Wait, Let’s Talk About This
By Ken Nesmith, Andrew C. Thomas, and Jonathan Wang
editorial board members
An interesting thing happened this summer. A government antiterrorism program was discovered and disbanded within the course of a few hours. This wasn’t a nefarious spy-on-your-neighbor program, or a plan to distribute lies through the media. This was a creative use of a traditional tool of prediction: a futures market on terrorism.
We Techies are famous for unorthodox solutions to challenging problems; in fact, you could say that’s our trademark. Throw a problem at us, give us a few tools and some creative freedom, and we’ll rig something up and make it work. It may not be pretty, and it may be unconventional, but it’ll make the plane fly farther and faster, the engine cleaner, the microprocessor more efficient, the house more stable, and the medicine more robust -- and aesthetics be damned. That’s why some of us were bothered by the rapid, uncritical dismissal of what was really a rather creative approach to predicting global terrorism. In fact, critical analysis of the concept was almost nowhere to be found, in any of the media. All we saw were out-of-hand dismissals and mockery of this unconventional idea.
Though we can’t fully explore the workings of the idea in this space, we can examine a few sides of the issue. Futures markets do offer tremendous predictive power, much more effectively than pundits and experts. They are a remarkably effective tool for aggregating information on future events. Very little attention was paid to the predictive power of these markets, which do a better job predicting weather, elections, and stock prices than do celebrity professionals. This market could enable unprecedented prediction of coming terrorist acts, and thereby aid prevention.
Many members of Congress righteously objected that it is wrong to profit on death. They couldn’t have thought through that statement too thoroughly. Insurance companies, funeral homes, and tobacco companies profit on death. Somehow, they don’t bother anyone too much. More relevant to MIT is the arms industry, which makes a science of death and destruction -- and profits quite handsomely off of it. Look into your UROP, your funding, and your professors; you may be “profiting on death” at this very moment. But more importantly, the very purpose of this market is to reduce death and destruction. We think it inexplicable to tolerate more death and destruction rather than let a profitable market reduce the quantity thereof, and even absurd to then claim the moral high ground.
Another common objection was that this market would allow evil-doers to feed bad information into the system, confounding investigative efforts. This idea leads us to absurd conclusions. Quite simply, any increase in information gathering capabilities will create more opportunities to feed bad information into that system. That is, of course, no reason not to seek more information. Futures markets, we know, efficiently and accurately collect and manage information. Let’s not forget that we already suffer the effects of the weakness of information collection via conventional means, as was the case in Afghanistan when bin Laden left recordings of himself broadcasting from caves, fooling commanders into assuming him present. We have also seen the effect of bad information management in the case of Sept. 11. We’ve seen the conventional system. It may be time to try a new tool.
It’s hard to make too strong a case against the futures market, but more troublesome is that no one tried. Reactionism won the day; political palatability triumphed over even the notion of reason -- in the media, the political world, and among the American people. This is unfortunate.