I’ve been trying to figure out how someone who appears to believe deeply in the principles of effective altruism could do what SBF did. … It seems important to me to seek an understanding of the deeper causes of this disaster to help prevent future such disasters.
There’s a part of my brain screaming “Why are you leaving yourself wide open to affinity fraud? Are you trying to ensure ‘SBF 2: This Time It’s Personal’ happens or what?” However, I’ll ask him to be quiet and explain.
The problem was that you should never go around thinking “Somebody who believes in EA wouldn’t screw me, therefore this investment must be safe.” Instead you should think “The rate of return on this investment is not possible without crime, therefore I don’t know why somebody who claims to be an EA would do this, but I don’t have to know, I just have to stay away.” Or as I said in response to Zvi’s book review
You have to think: this man wouldn’t offer me free candy just to get in his unmarked van, that doesn’t make sense. I wouldn’t give anyone candy for that. What’s going on here?
It doesn’t matter why something is too good to be true. If it is, it must be a lie, and thus bad. Don’t take the deal. In case it’s not clear “taking the deal” can mean more than just investing with FTX; it also encompasses other sorts of relationships one might get into with SBF or FTX, like taking their money or allowing them to be a public symbol of you.
The point here is that understanding human psychology and motivations, especially where the human you’re trying to understand might be trying to trick you, is way harder than just knowing what sorts of returns are possible on capital investments with given amounts of risk. You can try to understand the SBFs of the world in the hopes of being able to identify them, but why do all that extra work? Just don’t trust anyone who says they can make you a 50% return on your investment in a year with zero risk (or comparable risk to T-bills) because every single one of them is lying and committing crimes.
It doesn’t matter. Plaintiff wants to prove that an engineer told the CEO that the widgets were dangerous. So he introduces testimony from the engineer that the engineer told the CEO that the widgets were dangerous. Defendant does not dispute this. How much more weight could you possibly want? The only other thing you could do was to ask defendant to stipulate that the engineer told the CEO about the widgets. I think most lawyers wouldn’t bother.
Because it makes it look like they’re trying to conceal evidence, which is much worse for them than simply maybe being negligent. This could it be grounds for punitive damages or an adverse inference ruling or both. It would also be so easy for plaintiff to score off of that the court might not even bother with an adverse inference
If I say I want you to turn over your email records to me in discovery to establish that an engineer had told you that your widgets were dangerous, but you instead destroy those records, the court will instruct the jury to assume that those records did contain that evidence. This is an adverse inference.
Even if there’s no adverse inference, just think about what happens. Defendant attempts to counter the testimony by saying that if this meeting took place there would be records, but there aren’t, so you must be lying. Plaintiff responds by showing that defendant had a policy designed to prevent such records from being created, so defendant knows that records would not exist whether the meeting took place or not, and thus his argument is disingenuous. Would you follow defendant’s strategy here? I wouldn’t.
Remember, they’re not conceding the whole case, just the fact that the engineer told them his opinion. What they’re going to do instead is admit that the first engineer told them, but that they asked some other other engineers to weigh in on the point, and those engineers disagreed. They decided to trust the other engineers and thus the resulting injury wasn’t negligent, it was just a mistake.
This is what I was saying before. And moreover, if the actual main effect of these policies was to prevent creation of discoverable records of real bad stuff the companies deserved to burn for, they’d probably risk trouble just for having them in the first place.
In my own case, I was working on a project where I thought it would be useful for us to have a copy of the entire WHOIS database. Under ICANN’s rules (IIRC), a registrar who got the WHOIS database in the first place was required to sell copies to organizations which meet certain criteria, which we definitely did. I was told that regardless of ICANN’s rules, registrars all just ignore that rule and refuse to sell the database. I said that in that case we should just flagrantly violate their ToS and scrape ourselves a full copy from their free lookup interface, and if they didn’t like it they could sell me a copy like they were required too. It’s not like they’d be able to stop me. Legal got in touch and said basically “Look, we’re not saying you’re wrong, but keep that off of discoverable channels. Proving that you’re right in court costs money.” Which of course was correct, and exactly what I was missing. As an engineer, I could establish that it was both feasible and legally winnable, but it takes a lawyer to know about the expected legal costs in the event of a conflict and how to minimize those. Anyway, we never ended up actually doing it for unrelated reasons.