April 4, 2024
"To get yourself into SBF’s mindset, consider whether you would play the following godlike game for real."
"In this game, there’s a 51 percent chance that you create another Earth but also a 49 percent chance that you destroy all human life. If you’re using expected value thinking, and if you think that human life has positive value, you must play this game. SBF said he would play this game. And he said he would keep playing it, double or nothing, over and over again. With expected value thinking, the slightly higher chance of creating more value requires endlessly risking the annihilation of humanity.
Expected value is why SBF constantly played video games, even while Zooming with investors. He calculated that he could add the pleasure of the game to the value of the calls. The key to understanding SBF is that he plays people like they’re games too. With his long-suffering EA girlfriend, her expected value went up when he wanted sex and then down right afterward.... This is the perfection of the EA philosophy: Maximize the value of the use of any given resource. And aren’t other people resources that can produce value?"
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I don't think I've ever seen so many people torture themselves to come up with "reasons" for what ends up being nothing more than a very common scam, albeit on an intergalactic scale.
If that’s really how he thinks, then he shouldn’t be in a mere jail. A bit of cannibalism is all that stands between SBF and Hannibal Lector.
Autistic people are going to be autistic. Don't expect clear reasoning from those with mental illnesses.
There's a grain of truth in the claim that games lead to unrealistic thinking -- on the order of believing that simulated skills equate to real world abilities. They do not. This ranges from wannabe pro football players, race car drivers, and pro golfers to pretend military combat. While a game can indeed simulate some aspects of the skills required, they do not address physical fitness, endurance, getting hot, getting cold, having a sort spot, the incapacitating shock of an injury, or any other things that must be managed in the real world.
With the Robinhood gaming stonk investors of today, genuine suffering is required to teach proportionality and that necessity is the mother of invention.
Sounds a lot like narcissism, with an unhealthy side of solipsism.
SBF is not very good at math and risk calculation. He’s in the Slammer for the next 25 years.
Its merits aside, the author relies on an overly simplistic argument. The utility of creating another Earth does not equal (indeed it is lower than) the disutility of losing your only Earth. (Just as the utility of getting a second chocolate bar is lower than the disutility of losing your only chocolate bar.)
The people who ran the port of Baltimore, whether formally or not, calculated the expected value of installing barriers around the piers of the Francis Scott Keyes bridge. They lost. At some point the consequences of being wrong are so high that you have to value the potential negative consequences as essentially infinite. So you either do it right, no matter the cost, or you don’t do it at all.
Hubris. This quote in the article from Tyler Cowen:
“Hardly anyone associated with Future Fund saw the existential risk to … the Future Fund, even though they were as close to it as one could possibly be. I am thus skeptical about their ability to predict existential risk more generally, and for systems that are far more complex and also far more distant. And, it turns out, many of the real sources of existential risk boil down to hubris and human frailty.”
He calculated that he could add the pleasure of the game to the value of the calls.
Jeffrey Toobin made a similar calculation.
Bankman didn't create de-personalization. This has been going on in the general workplace for decades. In the old days, you had Personnel = persons = people, these people supervised employees, who were also people. Then, they weren't people, they became resources = Human Resources.
Same thing in Health Care, in the old days it was a Doctor/Patient/Cure relationship, but then that was de-personalized/de-humanized to Provider/Case/Management.
People are reduced to Cases, to be managed, and Resources bred to provide services. You can't really blame Bankman for this.
It's called gamblers' ruin and has always been given in philosophy 101 to show that people don't use expected value.
Or a random walk in one dimension with an absorbing wall somewhere.
and yet..
His parents were "smart!" that is: college professors
Rich people trusted HIM with BILLIONS
He Never combed his hair
He isn't the weird one.. The Weird ones are the ones that gave him the money
sounds like somebody needs a poker course on bankroll management
He Never combed his hair
I don’t know what it is with lefties and guys what don’t comb their hair. This guy, Tsarnaev…they equate them all with Einstein or something…
This is the perfection of the EA philosophy: "I'm not a sociopathic piece of shit. I'm a philosopher!"
That’s a Kamala type word salad when just calling him a sociopath would have sufficed
Things like expected value should not be used to determine actions. They are a tool to be used to inform better decisions by people.
Sounds like plan old fashioned narcissism...
