Robin Hanson (Overcoming Bias) believes that prediction markets should be harnessed for policy decisions — something he calls futarchy.
Mencius Moldbug considers this retarded. Naturally Hanson disagrees.
But Moldbug makes a more interesting point when he asks why Hanson — Professor Hanson — would be recommending decision markets to the US government:
If futarchy or predictocracy is truly an effective new way to make decisions, don’t you think our good professors would have better luck in marketing it to, say, Apple? I mean, why doesn’t Apple use decision markets already? They seem so, well, wired.Well. I have never worked for Apple, but I have worked for some of its competitors. And I can tell you exactly how decisions get made at Apple. Or at its competitors.
You see, Professors, when Apple wants to make an important decision, here’s how Apple does it. First — not being un-PC, just quoting Mark Twain — Apple finds a man. Hires him, in fact. And having hired this man, it tells him: sir, this decision is yours.
Consult with your subordinates, consult with your supervisor, consult with your colleagues, consult with El Stevo himself. Do you need data? Immerse yourself, sir, in data. Is technical input required? Apple’s star nerds shall file, one by one, into your cube. But at the end of the day, you are a man, this decision is yours, and you are responsible for its consequences.
No process is more foreign or repugnant to [the US government].
The US government, Mencius notes, does not make decisions, because it always does the right thing:
The question is how that right thing is defined. Within [the US government], here are the preferred sources of policy, ranked in order of rough precedence.
- The Law. A [US government] employee is always on extremely solid ground when his actions are dictated by the majesty of the law. He has no choice at all. Therefore, he cannot possibly be accused of any personal turpitude, and nor is he responsible for any suboptimal outcome. Fiat justitia, ruat coelum. Sorry, bub, it’s the law. He just works here. Of course, anything good that happens in his vicinity will redound to his credit. With the law — you can’t lose.
- Science. The ordering of #1 and #2 are a matter of taste, as the two hardly ever conflict these days. Indeed, when science is available, if you read the law it will generally say: follow science. And #2 enjoys all the fine benefits previously described under #1.
- Public Opinion. [The US government] is, of course, a democracy. Sometimes it is helpful, in future-proofing one’s ass-covering, to know not just what public opinion is today, but what it will be tomorrow. Ask a journalist — that’s his job. Of course, when today’s public opinion conflicts with science or the law, it is the role of the brave civil servant to defy it. And of the journalist to mend it.
- A Committee. Sadly, some decisions appear for which #1, #2 and #3 produce no clear answer at all. In this case, the only remedy is to gather as many “stakeholders” as possible in the same room. After all, too few cooks spoil the broth, they say.
- Personal Authority. This is sometimes sufficient to order pens. But usually not.
The pattern here is not hard to find. [The US government] craves mechanical processes for decision-making. If a decision is made mechanically, no one is responsible for any bad results. Since mechanical management tends to produce bad results, this ass-covering imperative perpetuates itself. Of course, everyone in [the US government] wants to be “in the loop” on everything — even the disasters. Better to be in on a fiasco than twiddling your thumbs around a success. Who needs responsibility?
And mechanical decision models have another benefit. Obviously, [the US government] makes real decisions all the time. Somewhere inside the great machine, there are real people with real power. But, since they exert that power by massaging a mechanical decision process — by disguising their personal whims, which are just as personal as anyone’s, in the trackless bureaucratic wastes of law or science or the like — they get to rule in secret. Power without responsibility. What fun!
Mechanical decision processes perform a kind of power laundering. Because all these processes can be gamed and hacked and massaged, they are not truly mechanical at all. But since the machine is so complex as to be incomprehensible to outsiders, no one can see the true power structures of the Beltway.
Thus the incentive for futarchy. If it wasn’t retarded (and indeed, it is no more retarded than many of the phenomena that inside the Beltway pass for law or science), it would fit perfectly in this hierarchy, right between #2 and #3. Law, or science, or the market. Of course, if science tells us to ask the market — then there’s no conflict, then, is there? And so it goes.
You might think this is a new problem. Au contraire. It is intrinsic to 20th-century economics, which stole the good name of 19th-century political economy and applied it to the science of economic central planning. Like any zombie, the whole field cries out for its nine grams of lead. And its cold, stinking life in death is older than most can imagine.
Better late than never right? Here’s the video: Robin Hanson and Mencius Moldbug: “Futarchy Debate” at Foresight 2010 Conference. Moldbug looks surprisingly normal, no horns or anything.