Thursday, February 21, 2013

Fertilizing the Garden of Truth

Talk is cheap. To him who talks, that is. The rest of us often pay handsomely to hear others bloviate. Political and intellectual elites can earn millions on the lecture circuit, blistering audiences with gales of hot air. Empty suits parading falsehoods on television command impressive salaries, immune from censure for all but the most egregious lies. False prophets are almost never taken to task for their hornswaggles.

But then, mirabile dictu, someone finds a way to make blowhards accountable for their posturing, and what happens? Banned in the US. To no one's surprise, Intrade traffic has dropped to virtually nil.

What gives? I can see why political kayfabe artists have an interest in protecting their livelihoods, but there are two puzzles that still bug me: a) why aren't prediction markets more popular with regular people and b) even if they aren't popular, why isn't there more outcry when political elites put the kibosh on a tool that will increase the amount of honesty in political discourse. In other words, why aren't constituents more interested in the truth?

Hypocrisy is deep in our bones. We see it as strongly on Capitol Hill as in the highlands of PNG. Institutions like Intrade are the modern version of stripping the oracle bare and shoving her into the town square. Truth markets can't be euvoluntary because lying to ourselves and each other, believing those lies, loving them... this is mixed in the mortar of man qua man.

Homo Hypocritus shall cling to self-deception so long as MB>MC. Sadly, this is one of those cases where benefits are private, yet costs are socialized. Intrade blocks liars from the bailouts they expect. A hardy weed it is not.

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Do you have suggestions on where we could find more examples of this phenomenon?