I’ve been trying to figure out how someone who appears to believe deeply in the principles of effective altruism could do what SBF did.
…
It seems important to me to seek an understanding of the deeper causes of this disaster to help prevent future such disasters.
There’s a part of my brain screaming “Why are you leaving yourself wide open to affinity fraud? Are you trying to ensure ‘SBF 2: This Time It’s Personal’ happens or what?” However, I’ll ask him to be quiet and explain.
The problem was that you should never go around thinking “Somebody who believes in EA wouldn’t screw me, therefore this investment must be safe.” Instead you should think “The rate of return on this investment is not possible without crime, therefore I don’t know why somebody who claims to be an EA would do this, but I don’t have to know, I just have to stay away.” Or as I said in response to Zvi’s book review
You have to think: this man wouldn’t offer me free candy just to get in his unmarked van, that doesn’t make sense. I wouldn’t give anyone candy for that. What’s going on here?
It doesn’t matter why something is too good to be true. If it is, it must be a lie, and thus bad. Don’t take the deal. In case it’s not clear “taking the deal” can mean more than just investing with FTX; it also encompasses other sorts of relationships one might get into with SBF or FTX, like taking their money or allowing them to be a public symbol of you.
The point here is that understanding human psychology and motivations, especially where the human you’re trying to understand might be trying to trick you, is way harder than just knowing what sorts of returns are possible on capital investments with given amounts of risk. You can try to understand the SBFs of the world in the hopes of being able to identify them, but why do all that extra work? Just don’t trust anyone who says they can make you a 50% return on your investment in a year with zero risk (or comparable risk to T-bills) because every single one of them is lying and committing crimes.
There’s a part of my brain screaming “Why are you leaving yourself wide open to affinity fraud? Are you trying to ensure ‘SBF 2: This Time It’s Personal’ happens or what?” However, I’ll ask him to be quiet and explain.
The problem was that you should never go around thinking “Somebody who believes in EA wouldn’t screw me, therefore this investment must be safe.” Instead you should think “The rate of return on this investment is not possible without crime, therefore I don’t know why somebody who claims to be an EA would do this, but I don’t have to know, I just have to stay away.” Or as I said in response to Zvi’s book review
It doesn’t matter why something is too good to be true. If it is, it must be a lie, and thus bad. Don’t take the deal. In case it’s not clear “taking the deal” can mean more than just investing with FTX; it also encompasses other sorts of relationships one might get into with SBF or FTX, like taking their money or allowing them to be a public symbol of you.
The point here is that understanding human psychology and motivations, especially where the human you’re trying to understand might be trying to trick you, is way harder than just knowing what sorts of returns are possible on capital investments with given amounts of risk. You can try to understand the SBFs of the world in the hopes of being able to identify them, but why do all that extra work? Just don’t trust anyone who says they can make you a 50% return on your investment in a year with zero risk (or comparable risk to T-bills) because every single one of them is lying and committing crimes.
If they can steal your savings and buy 1000 anti-malaria nets, why wouldn’t they?
(Just kidding… mostly.)
What, you don’t think Plasmodum falciparium is a living being with a right to exist? Don’t be such a humanity chauvinist.