Re: Vote on Values, But Bet on Beliefs

From: hal@finney.org
Date: Mon Sep 25 2000 - 00:09:07 MDT


I've belatedly had a chance to read Robin's futarchy paper,
http://hanson.gmu.edu/futarchy.pdf or .ps. In it Robin proposes a
political system based essentially on Idea Futures. Any policy for
which an IF market predicts a substantial increase in adjusted future
GDP would automatically be put into force.

It's a fascinating idea, although one for which people seem to come up
with a great many objections on first exposure. Most of Robin's paper
is taken up with answering various objections. At the end he gives a
proposal for a specific form of futarchy.

I had a few concerns which may not have been clearly addressed. The first
is, what evidence is there that futures market predictions can work over
the time scale envisioned for futarchy? The paper talks about 50 year
time horizons. But most futures markets only predict prices a few months
out. Even the long-term LEAPS options are only good for a year or two.

Along these lines, can any conceivable system estimate GDP over such a
long time frame? Robin's specific proposal is to average log of GDP over
the next few decades, discounting by a few percent a year. What if we
combine this with Robin's estimates from his paper on long-term growth,
which envisions one or more transitions to much more rapid GDP growth,
within this time frame? We could see the economy doubling over periods
of weeks, and later even hours. I think with Robin's formula you'd
get a divergent series; at a minimum, the sum would be dominated by the
ultra-explosive growth we hit during the Singularity.

I was somewhat confused by the futarchy descriptions of the legal
structure as being composed of nested policies, with more fundamental
policies authorizing less fundamental ones. This does describe the
current regime to some extent, but how would it work with futarchy?
Would more-fundamental policies constrain less-fundamental ones? How
would this be enforced, by the courts?

The other point that seemed troublesome to me was the tremendous
complexity of current laws. A recent widely debated case was
the Digital Millennium Copyright Act, which put forth new forms
of intellectual property protection. The DMCA is available at
http://www.eff.org/ip/DMCA/hr2281_dmca_law_19981020_pl105-304.html.
It is 24 sections in 5 titles; a total of 4570 lines long. This is 90
pages of dense text.

I don't see how such a complex document could successfully make it through
a futarchy process. How would the text be developed? Currently a process
exists in which various competing interests influence legislatures
to try to get language the way they want it. But presumably "pure"
futarchy doesn't want to retain this kind of lobbying.

At the other extreme you could let anyone propose any law, but there
would be so many possible variations on even a simple 5 or 10 page
law that it's hard to see how the market could work. Every different
clause or section could be reworded, added or removed. You'd have a
combinatorial explosion of possible documents.

DMCA may not be a great example because many people oppose it, but
probably even its opponents would agree that it ought to be offered as a
possibility in a futarchy system. There are substantial issues at stake
regarding the economic impacts of intellectual property protection, and
if futarchy could shed light on these issues that would be a valuable
contribution.

I'd say that with examples like this, the less extreme forms of futarchy
could work well. Answer the question, would the DMCA help or hurt
economic growth over the next five or ten years. Getting a market
consensus on this issue would be helpful. But it's harder to see how
the pure futarchy system could generate such laws.

Robin's document is somewhat sparse in its description of these
procedural issues. He suggests using the futarchy market itself to
evaluate different ways of handling these matters. This is a consistent
viewpoint but it makes it harder to evaluate the system because we can't
know in advance how the specifics would work. I'd like to see futarchy
details fleshed out a little more as a straw man proposal.

Hal



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