Futarchy: Are we ready to ‘’Vote on values, Bet on beliefs’’?
Exploring DAOs has led me to Futarchy and never would I have ever thought that gambling alongside voting could every be aligned to society and more democratic way of decision making.
In the words of former president, Obama:
“… if we want a better politics, it’s not enough to just change a Congressman or a Senator or even a President; we have to change the system…” (President Obama, State of the Union Address, January 12th, 2016)
So how do we change a system? How do we solve Brexit, How do we decide on a bridge/tunnel? How do we decide if we should be in complete lockdown or not?
What is Futarchy?
A means of reform might be Futarchy. Introduced by Hanson and elaborated upon by even Vitalik, is a model where you ‘vote on values, bet on beliefs’.
It’s a satisfaction driven form of governance, which doesn’t rely on expert of knowledge, and where ‘voters learn many things as a side effect of just living’. In futarchy it is understood that ‘speculators have a much stronger incentive to eliminate price biases that vary over shorter terms and that are independent of the few aggregate price dimensions that command a “risk-premium.” (Hanson, R. 2000)
Hanson believes that ‘asymmetric information, is the key problem in social systems’. This is not a sole thought. Society is lead to believe that the best form of governance is that of a liquid democracy, however as highlighted by Merkle ‘from a societal perspective we are expending substantial resources to ensure that unmotivated, unqualified, misinformed voters make societally critical decisions, which are then often ignored’ (Merkle, 2016) This is also backed up by Hayek who highlights the ‘problem of a rational economic order’ is often ‘dispersed bits of incomplete and frequently contradictory knowledge’ (Hayek, 1945)
What do you think about Futarchy?
To bring a current affair to table like Covid-19: Would you be ready to vote on lockdown vs non lockdown? By betting on the belief a non lockdown would drive a certain social economical outcome that a lockdown would? But also meaning that you would also benefit financially from being right?
Or in the case of Brexit, would you have wanted to vote ‘leave or stay’ by putting your money on your decision, with the option to win or lose that stake if the social economical outcome of that bet is respective to your original vote?