that. The problem becomes that there are a few other groups of EA which have taken that philosophy and built on it even further. And many, like Sam Bankman-Fried, were a part of a group that consider themselves earn to give effective altruists.

00:03:36:07 - 00:04:06:16
Bennett Tomlin
So these are individuals who believe that by building businesses, taking high paying jobs, whatever they can, despite not doing a lot of philanthropy or altruism now, can eventually put themselves in a position where they will be able to do lots of philanthropy. And at that point, it will be much more valuable. This also gets complicated because there's this other philosophy that has infected a lot of the EA community called longtermism.

00:04:06:18 - 00:04:40:08
Bennett Tomlin
And this is the belief that basically future unborn creatures, lives, people, whatever, have the same moral worth as those who are existing today and in various interpretations of longtermism philosophy, that means often the most effective altruism you can do is by ignoring many of the problems that are currently hurting real living people and instead focusing on various far off or distant threats, which you believe to be existential.

00:04:40:11 - 00:05:04:28
Bennett Tomlin
And once you've categorized these risks as existential meaning, they threaten the existence of humanity, you are then justified in taking basically whatever steps you need to to prevent that existential risk. There are some who come at like the existential risk of climate change, but more often in these communities you run against people who think we need to like, move humanity off of Earth to Mars in order to ensure our existence.

00:05:05:01 - 00:05:05:18
Bennett Tomlin
That's where Elon Musk gets that brain worm.

00:05:05:18 - 00:05:38:05
Cas Piancey
AI people who are who are concerned about A.I. taking over, who are concerned about, you know, Terminator, who are concerned about aliens discovering us, or maybe a comet smashing into the Earth. These kind of foreign, broad and scary topics that. Right. Like I it's easy to fall into the terrified practitioner of this we've we've there's a great article in Protos from years back about a organization called Lifeboat.

00:05:38:08 - 00:06:00:25
Cas Piancey
And lifeboat was around before EA existed. But it shares many of the same philosophies and crypto people were super into that as well. So it's like a certain brand of person, a fear mongering individual is seems to be quite attracted to these. That's not to necessarily suggest, as you said, that it was founded with those principles at top of mind.

00:06:00:26 - 00:06:31:09
Cas Piancey
I do want to talk about, though, how much this affected SBF, the way he did business. In case you're unaware, SBF and Tara Macauley who founded Alameda Research, they're they're both effective altruists, and so was Caroline Ellison. So a lot of the people involved in or she sort of was I know Sam Trabucco as well, like a bunch of these people who were involved in this were effective altruists and they took it very, very seriously.

00:06:31:09 - 00:07:00:19
Cas Piancey
There's a document shown in one of these lawsuits or whatever where it shows that Sam Bankman-Fried made a list of what he was doing that was harming people versus the good that he was doing or future good that he could do and how he was trying to weigh those concerns and weigh them actually, like monetarily. Like it wasn't just like some weird system that he invented.

00:07:00:19 - 00:07:13:20
Cas Piancey
He was actually weighing every dollar and sent as a good or bad thing. To me that that is proof positive that this this philosophy played a key role in how he ended up committing fraud.

00:07:13:24 - 00:07:33:17
Bennett Tomlin
Yes. But I think also you should detail how those effective altruists were very specifically involved, like right at the very founding of Alameda Research, because I think that kind of points at some of these issues. Right. Because Tara and some of the other people they were able to connect them with was the money that got Alameda Research to where it was, right?

00:07:33:19 - 00:07:59:23
Cas Piancey
Yeah. No, I mean, that's exactly and, and I think the community in general was also that they were a lot of them were the cheerleaders for SBF, right. Because they were also receiving huge benefits from one of the arguably the biggest known individual person in cryptocurrency in the entire industry. Right. Like, the benefits they were receiving were millions of dollars in donations.

00:07:59:23 - 00:08:22:23
Cas Piancey
That and and ultimately that is how they measure whether their goal is succeeding or not. So, again, the reason I want to talk about this, though, is because after acknowledging it. So if you go back, William MacAskill, you said there's another sorry, who's the other gentleman involved in the beginning of the founding? Well, there's.

