Futarchy: Vote Values, But Bet Beliefs(hanson.gmu.edu)
hanson.gmu.edu
Futarchy: Vote Values, But Bet Beliefs
http://hanson.gmu.edu/futarchy.html
66 comments
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?
You are talking about the issue of manipulating prices via trades. We have lots of evidence that this isn't much of a problem. Read my papers for details.
There's Goldman Sachs, the Sugar Cane Lobby, non-profits that raise money against childhood obesity. It'll really be voting with wallets.
Voting with minds and wallets combined.
And I think Goldman Sachs wins that fight every time. Which is the whole purpose - to let the smart money guide the policy.
And I think Goldman Sachs wins that fight every time. Which is the whole purpose - to let the smart money guide the policy.
Lots of money != smart money.
And even if that was the case - define smart. Smart in the interest of Goldman Sachs is to make more money. Smart in the interest of humanity, society or a community can be (and often is) something entirely different. Who are we creating policy for?
And even if that was the case - define smart. Smart in the interest of Goldman Sachs is to make more money. Smart in the interest of humanity, society or a community can be (and often is) something entirely different. Who are we creating policy for?
Lots of money != smart money.
Eventually it does. Manipulating markets == handing your money to someone else, so the rich manipulators will exponentially [1] lose money as the smart speculators take it.
In this case, it's "smart in the interests of predicting which policies achieve the democratically selected objective function". For example, smart in predicting whether Obamacare will bend the cost curve (assuming that's the goal of obamacare).
[1] Assume 50/50 bets. The speculator bets $1, and takes $1 from the rich man. Next bet, he bets $2, takes $2 from the rich. Next bet he bets $4. The rate of growth doesn't have to be ln(2), but it is exponential.
Eventually it does. Manipulating markets == handing your money to someone else, so the rich manipulators will exponentially [1] lose money as the smart speculators take it.
In this case, it's "smart in the interests of predicting which policies achieve the democratically selected objective function". For example, smart in predicting whether Obamacare will bend the cost curve (assuming that's the goal of obamacare).
[1] Assume 50/50 bets. The speculator bets $1, and takes $1 from the rich man. Next bet, he bets $2, takes $2 from the rich. Next bet he bets $4. The rate of growth doesn't have to be ln(2), but it is exponential.
Like OCP said, it'd be plutocracy: Transforming politics into a speculative market.
That's one of the most frustrating elements of the paper: the actual speculating mechanism is too imprecisely defined to assess whether speculators actually have any interest in opposing policies which are marginally negative overall but massively enrich one group. From the rather vague description on page 22, a speculator who thought Policy X would reduce the MagicIndex effectively "shorts" the policy by placing a "conditional" bet that comes into play only if the policy is passed, in which the speculator earns money if the MagicIndex then falls.
Frustratingly, it doesn't specify what happens to outstanding "conditional" bets if the policy isn't passed, but a reasonable guess is that it's returned less transaction costs, which means that every time Goldman Sachs does the public the service of vetoing a bad policy it loses money. Even if speculators' transaction costs are zero it's irrational for them to bet against a market actor that will take a profit (from selling corn) even if they pay more than the market price to for their long position. Assuming the corn industry is really committed to supporting tariffs and that the tariffs won't harm speculators' ability to earn from other markets, the Nash equilibrium strategy for speculators is not to bet.
Frustratingly, it doesn't specify what happens to outstanding "conditional" bets if the policy isn't passed, but a reasonable guess is that it's returned less transaction costs, which means that every time Goldman Sachs does the public the service of vetoing a bad policy it loses money. Even if speculators' transaction costs are zero it's irrational for them to bet against a market actor that will take a profit (from selling corn) even if they pay more than the market price to for their long position. Assuming the corn industry is really committed to supporting tariffs and that the tariffs won't harm speculators' ability to earn from other markets, the Nash equilibrium strategy for speculators is not to bet.
Under a "Futarchy", the corn lobby can spend lots of money to "predict" that a sugar tariff will make the country better.
To do that they would have to bet a lot of money that the tariff will make the country better (by an objective metric which is decided upon by the voters), and if that turned out wrong, they would lose a lot of money.
To do that they would have to bet a lot of money that the tariff will make the country better (by an objective metric which is decided upon by the voters), and if that turned out wrong, they would lose a lot of money.
