6 ms·

An Introduction to Futarchy

54 points by panarky 12y ago

vertex-four 12y ago
Umm, so, basically, this is a system which would get rid of one-vote-per-person, and implement a pay-to-vote system, where those with more money to spend have more vote, built into the very fabric of the system. Unless I'm getting it completely wrong.
- drcode 12y ago
  Yes, except that if you spend your money to vote irrationally, smaller players can use this as a profit opportunity to extract money from the "rich"... irrational/biased voting is penalized.
  - tunesmith 12y ago
    So, honest rich people get more voting power than honest poor people?
    - roryokane 12y ago
      No, smart, effective rich people get more voting power than smart, effective poor people. Which is not so bad, since if they are smart and effective, they will usually vote for the better policy anyway.
      - angersock 12y ago
        Smart and effective doesn't necessarily imply better policy. Better policy for them, perhaps, but not for everyone else.
        cbr 12y ago
        In this system there's an agreed-on concept of "better", and this is standard one-person-one-vote with no money involved. If these "smart, effective rich people" then bet that certain policies will be better, but in fact these policies turn out to only be better for them and are worse for everyone else, they will lose lots of money for betting wrong.
        notahacker 12y ago
        You seem to assume the incentives are always correctly aligned, and agreed on concepts of "better" are immutable. They're not. Simple example: Country X decides to do something dastardly against the interests of Futarchy Y. Confidence in the economic outlook wavers, as happens in any country where there's an anticipated reduction in trade and maybe even war. Country X, could have made a lot of money shorting "future GDP per capita" on the Futarchy prediction exchange prior to their dastardly act though. It gets worse because not only is Country X able to directly profit from making the lives of Futarchy Y worse, but the futarchic system actually makes retaliation impossible. Much as the government of Futarchy Y talks tough, and would like to take action, like sanctions, but when they actually put their sanction policy to the test, these proposed sanctions probably have a negative impact on "future GDP per capita", which is one of a perfectly reasonable set of metrics Futarchy Y has chosen. Despite the man on the street tending to agree that sanctions would be a just and moral cause of action Futarchy Y is forced into retreat because a priori metrics matter more than what the government and the public actually want to happen, and there's no way the market agrees that sanctions are going to help them achieve the given goal of growing GDP. Smart people outwit crude algorithms in simple games like Go if they have an infinitude of possible outcomes. Now imagine that crude algorithm is calibrated by simpletons voting on parameters they don't really understand
        cbr 12y ago
        You seem to assume the incentives are always correctly aligned, and agreed on concepts of "better" are immutable. They're not. No, I agree with you. I'm not very confident futarchy would work out in practice. I can theorize about how you need to set up your metrics so your country doesn't get exploited by others, but getting the metrics right is very important and they're going to be constantly under attacks to separate them from what they're actually trying to measure.
        baddox 12y ago
        > Better policy for them, perhaps, but not for everyone else. That's precisely what the prediction market purports to solve.
      - bcoates 12y ago
        That's the one thing this proposal gets right -- the returns to betting marginally better than everyone else are exponential, so they are mostly insensitive to initial conditions. In a world where everything is decided by cointoss, it's better to be born poor and lucky than rich and unlucky.
    - deleted 12y ago
      [deleted]
    - baddox 12y ago
      I guess it depends on what exactly you mean by "honest." Rich people would have more voting power, but also the incentive to vote "correctly." Right now, in the real world, rich people have much more political influence than poor people, and very little incentive to vote "correctly."
      - tunesmith 12y ago
        Is it a truism that "correctly" has the same definition for a smart, effective, honest rich person as it does for a smart, effective, honest poor person?
        baddox 12y ago
        The reason I put it in quotation marks is because it's not a very well-defined concept, and it assumes that there is objectively a correct society, when in reality, people have different preferences. One way to formalize it would be in terms of Pareto improvements, which are theoretical but useful for analysis. Imagine a referendum where voting yes results in rich people receiving a benefit at the expense of the poor and voting no results in no benefit or expense to anyone. One example of this might be introduction of a regressive tax. Most of us would agree that, according to standard Western civil values, the "correct" vote is no. But obviously rich people in our current system are incentivized to vote yes, and perhaps also to spend money campaigning in support of this referendum.
        Qworg 12y ago
        And rich people in this new system are incentivized to not vote yes? They gain a benefit. The poor people, who don't have any market power, do not. Why would they vote any other way?
        baddox 12y ago
        If I understand futarchy (I haven't studied it extensively, so I may be wrong), you need over 50% of the money in the system to be voting yes in order for it to be profitable to vote yes. If, say, 75% of the money was voting no (the "correct" decision), then the rich people voting no with 25% of the money would be losing money. In our current system, rich people are incentived to vote yes, even if they will be vastly outnumbered by the people voting no, because there is very little cost to voting for the "incorrect" option (if we're ignoring the cost of educating yourself about the effect of each vote, which we assumed away previously). In this system, rich people are incentivized to vote for the "correct" option, because voting for the "incorrect" option is costly.
    - logfromblammo 12y ago
