After failing to obtain fresh financing, the cryptocurrency exchange, FTX, filed for Chapter 11 bankruptcy protection on Friday, November 11. Like an overripe watermelon falling on hot pavement and spewing seeds and pulp in every direction, FTX’s troubles splashed before the public, revealing a noxious slurry of corruption, arrogance, class chauvinism, and spinelessness.
We learn that a privileged 30-year-old son of two Stanford law professors managed to create a firm in 2019 recently valued at $32 billion and also said to have amassed a personal worth of $26 billion before FTX’s collapse. Affecting t-shirts and shorts and going by the hip moniker, SBF, Sam Bankman-Fried was Peter Pan to his small executive group of “Lost Boys” and his FTX Neverland. Playing Wendy to SBF’s Peter Pan in this drama is a 28-year-old math prodigy-- the daughter of two MIT economics professors-- Caroline Ellison. They, and their co-executives, played out their fantasy in a luxurious mansion in the Bahamas (You can get a taste for SBF’s maturity and acumen in this post-crash YouTube interview which appears to have him splashing in the bathtub or in the surf, judging from the background noises).
SBF and his playmates “earned” their treasures through trading magical cryptocurrencies and investing in allied companies. To most of us, cryptocurrencies were and are baffling. In the US and most of the rest of the world, we already have a currency (dollars, renminbi, euros, etc.) or, if we don’t like our currency, we can exchange it for another. Why create another shadowy, tech-based means of exchange?
My own ignorant prejudice was that cryptocurrencies were possibly of use to criminals-- drug dealers, organized criminal syndicates, anyone hiding ill-begotten money.
Similarly, tax evaders might welcome an arcane, semi-private money with no blank spaces specified on the tax return. Maybe militant, intensely principled anti-tax libertarians are embracing cryptos.
Or cryptocurrencies might merely be the latest piece of financial engineering designed to capture speculative wealth on the upswing, as hipsters joined the herd of quick-wealth seekers pressing values skyward. Whether tulips, derivatives, or cryptocurrencies, manias have been sure-fire methods of amassing wealth for those who leave the game before the bubble bursts.
Anyone following the financial press must have surely noticed that journalists and commentators were decidedly ambiguous about crypto, neither embracing nor challenging crypto’s legitimacy.
But it wasn’t a burst of the crypto bubble that shattered SBF’s Neverland, though that may be forthcoming (the crypto universe has lost roughly 72% of its value). Instead, it was the apparent revelation that FTX had funneled large sums of customers' cash to the allied investment company, Alameda Research.
Believe it or not, Wall Street has rules, though certainly not to protect the general public, the productive economy, or the petty investor. But moving billions of dollars outside of intended investment purposes violates the rich peoples’ club’s sense of fair play.
Apparently, FSX’s Neverland was unsupervised. While some veteran investors walked away from the “opportunity” to invest in FSX, while some corporate leaders were skeptical in spite of SBF’s youthful wit, charm, and idealism, celebrities and politicians were eager to endorse the risky venture. No one-- including the young entrepreneur’s family and circle of associates-- found anything extraordinary about a small, insular, conceited clique growing a business from zero to tens of billions of dollars in less than three economically rocky years!
His shaky regard for business “ethics” and corporate legality makes the fawning adulation of SBF even more problematic for his admirers. He was, after all, the second largest individual contributor to the Biden presidential campaign after George Soros. And he supported numerous other liberal causes as well.
Behind SBF’s liberal largesse is a “philosophy” popular with the rich and powerful called “effective altruism.” In its most crude, accessible form, it urges the wealthy to accumulate enormous sums of money in order to give more generously to charitable causes. In its simplified form, it appears little different from the paternalistic philanthropy of the old robber barons who built libraries, museums, and endowed some schools to justify their extreme exploitation of the working classes. For many, effective altruism will ring true of an apologia for securing unconscionable amounts of wealth by giving a bit of it away.
But in this era of extremes, of market fundamentalism, of commodification of everything from public services to ideas, academic philosophers have risen to the challenge of providing a more secure, intellectually satisfying, outwardly rational justification for acquiring obscene wealth.
And they have stepped to the intellectual plate in the twenty-first century.
Now moral and political philosophers have always performed the role of justifying or explicating the dominant moral, legal, and political ideas of their time. Some have said and some can say that they mirror the ideas espoused by their ruling classes. On occasion, a few philosophers have misjudged the moment and paid with their lives by anticipating the emerging ideas of their era-- for example, Socrates or Giordano Bruno.
After World War II, moral and political philosophers in the Anglo-American tradition were unabashedly occupied with defending the core ideas of Western liberalism.
At the height of the Cold War, for example, the UK philosopher, Isaiah Berlin, was acclaimed for his windy, but far less-than-convincing special pleading for what Marx would call “bourgeois rights.” Later, John Rawls would dominate the field with his sophisticated, rigorous defense of Western social democracy-- an impressively expanded opus based on his earlier paper (1958), Justice as Fairness. His was the most ambitious attempt to ground Western capitalism and its bourgeois democratic superstructure on a rational foundation.