00:08:22:28 - 00:09:11:04
Bennett Tomlin
I think several people who come before MacAskill like I would point towards Toby Ord at Oxford and Peter Singer as both like effective altruists and stronger philosophers and writers than MacAskill. But McCaskill's like particular place of prominence in this story comes because in the United States, he acted as what friend of the show David Seymour has called an effective altruism powerbroker, where he was connected to so many of these groups, so many of these funders and so many of these things that even in 2018, when effective altruists leaders were warned about some of Sam Bankman-Fried improprieties, including his lies in sleeping with subordinates, it was MacAskill that, like, pushed to keep Sam Bankman-Fried centered in

00:09:11:04 - 00:09:32:01
Bennett Tomlin
kind of this effective altruism community under this belief that, like Sam Bankman-Fried would eventually be able to bring all of these other benefits to their broader community that it was worth sacrificing on perhaps some of these earlier points in order to achieve this bigger goal. And that, I think, is kind of the rot at the heart of effective altruism.

00:09:32:03 - 00:10:00:19
Bennett Tomlin
Right? And like the reason it can be really hard to create like a coherent utilitarian moral philosophy is that it becomes really easy to use the ends to justify the means in a way that allows the means to just continue getting worse and worse and worse. And that is compounded If you effectively place an infinity on one side of your balancing scale by saying, No, this will kill all humans who will ever live in the future.

00:10:00:21 - 00:10:20:09
Bennett Tomlin
And so represents the thing that it would be okay if we killed 90% of humans now, if it meant saving that entirety of humanity forward. Right. It's possible to concoct that kind of justification when you get really into kind of the longtermist stances. And that has just obvious harms.

00:10:20:13 - 00:10:48:20
Cas Piancey
Well, it's funny that you say this because I'm looking so. So just to be clear to everyone, MacAskill did address this right around when SBF when FTX collapsed back in November. So he did address this. And what he specifically said talks, talks about what you are exactly suggesting. He says For years, the EA community has emphasized the importance of integrity, honesty and the respect of common sense moral constraints.

00:10:48:22 - 00:11:12:19
Cas Piancey
If customer funds were misused, then Sam did not listen. He must have thought he was above such considerations. A clear thinking EA should strongly oppose ends justify means reasoning. I hope to write more about this soon. In the meantime, here are some links to writings produced over the years. So he specifically says that the ends justify the means isn't a healthy EA perspective.

00:11:12:22 - 00:11:34:20
Cas Piancey
And yet. Right. Like it's hard for me to to fathom EA existing if you don't have some level of ends. Justify the means. If you don't have some wall, you have to weigh out the good versus the bad. That's part of the whole thing and that has to be met with ends justify the means because otherwise you don't really have a philosophy at all.

00:11:34:20 - 00:11:38:15
Cas Piancey
So it's a confusing kind of backwards statement to me.

00:11:38:17 - 00:12:04:05
Bennett Tomlin
I feel confident that that statement from MacAskill was not written by a philosopher, but by a public relations executive because like I kind of already alluded to here, like common sense, moral, whatever isn't something that exists a priori, right? Like the fundamental basis of the philosophy that drives this is that you determine what's moral by assessing on balance.

00:12:04:05 - 00:12:49:23
Bennett Tomlin
It's good and it's bad, and there's variations of utilitarianism like rules based utilitarianism, where you modify that statement to say this type of action as a rule is more good than bad. And that gets around some of the issues. But still, fundamentally, to presume that there was an obvious set of moral actions that the EA community agreed on, and that Sam Bankman-Fried was clearly in violation of is particularly suspicious in light of the fact that Time reporting suggests that William MacAskill personally advocated to keep Sam Bankman-Fried in the community after he knew he was violating common sense moral frameworks by lying and sleeping with his subordinates.

00:12:49:29 - 00:13:09:27
Cas Piancey
Again, my issue with this statement now and that he's back, that he has not addressed any of this, is that at the end of this statement in November, he specifically says, I was probably wrong. I will be reflecting on this in the days and months to come and thinking through what should change. He also says if FTX misused customer funds, then I personally will have much to reflect on.

