FTX crashes with loopholes for effective altruism
With the collapse of cryptocurrency exchange FTX, huge sums of money were burned and numerous investors suffered unimaginable losses, and the bankruptcy of the company also hit the reputation of founder and CEO Sam Bankman-Fried. In addition to financial losses, Bankman-Fried's insistence on "effective altruism" – philanthropic philosophy of "make money first, give later" has also been heavily questioned.
On November 13, 2022, local time, Washington, D.C., the cryptocurrency trading platform FTX website wrote "We strongly recommend not depositing", displayed near its logo.
Bankman-Fried did not merely adopt "effective altruism" as a certain philosophical thought in favor; He has been committed to building his own philanthropy with that idea at its core. The ideological origins of effective altruism come from a moral framework proposed by philosopher Peter Singer in 1972. Singer argues that if you're willing to get your clothes dirty to help a drowning child nearby, you should at least donate a small amount of money to help a child you've never met, and Singer's ideas have had a profound impact on the idea of effective altruism. Bankman-Fried's admiration for the philosophy of effective altruism dates back to a lunch he had with William MacAskill, a professor at Oxford University, about a decade ago. At the time, the young Scottish philosopher McAskill explained to MIT college student Banksman Fried the advantages of earning a lot of wealth. The effective altruism that Bankman-Fried and McAskier agree with emphasizes that if you are smart enough, you can make it your noble goal to make a huge fortune to impact the world.
In May, Bankman-Fried elaborated on effective altruism at an investment conference in the Bahamas, describing it as a popular philanthropic movement. Bankman-Fried said: "You can influence more people through philanthropy than you can give back in your daily lives. Effective altruism helped Banksman-Fried rise to prominence, giving him a new identity besides FTX: a rising philanthropist. Unlike other cryptocurrency moguls who praise the ideals of decentralization and libertarianism, Bankman-Fried has publicly stated that he wants to use his wealth for good. In his description, cryptocurrency exchange company Alameda Research and cryptocurrency exchange FTX are nothing more than ways for him to earn his wealth, with the ultimate goal of giving away all the property he acquires. Moreover, before the FTX collapse, McEsquire, 35, was the de facto leader of the "effective altruism movement." McTAskill is currently in the spotlight for mentoring Bankman-Fried and helping the "effective altruistic" community connect with the latter.
Ironically, behind Bankman-Fried's seemingly rosy vision, there is a lot of fraud and illegal trading. In early November, CoinDesk, a US blockchain and crypto-asset media, disclosed a document stating that Alameda held an unusually large number of FTX tokens, FTT, indicating that the relationship between the two is extraordinary. Then FTX's rival, Binance, the world's largest crypto exchange, announced that it would sell all of its FTT tokens, causing investors to panic, and FTX ended in bankruptcy. On November 17, the team behind FTX's Philanthropic Future Fund all resigned, with members writing in an open letter: "We condemn in the strongest possible terms the possible involvement of FTX's leadership in deceptive or dishonest behavior." We believe that being a good person in this world means hard work, honesty and integrity. One user on Twitter said of the effective altruistic case of financial fraud: "They all think it's worth it to take the best risk for humanity... Bankman-Fried believed it was his responsibility to take that risk for the world for the world more than anyone else, and he persuaded many others to ally with him in an effective altruistic movement. "But in fact, Banksman-Fried didn't step up and take all the risks; Instead, a large number of investors were caught up in FTX's bankruptcy crisis.
While the world is focusing on the collapse of FTX, many are beginning to question the viability of an effective altruistic philosophy. After the FTX collapse, Singer spoke to Bloomberg Businessweek as a professor of bioethics at Princeton University and made it clear that Bankman-Fried's actions did not represent the ideals of an effective altruistic philosophy. Singer begins by declaring that anyone in the effective altruism movement does not support the risky financial decisions that Bankman Fried made at FTX, and emphasizes that the effective altruism movement does not encourage people to engage in such behavior. On the other hand, when talking about the "earn first, give later" philosophy, Singh stressed that if people want to act on this philosophy, they need to follow the rules and behave ethically in their work life and giving. In the real world, however, people can make serious mistakes. And the best way to avoid this is to go the right way and commit to only doing ethical things. At the end of the interview, Singh said it would be regrettable if many people learned about effective altruism for the first time because of the collapse of FTX. In the past, effective altruism campaigns have saved thousands of children from death by providing mosquito nets and safe drinking water, but the media has focused on the negative stories of the campaign and reported them widely. Singh doesn't want people to think of effective altruism as some kind of "defrauding others of their money and risking them."
