Pentagon Futures Market – The Golden Fleece Strikes Again
Posted By John Moore on July 29, 2003
Do you remember former Senator William Proxmire’s “Golden Fleece Award?” The was handed out to silly sounding scientific projects – projects usually with real value. But that didn’t bother Proxmire, who regularly bathed in the resulting publicity. Responsible scientists despised the man and his grandstanding.
Something similar is afoot with the Pentagon’s “Terrorism Futures Market.”
From Fox News:
The Pentagon will abandon a plan to establish a futures market to help predict terrorist strikes, the chairman of the Senate Armed Services Committee said Tuesday.
This is unfortunate. This good idea is being trashed because it looks bad, and probably because it is part of the “dreaded” TIA. The project is DARPA FutureMAP (Futures Market Applied to Prediction).
Fox again:
The little-publicized Pentagon plan envisioned a potential futures trading market in which speculators would wager on the Internet on the likelihood of a future terrorist attack or assassination attempt on a particular leader. A Web site promoting the plan already is available. [ here ]
Although this sounds pretty macabre, it is actually a very clever idea by the Pentagon. This approach has been successfully used to predict other events. It is an interesting use of the free market information concept: that a market (where people have money at stake) will do a good job of processing all available information. Markets frequently outperform expert specialists.
In order to be effective, these markets have limits to prevent players from trying to influence the events. Thus the maximum amount of money represented by a contract is quite small, and so is the number of contracts. You don’t get rich participating in one of these.
Such a market focused on terrorist events certainly would not provide an incentive for a major terrorist attack, contrary to the accusations thrown around by the ignorant and the irresponsible.
You can actually take part in this type of market at the University of Iowa Iowa Electronic Markets. It has an enviable record in predicting election outcomes.
One thing is for sure. The Pentagon needs some good public relations types to guard their geeks! The researchers seem to have a penchent for coming up with good ideas (like parts of TIA) and then blowing the PR
And, of course, a cowardly irresponsible congress doesn’t help – but then, did it ever?
[UPDATE: That old crank, Pat Buchanan, just agreed with me on this issue. Am I missing something? Now I'm worried!]
[ANOTHER UPDATE: This is what I get for blogging too late in the west coast morning. I just found out that EVERYONE is blogging about this, even Glenn Reynolds. Anyhoo... thanks to samizdata.net for providing this link to the now defunct market.]
As amusing as this story might be, the killing of the terrorism market is probably a symptom of something more problematic.
Given a charitable interpretation: US Senators are so overloaded with legislation to ‘manage’ our mixed economy and that they have no time to rationally evaluate a clever plan that might enhance the one true function of government – the protection of individual rights.
A less charitable explanation: it was a simply bit of demagogy aimed at the emotional mob that inhabits the Democratic side of the electorate – especially those who foam at the mouth at the mention of any connection between profit and human life.
Kudos to DARPA, and the opposite to all those who killed this before it was even tried.
It is doubly sad when you think about what government does spend money on…
sigh…
He who spends a storm beneath a tree, takes life with a grain of TNT.
tramadol