Firstly, I&#8217-d like to say that I respect Donald Luskin as a Wall Street professional and as a libertarian blogger. But I think that his explainer is too simplistic.

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Not a single word on the concept of probabilistic prediction:

The financial incentive to get it right, and the ability to draw on bettors from around the world &#8212- anyone who might have any information on whatever proposition is being bet on &#8212- is what gives these markets their uncanny predictive power.

Mixing prediction markets (a reality) with decision markets (a utopia):

Economics professor Robin Hanson, who has studied prediction markets extensively, told me he envisions a &#8220-futarchy&#8221- &#8212- government by futures contracts traded in a prediction market.

Claiming that these information aggregation mechanisms (the prediction markets) will supplant the advanced indicators which they feed on:

Today prediction markets are threatening to replace political polling &#8212- they&#8217-re certainly doing a better job. Tomorrow, who knows? Prediction markets might replace politics itself.

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My readers will prefer the Midas Oracle explainer on prediction markets.