After growing up amid upper-middle-class affluence in Silicon Valley as the children of two Stanford Law School professors, as a super-smart kid who got into MIT to study physics, Sam Bankman-Fried decided in those teen years that he wanted to save the world in the worst way.
Which is exactly what he did.
The young, and by all accounts idealistic, Bankman-Fried fatefully attended a college lecture where he learned about and came to embrace an idea called "effective altruism" — that rising geniuses like him won't improve humankind through mundane drudgery like organizing the peasants. No, they should use their brainpower and some math calculations to maximize the amount of money they earn in the free-for-all of modern capitalism, and then give their millions or maybe billions of dollars away to their favorite social causes.
"If what you're trying to do is donate, you should make as much as you can and give as much as you can," said Bankman-Fried, whose mission became his calling card to the point where there's a podcast episode called "Sam Bankman-Fried Wants to Save the World."
Bankman-Fried became effective altruism's best disciple, because he went to Wall Street and turned out to be very, very good as the "make as much as you can" part of all this. He used a trading trick in the new frontier of cryptocurrency to get rich and — still in his 20s — launch a small empire based around his crypto exchange, FTX. But while his net worth ballooned to an estimated $16 billion at the peak, Bankman-Fried hadn't gotten very far on the "give as much as you can" part — perhaps a couple hundred million dollars — before his Jenga empire tumbled down.
It turns out you can't be a very effective altruist if your money disappears, which started happening this spring in tandem with a worldwide cryptocurrency crash. It may take investigators months or years to untangle the mess at FTX, but by his own admission Bankman-Fried engaged in risky and unethical practices to prop up one arm of his crypto empire — including tapping the accounts of FTX customers. Those duped investors may have lost as much as $8 billion.
Now 30, the wunderkind of effective altruism wasn't just ineffective at saving planet Earth. He made it demonstrably worse, for his reeling investors and possibly for all of us as FTX's losses ripple through the economy. Sure to be the subject of podcasts and biopics for the rest of our lives, the rise and fall of Sam Bankman-Fried is indeed a remarkable story, but it's just the latest twist on what arguably is becoming the story of the 21st century — and the disease of late-stage capitalism.
Messianic billionaires — and we all know who they are ... Elon Musk, Jeff Bezos, Howard Schultz, Bill Gates and even arguably MBS over in Saudi Arabia — have emerged as the ultimate winners in a winner-take-all economy that has exacerbated income inequality to levels beyond the notorious Gilded Age. And they are now spending a lot of those billions on what they think is making the world better — yet often marred by the same sociopathy that made them so rich in the first place.
Indeed, the Bankman-Fried saga is probably not getting all the attention it normally would because journalists and various self-anointed thought leaders are busy obsessing on a different billionaire, Musk, and his $44 billion project — seemingly rooted in personal obsession with the social media site Twitter which he now owns — that has the blue bird gasping for breath in a matter of days.
The erratic, mercurial leadership of Musk — the electric car and space mogul and still the world’s richest man, although his Twitter travails have knocked his net worth down to a mere $189 billion — has brought a site that seemed to be surviving OK before his purchase to the brink of the abyss. Problems around a spike in unmoderated hate speech or weird changes in verification had Twitter users, its beleaguered employees and puzzled advertisers racing each other for the exits — and that was before Musk’s reprehensible decision on Saturday night to undo Donald Trump’s lifetime ban for using Twitter to promote his violent coup attempt on Jan. 6, 2021.
Fittingly, it was Trump — who dipped into his own overstated wealth as a maybe-maybe-not-billionaire in 2016 for arguably the worst vanity project of them all, electing himself American president — who laid down the mantra of this billionaire boys' clubs (and it's almost all boys) when he declared, "I alone can fix it."
Indeed, the world's currently richest people — for all their differences in style or subject matter — seem to share a strikingly similar philosophy. It goes something like this: "Let's maintain this status quo where I get to run my business in the ways that maximize my own wealth — including historically low taxes and underpaying my workers — and I swear I will use that wealth to better the world. The catch? I alone decide what that better world is, and how to get there."
Just last week, Amazon founder Jeff Bezos — who had been the world's richest man, before his messy divorce — laid down the blueprint for this model when he promised to give away most of his $124 billion net worth during his lifetime. In an interview with CNN, Bezos admitted that this is easier said than done, that "there are a bunch of ways, I think, that you could do ineffective things."
Here's what's so infuriating about this: It actually would be easy for Jeff Bezos to be a truly "effective altruist" — using his power as Amazon's founder to make life better for the 1.1 million people who work there, not only through a living wage but by spending to make his workplaces safe and comfortable for those who currently describe hellish conditions. Instead, Bezos' Amazon spends untold millions on fighting to keep those workers from organizing.
Just imagine: He could make the world a lot better by giving his wealth before it passes through his wallet, instead of after. But that would also mean sacrificing what really matters to a Bezos or a Musk: total control.
The commonalities of how these billionaires think we can attain a better world are strikingly similar — a society where an individualistic and technocratic form of free market libertarianism fixes everything, and labor unions and other forms of community organizing go away. It's why so many billionaires like Microsoft's Gates fixate on giving money to the failed, teachers-union-crushing charter schools project, conveniently forgetting the role that thriving public schools once played in building an American middle class. It's why Starbucks' Schultz came out of retirement to lead an anti-labor crusade against organizing baristas, because their work is shattering the dangerous myth of the modern, socially conscious corporation.
It doesn't have to be this way.
Of course, the battle cry at a moment like this is typically, "Tax the rich!" — and, yes, we should absolutely be doing that. The historically low tax rates on the superwealthy — enacted by politicians who run their campaigns on these billionaires' wealth — ought to be undone. And given our ridiculous levels of wealth inequality, we ought to be exploring additional steps like a wealth tax. (Sen. Elizabeth Warren proposed this as a way to pay for free public universities, which is a much better system than billionaires writing giant checks to their favorite elite school.)
But that fact that our billionaires spend so much of their energy in fighting unions should be a tell: What they fear even more than a higher marginal tax rate is the notion that we — the 99 Percent of everyday folks — will work together, collectively, for our own good instead of begging for the crumbs of their largesse. The best and maybe easiest way to lessen the grip of a Musk or a Bezos is to strengthen organized labor.
I'd argue more broadly that we need to rethink what is a public good and should be supported — financially and morally — by society, rather than by spinning the wheel of billionaire philanthropy. A social media site like Twitter — which, for all its flaws, also gave voice to social movements as diverse as the Arab Spring, Black Lives Matter and #MeToo — should exist more as a semi-public utility than as an entity that a man with a spare $44 billion can just light on fire. Ditto for things like community media and higher education
We should never have left everything from our neighborhood schools to our favorite websites in the clutches of these madmen posing as altruistic visionaries. And sorry, Sam and Elon, but the path to a better world actually isn't rocket science, after all.
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(Will Bunch is national columnist for the Philadelphia Inquirer.)