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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.
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.
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.
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.
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.
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.
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
A speech by Noga Alon [1], Baumritter Professor of Mathematics and Computer Science, Tel Aviv University
[1] http://www.tau.ac.il/~nogaa/
[0] 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/
Is there any reason to think those are worse for futarchy than for democracy?
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
[1] http://www.youtube.com/watch?v=jTYkdEU_B4o
[0] http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf
[1] http://www.youtube.com/watch?v=jTYkdEU_B4o
I think you're misinterpreting what futarchy actually is. It is not replacing our current system of government with a "market". Hanson's description in the article is this:
When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
This is not how a normal market works. In a normal market, everyone gets to choose their own strategy for how they are going to act. The market only conveys information to them, through prices, about how good (or bad) their current strategy is.
In futarchy, the "market" would determine a strategy that everyone would then have to follow, because it's the law. In other words, it still retains the key feature that makes our current system of government broken: whatever is considered "a good policy idea" is imposed on everyone, instead of being tested by allowing people who think it's a good idea to try it out individually.
To really fix the current system, we need to really look hard at all the things we currently think have to be decided by a single policy for everyone. There may be some things (like national defense) that actually do need to be decided that way. But a lot of things don't, yet our current system forces us to adopt a one-size-fits-all policy for them. Futarchy does not fix that: in fact it is likely, if anything, to make it worse by making it easier for special interests to simply buy the policy they want, by eliminating the middleman (instead of having to buy politicians and elections, just buy into the betting market).
When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
This is not how a normal market works. In a normal market, everyone gets to choose their own strategy for how they are going to act. The market only conveys information to them, through prices, about how good (or bad) their current strategy is.
In futarchy, the "market" would determine a strategy that everyone would then have to follow, because it's the law. In other words, it still retains the key feature that makes our current system of government broken: whatever is considered "a good policy idea" is imposed on everyone, instead of being tested by allowing people who think it's a good idea to try it out individually.
To really fix the current system, we need to really look hard at all the things we currently think have to be decided by a single policy for everyone. There may be some things (like national defense) that actually do need to be decided that way. But a lot of things don't, yet our current system forces us to adopt a one-size-fits-all policy for them. Futarchy does not fix that: in fact it is likely, if anything, to make it worse by making it easier for special interests to simply buy the policy they want, by eliminating the middleman (instead of having to buy politicians and elections, just buy into the betting market).
A futarchy could approve a private law anarchy of the sort that Friedman suggests, if market speculators thought it would do better to achieve national welfare as voters have defined it.
As I commented in another subthread, the root problem is not that we need a better mechanism for determining what policy will best improve national welfare as voters have defined it; the root problem is the very concept of "national welfare as voters have defined it".
We do not have a single concept of "national welfare". We have a multitude of things that various people think are part of national welfare, but different people pick different sets of things, and they often conflict with each other. Many of these conflicts are fundamentally irreconcilable.
In our current system, we force people who do not agree with a certain policy goal to abide by laws aimed at achieving that goal, if there is a sufficient majority to pass such laws. That is bad. Futarchy would not change that. Imposing private law anarchy on everybody because the betting market says it would best achieve national welfare is just as bad as imposing, say, the Federal Defense of Marriage Act on everybody because a particular Congress passed it into law.
But futarchy adds another bad thing to this already bad system: now not just individual policies, but the measure of success for any policy, the definition of "national welfare", gets decided by majority vote, and that measure of national welfare gets imposed on everybody, whether they agree with it or not. So futarchy imposes more things on everybody against their will than the current system does. That makes it worse than the current system, not better.
We do not have a single concept of "national welfare". We have a multitude of things that various people think are part of national welfare, but different people pick different sets of things, and they often conflict with each other. Many of these conflicts are fundamentally irreconcilable.
In our current system, we force people who do not agree with a certain policy goal to abide by laws aimed at achieving that goal, if there is a sufficient majority to pass such laws. That is bad. Futarchy would not change that. Imposing private law anarchy on everybody because the betting market says it would best achieve national welfare is just as bad as imposing, say, the Federal Defense of Marriage Act on everybody because a particular Congress passed it into law.
