the market will solve it!

June 11, 2019 10:25 AM

Back in 2000, economist Robin Hanson proposed futarchy, a governance model in which people would Vote Values, But Bet Beliefs.
"Under this system, individuals would vote not on whether or not to implement particular policies, but rather on a metric to determine how well their country (or charity or company) is doing, and then prediction markets would be used to pick the policies that best optimize the metric. "

Rational democracy and futarchy, Stijn Bruers
BLOCKCHAIN MAY HOLD THE KEY TO A GOVERNANCE CRISIS. Could Futarchy solve certain problems in distributed autonomous organizations like Bitcoin, Ethereum, and other cryptocurrencies?

more Hanson:
Futarchy vs. Predictocracy
Merkle’s Futarchy

//
Futarchy: an experiment we'd learn a great deal from, but please don't try it on me - "Mencius Moldbug and Robin Hanson are debating Robin's intriguing idea of "futarchy", which has attracted many fans. The basic idea of futarchy is "when a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.""

posted by the man of twists and turns (28 comments total)

Like that joke "Theory and practice are the same in theory but not in practice" there needs to be a clever aphorism about the limits of implementation. Blockchain and public key encryption are incredible concepts that are changing the world but there is more bitcoin stolen than used due to glitches in the system.(perhaps a slight exaggeration)
posted by sammyo at 10:39 AM on June 11, 2019 [2 favorites]

When I read a complicated concept and can immediately punch big gaping holes in it, it is hard to tell whether the problem is that I don't understand the concept or that the concept is stupid.

Reading this, I feel like the proverbial five year old asking a priest 'But if God is good, why did my mommy die of cancer?'
posted by jacquilynne at 10:40 AM on June 11, 2019 [5 favorites]

Problem: a global climate disaster caused by the inability of markets to plan more than a decade ahead.

Proposed solution: an even more complicated market sustained by an exponentially increasing competition to see who can burn the most electricity.
posted by Pyry at 10:47 AM on June 11, 2019 [37 favorites]

But we decided to go with good old reliable fascism instead.
posted by Grangousier at 10:53 AM on June 11, 2019 [4 favorites]

when a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law

Collateralized debt obligations for everybody!
posted by flabdablet at 10:53 AM on June 11, 2019 [8 favorites]

And tulips. We're going to need lots of tulips.
posted by flabdablet at 10:54 AM on June 11, 2019 [14 favorites]

> Mencius Moldbug and Robin Hanson are debating Robin's intriguing idea of "futarchy"

And what has endowed Moldbug with any legitimacy on the matter?
posted by at by at 10:55 AM on June 11, 2019 [10 favorites]

I mean, how can anyone say you're really fair to all sides of a debate in a modern democratic society if you don't at least give people who literally want to dismantle democracy and bring back monarchy an equal place at the table?
posted by wildblueyonder at 11:16 AM on June 11, 2019 [7 favorites]

Market fundamentalism knows no bounds, especially when it comes to stupidity — or in the case of "futarchy", perhaps I should say futility.
posted by jamjam at 11:53 AM on June 11, 2019 [2 favorites]

this would be very easy to game, with very bad consequences. right now, political prediction markets dont matter much, except the few participants involved might gain or lose a few bucks. so the players' interest is principally to make correct bets. but if the markets actually determined what policies would be enacted, the incentive to affect policy would far, far outweigh the monetary value of winning the prediction in cases where the policy is very important like bailing out an industry or, god forbid, declaring a war. so the market actors' primary incentive would not be to make money off the market but to manipulate it (perhaps manipulating several interrelated markets at once) to achieve some obstruse interwoven policy objective. it would be like how hedge funds toy with failing companies, except instead of a failing company, it's everyone's social security or medicare in play.
posted by wibari at 11:56 AM on June 11, 2019 [8 favorites]

I just wanted to say that futarchy was ... not what I initially expected.
posted by Balna Watya at 12:03 PM on June 11, 2019 [17 favorites]

I just wanted to say that futarchy was ... not what I initially expected.

Winners of the Women's World Cup decide everything?
posted by clawsoon at 12:06 PM on June 11, 2019 [4 favorites]

COLLATERALIZED DEBT OBLIGATIONS FOR SOME, LUXURY GAY SPACE COMMUNISM* FOR OTHERS
posted by sixswitch at 12:11 PM on June 11, 2019 [10 favorites]

...futarchy...

Soooo...both houses of government in the same room?
posted by Thorzdad at 12:39 PM on June 11, 2019

Back in 2000, economist Robin Hanson proposed futarchy, a governance model in which people would Vote Values, But Bet Beliefs.

