Hi effectenator. I do appreciate the concern for EA’s reputation. (And, charitably, I assume you’re also factoring in that this might just be the right thing to do anyway regardless of the effects on EA’s image.)
But I also wonder: Do you think non-complicit FTX employees/freelancers should donate their salaries to these people too?
My guess is that the large majority of people would answer “No.” But I’m not sure that this case is all that different from grants. Future Fund wasn’t distributing gifts; it was distributing money to fund work. In fact, when I received an EA grant (not from FTX), I assumed that legally it would be classified as self-employment income and indeed that also turned out to be the main recommendation of the people giving me the grant, so it’s possible that in many cases these are in fact legally the same thing.
I think there is still a weak case for people paying back (especially unspent) salaries / severance pay / fees / grants—perhaps staff and grantees had a moral obligation to have done more due diligence before accepting money from FTX, and this is plausibly a much stronger consideration than the “prudential” obligations of people to do sufficient due diligence before trusting FTX with their money.
But still, in all of these scenarios you end up with a situation where many people who owned $XXX a week ago and were making financial decisions accordingly, now no longer have it and are potentially in financial difficulty. You’d just be changing who the victims are.
I think your metaphor is a good one, but doesnt entirely get you where you want to go.
Insolvency is all about distributing pain. I agree that non-executive employees (including indirect employees through grants) have a high priority moral claim for work already performed and should not be clawed back. There are also practical utilitarian reasons for this rule more generally.
However, I don’t think they have this moral superpriority status for work performed after the insolvency became known. Taking away the expectation for future compensation for future work that does not benefit those with high-priority moral claims on the insolvent entity is better than the alternative of foisting more losses on depositors than absolutely necessary. Depositors have actual losses, not losses of expectancy, and there are utilitarian reasons to grant them special protections over ordinary claimants.
Moreover, most individuals funded by grant work can find alternative employment in a fairly short period of time. So they are in a much better place to mitigate loses than depositors..which is another reason I think their claims are weaker.
Hi effectenator. I do appreciate the concern for EA’s reputation. (And, charitably, I assume you’re also factoring in that this might just be the right thing to do anyway regardless of the effects on EA’s image.)
But I also wonder: Do you think non-complicit FTX employees/freelancers should donate their salaries to these people too?
My guess is that the large majority of people would answer “No.” But I’m not sure that this case is all that different from grants. Future Fund wasn’t distributing gifts; it was distributing money to fund work. In fact, when I received an EA grant (not from FTX), I assumed that legally it would be classified as self-employment income and indeed that also turned out to be the main recommendation of the people giving me the grant, so it’s possible that in many cases these are in fact legally the same thing.
I think there is still a weak case for people paying back (especially unspent) salaries / severance pay / fees / grants—perhaps staff and grantees had a moral obligation to have done more due diligence before accepting money from FTX, and this is plausibly a much stronger consideration than the “prudential” obligations of people to do sufficient due diligence before trusting FTX with their money.
But still, in all of these scenarios you end up with a situation where many people who owned $XXX a week ago and were making financial decisions accordingly, now no longer have it and are potentially in financial difficulty. You’d just be changing who the victims are.
I think your metaphor is a good one, but doesnt entirely get you where you want to go.
Insolvency is all about distributing pain. I agree that non-executive employees (including indirect employees through grants) have a high priority moral claim for work already performed and should not be clawed back. There are also practical utilitarian reasons for this rule more generally.
However, I don’t think they have this moral superpriority status for work performed after the insolvency became known. Taking away the expectation for future compensation for future work that does not benefit those with high-priority moral claims on the insolvent entity is better than the alternative of foisting more losses on depositors than absolutely necessary. Depositors have actual losses, not losses of expectancy, and there are utilitarian reasons to grant them special protections over ordinary claimants.
Moreover, most individuals funded by grant work can find alternative employment in a fairly short period of time. So they are in a much better place to mitigate loses than depositors..which is another reason I think their claims are weaker.
Yes I think I agree on both counts.
[Edited to add: Maybe after including severance pay or equivalent? Sudden loss of income seems much worse than sudden loss of savings.]