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Monday
Aug102009

A stock market approach to public policy decisions

"We believe democracy's flattering lie that each voter's opinion is just as valid as anyone else's. But, in fact, most voters' opinions about what works are usually awful."

Therein is the basis for futarchy, an alternative governance system where democracy continues to be the mechanism to determine desired outcomes, but speculative markets determine the means. See Robin Hanson's article this month in BBC Focus Magazine (for the full text, see here).

This wild idea actually might actually have some appeal now with the massive failure of democratic town hall meetings to achieve any type of thoughtful discourse on how to tackle challenges of healthcare and climate change. Would an objective evaluation of the impact of proposals on national welfare through an open market, as proposed in this model, help us reach a better outcome?

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