Saturday, January 17, 2015

The Relative Merits of Prediction Markets and Democracy

I'm 2 years late to the party, but Scott Siskind's 2013 post on prediction markets and democracy is probably the best on politics that I've ever read.

Siskind succinctly explains both why democracy is better than most or all rival forms of government (surprise: it's not because democracies settle on the best policies) and why prediction markets are both (a) the most consistently accurate sources of information anywhere and (b) incorruptible, despite feeble arguments to the contrary.

Prediction market for the 2008 U.S. presidential election

Siskind asserts that futarchy (government by prediction markets, promoted by economist Robin Hanson) might be better than democracy, but unlike other futarchists (probably including Robin Hanson) Siskind has a firm grasp of democracy's several merits.

Robin Hanson, futarchist, and the least cranky anarcho-capitalist transhumanist cryogenicist you're ever likely to meet

Essentially, according to Siskind, democracy enables a society to avoid the intermittent truly terrible leaders and frequent succession struggles which plague monarchies and authoritarian regimes, and democracy creates social consensus by having a fair mechanism for creating a "Schelling point" for deciding questions of leadership and policy.

Siskind's post is recommended reading for all Patriots and Citizens.
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