For Australian philosopher Peter Singer, the fraud charges laid against Sam Bankman-Fried will not trigger a death blow for “effective altruism,” a philanthropic movement championed by the FTX cryptocurrency exchange founder.
“It may lead the movement to reconsider its relationship with billionaires and reconsider its relationship with crypto,” Singer, who some have labelled the “father of effective altruism,” said in an interview with CBC News.
“Is this going to do long-term reputational damage? I think the answer to that is no.”
But the arrest of Bankman-Fried — who U.S. federal prosecutors allege “devised a scheme and artifice to defraud FTX’s customers” — has sparked some speculation that the scandal could cause serious damage to the controversial effective altruism philanthropy movement. Bankman-Fried was also one of its largest donors, so that flow of funds has dried up.
Australian philosopher Peter Singer, whose work inspired the founder of the effective altruism movement, doesn’t think the charges laid against Bankman-Fried will trigger a death blow for the movement. (Princeton University)
Singer sees no “direct relationship” between what Bankman-Fried is accused of and effective altruism. But the scandal has definitely raised questions as to what links there are to Bankman-Fried’s alleged conduct and the movement itself.
‘Damaging for effective altruism’
The founder and director of the U.K.-based think-tank Why Philanthropy Matters considers Bankman-Fried’s involvement in effective altruism “an absolutely core part of the story.”
“It’s damaging for effective altruism because the fact that Sam Bankman-Fried was an effective altruist doesn’t seem to be incidental to the whole story and what’s happened [with] FTX,” said Rhodri Davies.
As described by the effective altruism organization Giving What We Can, the movement is based on using “evidence and careful reasoning to work out how we can do the most good with our limited resources.”
Its core idea, then, is that when it comes to trying to do good in the world, and particularly give to charity, people shouldn’t focus on what they think is important or what they want to do.
For example, does it make sense to give money to a local charity, like a food bank? Or might that money, according to effective altruists, be better utilized going toward something that would have a larger impact, more bang for the buck, like the purchase of mosquito nets to help in the global fight against malaria.
“[The idea is] you should kind of take yourself out of the picture, be totally neutral about causes, and think ‘What’s the way I can do the most good in the world with the money that I’ve got,'” Davies said.
But the idea of effective altruism has also drawn criticism for being too utilitarian, or consequentialist, and been accused of prescribing an ends-justifies-the-means kind of philosophy.
“I think the narrative in a lot of people’s minds now is he he has sort of pushed that idea to its limits and beyond … up to and including [alleged] fraud and kind of corporate malpractice,” Davies said.
FTX founder charged with multiple financial crimes
The U.S. government has charged Samuel Bankman-Fried, the founder of now-defunct cryptocurrency exchange FTX, with a host of financial crimes after being arrested in the Bahamas. He faces decades in prison if convicted.
Make your pile, give later
The movement has also been criticized as arrogant for suggesting that effective altruists can determine just what charities are most worthy of donations.
“It basically says we’re a bunch of very smart philosophy graduates and we kind of know what the problems of the world are and how to solve them. So it’s very top-down,” Davies said.
Leslie Lenkowsky, professor emeritus in public affairs and philanthropic studies at Indiana University, said that effective altruism makes a virtue out of arrogance.
“If I had $1 million to spend, I’d love to put it into something that would change the world. But the truth of the matter is, I don’t know what that is. The world’s a pretty complicated place, and there’s not one button you could push.”
He said the allegations against Bankman-Fried raise big questions about the ethical nature of the movement.
Effective altruism had, at least initially, also advocated that instead of working at an NGO, people should seek to work in a job where they can earn a high salary — the “earning to give” philosophy — and use that money to pursue their philanthropic goals.
FTX was ‘absolutely amateur hour,’ says analyst
Cryptocurrency analyst David Gerard describes FTX as a ‘clown financial institution’ that held many ‘imaginary assets.’ FTX founder Sam Bankman-Fried has been charged with eight criminal offences after the collapse of the company.
“Bankman-Fried was following one of its principle injunctions, which is if you have the ability to make money, go make money, rather than go into some non-profits or pursue a social cause,” Lenkowsky said. “Once you’ve made your pile, you can give later.”
He added: “If in fact he was knowingly doing something illegal, he was trying to make it justifiable because it was going to be for philanthropy. That raises a big ethical question about the central premise of effective altruism.”
But Singer says the fact that Bankman-Fried is facing serious fraud allegations suggests he was acting “much less rational” than effective altruism, “which is all about evidence and reasoning.”
“To do something that is that blatant and that obviously is going to carry a serious risk that you will go to jail for a long time … I mean, that’s just pretty crazy,” he said. “And I don’t think there’s anything in effective altruism that would say you should do that.”
‘Sam did not listen’
While Singer has been called the intellectual father of effective altruism, the movement itself was co-founded by Scottish philosopher William MacAskill in 2009 as an Oxford student, inspired by Singer’s work.
MacAskill himself, shortly after news of the FTX scandal broke, tweeted that “for years, the EA community has emphasized the importance of integrity, honesty, and the respect of common-sense moral constraints.”
“If customer funds were misused, then Sam did not listen; he must have thought he was above such considerations.”
Singer said he believes the effective altruism movement has done a lot of good and he is hopeful that it is going to go on to do considerably more.
FTX founder speaks for 1st time since crypto company’s collapse
FTX founder Sam Bankman-Fried, once hailed as the ‘King of Crypto,’ spoke on video for the first time since the sudden collapse of his cryptocurrency exchange company, pushing back against allegations of fraud.
But he acknowledged the fact that billions of dollars slated to go to effective altruistic endeavours have now “gone up in smoke” is “pretty terrible.”
Bankman-Fried, who reportedly became interested in effective altruism after a lunch meeting with MacAskill around a decade ago, had entrusted MacAskill and four of his lieutenants to oversee grant-making at the Future Fund, according to Forbes. The fund, launched in February, is thought to be a subsidiary of the FTX Foundation.
Yet gifts made by the Future Fund could now be clawed back by FTX’s creditors in bankruptcy court, Forbes reported.
And MacAskill is now under fire by many in the effective altruism community.
“The recent FTX scandal has, I think, caused a major dent in the confidence many in the EA Community have in our leadership,” wrote Gideon Futerman, whose small non-profit received money from the Future Fund, on a community forum, Forbes reported.
Singer, however, remained optimistic about the future of the effective altruism movement.
“I think it’s it’s now quite well established, it’s quite well known. It’s causing very substantial sums of money to be donated to highly effective charities. And that’s all a good thing. And I think that’s going to continue despite the FTX collapse.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
