Kill a Middle East head of state, win prizes! – Pentagon shows how
DARPA terror game under fire
"Poor people aren't necessarily killers," the current President of the United States tells us. "Just because you happen not to be rich, doesn't mean you're willing to kill."
Phew! However, the poor now have an additional incentive to take up arms, thanks to an extraordinary initiative from the Pentagon-funded research agency DARPA. Long ago DARPA brought you the Internet, although its more recent windfall has gone on projects that range from the sinister to the whimsical, from Admiral Poindexter's Total Information Awareness surveillance research, to invisible body suits, and a self-healing minefield, complete with winking knight.
Now DARPA is launching an online gambling site called the "Policy Analysis Market". However, this one is, in its own words, "A Market in the Futures of the Middle East." What does that mean?
"PAM will focus on the economic, civil, and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria, and Turkey and the impact of U.S. involvement with each," according to the blurb on the website. A limited number of participants would be invited to bet on the likelihood of the overthrow of the Jordanian monarchy, for example, or a biochemical attack on Israel.
Senators Ron Wyden of Oregon and Byron Dorgan of North Dakota don't think so. "Spending taxpayer dollars to create terrorism betting parlors is as wasteful as it is repugnant," they announced at a press conference yesterday. Dorgan called it "the most Byzantine thing I have ever seen proposed by a federal agency.'' Aiding the Terror Game, we learn, is the research unit of the right-wing Economist magazine - which has never knowingly undersold a market - and Net Exchange, which boasts that its Pentagon pork is "leveraged for the next generation of Deal Optimization Solutions."
One Market Under Karma
However the $3 million PAM Project deserves to be vilified not for its choice of subject, but for the very unscientific mysticism that underpins the exercise. DARPA sees the market as a blinding oracle of truth:-
"Since markets provide incentives for good judgment and self-selection, the market will effectively aggregate information among knowledgeable participants,'' according to agency.
From experience, the rest of us are more likely to conclude that markets are very likely to be rigged or gamed, and prone to collapse.
In recent years finance capital, which once served the purpose of funding new business, has devoted itself to the more abstract but more lucrative game of creating new markets - and then getting out as soon as the financiers could cash in their chips. Some got rich, while others such as Enron's Kenny Lay - who created a "billion dollar business" out of creating a market in energy trading - weren't so lucky.
George Soros is far closer to the mark when he describes the market as "a theoretical construction of great elegance that resembles natural science but does not resemble reality. It relates to an ideal world... it has little relevance to the real world. Market prices are always wrong."
While belief in markets remains one of the world's most touchingly naïve religions, the belief that technology itself will fix us is an equally enduring faith, and the PAM project is fascinating because here the two ideas intersect. Not for the first time, techno-utopianism - which tends to sprout such parallel beliefs (cf. "hive mind", "self-organizing systems", "self-correcting blogosphere") - has met capitalism, and found a face it likes. The two tend to lean on each other, like a couple of drunks propping each other up.
Long Boom, anyone?
Well, the incentives are certainly there for the participants.
"Whatever a prospective trader's interest in PAM, involvement in this group prediction process should prove engaging and may prove profitable."
Even more so if you have some inside knowledge. As the Contract Overview explains, "The trading process at the heart of PAM allows traders to structure combinations of futures contracts. Such combinations represent predictions about interrelated issues that the trader has knowledge of and thus may be able to make money on through PAM," we learn from DARPA.
And especially so if you're in the position to round up some willing station chiefs or convince a few suicide bombers. Then you really have the power to 'move the market'. Such golden-opportunities to rig a market don't come up very often, and it's tempting to think of the DARPA experiment as a Pentagon-blessed life insurance scheme for would-be assassins. One of the scenarios envisaged is the assassination of the PLO's Yasser Arafat, another, as we mentioned above, was a biological attack on Israel.
So here's a Long Boom that invites the players, literally, to step forward and give us a real "Boom!". Is that the point of the exercise, or just a happy consequence for the Pentagon? When the military blesses such war games, it's hard to tell. ®