      The poor people get to decide what is important. The rich people decide how to optimize for the important things. For instance, if the one-person-one-vote decided, for whatever reason, that a metric of importance was grams of marijuana sold in a year to people older than 18, minus (18-age)^2*grams for any weed consumed by minors, then rich people would decide the best way to repeal marijuana prohibition while keeping it away from kids. The prediction market would decide the policy. But this is where I get confused about the payouts. The predictions have to be tied to reality in some way to have any value. So the backers of a given policy choice have a financial incentive to see it exceed predictions, while the opposition has incentive to see it fail completely. They could game the metric to avoid paying out as much, and do something like pass out pot brownies to kids in day care. They have an ongoing incentive to influence the metric. But if you remove the influence incentive, you also remove the motive to predict accurately. I feel like I'm missing something here. It seems like if you tried this with government, you're making renegade behavior potentially profitable. In the article example, it seems that if banker wanted a bailout, he would go long on bailout and short on no-bailout. If the no-bailout policy won, he then has a giant incentive to do anything in his power to crash the economy and keep GDP down. Can anyone explain what I'm missing, if anything?
  - micahwayne 12y ago
    If the voting is secret and instantaneous, instead of via a market over a period time, those who control enough of the market won't be able to push the market in one direction, without exposing themselves to significant losses.
- baddox 12y ago
  Can you explain from first principles why "one vote per person" is a good way to efficiently produce law, given that most of us accept that it's not a good way to produce many other things (like food and automobiles)? If everyone got a single vote on what model of automobile should be produced, and only the winning model was produced, surely we all agree that the resulting automobile would be much worse than the average automobile produced by the market. In this scenario, it's obvious that there would be mass voter apathy: the amount of time it takes to research automobile designs and manufacturers isn't worth it, because your vote is extremely unlikely to effect the automobile you receive. But when each person has to pay for their own automobile, it's absolutely worth you time to research automobiles, because you get exactly the automobile you purchase.
  - icushman 12y ago
    #1: People should have some form of influence on their own governance. #2: Any method of assigning relative degrees of influence is unacceptably vulnerable to a corruption by the advantaged party tantamount to a violation of #1. Side note: Efficiency of law production is not a metric most people will consent to prioritizing above metrics like perceived justice.
    - baddox 12y ago
      What if, hypothetically, it were the case that switching from "one vote per person" to some new system would result in everyone being better off (by their own subjective notion of "better off," which can include things like how much justice they believe exists, how corrupt laws are, etc.)? Then wouldn't it make sense to argue in favor of this new system? My point is that even though there are widely accepted moral arguments for why "one vote per person" is the best way to organize society, it really boils down to an economic argument about what the actual results of such a society will be. I suspect few people would support "one vote per person" on moral grounds if they believed that another system would result in a society where everyone is better off. Likewise, I suspect few libertarians, socialists, anarchists, etc. would continue to make moral arguments if they truly believed that their proposed society would end up the way their opponents believe it would end up. > Side note: Efficiency of law production is not a metric most people will consent to prioritizing above metrics like perceived justice. Economically efficient law is pretty difficult to argue against. I suspect the vast majority of people will support it if they understand the definition of economic efficiency. From Wikipedia: "An economic system is said to be more efficient than another (in relative terms) if it can provide more goods and services for society without using more resources." https://en.wikipedia.org/wiki/Economic_efficiency https://en.wikipedia.org/wiki/Economic_efficiency
- cbr 12y ago
  No, it's still one-person-one-vote. Voting is used to get agreement on what counts as a good outcome. The money and betting come in when trying to determine what policies are most likely to lead to the desired outcomes.
bitCromwell 12y ago
there seems a fundamental incongruence between a market based decision mechanism and a singular fiat decision. prediction markets are valuable because of their ability to absorb complex and dynamic information. while they point to a consensus it is a fleeting one by definition. for theoretical examples the 2 presented are especially awkward and seem fated to trip over themselves not because of the mystic beauty of self reference but rather because they are the wrong tools for the job. perhaps to start thinking this way its better to remove legacy institutions and things like government bail outs and ceo pay as a priori conditions.
- drcode 12y ago
  Agreed, futarchy seems clever but there seems to be too many reasons why you'd never reap the theoretical benefits in practice.
notahacker 12y ago
If prediction markets were really the best way for a large, centralised entity to make decisions, you'd think at least a few successful corporations would have implemented it into their corporate governance. The irony of proposals to reform the whole stakeholders-periodically-approve-an-all-powerful-executive model, on the assumption that markets make for better decisions than individuals with great power and limited accountability, is that markets consistently don't penalise large, successful firms for being almost-invariably run by a bunch of powerful executives whose power is checked only by the occasional AGM.
- Zigurd 12y ago
  There are many governance variants that should outperform conventional decision-making practice in corporations but go unadopted. Either we're living in a decision-making Golden Age, which seems unlikely, or corporate decision making is very ego-driven and resistant to systemic change.
  - notahacker 12y ago