But futarchy adds another bad thing to this already bad system: now not just individual policies, but the measure of success for any policy, the definition of "national welfare", gets decided by majority vote, and that measure of national welfare gets imposed on everybody, whether they agree with it or not. So futarchy imposes more things on everybody against their will than the current system does. That makes it worse than the current system, not better.
In Friedman's system, it's not "everyone votes on each issue, and only the winning issues get implemented," but rather "everyone pays for each issue they personally want, and therefore gets it" (limited by their means, general marketability of issues, etc.). It's the difference between "everyone votes on which car should get made, and only the winning car gets made" and "everyone pays for whatever car they want." Most economists and people agree that the latter works better for cars, and I don't think that the production and enforcement of law is an easier task than automobile production.
> Imposing private law anarchy on everybody because the betting market says it would best achieve national welfare is just as bad as...
It sounds like you're defining literally any society as "imposing" its traits on its members. I suppose that's true in a way, but I don't see it as a very useful definition, since there's no way to simply not have society (apart from something like transhumanism).
> Imposing private law anarchy on everybody because the betting market says it would best achieve national welfare is just as bad as...
It sounds like you're defining literally any society as "imposing" its traits on its members. I suppose that's true in a way, but I don't see it as a very useful definition, since there's no way to simply not have society (apart from something like transhumanism).
It sounds like you're defining literally any society as "imposing" its traits on its members.
In a sense I am, but I should first clarify the comment of mine that you were responding to. I wasn't saying that private law anarchy imposes things on people per se; I was saying that it imposes things on people if they are forced to adopt it because the national betting market said that would be the best way to improve national welfare. The whole point of private law anarchy is that people choose it voluntarily.
With regard to the more general point, yes, living in a society at all imposes certain restraints on people, but there are different ways that can be done. One way is for people to rationally understand the benefits of living in a society as opposed to living as Robinson Crusoe individuals, and to be willing to accept restraints that are necessary parts of getting the benefits. The other way is for society to impose the restraints regardless of whether the people being imposed on agree with the need for them. In any real society, there will be some element of the second way; but I think all of our current societies are far too quick to adopt the second way instead of letting the first way work.
In a sense I am, but I should first clarify the comment of mine that you were responding to. I wasn't saying that private law anarchy imposes things on people per se; I was saying that it imposes things on people if they are forced to adopt it because the national betting market said that would be the best way to improve national welfare. The whole point of private law anarchy is that people choose it voluntarily.
With regard to the more general point, yes, living in a society at all imposes certain restraints on people, but there are different ways that can be done. One way is for people to rationally understand the benefits of living in a society as opposed to living as Robinson Crusoe individuals, and to be willing to accept restraints that are necessary parts of getting the benefits. The other way is for society to impose the restraints regardless of whether the people being imposed on agree with the need for them. In any real society, there will be some element of the second way; but I think all of our current societies are far too quick to adopt the second way instead of letting the first way work.
In Friedman's system, it's not "everyone votes on each issue, and only the winning issues get implemented"
Yes, I agree, and I didn't say anything that contradicts this. My comments were about futarchy, not about Friedman's anarcho-capitalism.
It's the difference between "everyone votes on which car should get made, and only the winning car gets made" and "everyone pays for whatever car they want." Most economists and people agree that the latter works better for cars, and I don't think that the production and enforcement of law is an easier task than automobile production.
You should direct these comments at Hanson, not at me. These are criticisms of futarchy as well as of the democracy we have now, and I agree with them. In fact I am arguing that futarchy is worse than the democracy we have now, because it requires "everyone votes on what the measure of national welfare should be adopted, and only the winning measure gets adopted" in addition to "everyone votes on what laws should get made, and only the winning law gets made".
Yes, I agree, and I didn't say anything that contradicts this. My comments were about futarchy, not about Friedman's anarcho-capitalism.
It's the difference between "everyone votes on which car should get made, and only the winning car gets made" and "everyone pays for whatever car they want." Most economists and people agree that the latter works better for cars, and I don't think that the production and enforcement of law is an easier task than automobile production.
You should direct these comments at Hanson, not at me. These are criticisms of futarchy as well as of the democracy we have now, and I agree with them. In fact I am arguing that futarchy is worse than the democracy we have now, because it requires "everyone votes on what the measure of national welfare should be adopted, and only the winning measure gets adopted" in addition to "everyone votes on what laws should get made, and only the winning law gets made".