Yeah, no. A confidence game is not a philosophy
The roots of this lie in utilitarian moral philosophy. The inherent flaws always seem to lead to very bad consequences such as we see with SBF. The great benefit of utilitarianism has been to offer superficially plausible justifications for what you want to do.
Effective Altrism is an attempt to hide Narcissism by suggesting you are acting on someone else’s benefit.
“The Deaths of Effective Altruism/Sam Bankman-Fried is finally facing punishment. Let’s also put his ruinous philosophy on trial" (Wired).
Let’s not but let’s say we did!
I have repeatedly gotten in arguments over at MarginalRevolution.com and Astral Codex Ten over one simple supposition, that "the most effective altruism you can do is the altruism you do yourself."
For some reason, a significant cohort of commenters on those forums hate that concept. I have concluded they hate that concept because the altruism/charity industrial complex hates the idea of being unable to siphon as much as 90% of charity donations to administrative purposes, and that the people hating that concept are somehow benefitting from this heinous shit.
Feel free to try it out elsewhere. That "the most effective altruism you can do is the altruism you do yourself" and post results. It's amazing how mad that makes them.
He’s in the Slammer for the next 25 years.
@Dave Begley, and it should have been twice that.
Baloney.
SBF apparently was raised by his parents to believe that he was "extra-special", above the common expectations and civilities of "don't lie" and "don't cheat" and "don't steal $1+ billion".
SBF got a remarkably light sentence for the magnitude of his financial fraud and outright theft.
Now will Fed compel politicians and political action committees who received SBF-funded contributions to return that cash? Silly me, of course not. Laws are for Republicans and Normies, not Palo Alto progressive millionaire Democrats.
His parents should be arrested, convicted, and imprisoned too, for aiding and abetting financial fraud crimes, for receiving stolen monies, for lousy parenting.
Dave Begely points out... SBF wasn't good at math
And he said he would keep playing it, double or nothing, over and over again.
let's ASSUME, that you have a just a 51% chance..
How many times, double or nothing, over and over again; will it take until you are BROKE?
the problem with computer games is: you respawn. Death doesn't mean Anything in a computer game;
you just start over.
They should let SBF play A COOL GAME, with the odds of Winning 5 out of 6..
It's called russian roulette. We can give him a gun with one round in a chamber, and let him point it at his head, and "keep playing it", "over and over again" until conclusion
Life is NOT like a video game.. You can't just respawn
Someone give him a revolver with a bullet in it. Every time he spins the cylinder, points the gun at his head and pulls the trigger he gets a year off his sentence. Would he pull the trigger even once?
SBF's parents got millions from him. Maybe they groomed him in EA with the desire of making themselves rich.
Celebrate mental illness!
This reminds me of a couple of posts recently on Arnold Kling's SubStack about whether probability is 'real'. Assigning a number you pulled out of your nethers to some event or action doesn't make the subsequent reasoning any more scientific or rational than if you reasoned non-empirically, and the mathematical exuberance of doing calculations to n digits of accuracy with those figures obfuscates their origins.
What "Dan from Madison" said to begin the comments.
Bob Boyd for the win!
No doubt he acted unethically, but I do find it odd that an entire industry based on removing the state from money, law and finance then begs the same state to recover their money and prosecute the man who took it. Caveat emptor and all that.
thank you MartyH, you said that MUCH clearer than i did.
This excerpt seems to define expected value thinking (whatever that is) as choosing the option with the higher probability. That makes no sense. Alternative choices have different benefits or costs. There is more to a decision than simply looking at "average" outcomes, especially if making the decision repeatedly.
I choose the option of not bothering to read this article.
>Dave Begley said...
He’s in the Slammer for the next 25 years.<
I strongly doubt that. Out long before then.
He has a lot of Democrat friends whom he helped out. Yeah, they can drop him now that he's of no use but I'll bet some of that beholdingness lingers. Hell, I wouldn't be surprised to see Biden - or one of his puppeteers - pardon or commute him. On some mental illness/compassionate grounds or similar subterfuge. His parents have significant money and legal Dem influence, and be assured they aren't sitting back.
I also think that MartyH has said it best.
"He calculated that he could add the pleasure of the game to the value of the calls."
Expected value thinking might be something someone can do dispassionately, as a sober calculation of risk vs. reward with the thinnest of margins. Calculating the ethics of putting civilians at risk in order to have a chance at winning a key battle, for example.