    Corporate decision making is very ego driven and resistant to systemic change[1]. From which we can conclude either that stock markets are not very good at promoting good governance (even with narrow, homogenous criteria like "grow shareholder value) or that concentrating power in the hand of ego-driven, change resistant groups of [mostly] old men is not as bad for shareholders as running a corporation based on prediction markets. I'd say both were true [1]though many corporations' shareholders would justifiably argue the latter part is a feature of the system rather than a bug
- baddox 12y ago
  > If prediction markets were really the best way for a large, centralised entity to make decisions, you'd think at least a few successful corporations would have implemented it into their corporate governance. Only if you think that every "best way" to do every thing has already been done, which I highly doubt.
bcoates 12y ago
Markets only solve the information problem, they don't address the decision problem (given unlimited knowledge of the present, how do we optimize the future? -- an intractable problem) or the measurement problem (were the decisions we made in the past good or bad? What was the GDP in 2011? -- a very hard problem). Applying markets to problems other than information problems won't work. Using markets to "deci[de] on a political party every few months and that political party makes decisions" isn't bad (just) because it's a one-party state, but because nobody--not even new Soviet man or Madison's government of angels--is actually competent to make the decisions that would be needed to make central planning work. Democratic or Plutocratic or Market-inspired or AI-based central planning all don't work because the problem is central planning, not the method of choosing the planners.
josephschmoe 12y ago
How do you pronounce "futarchy?"
- roryokane 12y ago
  The introductory paper on futarchy (http://hanson.gmu.edu/futarchy.pdf http://hanson.gmu.edu/futarchy.pdf) says ‘For no particular reason, I’ve named this alternative “futarchy.”’ That seems to indicate that “fut” isn’t any kind of standard prefix with a known pronunciation. So the way I naturally read the word is “FOO-tar-ki”.
dlsx 12y ago
SCAMCOIN beware. Just look at that eastern euro face, how can you NOT trust it? Seriously, these guys are talented programmers, but they just want money like everyone else. And like everyone else they are using framework already pioneered by Satoshi Nakamoto. In 10 years we will have a graveyard of thousands of "alt coins" And guess what, just like the internet the only one people will remember is Bitcoin.
micahwayne 12y ago
Somebody CC Bill Belichick - I'm sure he can get this thing in place for a fourth down play by the post season.
josephschmoe 12y ago
What's to keep someone from going short on a proposal and just going from house to house wrecking mailboxes with baseball bats?
- roryokane 12y ago
  The incentive that already exists – the law. A single person couldn’t do much damage on their own to affect a global metric like GDP much, and they would probably not consider it worth it to have made a little bit of money if they have to spend time in jail because of it.
otakucode 12y ago
I thought for sure futarchy had to have something to do with futa as a governmental system...
csandreasen 12y ago
Though I've advocated for more metrics-based accountability in the past and agree with the author on that level, I don't know that tying a profit incentive is necessarily a good thing. It encourages people to vote for which policy is more profitable, which may or may not equate to which policy is more effective. If the goal was, for example, to reduce crime rate, it would be more profitable for me to vote for the Sheriff who's slightly more likely to fail but simultaneously more likely to cook the books than the one who has a 50/50 shot of actually decreasing the crime rate. What if the policy in question is a rather difficult problem where all solutions are equally likely to fail? Would that discourage everyone to vote on that policy except for those who are already wealthy enough to make a risky investment? Stepping back further, this would likely discourage anyone who didn't have sufficient disposable income to vote, thus making policy more lopsided. If I lose my job, how do I vote on establishing/expanding a safety net when I have to worry about feeding my family? If I can't vote, does that effectively mean that welfare and similar programs will be voted out by those that have no use for it?
- roryokane 12y ago
  This all just points to the importance of choosing a good metric. The article’s example of GDP as a metric was just an example – later in the article, the author points out that a few ways in which that metric would need to be patched. I think the proper response to wanting to vote for a sheriff who would cook the books is to increase the penalty for sheriffs who are caught cooking the books, since their actions would incentivise others more than they do now. Hopefully then, even a more crooked sheriff would recognize that it is not in his interest to go to jail just so that the people who voted him in with can make more money. To help those who are on welfare, perhaps the metric needs to additionally include a criterion such as average happiness of everyone, including those on welfare, as rated by a periodic survey.
  - seanflyon 12y ago
    The problem of selecting a good measurable metric is not solvable.
josephschmoe 12y ago
I actually really like the idea of Futarchy for corporates because it gives investors a way to invest in a change in the company, rather than just the company in general. For example: There are plenty of people who would love to invest in the Microsoft Surface, but don't care at all about Microsoft Office or Microsoft Windows. Why would I want to package all of those together if I don't have to?
Executor 12y ago
This idea is horrible since it is plutocratic and elitist. It encourages the lives of affluent people living in the finance sector/stock traders but empowers nobody else. It punishes those who don't participate in the stock market, fail to correctly predict trends. Remember the damage caused by the finance industry in recent years: the 2007 depression, the bursting of the housing market, as well as the initiation of austerity policies around the world. We should be concerned with eliminating the finance sector's control on society - not increasing it.

