Sam Bankman-Fried & The Way We Live Now
Sam Bankman-Fried & The Way We Live Now
A Fraud's Path May Illuminate the Long Reach of American Oligarchy
A certain class of dishonesty, dishonesty magnificent in its proportions, and climbing into high places, has become at the same time so rampant and so splendid that there seems to be reason for fearing that men and women will be taught to feel that dishonesty, if it can become splendid, will cease to be abominable. If dishonesty can live in a gorgeous palace with pictures on all its walls, and gems in all its cupboards, with marble and ivory in all its corners, and can give Apician dinners, and get into Parliament, and deal in millions, then dishonesty is not disgraceful, and the man dishonest after such a fashion is not a low scoundrel. Instigated, I say, by some such reflections as these, I sat down in my new house to write The Way We Live Now.
—Anthony Trollope, Autobiography
The name might have been plucked from a Victorian novel: Sam Bankman-Fried… or shall we say Sam Bankman-Fraud?
Amid the rapids of financial turbulence, Bankman-Fried offered himself as an unlikely, rumpled prophet. As the United States places the dollar’s reserve currency status at risk, many look to cryptocurrencies as part of a revised international system. His company, FTX, was established to show the way.
Unfortunately for a number of credulous investors and depositors, Bankman-Fried was running a roach motel: Their hard-earned money went in but never came out.
The We Way We Live Now
The full extent of the collapse of FTX—now in Chapter 11 bankruptcy proceedings—is far from clear.
Some predict it may be a triggering event of larger, systemic disruption. Early indications suggest its reach could be extraordinary.
That’s trouble enough for one scandal. Yet it may go much further. The unwinding may provide a miner’s flashlight, exposing all manner of operations and connections and understandings and alliances of privileged, established institutions and individuals.
The FTX debacle may occasion a guided tour through the oligarchy that has seized American life over the course of the past generation.
The FTX debacle may occasion a guided tour through the oligarchy that has seized American life over the course of the past generation.
Secretariat of Sleaze?
In his classic work, The Way We Live Now, novelist Anthony Trollope exposes the corruption of high finance and politics in the United Kingdom of the Victorian era. His most memorable character is Augustus Melmotte. Overbearing, roguish, and larger-than-life, Melmotte is a vivid mountebank. He brings to mind the “robber barons” who were simultaneously emerging in the rising United States.
In our time, Trollope would be hard-placed to come up with a more suitable, representative villain than Sam Bankman-Fried.
The earnest young Millennial may emerge as a thoroughbred of treachery, Secretariat of sleaze.
The earnest young Millennial may emerge as a thoroughbred of treachery, Secretariat of sleaze.
His path is familiar yet never more effectively trod. Charles Ponzi would surely recognize his spiritual heir.
As with so many in today’s oligarchy, Bankman-Fried would likely reject any such comparison. Indications are that he views himself as having unimpeachable integrity and idealism. His brief resume includes a stint at the Centre for Effective Altruism.
As a cascade of damning facts gathers force, one might well dismiss Bankman-Fried’s scheme as affective altruism.
Born into Meritocracy
The youthful, disheveled Sam Bankman-Fried was bred for the part.
Bankman-Fried’s parents are professors at Stanford Law School. He was raised in privilege, in proximity not only to a great university but also to Silicon Valley. Born in 1992, his life serendipitously tracked the extraordinary creation and aggregation of wealth of the digital age.
After graduating from a first-rank prep school, Bankman-Fried attended the Massachusetts Institute of Technology.
With his resume and roots, young Bankman-Fried was positioned to dazzle an array of sterling, anchor investors. These included the world’s largest holder of financial assets, Blackrock. In Silicon Valley, Sequoia Fund joined in.
Such recognized and respected names doubtless reassured other prospects. Their presence might have comforted and coaxed others into overlooking or overcoming the skepticism generally turned toward a new and untested entry into a new and largely unregulated sector.
Mr. Bankman-Fried Goes to Washington
As FTX gathered strength, Bankman-Fried turned his attention to the political class in Washington, DC.
Befitting his vision of redefining finance, he focused not only on the regulatory authorities such as the Securities & Exchange Commission and the Commodity Futures Trading Commission. He boldly went upstream, straight to the politicians who set the agenda and control agency budgets.
Bankman-Fried rose rapidly to the summit of political donations.
Bankman-Fried’s Star Turn
FTX, along with other firms, sought to earn public trust in cryptocurrencies by association with celebrities.
Perhaps Larry David was the best imaginable “get” for this purpose. His familiar presence as a crusty yet trusty curmudgeon fits our moment—even more than anyone might have realized on Super Bowl Sunday 2022.
Other celebrities may be swept into the downdraft.
Michael Lewis, Our Trollope?
Trollope composed memorable literature not only to expose the chicanery of unethical finance. He was also pointing out that such large-scale fraud such as marked the City of London at the height of its power could only be achieved amid a larger culture that itself was ethically compromised:
And as I had ventured to take the whip of the satirist into my hand, I went beyond the iniquities of the great speculator who robs everybody, and made an onslaught also on other vices—on the intrigues of girls who want to get married, on the luxury of young men who prefer to remain single, and on the puffing propensities of authors who desire to cheat the public into buying their volumes.
Trollope acknowledged that The Way We Live Now is marked by “the fault which is to be attributed to almost all satires, whether in prose or verse. The accusations are exaggerated. The vices are coloured, so as to make effect rather than to represent truth.”
With the loss of Tom Wolfe, we don’t have our Trollope. But we do have a cavalcade of corruption beyond the imagining of the most creative novelists. No exaggeration is required.
Through a great fortuity, the peerless chronicler of our time, Michael Lewis, is on the case. It’s been revealed that he’s been embedded with Sam Bankman-Fried for six months.
What likely began as a look at the emergence of the cryptocurrency space may well become a platform for revealing the truth about the FTX debacle. Lewis’s exploration may lift numerous veils shrouding today’s American oligarchy.
That may help us discern a lot about our moment, our future, and ourselves: the way we live now.
Image Credits | “Mr. Melmotte speculates,” Lionel Grimston Fawkes, M. Linton, wood engraving, 1875; illustration for chapter 62, The Way We Live Now, Anthony Trollope, Public Domain via Google Books Library Project and Project Gutenberg, formatting and text by George P. Landow, The Victorian Web. Sam Bankman-Fried, Cointelegraph, Creative Commons BY 3.0, via Wikimedia Commons. “Visualized: The Biggest Donors of the 2022 Elections,” Visual Capitalist, November 2, 2022.
Readers of the Next Nationalism might enjoy knowing that Trollope was one of Franklin Roosevelt’s favorite authors. FDR didn’t read contemporary fiction, though he would pick up an occasional detective novel later in his presidency, for the sake of escape. However, he liked to discuss Trollope’s writings, such as "The Duke’s Children," with his learned traveling secretary, Bill Hassett. And most of Trollope’s novels can be found in the 20,000-volume library of Springwood, the Roosevelt family house in Hyde Park. Why was FDR rivetted? Perhaps because of the political machinations chronicled by several of the books, as well as by what one student of Trollope calls “all the permanent, practical questions of the politics of existence.” Moreover, FDR was fascinated by the drama of money—who gets it, how, what taxes are paid by whom, and how fortunes are lost……. Of course, he was intrigued by corruption too.