Epistemic status: I may regret writing this, but will likely regret not writing this more.
Key points:
The FTX blowup might be a bad judgement call, not willful fraud
Loyalty is good, and y’all are way over-updating
Ambition is good, and failed bets are worth celebrating
Never attribute to malice that which is adequately explained by stupidity — Hanlon’s razor
Here’s my model of what happened: SBF was busy. Things were confusing. He made a lot of decisions. One of them blew up.
Why do I believe this “bad judgement” thesis? Well, it’s what Sam claims. Publicly on Twitter, his explanation comes out to: “I genuinely believed customers were not leveraged, and that we could pay out all deposits”.
I’m biased towards trusting people at their word; and furthermore, SBF was a personal hero of mine. So you might not extend him the same trust that I do. But: Sam doesn’t have a history of lying on the record. Even at this point in time, when the muckrakers of the world are busy scrutinizing every deed he’s done, I don’t see any allegations of the form “he lied about this thing”. “Truthful, but mistaken” seems like a better model for SBF than “masterful schemer”. I choose to believe this. Maybe I’ll be wrong; feel free to bet on whether I’ll change my mind. (This comment does lead me to some level of doubt.)
Why do I emphasize the difference between fraud (roughly, taking funds from customers with full knowledge) and a bad judgement call? Because “don’t do fraud” is a good heuristic to propagate, but “don’t make mistakes” is not.
It’s really, really easy to pick apart other people’s mistakes, especially after the fact. If you’re a public figure making 10 good decisions and 1 bad one, a critic can jump in with “look at that mistake! It was such a mistake! I would never had made that mistake!” Oftentimes, the critic is even correct! But: in the same position, they would have made 2 other bad decisions, ones that weren’t even on their radar. From Zvi Mowshowitz on what would be difficult about being “in charge” during Covid:
…You can do better by taking a market price or model output as a baseline, then taking into account a bias or missing consideration. Thus, you can be much worse at creating the right answer from scratch, and yet do better than the consensus answer.
Think of this as trying someone’s fifteen-step chocolate chip cookie recipe, then noticing that it would be better with more chocolate chips. You might have better cookies, but you should not then claim that you are the superior baker.
If you, right now, are sitting on a high horse, saying “it’s so obvious; just don’t take customer deposits and gamble with them”… guess what, you do not understand how complex systems break. There is no special ability to know which of your many decisions might be the one that causes it all go kaput. I’ve witnessed and responded to my fair share of outages at Google and Manifold, and very often dumb things led to these outages— but you’ll never know which of your actions are the dumb ones. While you were editing a config file that later broke the site, you didn’t sit back and think “hm, maybe this will crash the site, I should look at it carefully”. That change looked no different than the twenty other changes you made this week, all of which were fine and good.
Whether this blowup was caused by intentional deception or an honest mistake, the EA community has been extremely quick to change its tune. In less than a week, everyone has gone from “SBF, golden boy” to “What a criminal, don’t be like that guy”. EA leaders have posted denunciations of fraud, and distanced themselves from Sam; the most upvoted all-time EA Forum post is a community condemnation; the entire Future Fund team up and resigned.
To be fair, the rest of the world is dogpiling on him too. Elon Musk called Sam “full of shit”; Sequoia deleted their glowing profile of SBF published one month ago; Miami took the FTX name off their arena.
But from EA folks, this behavior strikes me as cowardly, coldhearted, opportunistic, bandwagon-y, two-faced and distasteful. I am extremely confused, because these EA leaders are some of the smartest and “good-est” people in the world, whose work I respect and admire, who have shaped the way I think. So it’s very possible that I’m just in the wrong here, but…
Whatever happened to loyalty? To supporting those who have helped you in the past? Are EA folks only fair-weather friends, happy to accept your money in good times but also ready to eviscerate you to maintain deniability and a glossy PR sheen? What distinguishes altruism from selfishness is “being good to people who cannot help you back”. It is extremely suspicious that EA as a whole was happy to laud praise on SBF while the money was flowing, and then turn their backs as soon as it was clear the gravy train dried up.