54 points by panarky 12y ago

Umm, so, basically, this is a system which would get rid of one-vote-per-person, and implement a pay-to-vote system, where those with more money to spend have more vote, built into the very fabric of the system. Unless I'm getting it completely wrong.

drcode 12y ago
Yes, except that if you spend your money to vote irrationally, smaller players can use this as a profit opportunity to extract money from the "rich"... irrational/biased voting is penalized.
- tunesmith 12y ago
  So, honest rich people get more voting power than honest poor people?
  - roryokane 12y ago
    No, smart, effective rich people get more voting power than smart, effective poor people. Which is not so bad, since if they are smart and effective, they will usually vote for the better policy anyway.
    - angersock 12y ago
      Smart and effective doesn't necessarily imply better policy. Better policy for them, perhaps, but not for everyone else.
      - cbr 12y ago
        In this system there's an agreed-on concept of "better", and this is standard one-person-one-vote with no money involved. If these "smart, effective rich people" then bet that certain policies will be better, but in fact these policies turn out to only be better for them and are worse for everyone else, they will lose lots of money for betting wrong.
        notahacker 12y ago
        You seem to assume the incentives are always correctly aligned, and agreed on concepts of "better" are immutable. They're not. Simple example: Country X decides to do something dastardly against the interests of Futarchy Y. Confidence in the economic outlook wavers, as happens in any country where there's an anticipated reduction in trade and maybe even war. Country X, could have made a lot of money shorting "future GDP per capita" on the Futarchy prediction exchange prior to their dastardly act though. It gets worse because not only is Country X able to directly profit from making the lives of Futarchy Y worse, but the futarchic system actually makes retaliation impossible. Much as the government of Futarchy Y talks tough, and would like to take action, like sanctions, but when they actually put their sanction policy to the test, these proposed sanctions probably have a negative impact on "future GDP per capita", which is one of a perfectly reasonable set of metrics Futarchy Y has chosen. Despite the man on the street tending to agree that sanctions would be a just and moral cause of action Futarchy Y is forced into retreat because a priori metrics matter more than what the government and the public actually want to happen, and there's no way the market agrees that sanctions are going to help them achieve the given goal of growing GDP. Smart people outwit crude algorithms in simple games like Go if they have an infinitude of possible outcomes. Now imagine that crude algorithm is calibrated by simpletons voting on parameters they don't really understand
        cbr 12y ago
        You seem to assume the incentives are always correctly aligned, and agreed on concepts of "better" are immutable. They're not. No, I agree with you. I'm not very confident futarchy would work out in practice. I can theorize about how you need to set up your metrics so your country doesn't get exploited by others, but getting the metrics right is very important and they're going to be constantly under attacks to separate them from what they're actually trying to measure.
      - baddox 12y ago
        > Better policy for them, perhaps, but not for everyone else. That's precisely what the prediction market purports to solve.
    - bcoates 12y ago
      That's the one thing this proposal gets right -- the returns to betting marginally better than everyone else are exponential, so they are mostly insensitive to initial conditions. In a world where everything is decided by cointoss, it's better to be born poor and lucky than rich and unlucky.
  - deleted 12y ago
    [deleted]
  - baddox 12y ago
    I guess it depends on what exactly you mean by "honest." Rich people would have more voting power, but also the incentive to vote "correctly." Right now, in the real world, rich people have much more political influence than poor people, and very little incentive to vote "correctly."
    - tunesmith 12y ago
      Is it a truism that "correctly" has the same definition for a smart, effective, honest rich person as it does for a smart, effective, honest poor person?
      - baddox 12y ago
        The reason I put it in quotation marks is because it's not a very well-defined concept, and it assumes that there is objectively a correct society, when in reality, people have different preferences. One way to formalize it would be in terms of Pareto improvements, which are theoretical but useful for analysis. Imagine a referendum where voting yes results in rich people receiving a benefit at the expense of the poor and voting no results in no benefit or expense to anyone. One example of this might be introduction of a regressive tax. Most of us would agree that, according to standard Western civil values, the "correct" vote is no. But obviously rich people in our current system are incentivized to vote yes, and perhaps also to spend money campaigning in support of this referendum.
        Qworg 12y ago
        And rich people in this new system are incentivized to not vote yes? They gain a benefit. The poor people, who don't have any market power, do not. Why would they vote any other way?
        baddox 12y ago