It sounds like you think that while you like private law and anarchy, you don't think that it would actually achieve the ends that most ordinary people want to achieve. And you think speculators will agree with you, and in a futarchy would therefore reject anarchy proposals.
you think that while you like private law and anarchy, you don't think that it would actually achieve the ends that most ordinary people want to achieve
Not quite. I think that a private law/anarchy system would achieve the ends that most ordinary people want to achieve, better than any system that exists now, if people actually understood how it worked and were able to act accordingly. But that's a big "if".
And you think speculators will agree with you, and in a futarchy would therefore reject anarchy proposals.
I think this is probably true; I don't think there would be a significant number of people who would be willing to bet in favor of a private law/anarchy system. But, as above, that's not because it wouldn't actually achieve the ends people want to achieve; it's because too few people actually understand how it works.
However, I'm not sure how this is relevant to my criticisms of futarchy. I'm not criticizing it because I don't think it will lead to a private law/anarchy system; in fact I'm not criticizing it on the basis of any particular outcome I expect it to lead to. I'm criticizing it on the grounds that it requires a particular definition of "national welfare" (the one that gets the majority vote) to be imposed on everyone. I don't think "the ends that most ordinary people want to achieve" can be captured in any such definition. More precisely, as soon as you settle on one particular definition, someone will come up with a way to game it, by finding states of affairs that look good in terms of the definition, but do not actually achieve the ends that most ordinary people want to achieve (although they do achieve ends that the particular parties who are gaming the system want to achieve).
I don't think it's possible to come up with a definition that isn't vulnerable to this failure mode. The only way to avoid it is to discard the whole idea of "national welfare", which of course also means discarding the idea that there are policies, single policies that can be imposed on everyone, that will improve "national welfare", if only we can find them.
Not quite. I think that a private law/anarchy system would achieve the ends that most ordinary people want to achieve, better than any system that exists now, if people actually understood how it worked and were able to act accordingly. But that's a big "if".
And you think speculators will agree with you, and in a futarchy would therefore reject anarchy proposals.
I think this is probably true; I don't think there would be a significant number of people who would be willing to bet in favor of a private law/anarchy system. But, as above, that's not because it wouldn't actually achieve the ends people want to achieve; it's because too few people actually understand how it works.
However, I'm not sure how this is relevant to my criticisms of futarchy. I'm not criticizing it because I don't think it will lead to a private law/anarchy system; in fact I'm not criticizing it on the basis of any particular outcome I expect it to lead to. I'm criticizing it on the grounds that it requires a particular definition of "national welfare" (the one that gets the majority vote) to be imposed on everyone. I don't think "the ends that most ordinary people want to achieve" can be captured in any such definition. More precisely, as soon as you settle on one particular definition, someone will come up with a way to game it, by finding states of affairs that look good in terms of the definition, but do not actually achieve the ends that most ordinary people want to achieve (although they do achieve ends that the particular parties who are gaming the system want to achieve).
I don't think it's possible to come up with a definition that isn't vulnerable to this failure mode. The only way to avoid it is to discard the whole idea of "national welfare", which of course also means discarding the idea that there are policies, single policies that can be imposed on everyone, that will improve "national welfare", if only we can find them.
So it seems that you think that while anarchy would better achieve a true national welfare, it would not do so for any concrete concept of national welfare that one could define and measure. True welfare somehow is intrinsically unmeasurable.
it seems that you think that while anarchy would better achieve a true national welfare
No; I don't think there's any such thing as "true national welfare".
True welfare somehow is intrinsically unmeasurable.
No, that's not what I said. "Welfare" is a much broader term than "national welfare". I only said "national welfare" was unmeasurable, not "welfare".
No; I don't think there's any such thing as "true national welfare".
True welfare somehow is intrinsically unmeasurable.
No, that's not what I said. "Welfare" is a much broader term than "national welfare". I only said "national welfare" was unmeasurable, not "welfare".
There is also the issue of manipulation of the betting market, which I've already mentioned. I still think this would be worse under futarchy as well, because it eliminates the middleman, as I said before.
But also, the vote on the measure of national welfare would be just as susceptible to manipulation as votes for elected representatives are under our current system, because voters would still face the rational ignorance issue: even if we assume, for the sake of argument, that it is possible to find a single measure of national welfare, it simply would not be a net benefit to most voters to learn enough about the various aspects of national welfare to be able to cast an informed vote on what would be the best measure of national welfare. So most people's votes would be determined the way most people's votes are determined now.
