You may be familiar with Curtis Yarvin's idea that Covid is science's Chernobyl. Just as Chernobyl was Communism's Chernobyl, and Covid was science's Chernobyl, the FTX disaster is rationalism's Chernobyl.
The people at FTX were the best of the best, Ivy League graduates from academic families, yet free-thinking enough to see through the most egregious of the Cathedral's lies. Market natives, most of them met on Wall Street. Much has been made of the SBF-Effective Altruism connection, but these people have no doubt read the sequences too. FTX was a glimmer of hope in a doomed world, a place where the nerds were in charge and had the funding to do what had to be done, social desirability bias be damned.
They blew everything.
It will be said that "they weren't really EA," and you can point to precepts of effective altruism they violated, but by that standard no one is really EA. Everyone violates some of the precepts some of the time. These people were EA/rationalist to the core. They might not have been part of the Berkley polycules, but they sure tried to recreate them in Nassau. Here's CEO of Alameda Capital Caroline Ellison's Tumblr page, filled with rationalist shibboleths. She would have fit right in on The Motte.
That leaves the $10 billion dollar question: How did this happen? Perhaps they were intellectual frauds just as they were financial frauds, adopting the language and opinions of those who are truly intelligent. That would be the personally flattering option. It leaves open the possibility that if only someone actually smart were involved the whole catastrophe would have been avoided. But what if they really were smart? What if they are millennial versions of Ted Kaczynski, taking the maximum expected-value path towards acquiring the capital to do a pivotal act? If humanity's chances of survival really are best measured in log odds, maybe the FTX team are the only ones with their eyes on the prize?
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Notes -
It's more of a hit to EA than to rationalism but it's still a hit to rationalism because a fair number of rats glommed themselves onto EA's glow up and it's a somewhat reciprocal relationship (the EAs are fine with rats lending their hand as long as they don't provide bad press, in which case disavow - that's the +EV move after all)
I can only offer advice as I will not profess to be a devoted adherent to rationalism. I enjoy the commitment to spirited debate their communities foster and Scott in particular is (was?) a good welcome mat for the community.
Bankman-Fried and the EA crew are the reverse. This is preaching to the choir here but the Carrick Flynn fundraising campaign exposed the movement as a pretty naked political project of more or less basic Democrats with a slightly refocused issue set. The engorgement of donations, including those late enough in the campaign they likely had minimal impact, to a low importance primary demonstrated none of their professed values and was instead a rather desperate grasp for power.
Bankman-Fried embodied this more explicitly, as an institutional insider following the steps of "EA" outsiders trying to ledge their foot in the door. He leveraged his connections to create this fraud, and would have continued to get away with it as long as his laundered reputation of EA work kept him Cathedral-approved to the institutional actors he partnered with.
Apply your normal caveats to anecdata here, but as a once decently involved crypto user/trader precisely zero people I am in touch with kept money on FTX. Why? To people in the space, myself included, the guy radiated inauthentic. This is a world full of scammers, hackers and overall shady individuals. Anyone selling you that they're anything but nakedly self-interested in making a buck is probably lying to you and untrustworthy. That's where mantras like "the code is the law" come in. This is poison to retail investors but the idea is that you're buying exactly what you can see whether it's a smart contract, an app or a wallet. The libertarians in this space are not Scott's "grays" who we now know were just a shallower shade of blue that wish the rest would slow down the swimming leftward into the deep blue of the Pacific (note those guys were all from California) - they're hardline libertarian econ types with a side of some gun nuttery and no snake stepping
Bankman-Fried's ultimate goal was to buy enough government and institutional power to legislate a favorable environment for himself and a poor one for his main competition, an exchange run by a Chinese-Canadian that's had to dodge his own government a couple times that the hardline libertarians will still tell you not to trust (their hardline is Bitcoin-only with your own keys) but one where I actually know people with money on it because their motives are less vague.
Now, you're going to ask me who actually lost the $10 billion here if I'm Pauline Kael-ing away all these people and the Bitcoin libertarians were never on board to begin with? Well, some long-time crypto whales did trust them as did a lot of those institutional investors (VC types, or as a short-hand basically anyone who owned Solana) and celebrities they got in bed with it seems, and probably a wave of retail that came after me. All of them are fucked, which means they're gone from the space for quite some time if not permanently. Does Sam care? Nah, you can read his takes on betting it all for a bigger win down the thread. And he could have gotten away with it too if his grift kept going just long enough to legislate away his meddling competition before they could catch him with his pants down!
Is this an Effective Altruism or rationalist mindset? No, it's just what every other corporate oligopoly/monopoly in the United States tries to do. Maybe he could justify it with some ends justify the means consequentialism that once he dominated the industry he could gather all these resources and better utilize them but that just lays bare my issue with EA in general. If all you want is power to effect political action to reshape the world to best fit your interest, you don't have a new or unique movement. Lots of people now and throughout history have wanted that!
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