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Who’s to Blame for FTX?

Michael Meeropol

#20647

I bet our side has plenty to say about this issue ...

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From: Ben at Boston Review <members@...>
Date: Sat, Nov 26, 2022 at 1:04 PM
Subject: Who’s to Blame for FTX?
To: Michael <mameerop@...>

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READING LIST

The Meaning of the FTX Meltdown

The spectacular collapse of cryptocurrency exchange FTX earlier this month has dramatized the folly of unregulated markets. It has also prompted a predictably myopic form of social criticism. Many are scrutinizing FTX CEO Sam Bankman-Fried’s business operations and close ties to Oxford philosopher William MacAskill and the Effective Altruism (EA) movement. But on social media and now in mainstream news outlets, some are also targeting Bankman-Fried’s mother, legal scholar Barbara Fried, for her 2013 Boston Review forum essay, “Beyond Blame”—suggesting that her critique of the punitive ideology of “personal responsibility” and its role in mass incarceration is the real culprit here. If only Bankman-Fried had been raised on a steady diet of retributivism, the subtext goes, he wouldn’t have behaved so recklessly.

In this commentary, blame for the mother tellingly crowds out any analysis of the freewheeling world of tech, finance, and venture capital in which FTX got off the ground. In reality, these critics help to prove Fried’s point: if we insist on tracing wrongdoing back to a decisive individual choice, we miss the full range of social norms and economic forces that condition behavior and structure outcomes. Whatever else contributed to the FTX meltdown, it is essential to recognize the role played by a society—backed by a legal regime of economic incentives—that valorizes wealth, spurns regulation, and worships technical “smarts” over democratic accountability. The trouble is distributed throughout a culture that is “inherently elitist, genius-obsessed, and dismissive of larger society,” as Cathy O’Neil puts it in a searing essay on tech futurism.

“Ultimately,” O’Neil concludes, “this is all about power and influence.” If we took Fried’s arguments seriously, we might actually do something about that—by reining in the power of the rich, say, and shoring up the welfare of the rest. The relentless libertarian demand to parse personal responsibility, Fried’s essay makes clear, keeps distracting us from changing the organization of society—except perhaps to build more prisons. In its zeal to identify bad apples so it can leave everything else the same, this outlook is the anti-reformist and anti-regulatory philosophy par excellence.

This week’s reading list resists that tunnel vision by offering a fuller picture of the social and intellectual context surrounding the FTX affair. In a forum led by EA pioneer Peter Singer, respondents scrutinize the arguments for—and consequences of—the EA movement; Catherine Tumber, for one, objects to the way its utilitarian vision “leaves the state’s historical role in advancing or reducing poverty out of the equation.” All these pieces have something to say about what’s often left out the equation.

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