9 ms·

Futarchy: Vote Values, But Bet Beliefs

67 points by mike_esspe 13y ago

exratione 13y ago
The failure mode of all voting system with central control is that the elite take over the most important part of the system: what is actually voted on. This will happen in a futarchy just as it happens in democracy. The end result will be, I'd predict, indistinguishable. Only societies without strong centralization and with incentives on the elites that stand opposed to collusion have the promise to evade what happens to democracies. An example is that which prevailed for a fair time in Medieval Iceland, but there are few others: the opening society of the US gave way to growing centralization pretty quickly, and the original vision didn't last much past two generations. There were not strong enough incentives to prevent collusion of the elites against the masses.
- RobinHanson 13y ago
  It is quite possible to have a decentralized and open system for making proposals. For example, there can be a fee to make a proposal, which is paid back at a multiple of the proposal is approved.
eli_gottlieb 13y ago
Get this shit out of here. We already have rule-by-money.
jjsz 13y ago
I've searched your PDF and did not find the keywords from Voting Paradoxes and Combinatrics [0]. What are your thoughts on this subject? [0] http://www.youtube.com/watch?v=LFjApWH8R9c http://www.youtube.com/watch?v=LFjApWH8R9c A speech by Noga Alon [1], Baumritter Professor of Mathematics and Computer Science, Tel Aviv University [1] http://www.tau.ac.il/~nogaa/ http://www.tau.ac.il/~nogaa/
- gwern 13y ago
  Is there any reason to think those are worse for futarchy than for democracy?
DennisP 13y ago
I like this idea, but I don't know how it would handle multiple conflicting goals. Hansen gives a sample goal of improving the economy, but what if you also want to protect the environment, take care of your old and sick, maintain a strong defense, educate your children, etc? I suppose you could weight them by importance (based on score voting maybe), have people bet on each policy's effect on every goal, and apply an optimization algorithm to the whole thing to get policy decisions, but not many people would understand and trust the system.
- pjscott 13y ago
  Not many people understand and trust the system we use now. Would futarchy actually be more confusing, or just different?
- gwern 13y ago
  > Hansen gives a sample goal of improving the economy, but what if you also want to protect the environment, take care of your old and sick, maintain a strong defense, educate your children, etc? This is where the 'vote on values, bet on beliefs' part comes in (did you read the paper?). The voters' job is to specify how much importance they place on various goals or metrics, and the prediction markets are asked how to achieve the goals.
  - DennisP 13y ago
    It had been a while so I looked through it again. Throughout he talks about deciding everything with a single measure of national welfare (which could include things besides GDP, weighted). I'm not convinced that's realistic. That one function would get enormously complex, its exact definition hard to decide but very influential on policy, and instead of debating specific policies we'd have vicious debates on the right formula to use, mostly driven by self-interested actors attempting to gain advantage, with even more obscurity than we have now. In principle I like the idea, I'm just trying to figure out how to make it better.
    - yummyfajitas 13y ago
1053r 13y ago
This system suffers from the same political economy problems that democracies have. For example, if I am a corn producer in the USA, I have a strong incentive to spend lots of money lobbying and contributing to political campaigns to ensure a strong protectionist policy for sugar. It ensures that my corn is purchased and used for corn syrup, and that Brazilian sugar cane doesn't destroy my market. The good from this policy is concentrated on the corn producers, and the harm is spread diffusely across all people who consume sweets. If I am an average consumer of sweets, I see little benefit fighting this policy today, since it will only change the price of a soda by a few cents. Under a "Futarchy", the corn lobby can spend lots of money to "predict" that a sugar tariff will make the country better. They might even believe it, but I will have little incentive to vote with my wallet against such a policy, since the harm will be diffuse and extremely difficult to conclusively pick out from the noise using econometric techniques. Result: a strong tariff, which almost all economists agree is a bad policy. [1] Just because Futarchy is vulnerable to some of the same problems as democracy as practiced in the USA doesn't mean it is a bad system, but I fail to see how it is functionally different than a plutocracy. [2] The problem with prediction markets is that they are only accurate in so much as one's incentive to "waste" money producing an incorrect prediction is smaller than the amount of money to be made by having that incorrect prediction. Hanging all law off of the results of prediction markets creates HUGE incentives for me to game the prediction markets, then extract rents elsewhere in the economy to more than recoup my investment. [1] https://en.wikipedia.org/wiki/Tariff https://en.wikipedia.org/wiki/Tariff [2] https://en.wikipedia.org/wiki/Plutocracy https://en.wikipedia.org/wiki/Plutocracy (Edited for grammar, citations).
- coffeemug 13y ago
  But you're ignoring speculators. In a system like futarchy it's easy to imagine organizations whose sole purpose is to make money on information asymmetry. Wouldn't Goldman Sachs hop in to massively outbid the corn industry and make a lot of money in the process?
  - altoz 13y ago
    There's Goldman Sachs, the Sugar Cane Lobby, non-profits that raise money against childhood obesity. It'll really be voting with wallets.
nairboon 13y ago