But also, the vote on the measure of national welfare would be just as susceptible to manipulation as votes for elected representatives are under our current system, because voters would still face the rational ignorance issue: even if we assume, for the sake of argument, that it is possible to find a single measure of national welfare, it simply would not be a net benefit to most voters to learn enough about the various aspects of national welfare to be able to cast an informed vote on what would be the best measure of national welfare. So most people's votes would be determined the way most people's votes are determined now.
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.
Friedman addressed that. It's been a while but I think he expected the small REAs to be smart enough to band together to resist the big one.
The bit of David Friedman's book that stretches credulity beyond breaking point and into the realms of the laughable is where he explains how profit-motivated "Rights Enforcement Agencies" can solve all the difficult problems, like banding together to fight really dangerous enemies and contracting "fair" dispute resolution, and yet fails to explain why they wouldn't collude in simple ways that actually push their profits up, like forcing fresh entrants out of the market and fixing price demands and "territories"... the sort of things that protection rackets actually do.
I think Friedman concedes that this certainly could happen. Of course, with government, all competitors are already pushed out, and it's already a complete monopoly.
The difference representative democratic governments don't aim to maximise and retain their profits and as such are infinitely preferable to an emergent local mafia, even if the local mafia's protection racket is subject to regular challenge (by more people demanding money with menaces from you...)
I disagree with all those claims. I think representative democratic governments do tend to aim to maximize and retain their profits, and they neither governments nor emergent local mafia are particularly preferable to the other.
How do opposing parties decide on a court to settle their differences?
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).
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.
Political scientists aren't all idiots, people. Social contract theory exists for a reason.
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.
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.
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.
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.
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.
blaming the poor countries for their poverty, because of "stupid policies" displays an overwhelming lack of historical knowledge.
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.
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.
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/
[1]: http://en.panokratie.net/
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.
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.
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.
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.
Not many people understand and trust the system we use now. Would futarchy actually be more confusing, or just different?
> 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.
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.
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.
In principle I like the idea, I'm just trying to figure out how to make it better.
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.
If your decisionmaking process is consistent then an objective function exists. That's just a topological fact.
http://www.chrisstucchio.com/blog/2013/metrics_manifesto.htm...
If your decisionmaking process is consistent then an objective function exists. That's just a topological fact.
http://www.chrisstucchio.com/blog/2013/metrics_manifesto.htm...
I didn't mean it's mathematically unrealistic, but politically unrealistic to actually determine that function. Since the function decides all, it will become the focus of continual, intense debate by people attempting to adjust it to the advantage of their favored policies.
Of course, but that's the whole point. Rather than debating policies which are nominally designed for one goal but secretly trying to promote another goal (e.g., social security, nominally a pension, secretly a redistribution scheme), we just debate the goals themselves.
This actually increases transparency. For example, if some party wants to declare a War on Christmas (TM) or a War on Women's Bodies (R), they actually need to put 23 x Dead Santa or -6 x Women's Freedom into the objective function.
This actually increases transparency. For example, if some party wants to declare a War on Christmas (TM) or a War on Women's Bodies (R), they actually need to put 23 x Dead Santa or -6 x Women's Freedom into the objective function.
I think people are pretty concerned about means as well as ends. That's why all parties want to reduce crime, and yet none campaign for a policy of "dispose of crime reports after 24 hours" which is almost certain to fulfil the objective function for "reduce recorded crime" (and will probably get passed in "futarchy" if someone proposes it and the market acknowledges that the highly-weighted variable "crime rate" will undoubtedly fall as a result).
Instead of voting for the party that wants to reverse something that directly impacts their welfare or they otherwise consider to be stupid or immoral, the electorate is forced to listen to a set of explanations of mathematical equations that try to reverse engineer how it could have been passed, and how to remove it with the least side effects. If I want to pay lower taxes I'd prefer to vote for the party that makes lower taxes for people like me a core plank of their platform, and not a set of equations purporting to show how a tax cut could feasibly be approved by the market in the current economic climate provided variables P, Q, R and S were held constant and Z was reduced by a couple of basis points.
