Review

Comment

Morality

23 November 2023

7 min read

Sam Bankman-Fried: doing the math on morality

The calculated character and philanthropy of crypto-criminal Sam Bankman-Fried is analysed by Krish Kandiah, who finds it doesn’t to add up.

Krish Kandiah

Krish is a social entrepreneur partnering across civil society, faith communities, government and philanthropy. He founded The Sanctuary Foundation.

Sam Bankman-Fried at a crypto-conference, 2021.

Cointelegraph, CC BY 3.0, via Wikimedia Commons.

Going Infinite, Michael Lewis’ biography of Sam Bankman-Fried, the world’s youngest self-made billionaire is quite the compelling read.

For a start Lewis has an incredible ability to explain complex economic and business scenarios in a way that is not only accessible, but also gripping. It is no wonder his previous books have been turned into Hollywood blockbusters.

Lewis also has a knack for finding the humanity in almost any given situation. Whether he is writing about the system for picking a world-beating baseball team, the global economic crisis or, in this case, the rise and fall of a cryptocurrency exchange, he delves deep into the characters at the heart of the stories, exposing their strengths and weaknesses, their struggles and values.

The publication of Going Infinite last month also coincided with Bankman-Fried’s real time court case, ending in a guilty verdict for, in the words of US attorney Damian Williams, “one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the king of crypto.”

This fraud centred on Sam Bankman-Fried’s company FTX, a cryptocurrency exchange. It emerged as one of the largest in the world with billions in deposits. All helping Bankman-Fried, aged just 29, to become recognised by Forbes magazine as the 41st richest American.

For all Bankman-Fried’s (and his friends’) talk of altruism, they weren’t very good at being nice to each other.

My personal interest in the man behind the fraud was shaped by three things. Firstly, as an adoptive and foster parent of two children who are on the autistic spectrum, I was interested in what Lewis would say about the common speculation that Bankman-Fried is also on the autistic spectrum.

I was also intrigued by Bankman-Fried’s philosophical approach to philanthropy and how Lewis would present the problems with the movement known as Effective Altruism.

Finally, I was interested in just to what extent Bankman-Fried’s commitment to mathematical algorithms overshadowed his moral awareness, given that it may well ultimately result in a sentence of 100 years behind bars.

Autism

Lewis invites us into as much of the inner world of Bankman-Fried as he can. He writes about his loneliness in childhood and his struggles with social conventions, for example. One particularly powerful moment is when we are allowed to eavesdrop on a video call with Vogue editor Anna Wintour. Bankman-Fried cannot do the call without simultaneously playing a video game. He doesn’t want to see Ms Wintour’s face while she is speaking and only looks at her when he is speaking.

While Lewis readily points to traits that are commonly associated with people on the autistic spectrum – Bankman-Fried’s struggle to comply with social norms and difficulties understanding facial expressions, for example – he avoids using the term “autism”.

It seems that Bankman-Fried himself is aware of his neurodivergent traits and is not afraid to talk about the way they impact his emotional and existential intelligence.

At one point he writes to his girlfriend:

“I don't feel happiness. What's the point in dating someone who you physically can't make happy?"

He went on to say:

“In a lot of ways I don’t really have a soul”

I found statements like these hard to read, but insightful. As a culture we are growing in our understanding and appreciation of a range of areas of diversity, however this has yet to be robustly applied to enable both widespread social acceptance and self-acceptance. The fact that Lewis chooses not to use the term autism may be a symptom of this.

Altruism

Sam Bankman-Fried was a very visible member of the Effective Altruism (EA) movement. EA is a fascinating philosophical approach to philanthropy which challenges individuals to consider their lives in terms of maximising their resources for the benefit of the world. Bankman-Fried’s answer to the question “How can I do most good with my life?” was to plan to earn a very large sum of money, ideally an infinite sum of money, that could then be used to help solve huge global issues such as the threat of nuclear war or another global pandemic.

There are many criticisms of the EA movement, and, Lewis explores several of them during the course of the book. Perhaps most obviously, for all Bankman-Fried’s (and his friends’) talk of altruism, they weren’t very good at being nice to each other. In fact, there was a major falling out between the effective altruists at his first company Alameda Research where half of the employees left because of his leadership style. Charity, it seems, did not begin at home.
It is also unclear how much money Bankman-Fried actually gave away to philanthropic causes. And it is alleged that just a month after FTX collapsed, the company even began trying to claw back the charitable donations it made. According to direct messages on X with journalist Kelsey Piper, Bankman-Fried agreed his ethically-driven approach was "mostly a front".

