Excellent post. I hope everybody reads it and takes it onboard.
One failure mode for EA will be over-reacting to black swan events like this that might not carry as much information about our organizations and our culture as we think they do.
Sometimes a bad actor who fools people is just a bad actor who fools people, and they’re not necessarily diagnostic of a more systemic organizational problem. They might be, but they might not be.
We should be open to all possibilities at this point, and if EA decides it needs to tweak, nudge, update, or overhaul its culture and ethos, we should do so intelligently, carefully, strategically, and wisely—rather than in a reactive, guilty, depressed, panicked, or self-flagellating panic.
I do think EA is above treating this as a black swan event. Fraud in unregulated finance (crypto even more so) even if at least initially guided by good (no to speak of naively utilitarian) intentions is to be expected. Most people did not expect this to happen with SBF/FTX, but some did. There’s a lot of potential to learn from this and make the movement more resilient against future cases of funder’s fraud via guidelines, practices. E.g. clarifying that dirty money won’t work towards achieving EA aims. And that EA credibility should not be lent to dubious practices.
Other than that I agree with the gist of this post & comment but it’s also important to gradually update views. Upvoted the comment of John_Maxwel
This is laughably disingenuous. An unregulated offshore crypto exchange that had hired the Ultimate Bet lawyer and publicly ran a hedge fund on the side collapsing is like the exact opposite of a black swan, it’s not even a grey swan, it’s that swan that’s definitely no longer a cygnet and is almost grown up but still has a few bits of darker fluff. Maybe no one thought it was likely, and I think almost no thought FTX was $8bn in the hole or had quite such an atrocious balance sheet (IMO not even CZ thought this), but come on!
Sabs—your tone here isn’t really in the spirit of EA Forum norms, IMHO.
I’ve followed crypto news pretty closely for the last couple of years, and the consensus in crypto and finance generally was that FTX was a big, serious, secure, respectable operation, vetted and backed by many of the most prominent VCs and investors in the industry, and doing great work lobbying for crypto acceptance in Washington DC.
That’s my honest assessment of what most crypto insiders and investors thought, up until last week. If there had been big red flags around FTX that were commonly discussed in the crypto industry, I think I probably would have known about it. (I’m about 70% confident in this; but I could be wrong.)
Sure, there were some skeptics who pointed out potential problems with FTX. There are always skeptics and FUD-promotors, regarding any crypto protocol, exchange, or business. If they happen to be right, they pop up later and say ‘See, I told you so!’.
Hindsight is always easy in these cases. But it’s important to be empirically correct about whether there were, in fact, big warning signs about FTX that were being widely discussed in crypto and finance news and social media. There were a few, but not nearly as many red flags as there were around Luna, or Tether.
I agree with your critique that there were important red flags and am glad you pointed them out, but I think it’s inappropriate to call the comment “laughably disingenuous”, since that’s a claim that the author is not being sincere. Most of us were blindsided by this, even if there were red flags we should have been paying attention to and worrying about. I think the definition of black swan could still apply to the EA community based on our subjective (but badly calibrated or poorly informed) beliefs about FTX:
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.
(...)
Based on the author’s criteria:
The event is a surprise (to the observer).
The event has a major effect.
After the first recorded instance of the event, it is rationalized by hindsight, as if it could have been expected; that is, the relevant data were available but unaccounted for in risk mitigation programs. The same is true for the personal perception by individuals.
It was a black swan to many of us, but should not have been, and may not have been a black swan to outsiders who were paying more attention and giving more weight to the red flags.
And even if it isn’t definitionally a black swan, that doesn’t call for “laughably disingenuous”, and you should assume good faith.
maybe not everyone deserves the assumption of good faith? I feel like this forum perhaps just got a reminder about the value of not always thinking the best of people, but no, everyone just wants to forget all over again maybe
This is a warning, please do better in the future; continued violation of Forum norms may result in a temporary ban.
I want to be clear that this warning is in response to the tone and approach of the comments, not the stances taken by the commenter. We believe it’s really important to be able to discuss all perspectives on the situation with an open mind and without censoring any perspectives. We would like Sabs to continue contributing to these discussions in a respectful way.
I don’t see how the third comment is objectionably ‘harsh’? It is a straightforward description of how many conventional financial firms operate, relevant to the topic at hand, combined with (accurately) calling the parent comment nonsense. Is the objection that it contains a swear word? If that is the rule it should probably be made explicit. (Also, ‘harsh’ does not appear in Guide To Norms, with good reason, as the truth can be harsh!)
I don’t think everyone deserves the assumption of good faith at all times, but you haven’t given enough reason to believe Geoffrey Miller doesn’t, and I’m pretty sure you can’t. If you’re going to make accusations, you should have good reasons to do so and explain them. Merely contradicting something someone said is not nearly enough; people can be wrong without being disingenuous. Accusations make productive conversation more difficult, can be hurtful, can push people away from the community and may have other risks, so we shouldn’t have a low bar for making them.
You also don’t even have to privately assume the best of someone or good faith; just keep conversations civil and charitable, and don’t make unsubstantiated accusations. If you want to argue that we should be more skeptical of people’s motives, that’s plausible and that can be a valuable discussion, but shouldn’t be started by attacking another user without good reason.
