If you were not an investor in the crypto exchange FTZ, you may read the stories emerging with astonishment and a certain amount of enjoyment. A writer would have dismissed some of the details as too far-fetched for a film script – a multibillion dollar firm that kept no proper accounts? An owner who wore shorts to meetings with Presidents, professed to care nothing for material goods then loaned himself a billion dollars from investors’ funds and bought luxury condos in the Bahamas for himself, mates and parents?
But if you care about the “purpose” agenda, it should be a concern that this episode will do nothing for the cause of “responsible capitalism”. Sam Bankman-Fried, the crazy / incompetent / criminal /naïve (delete words as you wish) founder and CEO of FTX made a big thing out of his desire to make money in order to do good. He worked closely with an Oxford academic, charity founder and writer, William Macaskill, whose 2015 book “Doing Good Better” outlines the “effective altruism” philosophy that Bankman-Fried espoused.
I read the book some years ago and found it illuminating and thought-provoking. Macaskill describes a framework for assessing how much real benefit different programmes, charities and similar organisations actually create. That seemed like a very useful piece of work, as most of us have little idea whether we are really giving our time or money to the “best” organisations if we want to support a particular cause – or indeed whether the cause itself is really worthwhile.
Whilst it isn’t the main point of the book, he does also say that it would often be better for concerned people to work hard in any career, become rich and successful, then donate money to the best causes, rather than volunteering to work for a not-for-profit at a young age, when we might have little to offer anyway. It seems that Bankman-Fried liked that particular aspect of the book, and claimed that he only wanted to make money in order to give it away. Macaskill was on the advisory board of FTX’s charitable Future Fund; and described the 30-year-old billionaire as his “collaborator”.
However, many of Bankman-Fried’s “donations” went to politicians or to gain naming rights for a basketball stadium, rather than supporting genuine good causes. Last summer, he was interviewed by the Vox reporter, Kelsey Piper, telling her that unethical conduct was not acceptable, even in service of “the greater good.” But when she had a Twitter conversation with him after the FTX storm broke recently, he told her, “Man, all the dumb shit I said, it’s not true, not really.” He also said ethics was “what reputations are made of, to some extent” and “I feel bad for those who get f****d by it … by this dumb game we woke westerners play where we say all the right shiboleths and so everyone likes us”.
So the implication was that his ethical stance was a bit of a game or a way to be liked and valued in the business world. Macaskill – who is blameless really in this - resigned his unpaid position with FTX and published a soul-searching thread on Twitter: “I don’t know which emotion is stronger: my utter rage at Sam for causing such harm to so many people or my sadness and self-hatred for falling for this deception.”
The danger is that we all get very cynical about business people who talk about ethics, responsibility and purpose. Are they doing that just to look good or promote their business – or even worse, to disguise unethical or even criminal behaviour, as in the case of FTX. Or do they really believe in what they are saying and doing?
We can only hope that FTX is seen as an isolated incident and that it does not pollute the genuine good work and commitment from many in business. I’d also recommend Doing Good Better – if you are interested in this area at all, it is well worth a read. As an example of a simple but powerful insight, Macaskill says this about the need to identify the very best programmes or organisations to support in terms of outputs and benefits delivered.
“The very best health and education programmes are hundreds of time better than “merely” very good programmes”.
That certainly made me think about how I support charities and the need to do some basic research before doing so.