But it doesn't have a lot of explanatory power for SBF's shenanigans. He's much better explained by an appeal to gambling addiction and learned sociopathy. Whatever expected value "calculations" he might have doing were of the cargo cult variety: Going through the outward motions of a thing, rather than understanding and building the system that makes the thing work.
A secular god through the act of redistributive change. Let us bray.
It’s not gambler’s ruin per se because the expected value in the 49/51 game is positive. For each play, the game has a 49% chance of 0 (zero) and a 51% chance of 2, so the expected value for one play is 1.02. If you keep playing, the expected value grows. But what a downside if you lose. SBF’s calculation to repeatedly play the 49/51 game comes directly from this assumption:
“COWEN: Should a Benthamite be risk-neutral with regard to social welfare?
BANKMAN-FRIED: Yes, that I feel very strongly about.”
The 25 years in jail that SBF lost isn’t quite a zero outcome, he’ll be 58 when he is released, younger if he gets time off for good behavior. Does SBF still believe in risk-neutrality? Who knows but we can be sure he will tell the parole board that he does not.
The bigger problem with the 49/51 game is who has the right to take a 49 percent chance of destroying all human life. That’s pretty close to the ultimate moral hazard.
Sounds like his EA decision tree was more like "if A has a 51% chance of adding value to me and a 49% chance of doing something really negative to anyone other than me, do A over and over again."
I've been propounding on EA and its buddy New Atheism to my long-suffering husband for the past couple of days for some reason. Maybe I don't understand either one well enough but... both continue to seem to me to be no more than ways of rationalizing your actions. Religion can be used this way too, but when religious (and in particular Judeo-Christian) people do it, everyone calls them hypocrites.
The beauty of being a New Atheist Effective Altruist is that your claim that you do what you do in order to further Human Thriving™ is unfalsifiable, like a religious motivational claim, but also doesn't require you to do anything inconvenient like go to a meeting you don't want to attend, give of your surplus, or follow any rule the social utility of which you haven't independently derived. Much less seek forgiveness for and repent of any time that you fall short of a moral expectation that you didn't develop for yourself, by yourself.
I think I've commented before about an old friend who - like the stereotypical vegan bicyclist - couldn't shut up about how he was his own god. Not only was he tedious, but his personal situation (encompassing his appearance, his habits, his present lifestyle, and his future prospects) was such that all I could think of when he was holding forth about his godhead again was, "Really? This is the best you can manage?"
Yeah, right. Except that's all bullshit. Other than that, Yeah, right.
"The beauty of being a New Atheist Effective Altruist is that your claim that you do what you do in order to further Human Thriving™ is unfalsifiable, like a religious motivational claim, but also doesn't require you to do anything inconvenient like go to a meeting you don't want to attend, give of your surplus, or follow any rule the social utility of which you haven't independently derived. Much less seek forgiveness for and repent of any time that you fall short of a moral expectation that you didn't develop for yourself, by yourself."
"New Atheist Effective Altruism only works until you run out of other people’s charity."
- Margaret Thatcher, allegedly
What Leland said at 8:14.
Also goes by another name - Virtue signalling. Same phenomenon.
That and his crazy parents.
99% of altruism and charity are like recycling. You know it's not getting recycled. You know it's going to a landfill. You know and so do all of us that you're not willing to pay the ungodly premium to actually facilitate recycling in your community and that it's a massive money loser. You know that the concept of recycling makes you feel good and possibly keeps your status illusion or gain status with the other suburban cattle that like you are going through the daily humiliation ritual of washing your bottles and cans out to place them in the ridiculously colored overpriced container in front of your driveway. A container that will be taken 2 counties over and dumped in a landfill.
People do it because of a psychological need to believe that the world can be a better place and that the transparent silicate rock you call a bottle can transform itself into a useful implement in a holy battle against climate change...or whatever The View happens to be schlepping today.
People give money to charities the way they place their recycling out to be collected. It's a kind of prayer. You hope that your money will get to the people that need it, even though you know deep down you bought some African potentate another Mercedes. We say the prayer and feel good. Please don't make us dig any deeper, the Catalina Wine Mixer is tomorrow.
so ayn rand summation for philosophical connection holds
epistemoloy-> ethics-> politics
reason-> egoism-> individualism
mysticism-> altruism-> collectivism
We can give him a gun with one round in a chamber, and let him point it at his head, and "keep playing it", "over and over again" until conclusion
========
you could give him a gun and tell him there is one round in a chamber, need not necessarily load the gun
or
lay out 100 guns with 51 'loaded' and 49 'empty'
let him choose
"In this game, there’s a 51 percent chance that you create another Earth but also a 49 percent chance that you destroy all human life. If you’re using expected value thinking, and if you think that human life has positive value, you must play this game. SBF said he would play this game. And he said he would keep playing it, double or nothing, over and over again.“
After ten plays the chance of humanity surviving is around 1 in 1000. Would love to play poker with this guy.