This leads to a system where people will vote only on the issues that affects them, which is a core principle of the panocracy system [1]. The problem with futarchy is that if the betting works with money, it will ultimately lead to a plutocracy. But this could be avoided if there would be some form of "voting credits", so that every citizen has a ceratin credits to bet per year/month/... The winning bets could then be paid out in money. [1]: http://en.panokratie.net/ http://en.panokratie.net/
- darkmighty 13y ago
  This would lead to non-expert masses (irrationally) giving a lot of credit to certain groups. It's a delicate issue, because you need to provide a long term stake to force the decisions to be optimal (so future welfare is evaluated correctly and optimized), but at the same time paying off those stakes leads to an unstable plutocratic scenario. Some kind clever compromise could probably be reached, I think, and this is one of those wonderful ideas that will never be implemented.
gathly 13y ago
blaming the poor countries for their poverty, because of "stupid policies" displays an overwhelming lack of historical knowledge.
baddox 13y ago
This is similar to, although one step removed from, the anarcho-capitalist proposal in David Friedman's 1973 book The Machinery of Freedom [0]. In this proposed society, monopoly government is replaced completely by a market for everything that government currently does, including law production, law enforcement, arbitration (courts), roads and infrastructure, and even "national" defense. I'm admittedly a big fan of Friedman's proposal, and I wonder what supposed advantage this futarchy provides over Friedman's proposal. There's a decent 20 minutes illustrated summary video on YouTube [1]. [0] http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf [1] http://www.youtube.com/watch?v=jTYkdEU_B4o http://www.youtube.com/watch?v=jTYkdEU_B4o
- judk 13y ago
  How do opposing parties decide on a court to settle their differences?
  - baddox 13y ago
    In the complete system, most or all parties would already be contracted with a rights enforcement agency, and each rights enforcement agency will already be contracted with an arbiter (court).
    - judk 13y ago
      And what if they don't have a contract, either because the interaction was nonconsensual, or because it is insanely impractical to negotiate a contract when buying a stick of gum? Political scientists aren't all idiots, people. Social contract theory exists for a reason.
- ehmish 13y ago
  One problem I can see with Friedman's private courts/Rights Enforcement Agencies, is that if you have bigger and smaller REAs, a sufficiently big REA would be able to compel smaller REAs to ignore violations by the customers of the big REA. Smaller REAs would go out of business, as the big REA would be a much better deal for anyone who doesn't want to get sued. Finally, you'd be left with one big REA, probably called "The Police" or something.
qwerty9999 13y ago
If we did this, 4chan would rig the votes and take over the world. ;-)
- davexunit 13y ago
  There's already a futarchy on /d/.
judk 13y ago
> Elected representatives would formally define and manage an after-the-fact measurement of national welfare The paper scuttles itself in the first paragraph.
- harshreality 13y ago
  That national welfare metric could be a legally required and binding part of the platforms they run on.
amalcon 13y ago
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. This is taken as obvious, but I don't find it so. There are many things that are not attributable to tangible national assets, but that can nonetheless change its course: things such as historical accident of where a particular thing was invented, actions of other nations, natural disasters, etc. I see every reason to think that this sort of thing is responsible for wealth disparity, moreso than repeated adoption of "dumb" policies.
jayfuerstenberg 13y ago
How is GDP a measure of wealth? It's a measure of how much money is spent back and forth and not much else. Some consider this money moving to be "progress" but it actually only highlights how many problems a society's people are willing to pay in order to solve. The medical industry is a classic example of this. People are suffering and paying an arm and a leg for cures and treatment. GDP reflects the money aspect of this while ignoring the human aspect.
- RobinHanson 13y ago
  GDP is only an initial starting point for developing a measure of national welfare. Using GDP in this system might well be better than our current system, and improvements should make it even better.
pdonis 13y ago
Quote from the article: Futarchy seems promising if we accept the following three assumptions: Democracies fail largely by not aggregating available information. And we don't even need to go any further, because assumption #1 is wrong in two ways: (1) Democracies fail because people have conflicting goals, not just conflicting beliefs about how to reach goals. Even people who have all the same factual beliefs can still have inconsistent goals. That is a problem in any system that requires everyone to adopt common goals in order to set policy. (2) The "information" that would need to be aggregated doesn't exist anyway. Hanson assumes that there is some policy that, if imposed on everyone, would work; he never considers the possibility that the real problem is that assumption--that the root problem is the very act of imposing policies on everyone, not the particular policies that get imposed.
- RobinHanson 13y ago
  But if there is no reason to think that problem is worse in this proposal, and the info aggregation problem would get better, you might still want to support this proposal.
  - pdonis 13y ago
    If the information that would need to be aggregated doesn't exist, then the "info aggregation problem" as you've defined it doesn't exist either, so it's meaningless to ask whether it gets "better". As for the problem of imposing policies on everyone, doing it by a mechanical procedure based on a betting market actually does strike me as worse than doing it the way we do it now, for a couple of reasons. But I'll respond further to that in the other subthread where we are having that discussion.

