For Australian philosopher Peter Singer, fraud charges against Samuel Bankman-Fried will not deal a death blow to “effective altruism”, the philanthropic movement promoted by the founder of the FTX cryptocurrency exchange.
“This may lead the movement to reevaluate its relationship with billionaires and reevaluate its relationship with cryptocurrencies,” Singer, who some call the “father of effective altruism,” said in an interview with CBC News.
“Will it damage the long-term reputation? I think the answer to that is no.”
But the arrest of Bankman-Fried – who US federal prosecutors say “conceived a plan and ruse to defraud FTX customers” – has sparked some speculation that the scandal could seriously damage the controversial movement for effective altruism and philanthropy. Bankman-Fried was also one of its biggest donors, so the flow of funds dried up.
Singer sees no “direct relationship” between what Bankman-Fried is accused of and effective altruism. But the scandal definitely raised questions about the links to the alleged Bankman-Frieda dealings and the movement itself.
“Detrimental to Effective Altruism”
The founder and director of British think tank Why Philanthropy Matters sees Bankman-Fried’s involvement in effective altruism as “absolutely a key part of the story”.
“It’s detrimental to effective altruism because the fact that Sam Bankman-Fried was an effective altruist doesn’t seem secondary to the whole story and what happened. [with] FTX,” said Rhodri Davies.
As described by the effective altruistic organization Giving What We Can, the movement is based on using “evidence and careful thinking to figure out how we can do the most good with our limited resources.”
So his basic idea is that when it comes to trying to do good in the world, and especially giving to charity, people shouldn’t focus on what they think is important or what they want to do.
For example, does it make sense to give money to a local charity like a food bank? Or, effective altruists say, that money could be better used for something that would have a bigger impact, more money, like buying mosquito nets to help fight malaria worldwide.
“[The idea is] you should kind of take yourself out of the picture, be completely neutral about the causes and think about, ‘How can I do the best in the world with the money I have,'” Davies said.
However, the idea of effective altruism has also drawn criticism for excessive utilitarianism or consequentialism and accusations of prescribing an “ends justify the means” philosophy.
“I think the story in a lot of people’s minds now is that he kind of pushed that idea to its limits and beyond … up to and including [alleged] fraud and a kind of corporate malpractice,” Davies said.
Make a pile, give later
The movement has also been criticized as arrogant for suggesting that effective altruists can determine which charities are most deserving of donations.
“It basically says we’re a bunch of very smart philosophy graduates and we know what the world’s problems are and how to solve them. So it’s very top-down,” Davies said.
Leslie Lenkowsky, professor emeritus of public affairs and philanthropic studies at Indiana University, said effective altruism turns hubris into a virtue.
“If I had $1,000,000 to spend, I’d like to put it into something that would change the world. But the truth is, I don’t know what that is. The world is a pretty complicated place and there’s one button you can push.”
He said the allegations against Bankman-Fried raise big questions about the ethical nature of the movement.
Effective altruism, at least initially, also advocated that instead of working in an NGO, people should try to work in jobs where they can earn a high salary, the so-called “earn to give” philosophy, and use that money to pursue their philanthropic goals.
“Bankman-Fried was following one of his core mandates, which is if you have the ability to make money, go make money rather than go to some nonprofit or pursue a social cause,” Lenkowsky said. “Once you make a pile, you can give later.
“If he was in fact knowingly doing something illegal, he was trying to justify it because it was for philanthropy. This raises a big ethical question about the central premise of effective altruism.”
But Singer says the fact that Bankman-Fried is facing serious fraud suggests he acted “much less rationally” than effective altruism, “which is all about evidence and reasoning.”
“To do something that’s so blatant and obviously has a serious risk of going to jail for a long time … I mean, that’s just pretty crazy,” he said. “And I don’t think there’s anything in effective altruism that says you should do that.”
“Sam didn’t listen”
While Singer has been called the intellectual father of effective altruism, the movement itself was co-founded by Scottish philosopher William MacAskill in 2009 as an Oxford student, inspired by Singer’s work.
MacAskill himself tweeted shortly after news of the FTX scandal broke that “for years the EA community has emphasized the importance of integrity, honesty and respect for the moral constraints of common sense.”
“If customer funds were misused, then Sam didn’t listen; he must have thought he was above such considerations.”
Singer said he believes the effective altruism movement has done a lot of good and hopes it will do much more.
But he acknowledged that the fact that billions of dollars that are supposed to go to effective altruistic efforts have now “burnt up” is “pretty terrible.”
Bankman-Fried, who reportedly became interested in effective altruism after a lunch meeting with MacAskill about a decade ago, put MacAskill and four of his lieutenants in charge of overseeing grantmaking at the Future Fund, according to Forbes. The fund, which was launched in February, is considered a subsidiary of the FTX Foundation.
Still, the donations made to the Future Fund could now be recovered by FTX’s creditors in bankruptcy court, Forbes reported.
And MacAskill is now under fire from many in the effective altruist community.
“I think the recent FTX scandal has created a big rift in the trust that many in the EA community have in our leadership,” wrote Gideon Futerman, whose small nonprofit received money from the Future Fund, on a community forum, Forbes reported.
However, Singer remained optimistic about the future of an effective altruistic movement.
“I think it’s pretty well established now, it’s pretty well known. It’s generating very significant amounts of money that are being donated to highly effective charities. And that’s all a good thing. And I think that’s going to continue despite the collapse of FTX .”
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