Kelsey Piper: You were really good at talking about ethics, for someone who kind of saw it all as a game with winners and losers.
Sam Bankman-Fried: Ya. Hehe. I had to be. It’s what reputations are made of, to some extent. I feel bad for those who get fucked by it, by the dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.
Kelsey Piper, “Sam Bankman-Fried tries to explain himself“.
1. Recap
This is Part 4 in my series on billionaire philanthropy. Part 1 introduced the series. Part 2 discussed the uneasy relationship between philanthropy and democracy, and Part 3 looked at patient philanthropy.
So far in this series, I have said little about the motivations of philanthropists themselves. Today, I want to bring the focus back to a series of questions about philanthropic motivations. What drives billionaires to give? Why are many members of the public suspicious of a gap between philanthropists’ actual and stated motivations? And if wealthy philanthropists are often driven by more than pure altruism, what might this imply for the role of billionaire philanthropy in society today?
2. Beyond the prosperity gospel
Contemporary American attitudes towards philanthropy are profoundly shaped by the prosperity gospel. We think that the virtuous and faithful are rewarded with health, wealth and earthly victory, so we see the healthiest, wealthiest and most victorious among us as endowed with faith and virtue.
In a book-length study of the prosperity gospel, the historian Kate Bowler provides an apt reminder of how these doctrines manifest in practice:
Leaders proved to be the most powerful demonstrators of divine wealth, and the living testimony and continued revelation of successful prosperity teachers presented an idealized portrait of what it meant to live victoriously. Their chauffeured cars and private jets served as tangible reminders of their blessedness, as Creflo Dollar reminded his congregation: “I own two Rolls-Royces and didn’t pay a dime for them. Why? Because while I’m pursuing the Lord those cars are pursuing me.”
We have become so infatuated with wealth that, far from becoming enraged by extravagant consumption, we see extravagance as a welcome reminder of what is possible for us. Bowler continues:
As embodiments of prosperity, these pastors offered tangible reminders of God’s goodness and the abundant provisions in store for all who believed. Frederick Price, pioneer of African American prosperity theology, made his financial success a perennial theme with a theological bottom line: “I’m only doing it so that you can see that there’s somebody the same color that you are, breathing the same contaminated air, paying the same outrageous prices for everything else, and I’m prospering because of the Book.”
Americans were not always so willing to excuse wealth and extravagance. We saw in Part 2 of this series that when John D. Rockefeller applied in the early twentieth century to establish a large philanthropic foundation, Rockefeller was outright refused by Congress even after elaborate concessions were made. In Part 2, we looked at one element of 19th- and early-20th century resistance to billionaire philanthropy: billionaire philanthropy was felt to be undemocratic. On the floor of Congress, the Reverend John Haynes Holmes said against Rockefeller:
[M]y standpoint is the whole thought of democracy. . . From this standpoint it seems to me that this foundation, the very character, must be repugnant to the whole idea of a democratic society.
What I want to emphasize today is something different: these words were spoken by a Reverend. Indeed, a large part of early resistance to big philanthropy in the United States was driven by Christian moralists. These Christian moralists rejected the prosperity gospel, cleaving far closer to a Gospel with little love for wealth or those who seek it. They emphasized scriptural passages such as these:
It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
Luke 18:25
Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted, and your garments are motheaten. Your gold and silver is cankered, and the rust of them shall be a witness against you.
James 5: 1-3
Why were the Christian moralists opposed to billionaire philanthropy? In large part, they were opposed because they didn’t like or trust billionaires. A bit more carefully: they liked many billionaires well enough in their personal capacity, but thought that billionaires’ very wealth made them incapable of acting morally and unfit to lead politically. The Reverend Hugh Price Hughes said of Carnegie:
I have always believed that Mr. Carnegie is personally a most estimable and generous man, who sets a splendid example to the unhappy class to which he belongs … But when I contemplate him as the representative of a particular class of millionaires, I am forced to say, with all personal respect, and without holding him in the least responsible for his unfortunate circumstances, that he is an anti-Christian phenomenon, a social monstrosity, and a grave political peril.
A similar spirit infected the Congressional debate about Rockefeller’s foundation. Speaking for the zeitgeist, labor leader Samuel Gompers proclaimed:
The one thing that the world could gracefully accept from Mr. Rockefeller now would be the establishment of a great endowment for research and education to help other people see in time how they can keep from being like him.
Matters are different now. The moralists lost, and the gospel of prosperity won. Philanthropists won this debate to such a degree that the Rockefeller Foundation can now put out a report on democracy and philanthropy extolling the virtue, faith and democratic vision of Rockefeller. The foreword to this report, written by no less a luminary than Justice Sandra Day O’Connor, proclaims:
John D. Rockefeller knew [his] responsibility. Heir to New England’s Puritan traditions and deeply immersed in his Baptist faith, he saw himself as a steward of his wealth. He created the Rockefeller Foundation in 1913 to “promote the well-being of mankind throughout the world.” In doing so, he demonstrated a rare sense of citizenship and personal responsibility.