Seems that Wenar is giving too much credit to con man's representations of his "philosophy."
And reading through the opinions of a few sentencing professionals it looks like he will do at least 15 years in a medium security lockup followed by a few years of a less restrictive assignment and possibly home confinement towards the end of that if he behaves himself.
I disagree that that is a "light" sentence although I see that many feel otherwise and would have preferred something involving a cross and a few nails.
Poor SBF, as his friends call him. Just made a few boo-boos. Didn't try to steal other people's money or commit fraud that cost billions. It was just a big whoopsie. His altruistic philosophy just wasn't what it should be.
Give me a fucking break.
Its amazing how the liberal/left bourgouise in the USA will scream hysterically about racism, trump, George Floyd antisemitism, Russia, etc. but when it comes to Bankmanfried stealing billions, Israel committing Genocide in gaza, Capital Hill police killing J6 protestors, Zelensky killing thousands with USA tax dollars, or .......They just don't care. Just can't rouse up any "outrage".
The USA power elite is morally degenerate. I don't even think they consider themselves Americans. And everyone else just blunders along.
Feel free to try it out elsewhere. That "the most effective altruism you can do is the altruism you do yourself" and post results. It's amazing how mad that makes them.
=================
is that something like this?
as Howard Roark architect tells Steven Mallory sculptor
[after giving him money AND freedom to do as he chooses]
> they want you to do 'X' I want you not to do 'X'
"People do it because of a psychological need to believe that the world can be a better place..."
I don't know about others, but I do it (put stuff, unwashed of course, in the ridiculously colored container) because it's there, I can't have it taken away and I'm paying for it so I might as well use it and leave space in the regular bland colored container for other crap I also want to have hauled away. I don't really care where they take it, as long as it's somewhere else. Makes my world a better place.
My husband was telling me he heard that SBF's company actually had enough assets to repay at least most of the money that his investors lost (and that they did so). If this is true, he thinks that the sentence is too heavy, since what SBF did essentially amounts to losing at a very risky game rather than intentionally defrauding, like Madoff.
I said that, if true, maybe the sentence is intended not necessarily to punish him for past crimes, but as one of the other purposes of incarceration: to keep him from doing it again for a long time. To protect society from him. Because it's obvious that he would do the same thing again, given the chance. He sounds like a true psychopath, utterly lacking in empathy for other people, and unable to learn from his moral errors, whatever that means, except through aversion, by being punished for them. I don't mean "psychopath" as a slur - I mean it as purely descriptive.
But would that mean that we are living in Minority Report?
Heinlein wrote a short story or novella, I can't remember which, called "Coventry" - a place of inescapable (well... until the inmates escaped) exile where people deemed antisocial were sent to live out their lives, doing whatever they had done to other people as much as they could get away with. Interesting story.
Heinlein had a lot to say about people who are intelligent, functional, and slightly spectrum-y in that they privilege rationality over empathy/fellow-feeling in many cases, but are still capable of love and self-sacrifice. He seemed to believe that these people are, or have the capacity to become, more social and humanistic than people who run entirely on feelings. (And given current events, can I gainsay him?) But he didn't offer much on psychopathy, except for the throwaway child-murderer character in Starship Troopers. I wonder what he would do with an SBF.
@Left Bank:
You are correct that the expected value for one play is 1.02. But the expected value aver the series of plays falls based on the number of times the game is played. Commit to play twice and it falls to 0.78 and by the 11th play the value is less than 1 percent. The paradox is that losing ends the game and winning does not (unless one walks away). So the game will eventually end in a total loss.
@Smilin' Jack: After ten plays the chance of humanity surviving is around 1 in 1000. Would love to play poker with this guy.
Keep this in mind every time you are tempted to buy a new mutual fund, ETF, or IPO stock. Wall Street's products have about the same success rate (flip a coin), but they market the winners hard and rapidly hide the losers. Fund managers with a lucky streak early in their careers often become lifelong profit skimmers per early luck, or they retire while they are ahead.
