Venture capital seems to love the promise of enrichment at no moral cost. Do well by doing good!  This slogan relieves the tension between the pursuit of individual self-interest (sometimes termed “selfishness”) and concern for the well-being of others (sometimes termed “altruism”). This moral relief helps explain why Elizabeth Holmes, posturing as Florence Nightingale, managed to defraud so many investors with her proposed magic blood testing machine. She is now sitting in jail. 

Sam Bankman-Fried’s public advocacy for “effective altruism” took a slightly different tack but helped him accumulate billions of dollars in cryptocurrency that, unfortunately, disappeared. He will soon be sitting in jail.

Effective altruism offers an algorithm for cost-effective philanthropy, based on maximizing the number of human lives saved. Its philosopher mavens urged Sam Bankman-Fried to make as much money as possible in order to distribute proceeds to the campaign. Kind of a waste of philosophical energy–Sam could have gotten the same message from reading Milton Friedman, or even Adam Smith. Effective altruism comes close to  the capitalist creed: maximize profits and they will trickle down. Or, if the voters want to, they can redistribute them! Money go up! More is always better! 

Speaking of energy waste, the cryptocurrency industry continues to boom at the expense of the global climate stability. The extravagant quantities of the annual electricity consumed by its computers devoted to Bitcoin alone exceed the electricity consumption of Pakistan. Most of the electricity Bitcoin utilizes is generated by fossil fuels, giving the industry a carbon footprint so big that even Investopedia worries about it. 

If you’re curious about the inner workings of the effective-altruist mind, I recommend Going Infinite, by Michael Lewis; it’s a thoughtful profile of Bankman-Fried himself. For more on cryptocurrency as an industry, Zeke Faux’s  Money Go Up is a better choice. It includes horrifying details of criminal gangs in several countries enslaving workers forced to engage in email cryptocurrency scams.  

Both books describe cryptocurrency as an online casino that makes no productive contribution. 

A little Care Go Up exercise: As I write this on November 13, 2023, the global cryptocurrency market is capitalized at $1.46 trillion U.S. dollars. The latest figures I could find for employment and earnings of child care workers in the U.S. are for 2022 (and I doubt they’ve gone up by much) With 459,460 workers at an average annual wage of 

$29,570, total expenditures come to $13.5 billion. This number goes into 1.46 trillion a little more than 100 times. So, the current value of global cryptocurrency could buy the U.S. more than 100 years of paid child care at current levels of employment and earnings. Just saying…don’t bet on it. 

If you’re a podcast fan, check out the interview with Zeke Faux on Capitalisnt.com. 

As interviewer Luigi Zingales puts it “crypto is money that only be created by computer scientists who don’t understand history.” 

The cover picture is designed by Nancy Folbre
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