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Comment by oldgradstudent | Hacker News Reader

> In the course of 2-3 days last week, SBF’s estimated net worth went from ~$15 billion to a negative number, possibly the fastest evaporation of such a vast personal fortune in all human history.

No.

His net worth was never $15B. His net worth might have been negative - less than that homeless living in a tent under the bridge.

He was a fraud, a con man.

There's no reason to assume his entire Effective Altruism interest was authentic. It could easily been a way of connecting to important people like Tony Blair and Bill Clinton.

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Effective altruism seems to be a sort of cult that’s way for elites (that is, the upper class) to both make themselves feel better and to give them yet another vector of superiority over people.

In Sam Bankman-Fried’s case, he seems to have let it be a justification for the huge risks and likely criminal actions he took.

SBF literally said he would wager the world for another world with 51% odds.

There's no amount of money that will satisfy someone like that, even if his EA statements were heartfelt. Why would he give a billion dollars to charities, when he could risk it, flip it into $20B, and give it to charity? Why would he give $20B to charity when he could risk it, and flip it into $150B? etc...

That, I think, is the basis of the advice from Aaronson. There should be some natural rational limit to the tendency because of exactly the types of events that just happened.

Good luck finding that limit though, especially when the market seems undefeatable.

important point. best predictor for future behaviour is past behaviour. also the reason why somebody gets euch never suddenly becomes genuinely altruistic.

I do wonder what addictions he has. It seems amphetamines and gambling are at least two. Or it’s possible they’re more sociopathic tendencies.

> Why would he give a billion dollars to charities, when he could risk it, flip it into $20B, and give it to charity? Why would he give $20B to charity when he could risk it, and flip it into $150B? etc...

But that would be the rational thing to do...

$1B less donated to charity is only roughly 1/20 as bad as $20B donated to charity is good, because there are also other people donating large amounts. In other words it's not at all like betting everything and ending up homeless if you lose the bet. At $20B vs $150B the catastrophe of losing $20B starts to become more significant, but I would absolutely still take that bet.

It's easy to see that this logic leads to a Zeno's paradox where you can never donate anything because it would cut into potential future profits that you could donate in the future. Since it leads to contradiction, it is obviously wrong in some of its assumptions.

No, because you are talking about compounding returns (which I was not), but improving people's lives today gives far greater long-term benefits than investing the money at reasonable return and donating more in the future, for well-known reasons.

In your post above, you justified not giving 1B to charity because it could be bet until it raised to 150B. But there is no reason why, by the same logic, you couldn't justify playing that 150B to raise it to any number rather than giving it away to charity today.

The point I was trying to make in my post* was that at some point you should stop gambling, because losing the bet would be catastrophic to humanity, but that point is maybe around $10-100B. (Depending on odds, obviously). It's because you pick the low hanging fruit of good causes, so every doubling of the amount gives marginally fewer gains. Eg. just look at how Bill & Melinda Gates have complained about how hard it is to give away billions per year.

*Aside: obviously it was tone-deaf for me to reply to that quoted sentence out of the context in this case of the money being stolen

> Effective altruism seems to be a sort of cult that’s way for elites (that is, the upper class) to both make themselves feel better and to give them yet another vector of superiority over people.

Setting aside the case of this crypto conman, is being holier-than-though the valid criticism it feels like - or is that just my instinct to protect my ego, when the guy sitting next to me and earning the same salary donates 100x more much to charity than I do?

most of the good done in the world thee days is paradoxically perhaps achieved through commerce, not charity per se. and even charities are mostly effective in the sense that they get money flowing into the economy, where people can trade value for value and attend to their material needs, etc etc. most charity is not as effective as simply achieving some equity in income distribution, or barring that just overall higher levels of income and lower costs for the inputs that go into the economy.

dont get fooled by people who think they can put good-ness into a box labelled "giving", I dont believe its that simple.

Doesn't that imply an EA enthusiast earning to give at a wall street hedge fund is doubly good, because they're charitably giving mosquito nets to developing nations while engaging in commerce and making money flow around the economy?

I think charitable giving has mostly secondary or tertiary benefits and those are mostly "trickle down" or just velocity of money effects. it gets some hoarded wealth into circulation which was a big issue the last 20 years with lower rates and quantitative easing etc, creating so much hoarded cash (look at corporate cash balances and hedge fund / VC / PE assets the last 10 years as a clue)

like the covid vaccines weren't possible because charity, but because science, the two are in no way equivalent. and there is evidence (not proof) from the last 150 years that capitalism enables science at a much higher multiple than charitable giving.

There's another crypto figurehead who is prominently in the EA tribe: Vitalik Buterin.

I would characterise both as elite but not upper class (as in, regularly going to old money dinner/rave parties).

I don't know which of the two is more "Effectively Altruistic".. lol.

Nevertheless, I find the anti-parallels with Buterin .. charming. Vitalik is clearly less anti-intellectual, less ambitious (more Ravenclaw than Slytherin), and thus less offensive to the gods.