Right, we need ideas for governance from a libertarian jack-off who two months ago was in a Twitter fight over whether Sally Hemmings and her brother were "voluntary slaves" and who met the tidal wave of evidence-citing responses explaining why that is utterly wrong with brain-genius rejoinders such as "Slave owners did many bad things, but each owner didn't do every single one" and "Do you think all Nazis were equally bad?"

Rational democracy and futarchy, Stijn Bruers
BLOCKCHAIN MAY HOLD THE KEY TO A GOVERNANCE CRISIS. Could Futarchy solve certain problems in distributed autonomous organizations like Bitcoin, Ethereum, and other cryptocurrencies?

Critics say the blockchain has no practical value but that's unfair. It's a 100% certain indicator that anything involving it can be safely ignored.
posted by Sangermaine at 12:42 PM on June 11, 2019 [21 favorites]

So I clicked around the links a little bit and came up to this gem in Robert Hanson's website:

Instead, much of the difference seems to be that the poor nations (many of which are democracies) are those that more often adopted dumb policies, policies which hurt most everyone in the nation.[...]It seems hard to imagine such policies being adopted nearly as often if everyone knew what such "experts" knew about their consequences. Thus familiar forms of government seem to frequently fail by ignoring the advice of relevant experts (i.e., people who know relevant things).

Stupid poor nations making dumb decisions! I guess some market magic will help them see the light and do what the experts say is right.
posted by each day we work at 12:42 PM on June 11, 2019 [6 favorites]

I'm always very wary of people who think optimizing for the metric is a good idea.
posted by Captain Fetid at 1:16 PM on June 11, 2019 [6 favorites]

usually I don't have strong decade stereotypes for the year 2000, but this is the most 2000-ass, Ralph-Nader-voting bullshit I ever did hear, even back then
posted by Countess Elena at 1:17 PM on June 11, 2019 [4 favorites]

Captain Fetid beat me to the punch in referencing Goodhart's Law: "When a measure becomes a target, it ceases to be a good measure."

If elementary school teachers can figure out how to game standardized tests for No Child Left Behind funding (and, indeed, may have had to do that to keep their classrooms at all functional), then I'm pretty sure that Wall Street analysts can figure out how to game Futarchy or whatever.
posted by Skwirl at 1:52 PM on June 11, 2019 [4 favorites]

I'm more optimistic about chappell, ambrose's idea to go back to reading scapula bone cracks.
posted by clawsoon at 2:35 PM on June 11, 2019 [1 favorite]

incidentally, everyone's comments in this thread pretty much exactly mirror how i feel whenever i hear anything about andrew yang or why UBI should replace social welfare programs.
posted by wibari at 3:46 PM on June 11, 2019 [1 favorite]

I have an idea where we could get a few scapulae....
posted by GenjiandProust at 4:08 PM on June 11, 2019

Metric #1: how many times has Robin Hanson and his ilk been told to fuck right off today.
posted by nestor_makhno at 4:13 PM on June 11, 2019

What an utterly appalling idea.

Appropriately, fut-atchy in my language = fuck-archy.

Zero understanding, zero humanity, zero any notion of reality. But who cares about reality when it's other people who get squashed by it?
posted by doggod at 4:48 PM on June 11, 2019 [1 favorite]

> Like that joke "Theory and practice are the same in theory but not in practice"

Theory is where you know everything, but nothing works.
Practice is where everything works, but no one knows why.

Here, we combine theory and practice:
Nothing works, and no one knows why.
posted by Quackles at 5:13 PM on June 11, 2019 [4 favorites]

Because what politics needs is gamification via an economic market *sigh*

F that...
Stochastocracy NOW!
posted by symbioid at 10:54 AM on June 12, 2019

oh oh - what if we had a prediction market on when mother earth was assassinated.
posted by symbioid at 10:58 AM on June 12, 2019

I often think "engineer's disease" can be an overused turn of phrase around here, but I'm afraid you leave us no choice when the introduction to your paper proudly admits it:

I offer neither a formal theoretical model nor a statistical analysis of this proposal; I instead take an “engineering” approach. That is, I seek to identify relevant design issues, and then seek a basic design that, by seeming to address enough design issues, seems plausible enough to be worth testing at the next level of prototype realism.

You can basically read just the headers of the sections trying to handwave away the obvious issues with market manipulation etc. as a sound argument against the proposal.
posted by mubba at 7:38 PM on June 12, 2019