In such a day and age, it can be hard to recall why early moralists were suspicious of billionaires. We might even read this description of a robber baron, by an otherwise impeccably principled jurist, and forget to scoff.
My aim today is to help to make once-salient worries about what drives billionaire philanthropists more accessible.
3. All the right shibboleths
The founder of FTX, Sam Bankman-Fried, was one of the most prolific donors to effective altruism. Until recently, Bankman-Fried appeared to be a paragon of virtue, pledging most of his money to effective charities and establishing the FTX Foundation to identify and fund effective charities.
This work allowed Bankman-Fried to present himself as altruistically motivated, a reputation reinforced by his work with effective altruists. Here is how the EA-aligned nonprofit 80,000 Hours described Bankman-Fried:
After graduating from Massachusetts Institute of Technology in 2014, Sam decided to try out earning to give. This approach — where he donates a significant proportion of his income to organisations aiming to make the world a better place as effectively as possible — is allowing Sam to have a pretty staggering impact. He has already donated millions to causes like animal welfare and the Biden campaign (and he’s even donated some to us, to help us help more people find high-impact careers). In July 2021, the FT estimated that he’s the world’s richest person under 30. He plans to eventually donate most of his wealth, and is especially interested in high-impact charities working to safeguard the long-term future of humanity.
Bankman-Fried spoke at length on the 80,000 Hours podcast about his commitment to altruism and earning to give.
After the collapse of FTX, the public got an inside look at Bankman-Fried’s motivations. The motivations that Bankman-Fried described to a reporter appear rather different from the purely altruistic motivations put forth on the 80,000 Hours podcast.
To hear Bankman-Fried tell it, ethical language was mostly a front for profit-seeking.
What did ethical vocabulary allow Bankman-Fried to do? If his own words are to be believed, Bankman-Fried used the appearance of altruism to boost his reputation, saying “all the right shibboleths” in what he regarded as a “dumb game we woke westerners play” in order to be liked.
In this light, passages such as this one, introducing Bankman-Fried on the 80,000 Hours podcast, begin to take on a very different light, as exercises as much in reputation-building as in altruism:
Sam founded the cryptocurrency trading platform FTX, which has grown his wealth from around $1 million to $20,000 million. Despite that, Sam still drives a Corolla and sleeps on a beanbag, because the only reason he started FTX was to make money to give it away. In 2020, when he was 5% as rich as he is now, he was nonetheless the second biggest individual donor to Joe Biden’s general election campaign.
We now know that such statements were in important respects misleading: Bankman-Fried also slept in a $40 million penthouse, owned a six-figure BMW, held a portfolio of at least nineteen properties, racked up massive restaurant tabs, and generally lived an extravagant lifestyle.
On this front, at least, we may suspect that the moralists were to a substantial degree correct to be suspicious of the match between Bankman-Fried’s stated and actual motivations.
4. Historical motivations: Skepticism about Rockefeller
Very often, effective altruists protest that Bankman-Fried was a special case. In many respects, that is true. The level of alleged fraud, duplicity, and ineptitude revealed by the FTX collapse has rarely been seen in recent memory.
However, this is not the first time that questions have been raised about the motivations of billionaire philanthropists. We all know that Alfred Nobel established the Nobel Prizes in large part due to a desire not to be remembered as the “marchand de la mort” who invented dynamite, and that Cecil Rhodes established the Rhodes Scholarship after a vicious colonialist legacy of mining and predation in Zimbabwe and Zambia, or as Rhodes would have it, Rhodesia.
What is less well-remembered is that questions about the motivations of billionaire philanthropists have often been raised, even where media, influence and the amnesia of time may compel us to forget them. For memory’s sake, let us return to the case of the Rockefeller foundation. Just why were moralists so distrustful of Rockefeller?
The first reason why nobody trusted Rockefeller is that nobody liked the way in which he had made his money. Rockefeller was one of a small-number of men styled `robber barons’, who made their fortunes through a combination of low wages, anti-union crackdowns, and monopolistic business practices. As Rockefeller petitioned Congress for the right to form a charitable foundation, his company Standard Oil was in the process of being broken up by anti-trust action because it controlled a whopping 90% of US oil.
At the same time, Rockefeller was widely accused of having played a key role in the Ludlow massacre, in which over a thousand striking workers were mowed down in their tents by machine-gun fire. Unsurprisingly, the congressional committee investigating Rockefeller’s proposed foundation grilled Rockefeller on his involvement in the incident and found his answers unpersuasive.
Contemporary resistance to the Rockefeller Foundation took Rockefeller’s business record as evidence that Rockefeller could not be trusted. The unionist John R. Lawson testified to Congress:
Health for China, a refuge for birds, food for the Belgians, pensions for New York widows, university training for the elect—and never a thought or a dollar for thousands of men, women and children who starved in Colorado, for the widows robbed of husbands, for the children robbed of fathers. There are thousands of Mr. Rockefeller’s employees in Colorado who wish to God they were in Belgium to be fed, or birds in Louisiana to be tenderly cared for.
The commission’s own final report echoed Lawson’s sentiment:
The funds of the foundations represent largely the results either of the exploitation of American workers through the payment of low wages or of the exploitation of the American public through the exaction of high prices.