SBF had an early lucky streak followed by a revelation of fraud. Bernie Madoff had a long Ponzi scheme taken down by the 2008-2009 real estate bubble. There are many thousands of others like these. They'd likely suck at poker too, but gain CONfidence and take in money. "We are investors, not gamblers..."
Jamie said...
"My husband was telling me he heard that SBF's company actually had enough assets to repay at least most of the money that his investors lost (and that they did so)."
The money has not been repaid. It may be in the future because FTX’s crypto/bitcoin holdings have exploded in value in recent months. This fact should not affect his sentence. Someone else paying back the bank with money over which you now have no control after you robbed it doesn't wipe away the crime.
NYC Journolist, I think I get your point as being that if one wins the second play, one only wins 1 new world, for a total of 3, so there’s a 26.01% probability of that happening, which means the expected value is .7803, a losing proposition. But that’s not the way the game was described:
“COWEN: Okay, but let’s say there’s a game: 51 percent, you double the Earth out somewhere else; 49 percent, it all disappears. Would you play that game? And would you keep on playing that, double or nothing?“
Double or nothing means one would win 2 worlds on the second play, for a total of 4 worlds, an expected value of 1.0404.
If one plays 16 times, one would have a 0.0021% probability of having 65536 worlds, an expected value of 1.3728. But, one would also have a 99.9979% probability of wiping out humanity. Theoretically, it’s a good bet if one just looks at expected value, with no adjustment for the risk of wiping out humanity. If a casino offered odds like that on bets of a reasonable sum and one could play again if one loses, one would expect to make money playing that game all day.
Left Bank of the Charles said...
and one could play again if one loses
But, THAT is THE WHOLE POINT.. Once you've wiped all ALL LIFE.. You can't "respawn"
life doesn't work that way.
I'd recommend you get a pistol, and try it at home. See HOW MANY TIMES you can play russian roulette
spin the chambers each time.. it makes it More Fun!
Let me know if you can do it 10 times in a row
Jeezus.
Do not, under any circumstances, let these people anywhere near a nuclear facility.
Upside: Yuge
Risk of destroying the world: not out of the question, but significantly less than 1 percent.
I say "Go for it. Let's take that chance."
No rational human--certainly no nuclear engineer--would accept anything close to that level of risk.
(Of course this all seems like some continuing plan to paint SBF as anything other than what he is--a sociopathic con man, who conned the 'elite' for the benefit of himself, and who bought protection by enriching the Democrat Party).
In this game, there’s a 51 percent chance that you create another Earth but also a 49 percent chance that you destroy all human life. If you’re using expected value thinking, and if you think that human life has positive value, you must play this game.
Only if you're a moron. The world human population was less than 2 billion in 1900. It's now over 6 billion. So we more than tripled the human population w/o the "world ended" risk.
The "game" sucks
SBF said he would play this game. And he said he would keep playing it, double or nothing, over and over again. With expected value thinking, the slightly higher chance of creating more value requires endlessly risking the annihilation of humanity
No, it doesn't. Nothing requires you to be so innumerate that you can't see teh eventual guarantee of "total wipeout" if you "play the game."
All this is arguing is that either the author, or SBF, or both, are morons
Left Bank of the Charles said...
If one plays 16 times, one would have a 0.0021% probability of having 65536 worlds, an expected value of 1.3728. But, one would also have a 99.9979% probability of wiping out humanity. Theoretically, it’s a good bet if one just looks at expected value, with no adjustment for the risk of wiping out humanity.
Which is to say "theoretically, it looks good, if you're a moron."
If a casino offered odds like that on bets of a reasonable sum and one could play again if one loses
Then you wouldn't be playing the game as described. So it's a fine bit of mental masturbation, but nothing more than that.
In a bet of the form Tyler Cowen suggests, I would say that the only way a society should be allowed to take the bet is if everyone in society votes yes to do so. SBF, of course, did no bother informing his "investors" that he was playing such games with their money, or allow them to have a vote in those decisions, thus it is not altruism, but simple fraud.
Rabel, thanks for that info. My husband was under the impression that the actual assets of the corporation had been sold off to pay out investors, not that the crypto investments were doing well and therefore investors might recoup their nut.
I guess I'll have to look into it... which I don't want to do, as I don't understand how crypto is actually a currency, at least at this point.
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