“One of the biggest conspiracies of the last decade” doesn’t seem right. The amount of money/influence involved in FTX is dwarfed by the amount of money/influence thrown around by governments in general, and it’s easier for factions within governments to enforce secrecy than for corporations to do so. More concretely, I’d say that there were probably several different “conspiratorial” things related to covid in various countries that had much bigger effects; probably several more related to ongoing Russia-Ukraine and Israel-Palestine conflicts; probably several more Trump/Biden-related things; maybe some to do with culture-war stuff; probably a few more prosaic fraud or corruption things that stole tens of billions of dollars, just less publicly (e.g. from big government contracts); a bunch of criminal gangs which also have far more money than FTX did; and almost certainly a bunch that don’t fall into any of those categories. (For example, if the CIA is currently doing any stuff comparable to its historical record of messing around with South American countries, that’s plausibly far bigger than FTX. Or various NSA surveillance type things are likely a much bigger deal, in terms of impact, than FTX. Oh, and stuff like NotPetya should probably count too.)
There are few programs even within the U.S. government that are larger than $10B without very extensive reporting requirements and where it’s quite hard for them to be conspiratorial in the relevant ways (they might be ineffective, or the result of various bad equilibria, but I don’t think you regularly get conspiracies at this scale).
To calibrate people here, the total budget of the NSA appears to be just around $10B/yr, making it so that even if you classify the whole thing as a conspiracy, at least in terms of expenditure it’s still roughly the size of the FTX fraud (though I more like 10x larger if you count it over the whole last decade) .
To be clear, there is all kinds of stuff going on in the world that is bad, but in terms of things that are as clearly some kind of criminal or high-stakes government conspiracy, I think FTX stands among the biggest ones (though I totally agree there are probably other ones, though by nature its hard for me to say how many).
(In any case, I changed the word “conspiracy” here to “fraud” which I think gets the same point across, and my guess is we all agree that FTX is among the biggest frauds of the last decade)
There are over 100 companies globally with a market cap of more than 100 billion. If we’re indexing on the $10 billion figure, these companies could have a bigger financial impact by doing “conspiracy-type” things that swung their value by <10%. How many of them have actually done that? No idea, but “dozens” doesn’t seem implausible (especially when we note that many of them are based in authoritarian countries).
Re NSA: measuring the impact of the NSA in terms of inputs is misleading. The problem is that they’re doing very highly-leveraged things like inserting backdoors into software, etc. That’s true of politics more generally. It’s very easy for politicians to insert clauses into bills that have >$10 billion of impact. How often are the negotiations leading up to that “conspiratorial”? Again, very hard to know.
in terms of things that are as clearly some kind of criminal or high-stakes government conspiracy, I think FTX stands among the biggest ones
This genuinely seems bizarre to me. A quick quote I found from googling:
The United Nations estimated in a 2011 report that worldwide proceeds from drug trafficking and other transnational organized crime were equivalent to 1.5 percent of global GDP, or $870 billion in 2009.
That’s something like 100 FTXs per year; we mostly just don’t see them. Basically I think that you’re conflating legibility with impact. I agree FTX is one of the most legible ways in which people were defrauded this century; I also think it’s a tiny blip on the scale of the world as a whole. (Of course, that doesn’t make it okay by any means; it was clearly a big fuck-up, there’s a lot we can and should learn from it, and a lot of people who were hurt.)
Does sure seem like there are definitional issues here. I do agree that drug trade and similar things bring the economic effects of conspiracy-type things up a lot, and I hadn’t considered those, and agree that if you count things in that reference class FTX is a tiny blip.
I think given that, I basically agree with you that FTX isn’t that close to one of the biggest conspiracies of the last decade. I do think it’s at the top of frauds in the last decade, though that’s a narrower category.
I do think it’s at the top of frauds in the last decade, though that’s a narrower category.
Nikola went from a peak market cap of $66B to ~$1B today, vs. FTX which went from ~$32B to [some unknown but non-negative number].
I also think the Forex scandal counts as bigger (as one reference point, banks paid >$10B in fines), although I’m not exactly sure how one should define the “size” of fraud.[1]
I wouldn’t be surprised if there’s some precise category in which FTX is the top, but my guess is that you have to define that category fairly precisely.