In fact, the initial effective altruism movement did not have a dizzying array of transactions or the ability to dispose of staggering amounts of wealth. In one report, The New Yorker shows readers about McEsquil's past life – when McEsquill was a graduate student in philosophy at Oxford University, Singer's moral framework had become the principle of his life... He left his income balance to others and did not hesitate to act in his own way. It was a time in his life that was both dark and lonely, but also full of morality. Since then, McEsquill has launched the "Effective Altruism" campaign, asking people to do good in the clearest, most ambitious, and most dispassionate way. The campaign advises inspired young people not to work for charities, but instead to work in finance and donate their earnings. In recent years, the movement has begun to focus on how to address existential risks for humanity, focusing on preventing pandemics and nuclear proliferation, preventing artificial intelligence from spiraling out of control, and sending humans to extraterrestrials. The effective altruism movement was once just a loose, Internet-enabled coalition of like-minded people; In recent years, it has evolved into a widely influential faction (especially in Silicon Valley) and controls about $30 billion in philanthropic resources.
In late 2011, McEsquill gave a lecture at Oxford University on "Doctors, NGO workers, or something else entirely?" which professions do the most good deeds". McTAskill proposed a utilitarian view that highly qualified students from elite institutions could become doctors in poor countries, potentially saving 140 lives in a medical career; Or he could work in finance or consulting, saving 10 times as many lives through wise donations. Effective altruism campaigns not only pursue good deeds, but also seek to maximize good deeds, but fail to provide a clear code of conduct. But surprisingly, Bankman-Fried and the huge cryptocurrency transaction "fulfilled" McEsquire's vision.
Singh said that when Bankman-Fried began to get rich and give more, Singh had no doubt that he was genuinely doing charity. Although it's uncertain what Banksman Fried went through, his egos may have gotten in the way, and some of his subsequent actions went seriously astray. However, the truth may be more disappointing than Singh envisioned. In a Twitter message with Vox reporters, Bankman-Fried acknowledged that his insistence on effective altruism was partly a "cover" for his reputation-boosting, adding: "Some of the greatest heroes of this decade will never be known, and some of the most beloved people are basically liars." In the past, Bankman-Fried often publicly emphasized philanthropy, which helped him gain positive media coverage, political clout, and even investment; But for Bankman-Fried, the moral imperatives behind effective altruism may be difficult to obey.
Quote Article:
https://www.coindesk.com/layer2/2022/11/11/how-sam-bankman-frieds-effective-altruism-blew-up-ftx/
https://www.forbes.com/sites/johnhyatt/2022/11/17/disgraced-crypto-trader-sam-bankman-fried-was-a-big-backer-of-effective-altruism-now-that-movement-has-a-big-black-eye/?sh=26e0939e4ce7
https://www.newyorker.com/magazine/2022/08/15/the-reluctant-prophet-of-effective-altruism
https://www.bloomberg.com/news/articles/2022-11-25/effective-altruism-pioneer-on-sam-bankman-fried-s-collapse?leadSource=uverify%20wall
Is it good or bad for the global population to exceed 8 billion?
On November 15, 2022, the United Nations announced that the world's population reached 8 billion, coinciding with the 27th session of the Conference of the Parties (COP27) to the United Nations Framework Convention on Climate Change (COP27), and the relationship between population growth and environmental protection has once again become a key focus. Recently, Jacobin magazine published an article titled "We Should Celebrate the World's Population Passing the Eight Billion Mark", refuting the Malthusian view of the left and right Malthusians arguing that food insecurity and climate change are the irrationality of capitalism, not population growth.
On October 14, 2022, local time, Sofia, Bulgaria, newborns in the maternity ward of Vita Hospital. According to the United Nations, the global population will cross the symbolic 8 billion mark on November 15.
From 10,000 BC to 1700 BC, the world's population grew from about 4 million to 600 million, an annual growth rate of 0.04%, during which the average life expectancy was less than 30 years. Since then, the world's population has grown to 8 billion, and the global average life expectancy is 73 years. Writing in the late 18th and early 19th centuries, the British economist Malthus argued that near-stagnation models depicting conditions for most of human history indicated the limits of population growth to economic development. He famously argued that population growth increased demand for food and other commodities, which were themselves limited by the planet's ecological limits, such as declining soil fertility and limited availability of arable land.
Matt Huber, the author of the article, points out that Malthus's view is only true if we assume that it is impossible to increase the productivity of the economic system. It was also true for most of human history that social relations characterized by coercion and exploitation of peasants had no other incentive to increase productivity than violence. Even with labor-saving techniques, feudal lords, who had near-absolute control over the peasants, lacked incentive to use it. However, the emergence of capitalism in rural Britain brought about increased investment in technology and the practice of adopting more efficient ways of working. Population is no longer the limit of production, which can be improved through different forms of social organization. Yet the recent reaction to the news that the world's population exceeds 8 billion shows that the Malthusian rupture that came with the advent of capitalism centuries ago seems to have gone unnoticed.
