New Orleans Sometimes when things just seem too good to be true, it is actually because it’s quite simply not true. At the bottom line, there’s still no substitute for good judgement. Ok, so that’s the moral of this story. You might wonder, what’s the story?
Part of it is about bitcoin. I’ve read a lot about it. I understand the broad outlines. I just don’t see any reason to believe the claims made by its promoters. You know, like it will replace money and all other transactions. Maybe, I guess in the “by and by.” Who knows? Now, at least in my small mind, it seems like the tulip craze in the Netherlands centuries ago or so many other wild and weird pieces of financial speculations. Values seem to go up and down like a yo-yo. Billionaires, one day, broke ass the next. The only ones who seem to have really done well are the ones that got in and then got out fast. All of which says to me, caveat emptor. At least folks who go to Vegas might get a cheap meal and see a show, before they lose their shirts.
The other part is about something called “effective altruism”, a philanthropic and philosophical construct that tries to measure with data and some semblance of fact-based evidence how money and personal actions might do the most good, founded and promoted by William MacAskill, a 35-year old associate professor at Oxford University. In the narrative they have boosted, one of the chief acolytes and funders of this movement was 30-year-old, Sam Bankman-Fried, the founder and CEO of the FTX crypto exchange, which has recently imploded into bankruptcy. The fall of FTX means that many investors, both large and small, have lost everything they had put into this currency exchange. Bankman-Fried, a momentary billionaire, obviously lost his shirt as well. He has apologized for messing up. Reportedly, he may have also invested money from clients’ accounts in FTX and some of its projects, which will likely keep the SEC, FTX, and Bankman-Fried in the news for quite a while, including when he may end up in jail for it all. MacAskill worries that as part of this hype about Bankman-Fried’s role in effective altruism, he may have abetted a situation in which “good will laundered fraud”, and saying, if so, he’s “ashamed.” Many of the nonprofits are scurrying in the fallout, since grants won’t be honored. Bankman-Fried spent more than $35 million in donations to Democrats during the midterms, so although they’ll miss the cash in the future, at least they got their money upfront.
All of this is a darned shame. Not so much for the easy come, easy go crowd, or the hustlers who reaped what they sowed, but for the regular folks who might have lost what they couldn’t afford in this mess. Certainly, there’s some general merit in the notion that one should focus time and money on what should yield the most good, but friends, the answers aren’t always going to be in data, no matter what the techies try to sell us as they gild their own lilies. Building an app or a platform is fine, but it provides no special knowledge about people or how the world works. Take Elon Must and his long-playing circus and disasters as a case in point, but almost any of them could serve as evidence of what disasters hubris mixed with money can bring.
Sometimes, the answers are “blowing in the wind,” not the data. Sometimes it’s the hard work off the headlines and deep in the vineyards. Data is ok, but, back to where we began, there’s no substitute for good judgement or in fact, the real work.