"Some of this decade's greatest heroes will never be known," he wrote to Piper, "and some of its most beloved people are basically shams."

The quest to do good in the world seemed to have become more like a gambling obsession with Bankman-Fried, a game in which the ends justified the means.

They say the road to hell is paved with good intentions. It is uncertain whether Bankman-Fried had good intentions at all or whether the lure of billions of dollars became so irresistible that whatever virtue once existed was sacrificed to vice.

There was another dark side to Bankman-Fried’s EA philosophy. He seemed to be fascinated by the question of just how far he could go in his calculations of trade-offs and risks in the supposed cause of saving the future of humanity? What was the highest risk he would take? What boundaries would he cross for financial gain? What would need to be sacrificed on the way? The quest to do good in the world seemed to have become more like a gambling obsession with Bankman-Fried, a game in which the ends justified the means.

Automatism

Sam Bankman-Fried was not afraid to be honest about his struggles to process and express empathy in socially acceptable ways. He once said:

"There's a pretty decent argument that my empathy is fake, my feelings are fake, my facial reactions are fake.”

However, what he seemed to struggle with in empathy, he apparently tried to make up for in logic. The following example is helpful.

Lewis records that Bankman-Fried saw Donald Trump as an “existential risk” to democracy and good governance and decided the best way to remove the threat was to offer to pay him not to run for president—an idea Trump was reportedly open to.

“His team had somehow created a back channel into the Trump operation and returned with the not terribly Earth-shattering news that Donald Trump might indeed have his price: $5bn. Or so Sam was told by his team,” Lewis writes.

I have some admiration for Bankman-Fried’s out-of-the-box thinking. He was speaking Trump’s language. He was trying to save the world. He was trying to solve a problem. Logically it was sound. But his $5,000,000,000 calculation was fundamentally flawed. It took no account of democratic values, of the consequences of feeding an ‘existential threat’ billions of dollars, or the illegality of bribery and corruption on that scale.

The same miscalculation haunts the EA movement. While earning infinite amounts of money to save the world or prevent the climate emergency sounds logical, it fails to factor in the dark side of humanity: greed, lust, pride or gluttony, or whichever vice stopped Bankman-Fried from giving away his promised sizeable sum of money and led him rather to committing one of the largest frauds in history. The tech-bro altruistic movement also doesn’t factor in the bright side of humanity: compassion, humility, generosity, sacrifice. It doesn’t account for the human things that keep us going as we pursue justice - proximity to the people we are serving, faith or beauty.

The verdict against Bankman-Fried shows us that hard logic, like lofty ideals, is not enough to protect us from the bad we might do or propel us unswervingly towards the good we should do. The equations are flawed. We are more than machines. We are not social or biological robots. Our emotions and reactions can never be completely predictable or automatic because we are human beings, each of us with our unique strengths and weaknesses.

Ultimately, this is what I liked about Lewis’ book – his portrayal of Sam Bankman-Fried not in terms of how much money he made, or how many years he will spend behind bars, not as Crypto-King or Lord of Frauds, but as a uniquely talented and flawed individual who wrestles with some of the biggest existential paradoxes, and who is still, by the way, only 31 years old.

Explainer

Comment

Economics

Leading

Politics

Wisdom

8 May 2025

5 min read

When someone makes a claim, ask yourself these questions

How stories, statistics, and studies exploit our biases.

Alex Edmans

Alex is a professor of finance, and an expert in the use and misuse of data and evidence.

A member of an audience makes a point while gesturing.

On the other hand...

Antenna on Unsplash.

“Check the facts.”

“Examine the evidence.”

“Correlation is not causation.”

We’ve heard these phrases enough times that they should be in our DNA. If true, misinformation would never get out of the starting block. But countless examples abound of misinformation spreading like wildfire.

This is because our internal, often subconscious, biases cause us to accept incorrect statements at face value. Nobel Laureate Daniel Kahneman refers to our rational, slow thought process – which has mastered the above three phrases – as System 2, and our impulsive, fast thought process – distorted by our biases – as System 1. In the cold light of day, we know that we shouldn’t take claims at face value, but when our System 1 is in overdrive, the red mist of anger clouds our vision.