Wikipedia says “the monetary losses caused by manipulation of the forex market were estimated to represent $11.5 billion per year for Britain’s 20.7 million pension holders alone” which, if anywhere close to true, would make this way bigger than FTX, but I think the methodology behind that number is just guessing that market manipulation made foreign-exchange x% less efficient, and then multiplying through by x%, which isn’t a terrible methodology but also isn’t super rigorous.
I wasn’t intending to say “the literal biggest”, though I think it’s a decent candidate for the literal biggest. Depending on your definitions I agree things like Nikola or Forex could come out on top. I think it’s hard to define things in a way so that it isn’t in the top 5.
There are few programs even within the U.S. government that are larger than $10B without very extensive reporting requirements and where it’s quite hard for them to be conspiratorial in the relevant ways (they might be ineffective, or the result of various bad equilibria, but I don’t think you regularly get conspiracies at this scale).
To calibrate people here, the total budget of the NSA appears to be just around $10B/yr, making it so that even if you classify the whole thing as a conspiracy, at least in terms of expenditure it’s still roughly the size of the FTX fraud (though I more like 10x larger if you count it over the whole last decade) .
To be clear, there is all kinds of stuff going on in the world that is bad, but in terms of things that are as clearly some kind of criminal or high-stakes government conspiracy, I think FTX stands among the biggest ones (though I totally agree there are probably other ones, though by nature its hard for me to say how many).
(In any case, I changed the word “conspiracy” here to “fraud” which I think gets the same point across, and my guess is we all agree that FTX is among the biggest frauds of the last decade)
There are over 100 companies globally with a market cap of more than 100 billion. If we’re indexing on the $10 billion figure, these companies could have a bigger financial impact by doing “conspiracy-type” things that swung their value by <10%. How many of them have actually done that? No idea, but “dozens” doesn’t seem implausible (especially when we note that many of them are based in authoritarian countries).
Re NSA: measuring the impact of the NSA in terms of inputs is misleading. The problem is that they’re doing very highly-leveraged things like inserting backdoors into software, etc. That’s true of politics more generally. It’s very easy for politicians to insert clauses into bills that have >$10 billion of impact. How often are the negotiations leading up to that “conspiratorial”? Again, very hard to know.
This genuinely seems bizarre to me. A quick quote I found from googling:
That’s something like 100 FTXs per year; we mostly just don’t see them. Basically I think that you’re conflating legibility with impact. I agree FTX is one of the most legible ways in which people were defrauded this century; I also think it’s a tiny blip on the scale of the world as a whole. (Of course, that doesn’t make it okay by any means; it was clearly a big fuck-up, there’s a lot we can and should learn from it, and a lot of people who were hurt.)
Does sure seem like there are definitional issues here. I do agree that drug trade and similar things bring the economic effects of conspiracy-type things up a lot, and I hadn’t considered those, and agree that if you count things in that reference class FTX is a tiny blip.
I think given that, I basically agree with you that FTX isn’t that close to one of the biggest conspiracies of the last decade. I do think it’s at the top of frauds in the last decade, though that’s a narrower category.
Nikola went from a peak market cap of $66B to ~$1B today, vs. FTX which went from ~$32B to [some unknown but non-negative number].
I also think the Forex scandal counts as bigger (as one reference point, banks paid >$10B in fines), although I’m not exactly sure how one should define the “size” of fraud.[1]
I wouldn’t be surprised if there’s some precise category in which FTX is the top, but my guess is that you have to define that category fairly precisely.
Wikipedia says “the monetary losses caused by manipulation of the forex market were estimated to represent $11.5 billion per year for Britain’s 20.7 million pension holders alone” which, if anywhere close to true, would make this way bigger than FTX, but I think the methodology behind that number is just guessing that market manipulation made foreign-exchange x% less efficient, and then multiplying through by x%, which isn’t a terrible methodology but also isn’t super rigorous.
I wasn’t intending to say “the literal biggest”, though I think it’s a decent candidate for the literal biggest. Depending on your definitions I agree things like Nikola or Forex could come out on top. I think it’s hard to define things in a way so that it isn’t in the top 5.