67 points by mike_esspe 13y ago

The failure mode of all voting system with central control is that the elite take over the most important part of the system: what is actually voted on. This will happen in a futarchy just as it happens in democracy. The end result will be, I'd predict, indistinguishable. Only societies without strong centralization and with incentives on the elites that stand opposed to collusion have the promise to evade what happens to democracies. An example is that which prevailed for a fair time in Medieval Iceland, but there are few others: the opening society of the US gave way to growing centralization pretty quickly, and the original vision didn't last much past two generations. There were not strong enough incentives to prevent collusion of the elites against the masses.

RobinHanson 13y ago
It is quite possible to have a decentralized and open system for making proposals. For example, there can be a fee to make a proposal, which is paid back at a multiple of the proposal is approved.

eli_gottlieb 13y ago

Get this shit out of here. We already have rule-by-money.

jjsz 13y ago

I've searched your PDF and did not find the keywords from Voting Paradoxes and Combinatrics [0]. What are your thoughts on this subject? [0] http://www.youtube.com/watch?v=LFjApWH8R9c http://www.youtube.com/watch?v=LFjApWH8R9c A speech by Noga Alon [1], Baumritter Professor of Mathematics and Computer Science, Tel Aviv University [1] http://www.tau.ac.il/~nogaa/ http://www.tau.ac.il/~nogaa/

gwern 13y ago
Is there any reason to think those are worse for futarchy than for democracy?

