Prediction Markets

[nemorathwald]

I want to be a good citizen. I also don't want to be taken advantage of in the service of foolish and harmful causes. It's pretty overwhelming to figure out how to get both of those, but I've been posting on this blog from time to time to work through it. This post will illustrate where I think the problem lies, and one out of several solutions that might mitigate it. Don't think this is a post of pessimism or despair; if that were the case, I wouldn't bother posting this. I think it's solvable and I'm going to discuss a proposed solution. The thing is, before you can fix a problem, you've got to acknowledge it.

I thought Iraq had weapons of mass destruction. I still cannot account for the fact that they didn't. But wait a minute! Am I supposed to have an opinion on the war based on that question of expert fact? The civic arena in which we participate relies on increasingly complicated truth claims. Maybe one reason Americans are so unmotivated to get involved in politics is because it goes like this:

Step One. I start from a set of values. Everybody's got values. This is easy. I could define for you what I consider to be metrics of success that matter to me as goals, intrinsically worthy in and of themselves. I think something is being neglected, or we stand to lose it, and I want to keep it. Let's say I want to lower crime.

Step Two. I'm expected to pick a policy that I think will achieve lower crime. My favored policy, let's say it's gun control, is likely to be wrong-headed and not successfully achieve a lower crime rate, because I'm not an expert specialist, and the information environment rewards deception by powerful interests.

Step Three. I'm expected to pick a politician to enact gun control (the policy that I suspect I am probably wrong about). I don't even know if a given politician will keep her promise to enact it.

Step Four. When I have picked a politician (the one who, remember, I don't know whether she will enact gun control, which may or may not lower the crime rate), I don't know if she is "electable". So I'm expected to vote for some other politician, who doesn't even want to enact gun control, just because she might make the political climate easier for somebody to enact it someday. In order to get closer to that she's cut a compromise deal, to go along with a policy from the NRA which she doesn't even believe in.

At this point it looks for all the world like nothing more than a grab for empty power by a political party. Power for its own sake, devoid of the values that I started with. It seems to me our attention as good citizens would be better spent on stepping back and solving the system itself, and on winning the hearts and minds of our friends one person at a time.

To sum up my thoughts on the matter: If you can't tell what's true, and there's no one with credibility, the main problem to solve is
A. the difficulty in establishing actual facts, and
B. a political system that is rewarded for acting out of accordance with facts.
Until this is solved, solutions can seldom be judged, much less implemented.

Did you know that Professor Lawrence Lessig, of the Creative Commons, a public figure in the forefront of the fight for digital civil liberties, announced he would stop his work on those issues in order to spend all his time fighting government corruption? He says until that is solved, other problems he has been working on will not be solved. I was reading his book "Code and Other Laws of Cyberspace", and listening to an interview on The Command Line Podcast in which he discussed this switch in his life's work, on the day I attended the Digital Citizenship Symposium.

As a follow-up to the post about that Symposium, I'd like to introduce a thought-provoking idea about a potential institution to mitigate the credibility crisis. I first heard about this in K. Eric Drexler's book about nanotech and the pitfalls of forecasting the future, Engines of Creation. I strongly recommend you read Chapter 13. It's called Prediction Markets, and its political extension is Futarchy. "Vote on values, bet on beliefs."

As I said in my post last year about climate change, :

Every scientist quoted in the debate appears to be cowed and censored with funding at risk, a mis-quoted and edited sock puppet on the hand of industries seeking exploitative profit, or of regulatory government seeking election to pass the rest of their platform. Scientific testimony appears to proliferate to discredit opposing scientific testimony on this topic, accusing it of being fatally compromised by a political faction that desires to use it to justify an economic system. That discrediting evidence is then, itself, discredited in what may turn out to be an endless cycle.

Politics is not about truth, it's about getting things to be the way you want them to be. It's like a corrosive acid on the good and decent people who choose it for a career. When a seasoned and successful politician results from that starry-eyed youngster, it is no longer that idealistic person; it has become an image marketed by careful handlers behind the throne like Karl Rove or James Carville, sweet-talked by corrupt lobbyists who protect all that wealth and power at stake. The ones who stay idealistic and don't compromise are the ones whose brief and failed careers you never hear about. It seems to require playing fast and loose with the truth in order to accomplish something that one hopes will be, on balance, good. One is swept into a machine of compromise in the hope that the ends justify the means.

You know that the issue I think about the most is this: how to tell what is true. An individual can't possibly study everything in the world, and has to trust the credibility of experts. When we can't trust our institutions, it's a disaster. Where can a lay person turn for scientific answers that are free of activism? Why are there no Science Courts or Idea Futures Markets?

Futures Prediction Markets are like Orange Juice Futures and other financial markets, except the express purpose is forecasting the measurable outcomes of policy. When a public figure gets up and claims global warming isn't happening, imagine if you could tell them to put their money where their mouths are. Markets have been established as extremely good at getting at complicated truths. Imagine thousands of people who research public policy outcomes, are financially rewarded to come to accurate conclusions about matters of measurable fact. For losing a bet, politically-motivated phonies would be financially punished rather than conveniently forgotten.

At the Symposium, I heard a lot of the questioners in the audience wondering how to get us more engaged. Today's citizens feel disenchanted with the political process. I think it's because, while policy is about values and facts, everybody's got values but it's far more difficult to get facts. Instead we resort to philosophical screeds that are devoid of observation of the world around us. Mark Rosenfelder describes this in the section "Who Needs Facts?" in his essay "What's Wrong With Libertarianism?" I first read that essay years ago. When I started, I was libertarian. When I finished, I was not; but I wanted to revamp government far more radically.

The plain fact is, designing public policy is difficult under the best conditions. Digging past the deceptions coming at us from all sides is even harder. Frankly, most citizens have got a full time job already and don't need a second one. Especially not one that we're bad at.

Comments

[drkelso.livejournal.com]

I don't follow. He wants to restore our privacy and rights that Bush took away. And save a ton of money in the process.

[drkelso.livejournal.com]

proof:

http://www.house.gov/paul/congrec/congrec2007/cr0522107.htm

[zifferent.livejournal.com]

Okay, I'll admit it. Either they (the original posters) and I forgot about Ron Paul when stating and further restating that statement, or were ignorant about it.

For me I was just ignorant. I still don't support him, for other reasons.

Sorry about that. The previous statement was unfair.