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The Terrorism Futures Market Is Immoral

Earlier this summer, for a brief while, the hottest buzz about terrorism in Washington and throughout the media was decidedly business-related. The Defense Advanced Research Projects Agency proposed the creation of Policy Analysis Market, a futures market that would allow anyone, including professional traders and potential terrorists, to buy and sell futures contracts anonymously based on the likelihood of political or economic events occurring in the Middle East.

In other words, if you are the owner of a contract that reads, “The American embassy in Tel Aviv will be bombed before October 1, 2003,” and other people think that will happen and also want to purchase similar contracts, the value of your futures contract will rise.

Though it initially appears that the main purpose of a futures market is to make money on sound predictions, another benefit is that they can often successfully predict the outcome of events better than polls or “expert” opinions. The reasoning behind establishing P.A.M. was that it would serve as an intelligence gathering tool: if several people were buying futures on a potential embassy bombing in Tel Aviv, the security would be heightened there.

Yet P.A.M., the brainchild of John Poindexter, a Reagan-era national security adviser who received a conviction (which was later overturned for procedural reasons) for lying to Congress about the Iran-Contra scandal, is no ordinary futures market. First, if it is implemented on a small enough scale, the actions of individuals acting in bad faith (i.e. terrorists) could seriously hamper the ability of the CIA, FBI, or whoever is monitoring P.A.M. to interpret the data, throwing into question its whole raison d’etre. In other words, a terrorist planning to assassinate a leader in Jerusalem could buy lots of contracts saying he plans to assassinate the leader in Tel Aviv.

But aside from this logistical objection, there is a larger problem with P.A.M., the reason why it was so quickly dismissed by the mainstream media and the public, and why Poindexter was forced to take a second (and hopefully last) disgraceful exit from government. That problem is one of morality.

It is morally repugnant to gain a profit or advantage in life based on the death of a fellow man. Futures markets in which you can buy contracts on the price of vegetables, the chance that it will rain next Saturday, or the chance that the Red Sox will win the pennant before 2050, are all legal forms of gambling that are not based on the life or death of the subject of the contract.

The American government should use every bit of its power to gather intelligence that benefits the safety and protection of the American people, but within reason. Just as our military must decide whether saving the lives of hundreds of people is worth sacrificing the lives of ten people, the intelligence community must consider whether a logistically flawed futures market would help intelligence gathering efforts enough to outweigh its immorality.

To the terrorist futures market, The Tech says a resounding “No,” and to Mr. Poindexter, we have only this to add, “And stay out.”

The editorial board reached its decision by a 5-3 vote.