        If I understand futarchy (I haven't studied it extensively, so I may be wrong), you need over 50% of the money in the system to be voting yes in order for it to be profitable to vote yes. If, say, 75% of the money was voting no (the "correct" decision), then the rich people voting no with 25% of the money would be losing money. In our current system, rich people are incentived to vote yes, even if they will be vastly outnumbered by the people voting no, because there is very little cost to voting for the "incorrect" option (if we're ignoring the cost of educating yourself about the effect of each vote, which we assumed away previously). In this system, rich people are incentivized to vote for the "correct" option, because voting for the "incorrect" option is costly.
  - logfromblammo 12y ago
    The poor people get to decide what is important. The rich people decide how to optimize for the important things. For instance, if the one-person-one-vote decided, for whatever reason, that a metric of importance was grams of marijuana sold in a year to people older than 18, minus (18-age)^2*grams for any weed consumed by minors, then rich people would decide the best way to repeal marijuana prohibition while keeping it away from kids. The prediction market would decide the policy. But this is where I get confused about the payouts. The predictions have to be tied to reality in some way to have any value. So the backers of a given policy choice have a financial incentive to see it exceed predictions, while the opposition has incentive to see it fail completely. They could game the metric to avoid paying out as much, and do something like pass out pot brownies to kids in day care. They have an ongoing incentive to influence the metric. But if you remove the influence incentive, you also remove the motive to predict accurately. I feel like I'm missing something here. It seems like if you tried this with government, you're making renegade behavior potentially profitable. In the article example, it seems that if banker wanted a bailout, he would go long on bailout and short on no-bailout. If the no-bailout policy won, he then has a giant incentive to do anything in his power to crash the economy and keep GDP down. Can anyone explain what I'm missing, if anything?
- micahwayne 12y ago
  If the voting is secret and instantaneous, instead of via a market over a period time, those who control enough of the market won't be able to push the market in one direction, without exposing themselves to significant losses.
baddox 12y ago
Can you explain from first principles why "one vote per person" is a good way to efficiently produce law, given that most of us accept that it's not a good way to produce many other things (like food and automobiles)? If everyone got a single vote on what model of automobile should be produced, and only the winning model was produced, surely we all agree that the resulting automobile would be much worse than the average automobile produced by the market. In this scenario, it's obvious that there would be mass voter apathy: the amount of time it takes to research automobile designs and manufacturers isn't worth it, because your vote is extremely unlikely to effect the automobile you receive. But when each person has to pay for their own automobile, it's absolutely worth you time to research automobiles, because you get exactly the automobile you purchase.
- icushman 12y ago
  #1: People should have some form of influence on their own governance. #2: Any method of assigning relative degrees of influence is unacceptably vulnerable to a corruption by the advantaged party tantamount to a violation of #1. Side note: Efficiency of law production is not a metric most people will consent to prioritizing above metrics like perceived justice.
  - baddox 12y ago
    What if, hypothetically, it were the case that switching from "one vote per person" to some new system would result in everyone being better off (by their own subjective notion of "better off," which can include things like how much justice they believe exists, how corrupt laws are, etc.)? Then wouldn't it make sense to argue in favor of this new system? My point is that even though there are widely accepted moral arguments for why "one vote per person" is the best way to organize society, it really boils down to an economic argument about what the actual results of such a society will be. I suspect few people would support "one vote per person" on moral grounds if they believed that another system would result in a society where everyone is better off. Likewise, I suspect few libertarians, socialists, anarchists, etc. would continue to make moral arguments if they truly believed that their proposed society would end up the way their opponents believe it would end up. > Side note: Efficiency of law production is not a metric most people will consent to prioritizing above metrics like perceived justice. Economically efficient law is pretty difficult to argue against. I suspect the vast majority of people will support it if they understand the definition of economic efficiency. From Wikipedia: "An economic system is said to be more efficient than another (in relative terms) if it can provide more goods and services for society without using more resources." https://en.wikipedia.org/wiki/Economic_efficiency https://en.wikipedia.org/wiki/Economic_efficiency
cbr 12y ago
No, it's still one-person-one-vote. Voting is used to get agreement on what counts as a good outcome. The money and betting come in when trying to determine what policies are most likely to lead to the desired outcomes.