DennisP 13y ago

I like this idea, but I don't know how it would handle multiple conflicting goals. Hansen gives a sample goal of improving the economy, but what if you also want to protect the environment, take care of your old and sick, maintain a strong defense, educate your children, etc? I suppose you could weight them by importance (based on score voting maybe), have people bet on each policy's effect on every goal, and apply an optimization algorithm to the whole thing to get policy decisions, but not many people would understand and trust the system.

pjscott 13y ago
Not many people understand and trust the system we use now. Would futarchy actually be more confusing, or just different?
gwern 13y ago
> Hansen gives a sample goal of improving the economy, but what if you also want to protect the environment, take care of your old and sick, maintain a strong defense, educate your children, etc? This is where the 'vote on values, bet on beliefs' part comes in (did you read the paper?). The voters' job is to specify how much importance they place on various goals or metrics, and the prediction markets are asked how to achieve the goals.
- DennisP 13y ago
  It had been a while so I looked through it again. Throughout he talks about deciding everything with a single measure of national welfare (which could include things besides GDP, weighted). I'm not convinced that's realistic. That one function would get enormously complex, its exact definition hard to decide but very influential on policy, and instead of debating specific policies we'd have vicious debates on the right formula to use, mostly driven by self-interested actors attempting to gain advantage, with even more obscurity than we have now. In principle I like the idea, I'm just trying to figure out how to make it better.
  - yummyfajitas 13y ago

1053r 13y ago

This system suffers from the same political economy problems that democracies have. For example, if I am a corn producer in the USA, I have a strong incentive to spend lots of money lobbying and contributing to political campaigns to ensure a strong protectionist policy for sugar. It ensures that my corn is purchased and used for corn syrup, and that Brazilian sugar cane doesn't destroy my market. The good from this policy is concentrated on the corn producers, and the harm is spread diffusely across all people who consume sweets. If I am an average consumer of sweets, I see little benefit fighting this policy today, since it will only change the price of a soda by a few cents. Under a "Futarchy", the corn lobby can spend lots of money to "predict" that a sugar tariff will make the country better. They might even believe it, but I will have little incentive to vote with my wallet against such a policy, since the harm will be diffuse and extremely difficult to conclusively pick out from the noise using econometric techniques. Result: a strong tariff, which almost all economists agree is a bad policy. [1] Just because Futarchy is vulnerable to some of the same problems as democracy as practiced in the USA doesn't mean it is a bad system, but I fail to see how it is functionally different than a plutocracy. [2] The problem with prediction markets is that they are only accurate in so much as one's incentive to "waste" money producing an incorrect prediction is smaller than the amount of money to be made by having that incorrect prediction. Hanging all law off of the results of prediction markets creates HUGE incentives for me to game the prediction markets, then extract rents elsewhere in the economy to more than recoup my investment. [1] https://en.wikipedia.org/wiki/Tariff https://en.wikipedia.org/wiki/Tariff [2] https://en.wikipedia.org/wiki/Plutocracy https://en.wikipedia.org/wiki/Plutocracy (Edited for grammar, citations).

coffeemug 13y ago
But you're ignoring speculators. In a system like futarchy it's easy to imagine organizations whose sole purpose is to make money on information asymmetry. Wouldn't Goldman Sachs hop in to massively outbid the corn industry and make a lot of money in the process?
- altoz 13y ago
  There's Goldman Sachs, the Sugar Cane Lobby, non-profits that raise money against childhood obesity. It'll really be voting with wallets.

nairboon 13y ago

This leads to a system where people will vote only on the issues that affects them, which is a core principle of the panocracy system [1]. The problem with futarchy is that if the betting works with money, it will ultimately lead to a plutocracy. But this could be avoided if there would be some form of "voting credits", so that every citizen has a ceratin credits to bet per year/month/... The winning bets could then be paid out in money. [1]: http://en.panokratie.net/ http://en.panokratie.net/

darkmighty 13y ago
This would lead to non-expert masses (irrationally) giving a lot of credit to certain groups. It's a delicate issue, because you need to provide a long term stake to force the decisions to be optimal (so future welfare is evaluated correctly and optimized), but at the same time paying off those stakes leads to an unstable plutocratic scenario. Some kind clever compromise could probably be reached, I think, and this is one of those wonderful ideas that will never be implemented.

gathly 13y ago

blaming the poor countries for their poverty, because of "stupid policies" displays an overwhelming lack of historical knowledge.