With FTX, there were important red flags, including the ones you pointed out.
Excellent post. I hope everybody reads it and takes it onboard.
One failure mode for EA will be over-reacting to black swan events like this that might not carry as much information about our organizations and our culture as we think they do.
Sometimes a bad actor who fools people is just a bad actor who fools people, and they’re not necessarily diagnostic of a more systemic organizational problem. They might be, but they might not be.
We should be open to all possibilities at this point, and if EA decides it needs to tweak, nudge, update, or overhaul its culture and ethos, we should do so intelligently, carefully, strategically, and wisely—rather than in a reactive, guilty, depressed, panicked, or self-flagellating panic.
I do think EA is above treating this as a black swan event. Fraud in unregulated finance (crypto even more so) even if at least initially guided by good (no to speak of naively utilitarian) intentions is to be expected. Most people did not expect this to happen with SBF/FTX, but some did. There’s a lot of potential to learn from this and make the movement more resilient against future cases of funder’s fraud via guidelines, practices. E.g. clarifying that dirty money won’t work towards achieving EA aims. And that EA credibility should not be lent to dubious practices.
Other than that I agree with the gist of this post & comment but it’s also important to gradually update views. Upvoted the comment of John_Maxwel
This is laughably disingenuous. An unregulated offshore crypto exchange that had hired the Ultimate Bet lawyer and publicly ran a hedge fund on the side collapsing is like the exact opposite of a black swan, it’s not even a grey swan, it’s that swan that’s definitely no longer a cygnet and is almost grown up but still has a few bits of darker fluff. Maybe no one thought it was likely, and I think almost no thought FTX was $8bn in the hole or had quite such an atrocious balance sheet (IMO not even CZ thought this), but come on!
Sabs—your tone here isn’t really in the spirit of EA Forum norms, IMHO.
I’ve followed crypto news pretty closely for the last couple of years, and the consensus in crypto and finance generally was that FTX was a big, serious, secure, respectable operation, vetted and backed by many of the most prominent VCs and investors in the industry, and doing great work lobbying for crypto acceptance in Washington DC.
That’s my honest assessment of what most crypto insiders and investors thought, up until last week. If there had been big red flags around FTX that were commonly discussed in the crypto industry, I think I probably would have known about it. (I’m about 70% confident in this; but I could be wrong.)
Sure, there were some skeptics who pointed out potential problems with FTX. There are always skeptics and FUD-promotors, regarding any crypto protocol, exchange, or business. If they happen to be right, they pop up later and say ‘See, I told you so!’.
Hindsight is always easy in these cases. But it’s important to be empirically correct about whether there were, in fact, big warning signs about FTX that were being widely discussed in crypto and finance news and social media. There were a few, but not nearly as many red flags as there were around Luna, or Tether.
I agree with your critique that there were important red flags and am glad you pointed them out, but I think it’s inappropriate to call the comment “laughably disingenuous”, since that’s a claim that the author is not being sincere. Most of us were blindsided by this, even if there were red flags we should have been paying attention to and worrying about. I think the definition of black swan could still apply to the EA community based on our subjective (but badly calibrated or poorly informed) beliefs about FTX:
It was a black swan to many of us, but should not have been, and may not have been a black swan to outsiders who were paying more attention and giving more weight to the red flags.
And even if it isn’t definitionally a black swan, that doesn’t call for “laughably disingenuous”, and you should assume good faith.
maybe not everyone deserves the assumption of good faith? I feel like this forum perhaps just got a reminder about the value of not always thinking the best of people, but no, everyone just wants to forget all over again maybe
The moderation team has noticed a trend of comments from Sabs that break Forum norms. Specifically, instances of rude, hostile, or harsh language are strongly discouraged (and may be deleted) and do not adhere to our norm of keeping a generous and collaborative mindset.
This is a warning, please do better in the future; continued violation of Forum norms may result in a temporary ban.
I want to be clear that this warning is in response to the tone and approach of the comments, not the stances taken by the commenter. We believe it’s really important to be able to discuss all perspectives on the situation with an open mind and without censoring any perspectives. We would like Sabs to continue contributing to these discussions in a respectful way.
I don’t see how the third comment is objectionably ‘harsh’? It is a straightforward description of how many conventional financial firms operate, relevant to the topic at hand, combined with (accurately) calling the parent comment nonsense. Is the objection that it contains a swear word? If that is the rule it should probably be made explicit. (Also, ‘harsh’ does not appear in Guide To Norms, with good reason, as the truth can be harsh!)
I don’t think everyone deserves the assumption of good faith at all times, but you haven’t given enough reason to believe Geoffrey Miller doesn’t, and I’m pretty sure you can’t. If you’re going to make accusations, you should have good reasons to do so and explain them. Merely contradicting something someone said is not nearly enough; people can be wrong without being disingenuous. Accusations make productive conversation more difficult, can be hurtful, can push people away from the community and may have other risks, so we shouldn’t have a low bar for making them.
You also don’t even have to privately assume the best of someone or good faith; just keep conversations civil and charitable, and don’t make unsubstantiated accusations. If you want to argue that we should be more skeptical of people’s motives, that’s plausible and that can be a valuable discussion, but shouldn’t be started by attacking another user without good reason.
With FTX, there were important red flags, including the ones you pointed out.