“The last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment.”

Robin Hanson, is what I would term a market fundamentalist – somebody who believes that markets are the primary mechanism for achieving the public good. Recent events have demonstrated that this creed is morally bankrupt. We are, in the words of Michael Sandel, “at the end of an era of market triumphalism”.

Robin Hanson:

I deny the accusation, though I’m not sure why I should have to. Having a high opinion of the eventual info power of decision markets [*] is very different from saying “markets are the primary mechanism for achieving the public good.” Shouldn’t you have to first provide support for your accusation, rather than me somehow having to first prove bald accusations wrong?

[*] That’s at the core of the issue. Somebody who has a “high opinion” of something that has not given stellar results since 1988 is obviously exaggerating. I personally have a somewhat good opinion of prediction markets and conditional prediction markets, but not a “high opinion” —sense my nuance. Niall O’Connor has been too strong in his “accusation” ( ), but he is a bit in the right. [UPDATE: Niall O'Connor has an honest reply to Robin Hanson.]

Folk activism broadly corrupts political movements. It leads activists to do too much talking, debating, and proselytizing, and not enough real-world action.

He asks the libertarian people to stop investing in ideas but, rather, in actions:

If a fraction of the passion, thought, and capital that are wasted in libertarian folk activism were instead directed into more realistic paths, we would have a far better chance at achieving liberty in our lifetime. We must override our instinct to proselytize, and instead consciously analyze routes to reform. Whether or not you agree with my analysis of specific strategies, my time will not have been wasted if I can get more libertarians to stop bashing their heads against the incentives of democracy, to stop complaining about how people are blind to the abuse of power while themselves being blind to the stability of power, and to think about how we can make systemic changes, outside entrenched power structures, that could realistically lead to a freer world.

Cato’s Tim Lee rebuts his ideas.

His own daddy rebuts his ideas, too:

My conclusion is that while something like seasteading or crypto anarchy may indeed be the most hopeful path to a freer future, those are not the only sorts of approach worth attempting. An alternative, for academics, authors, newspaper columnists, anyone able to produce ideas and information and put them into circulation, is to try to alter the mix of free information that drives the coarse control mechanism of democracy.

The supposed omniscience and perfect efficacy of a free market stems from economic work done in the 1950s and 1960s, which with hindsight looks more like propaganda against communism than plausible science. In reality, markets are not efficient, humans tend to be over-focused in the short-term and blind in the long-term, and errors get amplified, ultimately leading to collective irrationality, panic and crashes. Free markets are wild markets…

Surprisingly, classical economics has no framework through which to understand ‘wild’ markets, even though their existence is so obvious to the layman. Physics, on the other hand, has developed several models that explain how small perturbations can lead to wild effects. The theory of complexity shows that although a system may have an optimum state, it is sometimes so hard to identify that the system never settles there. This optimum state is not only elusive, it is also hyper-fragile to small changes in the environment, and therefore often irrelevant to understanding what is going on. There are good reasons to believe that this paradigm should apply to economic systems in general and financial markets in particular. We need to break away from classical economics and develop completely different tools. Some behavioural economists and econo-physicists are attempting to do this now, in a patchy way, but their fringe endeavour is not taken seriously by mainstream economics.

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Waiting to see the positions of Michael Giberson, Jason Ruspini, Caveat Bettor, Robin Hanson, Justin Wolfers, Eric Zitzewitz, etc.

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Free Markets –> Free Predition Markets

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