These statements hardly reflect on whether the existence of billions of people is a good thing per se, and 21st-century Malthusians simply treat the existence of more human beings as an irreconcilable issue. Malthusians, who are less willing to blame all humanity, argue that the problem is not everyone, but only some of the rich. In their conception, the problem is not overpopulation, but overconsumption. The environmental impact of population growth in the world's poorest regions is small and has not led to environmental collapse. Instead, the state of the natural environment is to blame for a small number of wealthy consumers in rich countries. Notably, this way of thinking emerged in the 1970s when there was a shift to neoliberal austerity, when "excessive" affluence – largely the product of working-class organisations and their harvests – was considered the main problem of capitalism.
Despite their obvious differences, both right-wing Malthusians and leftists essentially agree that the limits of production depend on the ecological limits of the planet rather than the social relations we create. Right-wing Malthusians believe that the human population will exceed a fixed food capacity, while left-wing Malthusians believe that affluent consumers overload the planet with so-called "carrying capacity."
The article further points out that while the previous economic system did face real natural and productive constraints, capitalism's enormous expansion of productive capacity created a special social scarcity of production. Although this system forces capitalists to increase labor productivity through competitive pressures in the market, it does not create incentives for the equal distribution of the products produced. In the previous system, famine was caused by poor harvests and natural scarcity, but under capitalism it was caused by people not having money to eat.
Malthusians on both the left and the right often overlook the fact that under capitalism, man can only reproduce by participating in the market. Thus, Malthusians ignore the political and economic causes of hunger and poverty. The mass starvation we see around the world has nothing to do with the ecological capacity to produce food, and our current production methods are enough to feed 8 billion or more people. The simple truth is that inequality and poverty make it impossible for many people to afford the food that our economic system produces more efficiently and in larger quantities. Ultimately, the reason for the persistence of hunger under capitalism is political, not natural.
Inequality arises from the structural characteristics of our economic system. The real shame of capitalism is that most of the human race in this system is superfluous. According to Marx, "Every ... The historical patterns of production all have their own special demographic laws. For capitalism, he says, its value orientation and technological productivity require a specific population to be ready to be "relative surplus" or "labor reserve." This unfortunate group has two functions. First, the existence of this surplus population constrains the employed labor force, which may be replaced if they try to organize politically; Second, because capitalists do not just enjoy their profits during periods of economic growth but reinvest them in generating greater returns, they inevitably need laborers to serve as employees for their expanding enterprises. As a result of these two tendencies, capital mainly needs a large surplus population to make the system work more efficiently with their own poverty and misery. Thus, under the neoliberal offensive of the past four decades, along with the expansion of what Mike Davis calls "superfluous humanity," a suffering group of informal proletarian workers has become the basis for global wage stagnation.
While Malthusians on both sides of the left and right seem to believe that we are fighting fixed ecological limits, the real solution to the climate crisis needs to overcome the limits of capitalism rather than the natural environment. While the current economic system makes productivity gains possible, the use we put into natural resources and labor is limited by the profit motive. Therefore, from the human standpoint, capitalism has a profoundly irrational character.
2022 showed the world that as long as fossil fuels remain hugely profitable, their production will continue. Evidence of this is that the high returns from the Russia-Ukraine conflict have even led so-called green asset managers such as BlackRock to withdraw their bold plans to cut ties with the fossil fuel industry. At the same time, long-known climate change solutions such as renewables, nuclear or direct air capture have yet to prove to be profitable enough for investors to be built quickly and on a large scale to avert climate catastrophe. This proves the fact that, like our broken food system, markets cannot distribute goods in a rational way, let alone justice.
Addressing climate change requires social control of investment through public ownership and/or labor ownership, thereby unleashing society's technological capacity and decarbonizing. This will enable us, for the first time in human history, to finally build a society organized with the legitimate interests of the majority of the people. Economic planning will enable society to build infrastructure to provide clean electricity, public housing, modern water, and waste disposal for the billions of "surplus people" deemed redundant by capitalism.
Anyone aspiring to create a fairer society should not accept the idea of a surplus population. The goal of ecosocialism should be to use the skills and contributions of all human beings to build a democratic economy around people's social and ecological needs. In moving forward with this plan, the group of workers living in slums and working in factories will not be an obstacle but an asset.