bitCromwell 12y ago

there seems a fundamental incongruence between a market based decision mechanism and a singular fiat decision. prediction markets are valuable because of their ability to absorb complex and dynamic information. while they point to a consensus it is a fleeting one by definition. for theoretical examples the 2 presented are especially awkward and seem fated to trip over themselves not because of the mystic beauty of self reference but rather because they are the wrong tools for the job. perhaps to start thinking this way its better to remove legacy institutions and things like government bail outs and ceo pay as a priori conditions.

drcode 12y ago
Agreed, futarchy seems clever but there seems to be too many reasons why you'd never reap the theoretical benefits in practice.

notahacker 12y ago

If prediction markets were really the best way for a large, centralised entity to make decisions, you'd think at least a few successful corporations would have implemented it into their corporate governance. The irony of proposals to reform the whole stakeholders-periodically-approve-an-all-powerful-executive model, on the assumption that markets make for better decisions than individuals with great power and limited accountability, is that markets consistently don't penalise large, successful firms for being almost-invariably run by a bunch of powerful executives whose power is checked only by the occasional AGM.

Zigurd 12y ago
There are many governance variants that should outperform conventional decision-making practice in corporations but go unadopted. Either we're living in a decision-making Golden Age, which seems unlikely, or corporate decision making is very ego-driven and resistant to systemic change.
- notahacker 12y ago
  Corporate decision making is very ego driven and resistant to systemic change[1]. From which we can conclude either that stock markets are not very good at promoting good governance (even with narrow, homogenous criteria like "grow shareholder value) or that concentrating power in the hand of ego-driven, change resistant groups of [mostly] old men is not as bad for shareholders as running a corporation based on prediction markets. I'd say both were true [1]though many corporations' shareholders would justifiably argue the latter part is a feature of the system rather than a bug
baddox 12y ago
> If prediction markets were really the best way for a large, centralised entity to make decisions, you'd think at least a few successful corporations would have implemented it into their corporate governance. Only if you think that every "best way" to do every thing has already been done, which I highly doubt.

