1.
The above quote is not a reference to Sam Bankman-Fried (SBF from here on). No, that sentence was uttered by Sarojin Naidu, the former president of the Indian National Congress, in reference to one Mohandas K. Ghandi. Yes, the Mahatma.
Don’t worry. I’m not here to disparage Ghandi, who was one of history’s great moral philosophers and one of the catalysts of India’s independence, not to mention an inspiration to civil rights movements globally. He did have some not-so-great ideas about economic development, but hey, what have you done with your life?
So, not too much on Ghandi.
I referenced that quote because it encapsulates the problem with a particular view on wealth, a view that focuses on the outward trappings of wealth. The picture of SBF is there because he illustrates a pretty recent example of the problem with this kind of flawed thinking. For those that don’t know, SBF was the founder and CEO of FTX, at one point the world’s third largest cryptocurrency exchange. As of November 2022, his net worth was reported at $26 billion. That number has since fallen precipitously. SBF was recently indicted on fraud charges after making approximately $8 billion in FTX’ value go poof; this was allegedly the result of him using customer deposits to cover losses accrued to FTX and to its associated trading firm, Alameda Research. If you’d like to know more, I recommend Matt Levine’s reporting, alternately, Coindesk is the outlet that broke the story and their coverage is not behind a paywall.
The story of FTX is fascinating, especially if you are as drawn to scammer stories as I am, but this post isn’t about FTX. No, this is about SBF himself, about how some of the quirkier aspects of his lifestyle and his world view might have influenced the decidedly fawning and equivocating press coverage he received, and continued to receive even as FTX was publicly imploding and his alleged fraud was coming to light. If you’d like examples, you can find them here and here and here.
What is striking about the media’s recent coverage of SBF is that much of it stands in stark opposition to the generally hostile coverage of tech in general, especially of billionaire tech founders. If you’re old enough to remember how the media was covering tech up through the late 2000s, the coverage of SBF may not surprise you, but it will seem anachronistic. There was a point when journalists were really impressed by Mark Zuckerberg’s jeans and hoodies. That sort of coverage has mostly disappeared, but I suppose it’s true that everything old will eventually become new again.
Jeans and hoodies were on the formal spectrum of SBF’s wardrobe. More common for him were shorts and t-shirts; although maybe this was a reflection of his firms’ locations in Hong Kong and the Bahamas. Equally esoteric, was SBF’s championing of Effective Altruism and its attendant foundation in utilitarian ethics. This podcast with Tyler Cowen is a pretty good introduction to SBF’s world view [https://conversationswithtyler.com/episodes/sam-bankman-fried/]. The short version is that SBF claimed to want to make as much money as possible as quickly as possible so that he could give much of it away to worthy and effective causes.
SBF’s wealth and his stated interest in doing good led him into the spotlight. He was a serial member of the conference circuit, speaking often about the potential for crypto to make a positive social impact and advocating for regulation of the crypto space. This willingness to say the right things and position himself as someone committed to doing good and seeking appropriate regulation is a big part of why the media covered him as they did. However, I think that there is more to it than just a good PR effort.
Or maybe it’s that there’s less to it.
2.
As I alluded to at the beginning of this piece, we tend to talk about wealth in terms of the accoutrements of wealth, things like fancy cars and grand mansions, expensive jewelry and a high-fashion wardrobe. Our avatars of wealth are the $5,000 suit or the Birkin bag, the supercar and the yacht. This focus on consumption often leads us to miss the forest for the trees. Take for example the absolutely stupid fad of covering food in gold foil. It’s supposed to convey a certain kind of extravagance and luxury. But you’re just being charged a large markup for a superficial element that adds nothing to the taste of the food. I suppose that is one definition of luxury. But it’s very obviously a prole definition.
As stupid as gold-covered food is, it doesn’t really explain the oversized level of scoffing it often gets, a lot of which comes down to scolding people for wasting money while other people starve. This Eater article is a good example. The author writes:
Though chowing down on gilded wings may be harmless to the human body, in a country where 40 percent of food intended for human consumption is thrown out, eating gold is a bleakly overt display of the fact that some people have entirely too much while others have far too little.