It's quite possible that a party advocating a high weight on lower-quartile average incomes and a negative weight on birth rate wouldn't want some nutters to propose the "compulsory abortions for offspring of the unemployed" law, and get it passed, but I'm not sure a welfare function that could avoid all such unintended consequences even exists, never mind one intelligible to the average voter.
Instead of voting for the party that wants to reverse something that directly impacts their welfare or they otherwise consider to be stupid or immoral, the electorate is forced to listen to a set of explanations of mathematical equations that try to reverse engineer how it could have been passed, and how to remove it with the least side effects. If I want to pay lower taxes I'd prefer to vote for the party that makes lower taxes for people like me a core plank of their platform, and not a set of equations purporting to show how a tax cut could feasibly be approved by the market in the current economic climate provided variables P, Q, R and S were held constant and Z was reduced by a couple of basis points.
It's quite possible that a party advocating a high weight on lower-quartile average incomes and a negative weight on birth rate wouldn't want some nutters to propose the "compulsory abortions for offspring of the unemployed" law, and get it passed, but I'm not sure a welfare function that could avoid all such unintended consequences even exists, never mind one intelligible to the average voter.
The objective function would need to include the measurement methodology, i.e. "reduce crime as measured by methodology X", where methodology X does not delete crime reports.
As for voting for tax cuts, you probably want taxes cut as low as possible while still providing certain vital services. (I'm assuming you aren't an anarchist.) In that case, you don't merely want maximize (-1 x tax rate), you instead want to maximize (-A x tax rate - B x # of murders). Lowering taxes may or may not be the best way to achieve that goal, but you are unlikely to be able to properly judge that (no offense intended - I can't either).
An objective function and it's unintended consequences may be hard to understand for the average voter but the results of policy are even harder to understand. For example, many voters are in favor of earning assistance for firefighters and soldiers (http://www.opencongress.org/bill/110-h3997/show). One unintended consequence of the "Earnings Assistance for Heroes" policy is a gigantic bank bailout.
As for voting for tax cuts, you probably want taxes cut as low as possible while still providing certain vital services. (I'm assuming you aren't an anarchist.) In that case, you don't merely want maximize (-1 x tax rate), you instead want to maximize (-A x tax rate - B x # of murders). Lowering taxes may or may not be the best way to achieve that goal, but you are unlikely to be able to properly judge that (no offense intended - I can't either).
An objective function and it's unintended consequences may be hard to understand for the average voter but the results of policy are even harder to understand. For example, many voters are in favor of earning assistance for firefighters and soldiers (http://www.opencongress.org/bill/110-h3997/show). One unintended consequence of the "Earnings Assistance for Heroes" policy is a gigantic bank bailout.
>An objective function and it's unintended consequences may be hard to understand for the average voter but the results of policy are even harder to understand.
Reverse that statement and you've got my position. It's very difficult for an average voter to figure out where the cash for his tax cut is coming from, but it's crystal clear approximately how much disposable income they will personally benefit from it even if the indirect consequences are pretty hazy. It's up to the government to figure out how to pay for it, and to balance that out against the desires of people that are really far more concerned about murder rates, welfare cuts or national debt rises.
By contrast this system asks voters to become technocrats and carefully predict the set of variable weightings that will allow the investors to pass legislation that reduces their taxes; that is if Big Capital doesn't decide to bet on a policy proposal that uses the freed-up budget to reduce their taxes instead. Frankly, if an average voter can't determine if they want the candidate that offers them lower taxes instead of the one that offers them better policing, they're certainly not capable of choosing between the two candidates' proposed set of HDI weightings and calculation methodologies. Nor does anything in the proposed mechanism stop policy proponents sneakily attaching undesirable policies to desirable ones: in this case if you offered the banking system bailouts they'd probably bet big enough on the bill to allow it to pass even if it had subsidiary clauses mandating the execution of firefighters' firstborn. It would be trivially easy to use this process to enact laws whose consequences were essentially non-statistical, like most civil liberties...
