by edward tenner
edward tenner, a frequent contributor to the Review, is a research affiliate of the Smithsonian Institution and Rutgers University.
Published February 20, 2023
Almost 50 years ago, during the first of America’s endemic academic crises in which graduate schools were exposed churning out unemployable humanities PhDs, I found a temporary reprieve. My redeemer was a U.S. Bicentennial publishing project that paid a handsome salary and even provided an office in a lakefront skyscraper in Chicago. Curious about the government origins of the funding for the nonprofit, I asked the founder. I’ll never forget his reply: “You don’t want to know.”
I was, of course, more than a little curious about the nature of this unwanted knowledge. And I later surmised that the information would have precipitated an unwelcome ethical dilemma — better, then, not to know. In any event, my qualms became moot when funding dried up as mysteriously as it had flowed, and I was back on the job market.
Making Sausage with Cryptocurrency
This episode came to mind when I saw an online interview of Samuel Bankman-Fried (aka SBF) with Andrew Ross Sorkin on the New York Times’s DealBook. The fidgety ex-billionaire denied any intention to defraud investors after his crypto trading company FTX declared bankruptcy. He added that he was unaware of the misuse of investors’ crypto deposits by Alameda Research, a related company he also controlled. The unavoidable conclusion was that if FTX was breaking the law, he did not want to know about it.
Social scientists have a phrase for SBF’s attitude: strategic ignorance. In the interest of keeping my serendipitous job in Chicago, I did not press the question of who was paying or with what. If anything embarrassing about my benefactor later came to light, I could say truthfully that I was unaware of it.
SBF’s criminal trial will not begin until the fall. I suspect the verdict will hinge not on what he said or wrote but on what he should have known. Was his strategic ignorance part of a tacit conspiracy? Was he like an office worker “borrowing” from the petty cash box, intending to pay everything back from his bet on a sure thing? Or was SBF’s judgment muddled by the antidepressant patch he wore?
Who could resist the world’s youngest billionaire, defiantly unkempt and openly neurotic, planning to devote his entire fortune to the future while speculating in an instrument few people understand. Pure clickbait gold.
A Strategy for All Seasons
The trial may or may not resolve these questions. But the FTX case is a convenient window to view other forms of strategic ignorance. Consider the institutional investors who gave SBF $2 billion based on little more than a handshake — among them, illustrious market players BlackRock, SoftBank and Sequoia Capital. While aware that financial regulation in the Bahamas, where FTX was registered and operated, did not meet SEC standards, they just could not pass up SBF’s take-it-or-leave-it terms.
Had they forgotten that Bernard Madoff had turned down investors who seemed curious about how he operated his magic money machine? Actually, some of Madoff’s investors did suspect he was breaking the law — but with an insider securities-trading technique called front-running, rather than by robbing Peter to pay Paul. (The SEC, by the way, duly investigated and cleared Madoff of the front-running charge without considering the possibility of a Ponzi scheme.)
Politicians, like financiers, found refuge in strategic ignorance of FTX’s shenanigans. Left-leaning Democrats did not want to know about the greenhouse gases created by cryptocurrency mining — not when SBF generously donated $40 million to Democratic candidates in the 2022 midterms. Bill Clinton did not insist on knowing the provenance of his $250,000 honorarium for appearing at FTX’s crypto conference last April. (Tony Blair appeared at the same meeting, but his financial arrangements have not been revealed.)
Prestigious academics were no more immune to the lure of strategic ignorance than Congressional candidates. The Oxford philosopher Will MacAskill, a champion of the hyper-utilitarian movement called Effective Altruism, was promised nearly all of SBF’s estate (to be used for the maximum long-term benefit of humanity) and understandably disregarded concerns about the source of the riches. The New Yorker’s subhead said it all: “Leaders of the social movement had no way to know that FTX would collapse. But they also had every incentive to ignore warnings.”
National news media, which received no cash from FTX or SBF, did enjoy payment in page views. The scruffy crypto-king was mesmerizing. After all, he was a Millennial prodigy who intended to use his Midas touch for the million-year benefit of us all. Hey, who could resist the world’s youngest billionaire, defiantly unkempt and openly neurotic, planning to devote his entire fortune to the future while speculating in an instrument few people understand. Pure clickbait gold. It was left to a more regulated competitor, Coinbase, to blow the whistle.
We Have Seen the Enemy…
Let us not overdo the schadenfreude, though. We are reminded daily by texts, images and videos of what we would rather not know: the unsustainable forest harvests that provide all that hardwood flooring, the South Asian sweatshops that produce those $12.95 polo shirts for Amazon and Walmart, the horror-show chemicals our household cleaners drain into the water table, the nitty-gritty of factory farming.
And it’s always been thus. Before the Civil War, abolitionists were violently attacked in the North as well as the South because people did not want to know about the conditions of slavery. As the English poet William Cowper had already put it:
I pity them greatly, but I must be mum,
For how could we do without sugar and rum?