I'm not sure if it's that far to be a cult because I was never in it, and the will to share is commendable.

To me it sounds like a way to justify making more money at all costs under the guise of a moral high ground. It'd feel more honest to do it without the cosplay around it and the "I donate better than you" holier than thou-ness.

I think it's more of a reactionary outburst from people who became wealthy enough to wonder about the purpose of their life and want to detach themselves from the late stage capitalist brand they get as cushy first world living while still reaping all the benefits.

I'm afraid if there were many good hearted people in that movement this single event will also discredit the rest. But maybe it was all a cult, who knows.

In this guy's case it sounds like a handy way to minimize whatever sentence he gets over this because he can argue "he did it out of pure intentions to help the world", which basically counts as insurance / marketing expenses for the scam.

Do you feel morally superior to Effective Altruists?

No.

Similarly, I don't think it's correct to characterize SBF's background as 'middle class'. Apparently, both of his parents are Profs at Stanford Law School. Most likely, they are wealthy or even rich and SBF could benefit from their network, gaining access to the American elites without too many questions asked.

I wouldn’t assume his family is wealthy, just because they are in academia. You don’t go to academia for the money.

(Although I’m not sure exactly what you mean by wealthy vs rich)

By common sense: most of academia is monetarily less attractive than Stanford Law School. The salaries of two full professors there make the family at least wealthy, i.e., able to maintain an upper class life. And the perks of being a full professor at Stanford Law School presumably include very attractive opportunities that can make one rich (able to amass wealth), e.g., well-paid consulting gigs and advisory roles.

But I agree, my distinction between wealthy and rich is pretty sloppy.

The author of the post seems a bit blind.

From what it seems, SBF is a pathological liar. He tried to lie at the last minute, assuring everything was fine and that others were to blame. After the last minute, he kept saying that if you filter out the mandatory "sorry" messages. It's not just Apollo 11 gone wrong, it was NOT Apollo from the start.

Maybe EA is a bit too far stretched, maybe it just attracts the wrong kind of individuals.

> ... possibly the fastest evaporation of such a vast personal fortune in all human history.

That title would probably go to Zucc after the most recent set of earnings. But the previous title holder was none other than Mr. Cyber Hornets himself, the man who just about popped the Dot Com bubble - Michael Saylor.

Saylor lost $6B in a single day (and $10B in 2 weeks) after reporting that his firm had cooked the books in 2000 and his 1999 profit was actually a loss. This was the largest single-day decline in history at the time. [1]

He was fined $8.2M banned from running a public company (just kidding, of course). [2] You'll never imagine what line of work he got into next.

[edit] $6B in 2000 dollars is ~$10.38B in 2022 dollars, and similarly the $10B over 2 weeks would be ~17.31B adjusting for inflation. So it looks like Mr Cyber Hornets still gets to slide in at number two.

[1] https://slate.com/news-and-politics/2000/03/michael-saylor.h...

[2] https://www.sec.gov/news/press/2000-186.txt

Bill Hwang of the Archegos blow up has got to be up there too. He lost 20bn in a couple of days.

Oh my god, I was around for the dotcom collapse and hadn't realised that Saylor was there and in the crypto scam ecosystem.

Yes he's got quite the nose for these things.

Well he was into EA when he was a nobody at University… I doubt that it was all for show.

Generally, in public downfalls like this, people over ascribe the causes to moral turpitude. There aren’t enough details here to say either way yet. There is a good book about this sort of thing Mistakes were made (but not by me). [1]

I think the blog post is very good, providing a unique perspective, and wonderfully written.

[1] https://www.amazon.com/Mistakes-Were-Made-But-Not/dp/1491514...

No, EA's cultish aspects played a huge role in this.

SBF got his start in crypto doing arbitrage with Japan, because setting up a trading account in Japan was hard. He got someone to do it through the EA community.

Most of the people who are in positions of power in his companies came from the EA community. And no joke a bunch of them are all in romantic relationships with each other too. You've got the CEO of his trading firm, who SBF dated, posting on tumblr about how poly relationships should be a vicious power struggle to get to the top.

I think you're way underestimating just how weird and cultish this whole clique is, and how moral criticism is actually valid here as the ideology is in a central role. These people cast themselves as noble heros making the world better in the net, when in reality they're total nepotistic weirdos.

My comment was about how there is often more to the story than a simple bad guy narrative when someone acts in reprehensible ways. You seem to be saying the same thing, so I agree with the sentiment. As to the role that EA played in it, I don’t know enough to say, and you don’t provide any sources. My point was that I don’t think he was pretending to be an EAist.

To be in a cult you only need to spew their Shibboleth, you don't need to actually believe it.

Seems that he always benefited from membership in the cult.

I always saw it as a rebranding of "trickle down", but for private companies and individuals.

More than "trickle down", it now seems to be "I'll hand down".

So you’re using a populist and speculative media narrative driven by the attention economy as your foundation?

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