The recent collapse in scandal and abuse of customers at FTX is yet another example of the risks associated with “money.”
More and more, I am thinking that there should be an independent discipline of knowledge and research on “money.” Actually, an interdisciplinary field of study and commentary, as “money” intersects with psychology, sociology, economics and politics.
There is something about “money” which can perversely engage with our natures, marginalizing the good and promoting the worst ambitions and meanness of the self. Perhaps that is why so many religious traditions teach and practice the shunning of “money” and “money” making. Usury – the making of money from money – was anathema to the writers of the Old Testament and is contrary to Qur’anic guidance. Monks in Catholicism and Buddhism take vows of poverty, the better to be good persons. The Confucian tradition did not privilege those who sought “money,” for such lifestyles would inhibit, it was thought, their ability to become good people following the moral codes of propriety and humaneness.
And so frequently, “money” abuses by smart and charming people – sociopaths? – involve “other people’s money,” not their own. This seems to have been the case at FTX.
Here making the case for “money” as corrupting, especially taking risks with “other people’s money,” is an editorial from today’s Wall Street Journal:
Sam Bankman-Fried Becomes an ESG Truth-Teller
The fallen wizard of crypto confesses to phony virtue-signaling.
By the Editorial Board
Nov. 17, 2022
Sam Bankman-Fried PHOTO: TING SHEN/BLOOMBERG NEWS
Crypto dark knight Sam Bankman-Fried may have deceived investors, customers and various journalists and politicians. But now the FTX founder is at least telling the truth about a few things. Lo, he says that environmental, social and governance (ESG) investing is a fraud, and so was his progressive public posturing.
Mr. Bankman-Fried on Wednesday tweeted a rambling account attempting to explain how he managed to lose billions of dollars in FTX customer funds. “I was on the cover of every magazine, and FTX was the darling of Silicon Valley,” he noted. As a result, “we got overconfident and careless.” There’s an understatement for the digital ages.
Mr. Bankman-Fried virtue-signaled by committing to make FTX “carbon neutral” and donating generously to fashionable progressive causes such as a foundation working to provide solar energy in the Amazon River basin. “We’re giving millions each year to launch sustainability related initiatives,” he said in an April Forbes magazine interview with—you can’t make this up—Brazilian super-model Gisele Bündchen.
Meanwhile, he was leveraging FTX customer funds to make risky, ill-timed bets. “Problems were brewing. Larger than I realized,” he tweeted. “In the future, I’m going to care less about the dumb, contentless, ‘good actor’ framework,” he added. “What matters is what you do—is *actually* doing good or bad, not just *talking* about doing good or *using ESG language.*”
Mr. Bankman-Fried is also acknowledging that he genuflected to regulators and Democratic lawmakers to win political protection. ESG ratings company Truvalue Labs even gave FTX a higher score on “leadership and governance” than Exxon Mobil, though the crypto exchange had only three directors on its board. The directors were Mr. Bankman-Fried, another FTX executive and an outside attorney. Truvalue Labs says FTX was given an overall “laggard” score.
“ESG has been perverted beyond recognition,” Mr. Bankman-Fried confessed in an interview this week with Vox in which he also acknowledged that his advocacy for strong crypto regulations was “just PR.”
He said he feels “bad for those who get” harmed by “this dumb game we woke westerners play where we say all the right shibboleths [sic] and so everyone likes us.” Ah, yes, the poor saps who invest in companies because they claim to be sustainable.
For the record, Mr. Bankman-Fried denies wrongdoing. “It was never the intention” to bilk customers, he said. Maybe not. But here is an object lesson for investors and the American public in how progressive virtue-signaling is used to conceal business vices. Some people will believe anything if you wrap a chance to get rich quick in political fashion.