From: Robin Hanson (rhanson@gmu.edu)
Date: Wed Jan 26 2000 - 11:30:42 MST
Peter McCluskey wrote:
> >Similarly, if a market said a given treaty made war more likely the treaty
> >could not be approved on the justification that it would keep us out of war,
> >thought it might be approved on other justifications.
>
>The natural response of those who negotiated the treaty would be that they
>have nonpublic information which is better than the market's information.
>I said on another list (on the subject of corporate board decisions): ...
>To which you responded: ... expect them to publicly declare their
> best estimate, and to bet a lot for it. If speculators don't
> believe them and move the price to their estimate, I think it
> reasonable to say the decision should go with the market estimate,
> not with what the board says is its estimate.
>In the case of treaties, I suspect that negotiators will find some hard-to
>-analyze argument for secrecy (based on ethical problems with insider trading
>and/or on the desire to prevent other nations from knowing how badly our
>government wants the treaty).
Sure, I'd expect people to offer hard to analyze arguments against my
proposal.
They might even be right. But I'm not sure what more I can do besides make a
proposal and respond to the arguments people actually make with the best
analysis we can muster.
> >3) Choose some official national objective function, something like GDP,
> >only more carefully measured and trying to include more contributions like
> >the value of leisure, etc. Have some independent and well monitored agency
> >continually update this estimate of the state of the nation. Then have the
> >rule be that decision D must be enacted whenever a market says that among
> >all the decisions markets are considering (including letting policy makers
> >do what they want), D gives the highest conditional estimate for this
> >national objective. I think this is the most promising approach.
>
> Given the problems experts have agreeing on how to quantify relatively
>well understood things like inflation, I wouldn't expect much agreement
>about how to quantify something for which you don't even have a name.
>I'd expect that measuring the value of unowned things like Linux or
>whales would be more subject to political manipulation.
We already measure GDP, and I suspect just using futarchy based on GDP in
fifty years time would probably result in a better government than we have
now. If so, any improvements we make on better measures beyond GDP just
make futarchy even more attractive.
> I don't think a single official measure is wise. I'd prefer to use a
>handfull of different measures (an economic growth indicator, an inequality
>indicator, a leisure indicator, etc.).
But then you couldn't have a simple constitutional decision rule like
the one I proposed.
Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030
703-993-2326 FAX: 703-993-2323
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