"Pay close attention to that man behind the curtain!"

Sunday, August 03, 2003


There's been a lot of discussion going on recently about the Futures Market in Terrorism. Many of its opponents were appalled by its "grisly" nature. Others, like Instapundit's Glenn Reynolds, supported the idea. Personally, I found the concept "offensive," but I simultaneously wanted to examine its potential values.

I was somehow led to Instapundit with the belief that the site had something to offer in the way of validating the idea. Unfortunately, Reynolds seems to contradict his own arguments in favor of the idea when he quotes Josh Chafetz:
A futures market in terrorist attacks, while it sounds grisly, may help us to aggregate diffuse knowledge in a way that will prove superior to expert knowledge. It also may not, but it seems to me that it's worth a try. At the very least, if we're going to demand that the government get creative in fighting terror, we shouldn't be so quick to criticize when it does just that. [italics mine]

Chafetz explains this idea by saying, "[B]y watching the information-aggregating index that we call "price," producers can generally ensure that, when you go to the supermarket, you'll find the brand you want." At least the idea is different, he seems to be saying, "so we shouldn't be so quick to criticize." Guess what -- I can no longer find many of the brands I want. They must've been too different.

"Aggregat[ing] diffuse knowledge" is not the same as putting knowledge out in the open, which Reynolds seems to be arguing for in his post and his 3 other articles linked above. Putting information out in the open ("Wanted" posters, for example), he seems to be saying, would let the public help authorities find "the bad guys." How this can work is exemplified in the case of how the Washington area snipers were spotted by someone at a rest stop after the license plate number of the suspects' vehicle was finally revealed to the public. This is not the same as aggregating diffuse knowledge. The terrorism futures market assumes that only people with money (and among them, only those who would "play" such a market) have opinions that are worthy of consideration, and that by distilling these opinions, terrorist acts could be prevented. At this point, it is still an idea which I strongly oppose. I'm glad it's gone, and I hope that it doesn't come back like Hong Kong's Article 23 did.
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