Put bluntly, neither Congress nor the public believed that someone who had made their fortune in such a manner could have the public interest at heart, whatever their professed charitable intentions.
A second reason for skepticism is that other motives beyond charity readily suggested themselves. For one thing, as the nation’s first billionaire, Rockefeller simply had too much money. Rockefeller’s wealth, representing almost 2% of national GDP, was so immense that despite his best efforts, Rockefeller was making money faster than he could spend it, and money was increasingly becoming a source of headaches to Rockefeller.
The Baptist clergyman Frederick T. Gates, a close adviser to Rockefeller, famously advised Rockefeller:
Your fortune is rolling up, rolling up like an avalanche. You must keep up with it. You must distribute it faster than it grows. If you do not, it will crush you and your children and your children’s children.
Far from a godly appeal, here Gates called on Rockefeller to donate his excess wealth for his own good and for the good of his family.
Relatedly, Rockefeller increasingly found himself hounded by fortune-seekers. Peter Johnson, a historian of the Rockefeller family, writes:
He was stalked, badgered, harassed, followed wherever he went. He couldn’t walk down the aisle of his church without people asking for some money, steamer trunks of letters would come in pleading cases, … ‘If I could only get $100, I’d be able to move to Arizona and clear up my sinuses,’ and things like that. It was constant.
Establishing a foundation allowed Rockefeller to get rid of the fortune- and favor-seekers, directing their appeals to his foundation and away from his drawing room.
None of this is to suggest that Rockefeller was entirely bereft of charity, Christian piety, or feeling for humanity. But we must recognize these motivations without fetishizing or exaggerating them, and we must place them in their proper context. Rockefeller was also in many ways callous, monopolistic, violent, exploitative, self-aggrandizing, and driven to improve his own lot at the same time as he sought to establish his foundation. The man was, quite literally, a robber baron.
What should we think of philanthropists such as Rockefeller, Nobel and Rhodes? Certainly we should not deny that they are moved in part by altruism. Nor should we deny that in many ways, their donations have done a great deal of good. But we should, I think, remain deeply suspicious of the professed motives of wealthy philanthropists and conscious of the fact that many philanthropists may have motives which are not exhausted by their public professions of altruism.
5. Conclusion
In this post, we took a look at the ways in which public opinion and religious doctrine have swung from sharply opposed to broadly favorable towards wealthy philanthropists. As a stark reminder of previous grounds for distrust, we took a look at the gap between Bankman-Fried’s public persona as a self-sacrificial altruist and his privately professed feelings towards philanthropy – a matter of saying “all the right shibboleths”. We also reflected on historical philanthropists including Cecil Rhodes, Alfred Nobel, and especially John D. Rockefeller to see how doubts about philanthropists’ motivations emerge in practice across a range of cases.
At least two immediate conclusions are suggested by this discussion. First, motivations matter. We should be more welcoming of large philanthropic endeavors when they are governed by competent and moral people than when they are governed by incompetent or immoral people. This much is well known, but we sometimes forget that these words apply to donors as well as to executives. Because of the wide discretion given to billionaire philanthropists in shaping how their money is spent, we should be deeply suspicious, as Congress was, of large foundations when we do not trust the people funding them.
Second, it is appropriate to cultivate a degree of distrust in the stated motivations of billionaire philanthropists. We should not, perhaps, adhere to the harsh gospel on which it is more difficult for a rich man to enter heaven than for a camel to pass through the eye of a needle. But neither should we forget recent events or previous historical examples in which billionaire philanthropists have had unsavory motives and morals that colored the impact of their philanthropy.
It is hard to make a billion dollars without ruffling a few feathers, and if we learned anything from the Bankman-Fried scandal, we learned it is sometimes all too easy for billionaires to hide the feathers they have ruffled under a cloak of altruism. Given this background, billionaire philanthropists must earn, not assume the public’s trust.
To be clear, I am not claiming that all billionaires are evil, corrupt, or to be mistrusted. Many are no doubt excellent people, not only in their private capacity but also in their public behavior. To call for scrutiny of wealthy donors’ motives is to call for evidence-based scrutiny, not blanket denunciation. This is the type of scrutiny which might have reminded listeners of the 80,000 Hours podcast that Bankman-Fried lived a lavish lifestyle at the same time as he drove a beat-up Toyota Corolla. And it is the same type of beneficial scrutiny which reminded Congress that Rockefeller, though showing genuine evidence of Christian piety and concern for his fellow citizens, made his fortune on the back of violence and exploitative labor practices.
What should be done in cases where we have reason to be suspicious of donors’ motives? Answering such questions is hard, because to a large extent criticism of billionaire philanthropy is systemic critique of a broad set of societal institutions and cultural norms of a sort that does not tend to issue in pithy action recommendations. But perhaps we might conclude the following: evidentially-grounded suspicion of donors motives should decrease our willingness to take their money; strongly decrease the discretion they are given over how that money is spent; lower the public credit and esteem they are given for philanthropic activities; and at a systemic level perhaps also make the case for reduced tax favoritism towards elite philanthropy.
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