With the end of the Cold War, Anglo-American political and moral philosophy had little to do but celebrate and navel gaze. A new generation of moral philosophers explored the less-than-weighty questions of sentiments, emotions, and feelings and the other immediate concerns-- like animal rights, identity, and individual regard-- of the petty bourgeoisie.
In our current moment of absurdity, of unprecedented inequality and wealth concentration, a small, but influential group of philosophers has emerged to provide a patina of social justice to the bloated wealth accumulated by Bezos, Soros, SBF, and their ilk.
This opportune school of philosophy has become associated with a young, earnest Oxonian professor named William MacAskill. MacAskill has promoted two key ideas: earning to give and longtermism.
MacAskill’s quick ascent to the higher rungs of one of the world’s most celebrated schools of philosophy, and his media celebrity no doubt is owed to his project to give elites a moral justification for their fantastic wealth.
Earning to give differs from the previous acclaim heaped on philanthropic benefactors in two ways.
First, unlike prior moral praise for the wealthy, earning to give does not envision charity as supererogation-- a philosopher's term for morally commendable acts outside of obligation-- but locates philanthropy firmly in the realm of obligation, of duty: it is a duty for the rich to part with their wealth to benefit humankind.
Mogul Andrew Carnegie did not have to fund libraries, yet he did it out of a good heart-- so goes the conventional view. But MacAskill contends that duty compels Carnegie to dispose of his wealth for the greater good. In this sense, MacAskill is making a strong case that the rich aren’t doing the rest of us any favors with their charity because they are morally obligated to do good with their wealth. We owe them no thanks for doing what they must.
The second aspect of earning to give is the accompanying duty to accumulate as much wealth as possible in order to maximize giving. It is not enough to give generously; one must make every effort to get more to give more. Thus, MacAskill justifies the capitalist maxim revealed by Marx to “Accumulate! Accumulate!” by attaching it to the effective altruistic demand to “Give more! Give more!”
It is a sign of the backwardness of our times that few in intellectual circles question the brazen elitism, the abandonment of democratic process latent in earning to give. When did it become a commonplace, an axiom, that social justice should be placed in the hands of the rich and powerful? Should the disposal of society’s wealth be decided by the fortunate few or democratically by the people through their elected representatives? It should be apparent that earning to give-- as a means of meeting the peoples’ social needs-- is inherently undemocratic.
But there is more: MacAskill and his circle have also contrived the clever, but misguided concept of longtermism. Effective altruism asks rich benefactors to look beyond the range of classical utilitarianism, beyond giving to alleviate the inequalities and injustices of the here and now.
Instead, MacAskill’s theory requires all acts of effective altruism to consider how each act might impact future generations. Thus, if the five dollars that could feed a starving family today might be repurposed to help fund an NGO that will help thousands in the future, then that is where the five dollars should go. Longtermism effectively expands our moral concerns well beyond the eight billion inhabitants of our world today to the possibly infinite number of global citizens that the future will produce. The eight billion-- as an immediate concern-- are accordingly diminished. In fact, they are erased from the philanthropic calculus of the obscenely wealthy.
Longtermism grants Jeff Bezos or George Soros and their counterparts the right to ignore the damage left in the wake of twenty-first century capitalism-- the vast inequality, poverty, insecurity, and war-- in order to “service” the needs of trillions of hypothetical and potential humans who may come into being in the limitless tomorrows. This clever, but ultimately cynical philosophical gambit trivializes the common-sense responsibility that moral and political philosophy has acknowledged-- for literally thousands of years-- as existing between each of us and our brothers and sisters.
Quite simply, longtermism is an evasion of that responsibility that we each owe to one another. It allows the very rich to maintain their gated communities, to step over the real, existing homeless, to justify obscene wealth inequality while pretending to lead morally exemplary lives. After all, they are looking after the interests of the trillions yet to be born!
We arrive at this destination precisely when we have intellectually disconnected the idea of wealth accumulation from its roots in exploitation. Too few of us think of the very rich as securing their vast wealth by exploiting the labor of others. The exploitation of workers seems very old fashioned, very nineteenth century. We have abandoned any notion that masses of private riches are really socially generated and socially owned wealth-- commonwealth-- to be allocated democratically for the good of all. That would be the unfashionable notion of socialism.
We assume that great wealth is the desert of the few; they have “earned” it. So we accept such bizarre, desperate ideas as effective altruism as a credible road to social justice, as a legitimate moral and political posture. Let us praise the rich for endowing chairs of effective altruism, funding foundations to plan for an unknown future, and creating forward looking NGOs that anticipate tomorrow’s problems, while sidestepping the horrors of today.
A philosophy that promotes this cynicism coexists within a social order that legitimizes financial toys and encourages adolescents to play with them.
Pray we survive.