Futarchy

Futarchy

Futarchy is a proposed system of government whereby public officials establish metrics for wellbeing and prediction markets are used to establish policy.

Futarchy is a proposed system of governance theorized by American economist Robin Hansonin a paper published in 2013 titled "Shall We Vote on Values, But Bet on Beliefs?" Futarchy makes three primary assumptions about the world to justify it as an alternative governance system. These three assumptions are:

  1. Democracies fail largely by not aggregating available information.
  2. It is not that hard to tell rich happy nations from poor miserable ones.
  3. Betting markets are our best known institution for aggregating information.

Theoretically, Futarchy is ideologically neutral and is based on betting markets determining the policies of governance based on a combination of democracy and speculating on theoretical benefits and downsides of proposed laws. According to Robin Hanson, the basic rule of a Futarchy government is:

When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
Stages of Futarchy

There are three stages of governance through Futarchy:

  1. Establishing values
  2. Betting on beliefs
  3. Evaluating success

Establishing values begins with a voting phase to help establish what the end goals of the system will be. After values and criteria for success are established through voting prediction markets take over governance and bets are made on what policies will achieve the values and metric determined in the voting phase. It's speculated that prediction markets give Futarchy an advantage over traditional democratic processes because prediction markets allow for the abstraction of bias in policy decision making because decision makers who think they know more will bet more and care more about the final outcome of the speculated policy instead of how it makes them look publicly. In the evaluating success phase of Futarchy, the policy is implemented and success is measured. Individuals who made accurate assumptions about how the policy worked after implementation are rewarded based on their accuracy of predictions for the policies success or failure.

Stages of Futarchy.

Timeline

2013
Robin Hansonin a paper published in 2013 titled "Shall We Vote on Values, But Bet on Beliefs?"

People

Name
Role
LinkedIn

Further reading

Title
Author
Link
Type
Date

On Governance: Futarchy - Alpine Intel - Medium

Rocco

Web

January 12, 2019

Documentaries, videos and podcasts

Title
Date
Link

EB98 - Robin Hanson: Futarchy, Prediction Markets And The Challenge Of Disruptive Technology

September 28, 2015

Robin Hanson and "Mencius Moldbug" debate futarchy at Foresight 2010

Robin Hanson, PhD: Prediction Markets/Futarchy for Efficient Governments and Resilient Economies

What is Futarchy? - Trading on The Future - Friederike Ernst #TOA18

August 14, 2018

Companies

Company
CEO
Location
Products/Services

References

Golden logo
Text is available under the Creative Commons Attribution-ShareAlike 4.0; additional terms apply. By using this site, you agree to our Terms & Conditions.