In this new podcast episode, I discuss with Will MacAskill what the Effective Altruism community can learn from the FTX / SBF debacle, why Will has been limited in what he could say about this topic in the past, and what future directions for the Effective Altruism community and his own research Will is most enthusiastic about:
In summarising Why They Do It, Will says that usually, that most fraudsters aren't just "bad apples" or doing "cost-benefit analysis" on their risk of being punished. Rather, they fail to "conceptualise what they're doing as fraud". And that may well be true on average, but we know quite a lot about the details of this case, which I believe point us in a different direction.
In this case, the other defendants have said they knew what they're doing was wrong, that they were misappropriating customers' assets, and investing them. That weighs somewhat against the misconceptualisation hypothesis, albeit without ruling it out as a contributing factor.
On the other hand, we have some support for the bad apples idea. SBF has said:
So I agree with Spencer, that SBF was at least deficient in affective experience, whether or not he was psychopathic.
Regarding cost-benefit analysis, I would tend to agree with Will that it's unlikely that SBF and company made a detailed calculation of the costs and benefits of their actions (and clearly they calculated incorrectly if they did), although the perceived costs and benefits could also be a contributing factor.
So based on the specific knowledge of the case, I think that the bad apples hypothesis makes more sense than the cost-benefit hypothesis and misconceptualisation hypotheses.
There is also a fourth category worth considering - whether SBF's views on side constraints were a likely factor - and I think overwhelmingly yes. Sure, as Will points out, SBF may have commented approvingly about a recent article on side constraints. But more recently, he referred to ethics as "this dumb game we woke Westerners play where we say all say the right shibboleths and so everyone likes us." Furthermore, if we're doing Facebook archaeology, we should also consider his earlier writing. In May 2012, SBF wrote about the idea of stealing to give:
I'm sure people will interpret this passage in different ways. But it's clear that, at least at this point in time, he was a pretty extreme act utilitarian.
Taking this and other information on balance, it seems clear in retrospect that a major factor is that SBF didn't take side constraints that seriously.
Of course, most of this information wasn't available or wasn't salient in 2022, so I'm not claiming that we should have necessarily worried based on it. Nor am I implying that improved governance is not a part of the solution. Those are further questions.
(This comment is basically just voicing agreement with points raised in Ryan’s and David’s comments above.)
One of the things that stood out to me about the episode was the argument[1] that working on good governance and working on reducing the influence of dangerous actors are mutually exclusive strategies, and that the former is much more tractable and important than the latter.
Most “good governance” research to date also seems to focus on system-level interventions,[2] while interventions aimed at reducing the impacts of individuals... (read more)