FTX and the myth of billionaire altruism
The collapse of crypto wunderkind Sam Bankman-Fried (SBF) and Elon Musk’s anarchic management of Twitter are two stories that have had ownership over a lot of headlines recently. One is being described as a danger to society and of our treasured “democracy” for leaning into free speech absolutism, while the other is described as a case of a smart but misguided young man getting so carried away with altruism that he created a Ponzi scheme.
The story surrounding exactly how SBF and his polyamorous cohort of crypto-kiddies were able to con so many of the rich, famous and powerful is one far too convoluted to tell in this column. Suffice it to say, the malfeasance behind FTX appears awfully similar to the construct around Theranos and Elizabeth Holmes, who was recently sentenced to 11 years in federal prison for fraud.
Both SBF and Holmes were the belles of the ball not only with investors, but with government players and media personalities, effectively marketing themselves as geniuses who were destined to not only change the world but make it a better place. The defining difference between the two was how much more power and influence SBF was able to wield with the Fugazzi fortune he had amassed of other people’s money.
Quite a bit of that money filled the coffers of not only President Joe Biden, who SBF was the second largest donor for, but of the Democratic Party at large, donating millions of dollars across the 2020 and 2022 election cycles. As Vox cofounder Matthew Yglesias admitted in his analysis of FTX’s collapse, it is “plausible” that without his generosity “Trump would still be in the White House.”
Troublingly, SBF admitted in a private Twitter discussion with a Vox reporter that “a lot” of the “effective altruism” he espoused was nothing more than a façade to convince the woke that he was a good guy who could be trusted.
Musk is making very much the same pitch with his reformation of Twitter, promising a more diverse and open venue for speech than it had been under the old regime. Based on the feedback, a lot of people including his own employees aren’t buying it. Make no mistake, anyone holding Musk aloft as some sort of hero for buying a website is deluding themselves, and everyone including supporters of free speech should adopt some measured skepticism.
Elon Musk parlayed his inherited wealth into being on the ground floor of eCommerce when he became one of the founders of what would become PayPal. The “PayPal” mafia included the likes of Peter Thiel and Reid Hoffman along with Musk and many others who would go on to invest in or jumpstart other ventures you have heard of, like Facebook, YouTube, Yelp, and Reddit.
Collectively, this group of futurists, engineers, and moneyed dreamers have formed the foundations of the modern Internet/Metaverse. Over the last 20 years their companies, platforms, and services have irrevocably altered how we shop, date, relate, think and feel as they grab hold of the reins of society for fun and profit.
Famously, Thiel was a significant early investor in Facebook, which coincided with a startup of his own called Palantir. One is the most ubiquitous social media platform on the planet with billions of users and the other is a big data analysis firm named after a scrying orb from “The Lord of the Rings.” “Big Brother” wasn’t foisted upon us, it was something we all blindly signed up for because our friends and family told us how great it would be if we did.
When someone like Elon Musk or Thiel invests in or purchases something like Facebook or Twitter, it is because they recognize the value in having control over the DeFacto town square of the 21st century and the power that comes from being able to know everything there is to know about as many people as possible.
This is why Musk’s purchase of Twitter has caused so much unrest amongst the “craptisvist” class of Twitter users who have grown quite used to being able to quickly silence or remove dissenting voices on the platform. They know what they’ve lost with the platform taking a softer approach to moderation, and currently they’re raging like a toddler whose parents have taken away their favorite toy.
Musk has gone a step further recently, reinstating a number of public figures exiled from their servers like The Babylon Bee, Jordan Peterson, and Kanye West. Now that he’s let the Great Orange Satan himself back on the platform, the real wailing has started.
While the terminally online activist set of the Democratic party gnashes their teeth and act like they’re jumping ship to Mastodon or Tribl, they’re really just mad that the current billionaire owner isn’t as censorious as the previous one. That said, SBF’s deceptions lay bare an uncomfortable truth about how the rest of humanity relates with billionaires and those that rub elbows with them.
One can be free to believe these people when they say they have our best interests in mind when they move mountains and figuratively flip the globe on its access, but there are consequences for belief when people can inflict such wonders and horrors on so many, but be accountable to so few.
I’m not saying we all should “eat the rich,” just that it’s not healthy or wise for us to have para-social relationships with them. We’re not simply the customers for these people anymore, we are the product, and we might as well be honest with ourselves while we’re led to the slaughter.