bcoates 12y ago

Markets only solve the information problem, they don't address the decision problem (given unlimited knowledge of the present, how do we optimize the future? -- an intractable problem) or the measurement problem (were the decisions we made in the past good or bad? What was the GDP in 2011? -- a very hard problem). Applying markets to problems other than information problems won't work. Using markets to "deci[de] on a political party every few months and that political party makes decisions" isn't bad (just) because it's a one-party state, but because nobody--not even new Soviet man or Madison's government of angels--is actually competent to make the decisions that would be needed to make central planning work. Democratic or Plutocratic or Market-inspired or AI-based central planning all don't work because the problem is central planning, not the method of choosing the planners.

josephschmoe 12y ago

How do you pronounce "futarchy?"

roryokane 12y ago
The introductory paper on futarchy (http://hanson.gmu.edu/futarchy.pdf http://hanson.gmu.edu/futarchy.pdf) says ‘For no particular reason, I’ve named this alternative “futarchy.”’ That seems to indicate that “fut” isn’t any kind of standard prefix with a known pronunciation. So the way I naturally read the word is “FOO-tar-ki”.

dlsx 12y ago

SCAMCOIN beware. Just look at that eastern euro face, how can you NOT trust it? Seriously, these guys are talented programmers, but they just want money like everyone else. And like everyone else they are using framework already pioneered by Satoshi Nakamoto. In 10 years we will have a graveyard of thousands of "alt coins" And guess what, just like the internet the only one people will remember is Bitcoin.

micahwayne 12y ago

Somebody CC Bill Belichick - I'm sure he can get this thing in place for a fourth down play by the post season.

josephschmoe 12y ago

What's to keep someone from going short on a proposal and just going from house to house wrecking mailboxes with baseball bats?

roryokane 12y ago
The incentive that already exists – the law. A single person couldn’t do much damage on their own to affect a global metric like GDP much, and they would probably not consider it worth it to have made a little bit of money if they have to spend time in jail because of it.

otakucode 12y ago

I thought for sure futarchy had to have something to do with futa as a governmental system...

csandreasen 12y ago

Though I've advocated for more metrics-based accountability in the past and agree with the author on that level, I don't know that tying a profit incentive is necessarily a good thing. It encourages people to vote for which policy is more profitable, which may or may not equate to which policy is more effective. If the goal was, for example, to reduce crime rate, it would be more profitable for me to vote for the Sheriff who's slightly more likely to fail but simultaneously more likely to cook the books than the one who has a 50/50 shot of actually decreasing the crime rate. What if the policy in question is a rather difficult problem where all solutions are equally likely to fail? Would that discourage everyone to vote on that policy except for those who are already wealthy enough to make a risky investment? Stepping back further, this would likely discourage anyone who didn't have sufficient disposable income to vote, thus making policy more lopsided. If I lose my job, how do I vote on establishing/expanding a safety net when I have to worry about feeding my family? If I can't vote, does that effectively mean that welfare and similar programs will be voted out by those that have no use for it?

roryokane 12y ago
This all just points to the importance of choosing a good metric. The article’s example of GDP as a metric was just an example – later in the article, the author points out that a few ways in which that metric would need to be patched. I think the proper response to wanting to vote for a sheriff who would cook the books is to increase the penalty for sheriffs who are caught cooking the books, since their actions would incentivise others more than they do now. Hopefully then, even a more crooked sheriff would recognize that it is not in his interest to go to jail just so that the people who voted him in with can make more money. To help those who are on welfare, perhaps the metric needs to additionally include a criterion such as average happiness of everyone, including those on welfare, as rated by a periodic survey.
- seanflyon 12y ago
  The problem of selecting a good measurable metric is not solvable.

josephschmoe 12y ago

I actually really like the idea of Futarchy for corporates because it gives investors a way to invest in a change in the company, rather than just the company in general. For example: There are plenty of people who would love to invest in the Microsoft Surface, but don't care at all about Microsoft Office or Microsoft Windows. Why would I want to package all of those together if I don't have to?

Executor 12y ago

This idea is horrible since it is plutocratic and elitist. It encourages the lives of affluent people living in the finance sector/stock traders but empowers nobody else. It punishes those who don't participate in the stock market, fail to correctly predict trends. Remember the damage caused by the finance industry in recent years: the 2007 depression, the bursting of the housing market, as well as the initiation of austerity policies around the world. We should be concerned with eliminating the finance sector's control on society - not increasing it.