Prediction Markets and the Illusion of Democracy

As the reds gloat and the blues lick their wounds, the greens count their money. Whether you subscribe to Efficient Market theory or not, one essential tenet resounds loudly from Tuesday’s election— prices in prediction markets reflect all available information, not just what your favorite feeds and corporate media polls are telling you. The incentive to follow the money instead of the pundits (or even the candidates) is more pronounced than ever. Prediction markets are the future of political polling, and more than that, they are an affirmation that democracy and capitalism are alive and well.

Kalshi and Polymarket were highly accurate predictors of election night, far more so than any other source, and embarrassingly so for legacy polls and pollsters. In fact, hindsight ensures a place of prominence for predictive markets in all future election cycles.

Vote your values, bet your beliefs.

The predictive market phenomenon warrants a reexamination of the original white paper that started it all— the Futarchy Manifesto written by Robin Hanson of George Mason University. The concept of Futarchy is simple, but nuanced: “vote your values, bet your beliefs”. But what exactly does that mean? The manifesto is well worth reading, but the simple premise argues that democracies work fairly well for tabulating majority rule on primary issues, but further suggests that the choices presented to the democratic process are ultimately determined in a very un-democratic fashion.?

If you fancy any of the neo-reactionary (NRx) ideology popularized by Curtis Yarvin, voting choices may actually be an illusion presented by an invisible ruling collective, which Yarvin calls the “Cathedral” (or the “deep state” for QAnon die hards). Those on the Left call Yarvin an Alt-Right hero, but Yarvin himself endorsed Biden in the 2020 election, which only proves that if you go far enough to one side of the political spectrum, you end up on the fringe of the other; or perhaps both directions inevitably find their way to the dark side of fascism.?

Anyway, the observable effect of our current political process is the sensationalization of national elections in the interest of maximizing advertising and podcasting revenue (which is just self-curated alt news), while fulfilling a more sinister purpose of distracting the masses. Ultimately, the outcome of a majority vote makes no material difference to the ongoing operation of the machine. Maybe Elon can change this. Meanwhile, as the parties of democracy debate on the public stage over various issues, the Cathedral ostensibly continues to determine the voting choices presented to us, effectively reducing even the most “fair and secure” election to some lower level of practical inconsequence.?

What I find interesting are the parallel lanes of NRx and Futarchy. It’s worth a trip down the rabbit hole for both. NRx is basically an anti-democratic, anti-egalitarian, revisionist movement toward monarchy. It touts the decisive efficiency of an authoritarian class under the banner of hyper democracy, which serves to discreetly determine the choices presented to us, the masses, while publicly celebrating the inconsequential nature of the choices we actually make. I know that sounds pessimistic, but it's also where the theoretical benefit of Futarchy should kick in (that is, predictive markets like Kalshi and Polymarket), allowing us to bet on our beliefs so that they become the ballot measures and political candidates we actually want. The ideal would be for predictive markets to ultimately determine our choices before an election. Then we’d be voting on things that actually matter to the majority, instead of betting on the outcome of things that matter to the Cathedral.?

What’s my point??

I’m not really sure I have one, other than to observe a few things from Tuesday: The Left now realizes they're not the majority in America, which is a bit sobering. However, now that the Right holds power to the executive, legislative, and judicial branches of American government, will anything change? Or is it just back to work for us, the proletariat?

Oh... and buy Bitcoin.

#predictionmarkets #polymarket #kalshi #bitcoin #crypto #digitalassets