Sam Bankman-Fried cast a pall over effective altruism on allegations he hoodwinked investors with do-gooder rhetoric and do-bad deeds.
Bankman-Fried put the movement on the map as the billionaire math whiz who was alleged by prosecutors to have commingled customer funds first to get rich and later to keep his crypto company, FTX, afloat. The 31-year-old former Wall Street trader, who publicly promoted effective altruism, is on trial for fraud and money laundering. (Presentation of his defense, with or without his own testimony, could start as soon as Oct. 26.)
The idealistic philosophy, which has its roots in 19th-century utilitarianism and helped birth impact and ESG investing, is now considered a scam by some. Recent articles have said effective altruism does more harm than good, isn’t altruistic or effective, and is even “sexist.”
Too bad. The tenets of effective altruism align with American economic and social values more so than with those of most other countries. The movement seeks to help others as much as possible, which naturally leads to charity and self-sacrifice.
Here’s how effective altruism — often referred to by adherents as “EA” — and the U.S. are ideal matches.
Charity and giving are ingrained in U.S. society.
French political philosopher Alexis de Tocqueville observed in “Democracy in America” (1835) that “[A]mericans of all ages, all conditions, all minds constantly unite.” They band together to solve problems because there is no aristocracy to do the work for them, as there is in Europe, the writer explained.
Americans collectively gave away $499 billion in 2022, equivalent to 1.9% of gross domestic product, according to Giving USA. What’s more, the U.S. has been deemed the most generous developed country for years, the Charities Aid Foundation has said in its annual reports.
EA is a grassroots movement that works outside government.
The government’s myriad revenue-distribution schemes are an affront to a large portion of the conservative wing of the U.S. electorate. Because effective altruists use reason and evidence as a basis for their decision making, money tends to flow to charities with low overhead and little bureaucracy. For example, an EA favorite, the Against Malaria Foundation, uses 100% of public donations to buy mosquito nets, which cost $2 apiece. According to research, bed nets prevented 450 million cases of the deadly disease between 2000 and 2015.
Billionaires are, in effect, proponents of effective altruism – often without knowing it.
The Giving Pledge, for instance, is a charitable campaign founded by Bill Gates and Warren Buffett that seeks to persuade the wealthy to donate at least half of their money to philanthropy during their life or upon their death. So far, more than $600 billion has been earmarked for philanthropy.
Still, effective altruists don’t consider the Gates & Buffett cohort as adherents to the movement because they don’t target effective charities – those that seek to save the most lives or improve the quality of life for the greatest number of people. The sole billionaire on the Giving Pledge list who hews to EA principles is Dustin Moskovitz, a co-founder of Facebook. His Good Ventures investment firm entered a partnership with charity evaluator GiveWell, which in turn led to a spinoff called Open Philanthropy. That group counts 10 focus areas, including ways to reduce potential harm caused by artificial intelligence, considered by many EA adherents as a “global catastrophic risk,” along with nuclear war and climate change.
EA serves as a springboard to the ’virtue’ stage of the wealth-power-virtue pyramid.
This holier-than-thou trinity is quintessentially a product of the U.S. The wealth-to-power transition usually involves a businessperson. After he – and it’s most often a man – amasses wealth, the populace assumes he could steer a state or the whole country using skills learned in cutthroat capitalism. Think of Jamie Dimon, who runs J.P. Morgan Chase & Co.: The CEO is regularly asked about U.S. affairs including monetary and fiscal policy, the energy transition — even Chinese and Russian politics. He’s also been asked many times if he’d consider running for president. (Donald Trump had faced the same inquiries since the 1980s.) Others in this phase: Ray Dalio, founder of hedge fund firm Bridgewater Associates; Jeffrey Gundlach, founder of investment manager DoubleLine Capital; and, increasingly, Elon Musk, co-founder of Tesla and owner of X, formerly Twitter.
The power-to-virtue transition is akin to attaining sainthood. Once wealth and power are acquired, virtue is the cleansing process that wipes away real or perceived sin associated with accumulating riches. (“Sin” in the sense that serious wealth is often derived from business strategies that frequently cause societal or environmental damage, or via generational bequeathment, which is unfair and mostly un-American.)
Bill Gates and Michael Bloomberg, both billionaires, are in this camp. Gates has owned large stakes in companies that produce nuclear power, clean polluted water and conduct biotech research. He speaks widely throughout the world on topics ranging from pandemics to climate change. Gates co-founded the Bill and Melinda Gates Foundation, the world’s largest private philanthropy. Bloomberg made his money as co-founder of Bloomberg Inc. and was a four-term New York City mayor. He now oversees one of the world’s biggest philanthropies and is the chair of the influential Task Force on Climate-related Financial Disclosures (TCFD).
Effective altruism instills religious-adjacent values in an increasingly secular U.S. society.
Many of EA’s tenets align with those of major religions. That is ultimately good for the U.S., which requires a temperance of individualism. Tithing is common in the EA community.
EA’s ethical core, propelled by modern philosopher Peter Singer, naturally fills the void left by the emptying out of pews across the U.S. The main mission of effective altruism reflects Jesus’ most basic pronouncement: “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”
Effective altruism posits that all humans are equal and have the same worth.
That’s why much of its effort is often focused on alleviating poverty in developing regions including Africa — rather than, say, funding disease cure R&D.
The idea makes perfect sense to Americans. And it may well do so because the Declaration of Independence and the Constitution espouse the same values. The former states that “[w]e hold these truths to be self-evident, that all men are created equal ….” The Fourteenth Amendment says that “[n]o state shall … deny to any person within its jurisdiction the equal protection of the laws.”