By contrast this system asks voters to become technocrats and carefully predict the set of variable weightings that will allow the investors to pass legislation that reduces their taxes; that is if Big Capital doesn't decide to bet on a policy proposal that uses the freed-up budget to reduce their taxes instead. Frankly, if an average voter can't determine if they want the candidate that offers them lower taxes instead of the one that offers them better policing, they're certainly not capable of choosing between the two candidates' proposed set of HDI weightings and calculation methodologies. Nor does anything in the proposed mechanism stop policy proponents sneakily attaching undesirable policies to desirable ones: in this case if you offered the banking system bailouts they'd probably bet big enough on the bill to allow it to pass even if it had subsidiary clauses mandating the execution of firefighters' firstborn. It would be trivially easy to use this process to enact laws whose consequences were essentially non-statistical, like most civil liberties...
By contrast this system asks voters to become technocrats and carefully predict the set of variable weightings that will allow the investors to pass legislation that reduces their taxes; that is if Big Capital doesn't decide to bet on a policy proposal that uses the freed-up budget to reduce their taxes instead.
No it doesn't. It merely asks voters to decide how many dollars a prevented murder is worth.
in this case if you offered the banking system bailouts they'd probably bet big enough on the bill to allow it to pass even if it had subsidiary clauses mandating the execution of firefighters' firstborn.
Why would Goldman do this? Why wouldn't they just take billions from all the other speculators willing to throw their money away to get bailouts and then use their winnings to bail themselves out?
Further, there is a proposed mechanism to stop policy proponents from sneakily attaching welfare-reducing policies: Goldman Sachs, George Soros, and other speculators. These folks are smart enough to spot sneaky clauses and greedy enough to rob the market manipulators pushing them.
No it doesn't. It merely asks voters to decide how many dollars a prevented murder is worth.
in this case if you offered the banking system bailouts they'd probably bet big enough on the bill to allow it to pass even if it had subsidiary clauses mandating the execution of firefighters' firstborn.
Why would Goldman do this? Why wouldn't they just take billions from all the other speculators willing to throw their money away to get bailouts and then use their winnings to bail themselves out?
Further, there is a proposed mechanism to stop policy proponents from sneakily attaching welfare-reducing policies: Goldman Sachs, George Soros, and other speculators. These folks are smart enough to spot sneaky clauses and greedy enough to rob the market manipulators pushing them.
Statistics about means can also be included in welfare measures.
Your article explicitly argues against that
Courts should invalidate any welfare definition change that seems too directly an attempt to favor a specific policy whose main rationale comes from other measurable outcomes
That - and your "miles of road" example - seems to me to invalidate changing the welfare definition to add welfare weightings for tax levels.
Courts should invalidate any welfare definition change that seems too directly an attempt to favor a specific policy whose main rationale comes from other measurable outcomes
That - and your "miles of road" example - seems to me to invalidate changing the welfare definition to add welfare weightings for tax levels.
Putting in weights to directly favor specific policy proposals is very different from putting in weights to penalize the kinds of means that people dislike. For example, if we dislike police detaining folks without charging them with a crime, we could count such events and penalize them.
Hm. I'm warming up to it.
A remaining problem might be actually measuring those values in ways that can't be gamed too easily. Attempts to objectively measure programmer productivity have generally failed at this, and Women's Freedom seems harder to measure than that.
Another problem might be that the objective function will keep changing. I guess the way to handle this is to pay off bets based on what the function was when the bet was made, and to have a fixed schedule that alternates making bets and changing the function.
A remaining problem might be actually measuring those values in ways that can't be gamed too easily. Attempts to objectively measure programmer productivity have generally failed at this, and Women's Freedom seems harder to measure than that.
Another problem might be that the objective function will keep changing. I guess the way to handle this is to pay off bets based on what the function was when the bet was made, and to have a fixed schedule that alternates making bets and changing the function.
> 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.
I don't think it would be even more obscure. In the current system, we mingle incestuously goals and means to the point where we can't even tell the difference. Forcing a separation is going to be helpful.
I don't think it would be even more obscure. In the current system, we mingle incestuously goals and means to the point where we can't even tell the difference. Forcing a separation is going to be helpful.
> Elected representatives would formally define and manage an after-the-fact measurement of national welfare
The paper scuttles itself in the first paragraph.
The paper scuttles itself in the first paragraph.
That national welfare metric could be a legally required and binding part of the platforms they run on.
If we did this, 4chan would rig the votes and take over the world. ;-)
There's already a futarchy on /d/.
Get this shit out of here. We already have rule-by-money.
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
[2] https://en.wikipedia.org/wiki/Plutocracy
(Edited for grammar, citations).