00:13:10:00 - 00:13:38:11
Cas Piancey
Sam and FTX had a lot of goodwill, and some of that goodwill was the result of association with ideas I've spent my career promoting. If that goodwill laundered fraud. I am ashamed. So if he's so ashamed and he feels like his ideas about this philosophy indeed helped create this fraud, which is kind of like what is being suggested, I don't think anyone has denied that now at this point that that the philosophy helped drive their decision making.

00:13:38:13 - 00:13:57:11
Cas Piancey
Why has he not said anything about it? Why is he not saying like, look, I am why? I mean, I know why. Like you said, there's legal reasons and other things. He was an unpaid advisor and all that for the Founder's Fund. You know, he was involved in in other ways. I am sure they've accepted. Who knows how many donations.

00:13:57:13 - 00:14:24:27
Cas Piancey
So I'm sure there's some legal reason for this, but that's like, that's such a bullshit excuse, especially when your whole shit is about your philosophy. I'm not surprised and I'm not even disappointed. Like, why would why would a cult address allegations against the cult? I do just want to ensure that people keep this perspective in mind as he tries to come back into the public fold and the public sentiment.

00:14:25:00 - 00:14:55:29
Bennett Tomlin
We're talking about the philosophy of effective altruism and all these things and taken just as like a philosophy as a thing you're thinking about and perhaps using like personally to guide yourself may have somewhat limited harms. I think what's particularly interesting in this case is how some of these social dynamics have developed around effective altruism. There's another community that calls themselves the rationalists and many of the people in this community that congregates in places like LessWrong.

00:14:55:29 - 00:15:31:22
Bennett Tomlin
Consider themselves effective altruists, and like these communities often have a type of norm where you're expected to kind of present your ideas in a certain way, address other people's ideas in a certain way. And it's a sort of kind of epistemic detachment that you're supposed to maintain when you're interacting with it. And because of this and many rationalists belief that they are uniquely rational, I think they've made themselves particularly vulnerable to people who are effective at using their rhetoric without necessarily believing the ideas.

00:15:31:24 - 00:16:06:03
Bennett Tomlin
Right. So EA and longtermism, especially in especially this existential risk stuff, gives you a lot of language you can inherent to justify basically anything. And if you are the type of charismatic leader who can create a following, you now have all these language and tools. And because this community is supposed to be effectively leaderless, those who are the leaders who have accumulated that type of social power are able to wield it without any of the checks you would normally expect on the leader of a movement.

00:16:06:10 - 00:16:44:16
Bennett Tomlin
So William MacAskill can like put this pressure on other people, keep Sam Bankman-Fried from getting kicked out of Alameda Research in 2018 because he personally believes in Sam Bankman-Fried because he bought into Sam Bankman-Fried pitch and because of that ends up allowing this entity that had already violated this moral framework he tried to allude to, to grow to the point where they've committed a multibillion dollar fraud and in doing so, hurt the reputation of EA hurt the reputation of longtermism, hurt the reputation of many of these charities and stuff that Sam Bankman-Fried was supposedly giving to.

00:16:44:18 - 00:17:24:22
Bennett Tomlin
And despite the fact that all these rationalists and the effect of altruism are supposed to be trying to think into the future and project this type of consequence so that they can, under their own moral philosophy, judge whether they're actions are good or bad. So few seem to actually notice it was coming. And this is a point that I raised when we were talking with Mario is that this moral philosophy, especially when you project it long term and even more so when you're talking about like existential risk requires you to make a make such a great number of predictions that go so far out into the future that I cannot plausibly believe that the errors

00:17:24:22 - 00:17:50:25
Bennett Tomlin
propagated back, that point mean you are actually making any kind of judgment whatsoever, right? Like it is so easy to pick whatever numbers you want, assign basically whatever you want, and make your conclusion whatever you need it to be. And this is also why EA has been so aggressively adopted by the ultra wealthy is because, again, it gives them the language and the rhetoric to justify whatever pet cause they want.

00:17:50:27 - 00:17:57:11
Bennett Tomlin
And that's what this is. It's another case of billionaires trying to use philanthropy to preserve their own image of power.

00:17:57:13 - 00:18:23:15
Cas Piancey
And they can feel really good about themselves, too, right? Like if they donate to something that they're like like instead of donating to, say, like a I don't know, cancer research or I don't know, something something that's currently going on if they're, let's say, donating to something that is coming up with a way for us to blow up asteroids or something, I don't know, like if they're they're coming up with some random threat that like we have NASA working on projects.

