The limitations of logic (and the need for passion)
Caveat Bettor May 10th, 2007
In case you need catching up, 2 of the finer prediction market intellects, Steve Levitt and Robin Hanson took different tacks on the economists petition in favor of rolling back restrictions on prediction exchanges.
Levitt wouldn’t sign, and gave his reasons here.
Hanson repudiated with Levitt’s decision with a bit of logic here.
My initial post on this at Caveat Bettor:
Levitt reminds me of Private Trip in Glory: tear it up. Tear it up! TEAR IT UP!!!
To expand a little on this, my thinking on Hanson’s fair and accurate but possibly weak argument is this: logic only holds in a given paradigm. Thus, if the paradigm is shifting, or we very much want it to shift, an illogical response may be more effective. In the film Glory, the Negro regiment was only paid $12 per month, even though they enlisted for $15 and white regiments were paid $15. Private Trip, played in an Oscar-worthy and award-winning way by Denzel Washington, says “we can stop a bullet the same as a white man”, and he encourages his comrades in arms to tear up their paychecks. Logically, Private Jupiter Sharts tells him “Twelve dollars is a lot of money”–economically speaking, these men could take their reduced wages and express them in speech and other markets, increasing their influence.
But no, they tear them up. They inspire their white officers to tear up their pay, too. An inspiring scene in an inspiring movie, that helps to change the world. The all-black regiment from Massachusetts kicks butt, inspires the creation of several more black regiments through the North, and starts a wonderful tradition of African-American service and dignity that continues in American history through the world wars and even to today.
I think Levitt, in his own way, is doing the same thing that Private Trip did when he found out about that first paycheck. Good for him!
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There is also the idea however that the perfect should not be the enemy of the good, but it seems that you and Steve and Alex and Masse don’t even think the statement was “good”.
This is just another iteration of the schism between principled libertarians and pragmatists (who may not care about sports) on the PM legality question. As usual, it’s likely that nothing will actually be *done* as a result of the statement.. and I again don’t put too much weight on the exact text. It’s just a conversation-starter and honestly it’s a complete throw-away given that the CFTC has already said they would not issue a no-action letter - with three of the signers present.
(As for the limitations of logic, my feeling is that “the heart” is in reality another kind of “head” with its own logic, the rationality of which may be less straightforward, but there.)