Confirmation bias

One culprit is confirmation bias – the temptation to accept evidence uncritically if it confirms what we’d like to be true, and to reject a claim out of hand if it clashes with our worldview. Importantly, these biases can be subtle; they’re not limited to topics such as immigration or gun control where emotions run high. It’s widely claimed that breastfeeding increases child IQ, even though correlation is not causation because parental factors drive both. But, because many of us would trust natural breastmilk over the artificial formula of a giant corporation, we lap this claim up.

Confirmation bias is hard to shake. In a study, three neuroscientists took students with liberal political views and hooked them up to a functional magnetic resonance imaging scanner. The researchers read out statements the participants previously said they agreed with, then gave contradictory evidence and measured the students’ brain activity. There was no effect when non-political claims were challenged, but countering political positions triggered their amygdala. That’s the same part of the brain that’s activated when a tiger attacks you, inducing a ‘fight-or-flight’ response. The amygdala drives our System 1, and drowns out the prefrontal cortex which operates our System 2.

Confirmation bias looms large for issues where we have a pre-existing opinion. But for many topics, we have no prior view. If there’s nothing to confirm, there’s no confirmation bias, so we’d hope we can approach these issues with a clear head.

Black-and-white thinking

Unfortunately, another bias can kick in: black-and-white thinking. This bias means that we view the world in binary terms. Something is either always good or always bad, with no shades of grey.

To pen a bestseller, Atkins didn’t need to be right. He just needed to be extreme.

The bestselling weight-loss book in history, Dr Atkins’ New Diet Revolution, benefited from this bias. Before Atkins, people may not have had strong views on whether carbs were good or bad. But as long as they think it has to be one or the other, with no middle ground, they’ll latch onto a one-way recommendation. That’s what the Atkins diet did. It had one rule: Avoid all carbs. Not just refined sugar, not just simple carbs, but all carbs. You can decide whether to eat something by looking at the “Carbohydrate” line on the nutrition label, without worrying whether the carbs are complex or simple, natural or processed. This simple rule played into black-and-white thinking and made it easy to follow.

To pen a bestseller, Atkins didn’t need to be right. He just needed to be extreme.

Overcoming Our biases

So, what do we do about it? The first step is to recognize our own biases. If a statement sparks our emotions and we’re raring to share or trash it, or if it’s extreme and gives a one-size-fit-all prescription, we need to proceed with caution.

The second step is to ask questions, particularly if it’s a claim we’re eager to accept. One is to “consider the opposite”. If a study had reached the opposite conclusion, what holes would you poke in it? Then, ask yourself whether these concerns still apply even though it gives you the results you want.

Take the plethora of studies claiming that sustainability improves company performance. What if a paper had found that sustainability worsens performance? Sustainability supporters would throw up a host of objections. First, how did the researchers actually measure sustainability? Was it a company’s sustainability claims rather than its actual delivery? Second, how large a sample did they analyse? If it was a handful of firms over just one year, the underperformance could be due to randomness; there’s not enough data to draw strong conclusions. Third, is it causation or just correlation? Perhaps high sustainability doesn’t cause low performance, but something else, such as heavy regulation, drives both. Now that you’ve opened your eyes to potential problems, ask yourselves if they plague the study you’re eager to trumpet.

A second question is to “consider the authors”. Think about who wrote the study and what their incentives are to make the claim that they did. Many reports are produced by organizations whose goal is advocacy rather than scientific inquiry. Ask “would the authors have published the paper if it had found the opposite result?” — if not, they may have cherry-picked their data or methodology.

In addition to bias, another key attribute is the authors’ expertise in conducting scientific research. Leading CEOs and investors have substantial experience, and there’s nobody more qualified to write an account of the companies they’ve run or the investments they’ve made. However, some move beyond telling war stories to proclaiming a universal set of rules for success – but without scientific research we don’t know whether these principles work in general. A simple question is “If the same study was written by the same authors, with the same credentials, but found the opposite results, would you still believe it?”

Today, anyone can make a claim, start a conspiracy theory or post a statistic. If people want it to be true it will go viral. But we have the tools to combat it. We know how to show discernment, ask questions and conduct due diligence if we don’t like a finding. The trick is to tame our biases and exercise the same scrutiny when we see something we’re raring to accept.

This article is adapted from May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – and What We Can Do About It
(Penguin Random House, 2024)
Reproduced by kind permission of the author.

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