baddox 13y ago

This is similar to, although one step removed from, the anarcho-capitalist proposal in David Friedman's 1973 book The Machinery of Freedom [0]. In this proposed society, monopoly government is replaced completely by a market for everything that government currently does, including law production, law enforcement, arbitration (courts), roads and infrastructure, and even "national" defense. I'm admittedly a big fan of Friedman's proposal, and I wonder what supposed advantage this futarchy provides over Friedman's proposal. There's a decent 20 minutes illustrated summary video on YouTube [1]. [0] http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf [1] http://www.youtube.com/watch?v=jTYkdEU_B4o http://www.youtube.com/watch?v=jTYkdEU_B4o

judk 13y ago
How do opposing parties decide on a court to settle their differences?
- baddox 13y ago
  In the complete system, most or all parties would already be contracted with a rights enforcement agency, and each rights enforcement agency will already be contracted with an arbiter (court).
  - judk 13y ago
    And what if they don't have a contract, either because the interaction was nonconsensual, or because it is insanely impractical to negotiate a contract when buying a stick of gum? Political scientists aren't all idiots, people. Social contract theory exists for a reason.
ehmish 13y ago
One problem I can see with Friedman's private courts/Rights Enforcement Agencies, is that if you have bigger and smaller REAs, a sufficiently big REA would be able to compel smaller REAs to ignore violations by the customers of the big REA. Smaller REAs would go out of business, as the big REA would be a much better deal for anyone who doesn't want to get sued. Finally, you'd be left with one big REA, probably called "The Police" or something.

qwerty9999 13y ago

If we did this, 4chan would rig the votes and take over the world. ;-)

davexunit 13y ago
There's already a futarchy on /d/.

judk 13y ago

> Elected representatives would formally define and manage an after-the-fact measurement of national welfare The paper scuttles itself in the first paragraph.

harshreality 13y ago
That national welfare metric could be a legally required and binding part of the platforms they run on.

amalcon 13y ago

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. This is taken as obvious, but I don't find it so. There are many things that are not attributable to tangible national assets, but that can nonetheless change its course: things such as historical accident of where a particular thing was invented, actions of other nations, natural disasters, etc. I see every reason to think that this sort of thing is responsible for wealth disparity, moreso than repeated adoption of "dumb" policies.

jayfuerstenberg 13y ago

How is GDP a measure of wealth? It's a measure of how much money is spent back and forth and not much else. Some consider this money moving to be "progress" but it actually only highlights how many problems a society's people are willing to pay in order to solve. The medical industry is a classic example of this. People are suffering and paying an arm and a leg for cures and treatment. GDP reflects the money aspect of this while ignoring the human aspect.

RobinHanson 13y ago
GDP is only an initial starting point for developing a measure of national welfare. Using GDP in this system might well be better than our current system, and improvements should make it even better.

pdonis 13y ago

Quote from the article: Futarchy seems promising if we accept the following three assumptions: Democracies fail largely by not aggregating available information. And we don't even need to go any further, because assumption #1 is wrong in two ways: (1) Democracies fail because people have conflicting goals, not just conflicting beliefs about how to reach goals. Even people who have all the same factual beliefs can still have inconsistent goals. That is a problem in any system that requires everyone to adopt common goals in order to set policy. (2) The "information" that would need to be aggregated doesn't exist anyway. Hanson assumes that there is some policy that, if imposed on everyone, would work; he never considers the possibility that the real problem is that assumption--that the root problem is the very act of imposing policies on everyone, not the particular policies that get imposed.

RobinHanson 13y ago
But if there is no reason to think that problem is worse in this proposal, and the info aggregation problem would get better, you might still want to support this proposal.
- pdonis 13y ago
  If the information that would need to be aggregated doesn't exist, then the "info aggregation problem" as you've defined it doesn't exist either, so it's meaningless to ask whether it gets "better". As for the problem of imposing policies on everyone, doing it by a mechanical procedure based on a betting market actually does strike me as worse than doing it the way we do it now, for a couple of reasons. But I'll respond further to that in the other subthread where we are having that discussion.