Ethics on Trial | Customers, Etc.
A quick detour to look at the trial of Sam Bankman-Fried, and a reminder about virtue
I thought that when I shared on Thursday that I was doing a series of posts about adaptive leadership and systems thinking, I had content for the next several weeks more or less mapped out. But then the trial of Sam Bankman-Fried landed in the news and a topic I care about deeply literally showed up in court.
In my post last year on Virtue, I briefly highlighted the various ethical frameworks we had discussed in my Ethics class in business school, then shared how it had appeared that Sam Bankman-Fried had more or less chosen a single ethical framework at the expense of others:
Where would we get if we applied the ethical frameworks from “Ethical Decision Making”?
Perhaps SBF was acting in his own self-interest, trying to profit off the backs of trusting customers and gullible investors. Or maybe he’s actually utilitarian, trying to make as much money as possible—no matter how—so he can focus on effective altruism. That almost sounds like a sort of social contract, but where he justifies exceptional risk for the end of positive societal change, you know, “make all this money so I can give it all away.”
Fast forward to this week when Caroline Ellison, the former CEO of Alameda and Sam Bankman-Fried’s former romantic partner, took the stand to testify. Elizabeth Lopatto from The Verge reports (bold emphasis mine):
Sam Bankman-Fried wasn’t just a crypto wunderkind, he was an ambassador for improving the world through effective altruism. And if you were wondering how he squared those values with all the lying he allegedly did during his time at FTX, wonder no more: the answer is utilitarianism.
Lying and stealing were permitted, as “the only moral rule that mattered would be maximal utility,” Caroline Ellison testified on her second day at Bankman-Fried’s fraud trial. I glanced over at his parents, Joseph Bankman and Barbara Fried, to see what they made of this; both appeared to be busy scribbling into legal pads. In any case, the approach apparently worked for much of Bankman-Fried’s life — right up to demanding doctored balance sheets for the company Ellison supposedly ran.
There it is! It’s in the trial! To be honest I’m kind of surprised. I was of course expecting to see themes related to ethics—this is a white collar criminal trial after all—but I wasn’t expecting to see it so directly.
Sam Bankman-Fried chose utilitarianism as his only guiding ethical framework. What the prosecution is no doubt trying to prove is that you can’t do that. There are laws and you can’t break them just because your ethical framework of choice seems to conflicts with those laws.
A return to virtue
Every time I write about this topic, I can’t help but be reminded of the contemporary philosopher Alasdair MacIntyre, whose books After Virtue and Whose Justice? Which Rationality? explore the topic of contrasting ethical frameworks quite deeply. I’m not sure I would casually recommend these books—I took a graduate-level philosophy course on MacIntyre in college and it was weighty stuff—but if you’re curious to go deeper, there you have it. Here’s a brief excerpt from After Virtue, emphasis mine:
It is easy also to understand why this abandonment of the Aristotelian tradition [an ethics centered on virtue] has to some degree remained unnoticed and why the fact of our continuing use of many of the key expressions of that tradition has concealed from us the changed character of the underlying social and moral world. When an agent consciously rejects the standards of some earlier morality, he does not cease to use such concepts as those of moral duty and moral virtue, but the criteria of their application have now to be found in some new theory of utility, or of ‘natural’ human wants, or of contractual obligation. Such concepts enter into a new theoretical and social context and their meaning becomes transformed, whether or not the users of the concepts are aware of the transformation.1
Doesn’t this appear to be exactly what happened in the case of Sam Bankman-Fried? Having chosen the ethical framework of utilitarianism (or its contemporary expression of “effective altruism”), he “consciously reject[ed] the standards of some earlier morality” in order to justify allegedly fraudulent business decisions.
Because this is playing out in a court of law, the prosecution is of course going to focus on how the only thing that really matters is whether or not Sam Bankman-Fried is guilty of breaking the law. But for those of us observing the case, this is also an opportune moment to reflect on the importance of virtue.
Virtue, succinctly defined, is “the habit of doing good.” Virtue isn’t something you “achieve”, but is rather a practice that you do over and over, in hopes of getting closer to an ideal center state. You’re never done practicing virtue. You have to keep at it.
While the prosecution’s lesson is going to be “don’t break the law”, I think a more fundamental lesson is the importance of growing in virtue so as to become resilient to the pressures of feeling forced to choose between competing ethical frameworks. When you’re “in the habit of doing good”, it’s more likely you’re going to reject blind fealty to a specific ethical framework when it would cause you to compromise your morality in a way that’s inconsistent with the person you wish to become.
That’s all for now. We’ll be back next week with thoughts on adaptive leadership and systems thinking.
from After Virtue, Chapter 6, “Some Consequences of the Failure of the Enlightenment Project”