00:18:23:15 - 00:18:44:07
Cas Piancey
We have the government that should be thinking about existential threats like that. Not weird, not for profits. It's it's very much ends justify the means. Oh, you're rich as hell. You want to spend your money the way you want to spend your money you are and you want to get a pat on the back for spending it the way that you want to spend it, not not for spending it the way people want you to spend it right.

00:18:44:07 - 00:18:52:20
Cas Piancey
Like it's purposely designed to be like, Yeah, let's fucking dump money into an AI not for profit.

00:18:52:22 - 00:19:09:20
Bennett Tomlin
It also leads to some, like, really inexplicable actions like we're talking about Sam Bankman-Fried and all this. And I think it was the the Future Fund recently had one of their publications revealed where they talked about potentially buying a small island nation.

00:19:09:23 - 00:19:10:01
Cas Piancey
Right, Nauru.

00:19:10:02 - 00:19:36:25
Bennett Tomlin
In order to survive. Yeah. In order to survive some of these existential risks, it's like one buying an island to form your own effective altruism nation is insane cult shit. Two, if you're worried about the future and how it's going to be in 100,000 whatever years. Why the fuck are you buying a small island nation when sea levels are rising?

00:19:36:27 - 00:19:37:25
Cas Piancey
Yeah, I want.

00:19:37:25 - 00:19:43:00
Bennett Tomlin
They become so focused on their pet issues they lose the ability to actually assess other things.

00:19:43:00 - 00:20:03:19
Cas Piancey
Yeah, I want to actually, just for anyone who's unfamiliar with with Nauru, Nauru is a phosphate rock island with rich deposits near the surface, which allowed easy strip mining operations for over a century. However, this has seriously harmed the country's environment, causing the island nation to suffer from what is often referred to as the resource curse.

00:20:03:21 - 00:20:31:00
Cas Piancey
The phosphate was exhausted in the 1990s and the remaining reserves are not economically viable for extraction. So I urge people honestly to look up pictures of Nauru and just see it's just a rock that's been it. It's what I just described. It's a rock that's been completely mined. So it's just holes everywhere that where they were strip mined, all of this phosphate out of it, it's tiny as hell, it has very little water.

00:20:31:07 - 00:20:48:06
Cas Piancey
It's obviously, as you said, like whether you believe in climate change or not, the ocean is rising, so it's going to possibly disappear. You're going to have to pour resources in this place just to keep it around. But you're also going to have to pour resources in it. Where are you going to get water? What do you like?

00:20:48:08 - 00:20:55:03
Cas Piancey
I don't understand why you would pick this place. Of all the places in the world to set up shop, it doesn't make any sense. Well.

00:20:55:06 - 00:20:58:04
Bennett Tomlin
I can tell you the reason, because they thought they were vulnerable.

00:20:58:11 - 00:20:58:22
Cas Piancey
Right.

00:20:58:22 - 00:21:18:03
Bennett Tomlin
They first got their independence in 1968, finally separating themselves from the colonial powers who had basically stripped away most of the resources from the island over the next, like 25 years before all the phosphate was like, no longer economically viable, they tried to save up enough in trust to kind of keep the nation solvent once these resources were gone.

00:21:18:11 - 00:21:28:06
Bennett Tomlin
But that trust is being depleted now and their role increasingly has become kind of like an offshore financial haven, a center for money laundering and tax evasion, and things.

00:21:28:06 - 00:21:31:17
Cas Piancey
Like a prison. Yeah, they're literally a detention center.

00:21:31:20 - 00:21:38:03
Bennett Tomlin
And so the reason they picked this island is because they thought it would be vulnerable to their type of pitch.

00:21:38:06 - 00:21:43:21
Cas Piancey
Yeah, that, that, that the people will are desperate. Yeah. I mean there's really no other, no other way to put it.

00:21:43:21 - 00:21:54:15
Bennett Tomlin
Their resources extracted from them by colonial powers and we can roll up with billions of dollars and they'll want us because we have the money they don't have.

00:21:54:15 - 00:22:17:13
Cas Piancey
And who can blame? I like you don't want to blame the Naurians for this. Like they've been kind of screwed over for a very long time. I guess if I was running out of money in a trust fund, that was my only source of GDP, then I might accept some crazy offer from some billionaires too. I don't know.

