Attack of the terror casinos, volume 2
Please step away from the slides
Of course, this is from a man who believes in the abstract market as a form of intelligence even beyond its role as information aggregator, to the point that our political decisions themselves should be chosen purely by market forces: futarchism.
Would some other form of government more consistently listen to relevant experts? Even if we could identify the current experts, we could not just put them in charge. They might then do what is good for them rather than what is good for the rest of us, and soon after they came to power they would no longer be the relevant experts. Similar problems result from giving them an official advisory role.
"Futarchy" is an as yet untried form of government intended to address such problems. In futarchy, democracy would continue to say what we want, but betting markets would now say how to get it. That is, elected representatives would formally define and manage an after-the-fact measurement of national welfare, while market speculators would say which policies they expect to raise national welfare. The basic rule of government would be: when a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
Of course, what do real markets really think of the prediction market concept? Not much, apparently. The largest of all, Intrade, is a relatively small company and the overall volume of prediction market trades, when compared to that of the world's commodities futures markets, is miniscule to the point of irrelevance.
There just aren't that many people interested in trading on current events, which is why so many of the papers were little more than laboratory experiments, and why so many advocates spend so much time defending the lack of liquidity in the prediction markets. Apparently, that does not affect their accuracy - though that, of course, runs counter to experience in other markets, where liquidity is everything.
It's an idea that is not ready for prime time, and may never be.
Fear and loathing at the TSA
The prediction markets are about as enlightening as the Transportation Safety Administration's (TSA) color-coded threat levels, which were at "orange" during a typically shitty airport experience. I was one of the chosen few, shunted for reasons unknown into a strange chamber where they blast you with high pressure air from all sides to test you for the presence of suspicious chemicals.
I passed that test, and then was handed over to a guy with latex gloves who looked like he had been grabbed out of the cafeteria at the local community college.
"This isn't even a real computer, is it?" the TSA nimrod said accusingly. What are they smoking at the TSA?
I thought about that for a moment.
Could it be true? Could he, too, have bought an Acer 5600 from TigerDirect.com, been screwed out of his rebates and left with a barely functional machine, unable to read its own optical drive?
He furiously brushed the handicapped notebook with a chemical-sensitive pad, glaring.
"Uh... it should start up...," I said, unsure if it really would.
He declined to power it up - clearly, if he believed it was ready to blow he preferred the plane go down to blowing himself up. Orange it is. ®
Burke Hansen, attorney at large, heads a San Francisco law office