The last thing that I want to do is to defend gold-covered chicken wings, but this sort of argument doesn’t make much sense coming from an outlet dedicated to unnecessary food. Plus, it buys into the phony claim that gold foil is some kind of extravagance. It’s not. You can buy it on Amazon.
If we’re being honest, real extravagance is the fifteen-course tasting menu painstakingly composed by the world’s best-trained chefs from ingredients raised by artisanal producers or scavenged from pristine wilderness areas. Danish chef René Redzepi recently announced the permanent closure of Noma (aka the world’s best restaurant), precisely because of how difficult it was to keep up that level of quality and service. To put it another way, it costs a lot of money (and time and effort and sanity) to be that inefficient with your food production.
This has nothing to do with my own personal taste. I would jump at the chance to eat at Noma and have absolutely zero interest in Salt Bae’s gold-covered tomahawk steak. But from an objective point of view, there’s really no reason why we ought to judge gold-covered junk food as bad and unethical, while tolerating, if not lauding, curated tasting menus.
So, why do we scoff at Salt Bae, but not at Noma?
3.
Part of the answer to the question above is just old-fashioned classism. It is entirely too normal to judge the trappings of new money and find them lacking, to scoff at people lucky enough to have gotten great wealth but not smart enough or savvy enough to display it tastefully. This is largely an aesthetic argument masquerading as an ethical one. Some people will push back. They will argue that aesthetics is an ethical issue and that certain aesthetics are de facto problematic. Here are a couple of examples of this type of thinking.
I don’t want to get to into the weeds on this issue of aesthetics, at least not yet. There is something to the link between aesthetics and ethics, but this link is often simplified. For now, I just want to suggest that part of the reason SBF got the media treatment he did was that he purposefully avoided those supposedly problematic aesthetic markers.
I should take an aside here and note that I firmly believe the main reason SBF got away with his scam for so long was that he had a lot of money and he was making a lot of money for other people. Full stop. When Bernie Madoff was making money for people, he was untouchable and unquestionable. But when the markets seized and Madoff could no longer meet redemptions, the whole façade crumbled. So too, with SBF. That said, compare SBF’s treatment to Martin Shkreli or to Do Kwon, two men who actively marketed themselves as avatars of rapacious capitalism. SBF’s outward appearance of modesty did a great deal to secure his favored position in the media.
Perhaps a more pertinent comparison would be between SBF and Elon Musk. In the early days of Tesla, Musk was somewhat of a media darling. Electric vehicles fit the right aesthetic category. But as Musk began to court the limelight and assert his somewhat erratic and eccentric personality, the media’s disposition towards him began to shift, even more so as he began to openly consort with figures on the right. Musk’s stated political opinions appear fairly moderate, but his avatar has become more and more identified as reactionary.
Unlike SBF, Musk has been quite antagonistic towards not only the media, but towards the larger professional managerial class of which the media is a part. His Tweeted response to former California Assemblywoman Lorena Gonzalez-Fletcher foreshadowed his moving Tesla’s headquarters out of California to Texas, a state with lower labor, tax and regulatory burdens. When Musk acquired Twitter, he was vocal about overhauling content moderation and cutting as many middle-management jobs as possible. All of this signals him as someone who isn’t particularly interested in courting favor with the professional managerial class.
Not only was SBF the anti-Shkreli. He was the anti-Musk. He paid a lot of lip service and gave a fair amount of actual support to the causes the professional managerial class holds dear. I think this completes the question of why SBF received the kind of darling treatment that he did. Yes, it was because he had a lot of money and because he was somewhat careful not to flaunt it in the wrong ways. But there’s more than that. In SBF, the professional managerial class found someone with whom they could work, and they treated him accordingly.
He is similar to a lot of people I know, who love to bash capitalism while fully enjoying the benefits of it and putting up a veneer of anti capitalist “activist” or philanthropist. On the other hand, maybe he appealed to people cause he looked like he is “using the system” to get rich for a good cause. While in reality he just likes being rich and splurging insanely.