00:22:17:15 - 00:22:21:24
Cas Piancey
It's just kind of gross that that's what the billionaires and the EA people decided, right?

00:22:21:27 - 00:22:41:20
Bennett Tomlin
The idea of taking over governments is one that pops up in this community sometimes as well. And sometimes it'll be as explicit as saying, we're going to buy an island. But even when they say that, sometimes what they mean is we're going to arrive in this place where most people don't have very much money and we're going to have so much money that we so quickly accumulate influence and power.

00:22:41:26 - 00:23:08:09
Bennett Tomlin
It's like we bought it, right? And this is kind of. Leverage Research is another group that is broadly connected to like the effective altruism and rationality movements. And members have reported that, like their stated mission was to change the world or take over the US government using their philosophy by helping their members become like these uniquely powerful achievers, like uniquely good at achieving things.

00:23:08:14 - 00:23:34:05
Bennett Tomlin
And by doing that, they would eventually elevate themselves all the positions of powers and be able to advance their own philosophy. There's a lot of echoes of that here. With what, like Sam Bankman-Fried Future Fund was planning. There's this kind of idea, and it reminds me a bit of Balaji’s Network State of: we are so powerful that we can we are so rich that we are powerful enough to force these small nations into serving our whims.

00:23:34:07 - 00:23:52:26
Cas Piancey
Again, the main reason I brought this up, I see that I have a feeling in my heart that EA, the people involved at the heart of EA, of effective altruism really want to make it a thing again. They want it to be relevant again. They want to start getting people to believe in it and agree to it again.

00:23:53:01 - 00:24:18:25
Cas Piancey
And I just need people to remember that FTX and Alameda Research While it seems like it was one man like we can sum it up as Oh SBF committing fraud, like, okay, but it wasn't one man. It was a lot of people pushing this one man to do the things that he did and that isn't that isn't to suggest he's innocent of that.

00:24:18:25 - 00:24:32:29
Cas Piancey
Like he's going to go to prison for a long time. I have no doubt about it. But a lot of these people should go to prison for a long time, or at least not be as influential, influential as they are. I want to see all the money that they gave for venture funds and stuff. I want to see every penny of that clawed back.

00:24:33:01 - 00:24:54:05
Cas Piancey
I want I want everyone who got a political donation to have that money clawed back. I want like I want every dime that they touched in some way I hope gets clawed back by the by the trustee. You know, I hope that they're able to do it. I hope that that happens. My fingers aren't crossed. But that's that is what I hope.

00:24:54:05 - 00:25:19:05
Cas Piancey
Remember, Please, like EA had something to do with this. And these guys aren't taking responsibility for it. And we need to hold their feet to the fire. They're not going to do it themselves. These other these other people involved, whether it's like Justin Sun doing this weird stablecoin stuff with TrueUSD or like, you know, obviously CZ and him were having their chats and doing their stuff.

00:25:19:10 - 00:25:39:14
Cas Piancey
I don't know what the hell the deal was with that equity and all that. Like there's a million questions and a million people who helped contribute to the crisis and the collapse and the fraud. I think all of them need to be held responsible. We shouldn't forget that they were involved. Don't let them just stop and pretend like they don't even know who SBF is.

00:25:39:17 - 00:26:14:23
Bennett Tomlin
I just want to add before we wrap this up, that broadly, I think the takeaway is that you should be immediately and deeply skeptical of someone who says that they are acquiring money, power or influence because they think they are uniquely positioned to use those things to do good, right? Not that there are not people who can use their wealth or their power or whatever for good, but someone who sets out with a goal of accumulating those things and tells you that they're doing it for good is someone you should be deeply skeptical of.

00:26:14:24 - 00:26:39:22
Cas Piancey
Yeah, and I know that obviously CasCoin did deposit most of our CasCoin into FTX, and we did work directly with SBF for years, you know, on the CasCoin project. But we are different than the rest of these people. And, and I don't want you to lump CasCoin in with these other projects. We are we're one of the good guys and that's it.

00:26:39:22 - 00:26:40:20
Cas Piancey
That's all I wanted to say.