Sam Bankman-Fried.
(Image credit: Stefani Reynolds/Bloomberg via Getty Images)

The story that the Silicon Valley investors who call themselves "venture capitalists" like to tell about themselves is that for decades they've been the engine of America's economic vitality. Blessed, they say, are the financiers, for without their investments in Apple way back when there would be no iPhone. Entrepreneurs who arrive in Silicon Valley are warned early on that while these investors are mouthing platitudes about innovation, they will also be rifling through your pockets. Most entrepreneurs try to keep them at arm's length, valuing their money more than their advice.

Silicon Valley's investors usually have impressive technical degrees, but their stock-in-trade is ultimately not technological innovation but financial engineering. This is why Silicon Valley loves "crypto," or digital currencies, so much. All the innovation was done for free; the only work left was taking in the profits. Those, of course, should come in what the crypto world liked to dismiss as "fiat" currency, also known as dollars.

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Mark Gimein

Mark Gimein is a managing editor at the print edition of The Week. His work on business and culture has appeared in BloombergThe New YorkerThe New York Times and other outlets. A Russian immigrant, and has lived in the United States since the age of five, and now lives in Brooklyn with his wife and son.