The Logic of the Code: Money, Time, and the Fatality of Reason

Reading Jean Baudrillard on Sam Bankman-Fried and his Illusions of Value.

Welcome to the Sunday edition of Dark Markets. Each week subscribers get a taste of my Sam Bankman-Fried book, in the form of incomplete drafts. This week, we approach the theoretical framing at the heart of the book: the idea that Sam Bankman-Fried’s crimes were underwritten by a mechanistic view of the predictability of the future. According to this logic, Bankman-Fried veiwed his own success as inevitable, justifying his borrowing of customer funds to help bring success just that bit faster.

This logic rhymes, first, with the logic of venture capital, which increasingly produces huge windfalls for financial engineers who have created nothing of actual productive value. I first began exploring this theme back in 2021 with the “Venture Capital on Arrakis” series - in fact, those pieces led towards my book deal with Repeater. I first wrote about Baudrillard and cryptocurrency in May of 2022 - well before FTX’s collapse, when Do Kwon was crypto’s biggest villian.

“This message, much more profound than quantitative equivalences, runs beneath commodities from the outset:

To remove indeterminacy from nature (and man) in order to submit it to the determinacy of value.”

Jean Baudrillard, “Symbolic Exchange and Death.”

Victims of the Logic of the Code of Money. Sam Bankman-Fried, Do Kwon, Kyle Davies, and Su Zhu all fell victim to their own certainty. Center: Jean Baudrillard.

One broad and metaphorical way of thinking about the deep logic that runs through Effective Altruism, Longtermism, the Silicon Valley Ideology, and the larger cluster we call TESCREALism, is as an example of what Jean Baudrillard calls the logic of the code. Code here is mostly in the sense of computer code, a contemporary version of the automated machine. Code is a linguistic machine, a set of instructions executed on a substrate of binary logic switches that can do nothing other than execute commands.

This logic is instilled by the training of engineers and mathematicians, whose mechanistic and hierarchical path during training leaves them stuck with a simplistic understanding of reality, and of humans in particular. “Their world is rational, rule-bound, and solvable,” as Joshua Tait writes [in Key Thinkers of the Radical Right, 2019]. The logic of the code sees history on train tracks, and the brain as a cluster of binary circuits.

This logic of the code, though, is based on a fiction - the fiction of representation and symbolism, which are inevitably reductive, and therefore necessarily inaccurate, even deceptive. These deceptions lead, most notably, to overconfidence in prediction - to a misplaced Netwonian faith that Condition A leads reliably to states B, C, and D, in clean succession.

We see the logic of the code take various forms in Sam Bankman-Fried’s story, including in Barbara Fried’s understanding of humans themselves in terms of robot-like determinism. A determinist view of humans echoes in discourses about artificial intelligence, first in the blind trust that a bodiless computer based on binary architecture can reproduce the complexity of an experiencing and desiring human mind. It rockets past even that, to A.I. leaders’ professed faith in the possibility of not merely inventing intelligence, but verily, in inventing God.

The logic of the code also manifests in the understanding of AIs future as a thread of unbroken linear progress, sure to produce abilities that threaten human well-being in very specific (and fantastical) ways. This is only one way that time itself comes to be seen in the mechanistic terms of the code, as the playing out of a current condition that leads, with mathematical and measurable reliability, to a particular future.

All of these conceits - humanity as machine, mind as computer, and time as mechanism - equally break down in the face of reality’s full complexity. One way to think about Sam Bankman-Fried’s downfall is as resulting from far too much faith in both predictability in general, and in Bankman-Fried’s own prognostications. His willingness to lend out billions of dollars of customer funds to Alameda Research was based, ultimately, on his faith in FTX’s evenutal massive success - his faith, to use the title that Michael Lewis did not change even as reality came calling, that he was “Going Infinite.”