Which parts of the government are run by representatives, which ones by direct democracy, and which ones by experts, differ by country (and to some extent by state, e.g. within the US), but the existence of such complex mixes is nearly universal (the Federalist Papers make a pretty good case to advocate why that should be so, in general, details apart). So, I don’t see why, similarly, “new” tools such as prediction markets should not be added to the mix, while remaining quite short of running the ENTIRE government.

Does the fed changing policy, (in this case, interest rates) just in time before the new york stock exchange opens count?

Seriously, the gyrations of the stock markets of the world are a very strong input parameter in policy making in most of the nations of the world. From my understanding of prediction markets, they should be behaving similarly. So, atleast we have an analogous situation if not an exact one.

No. And once upon a time, neither had democracry.

I’m always confused by statements like this. “[X] is really good, but I don’t think you should use it” What? Am I missing something? If [S] is good, use it. Otherwise, what are you talking about? Are you saying you don’t like it and don’t want to use it because of that? That’s fine, but the statement above doesn’t say this. What Cowen said is essentially contradictory.

P(My vote swings an election) < P(A tornado in Kansas assembles a Boeing 747)

It’s happened at least once, so this is very unlikely.

Seeing that P(My vote swings an election) < P(A tornado in Kansas assembles a Boeing 747) is an issue that can not be ignored.

“The record of representatives is strong,”

Is without a doubt a fallacious statement (see Hugo Chavez for a starting point).

The legislature’s need for private as well as public information was well understood by him, and reflected in the Federalist Papers:

“No man can be a competent legislator who does not add to an upright intention and a sound judgment a certain degree of knowledge of the subjects on which he is to legislate. A part of this knowledge may be acquired by means of information which lie within the compass of men in private as well as public stations.”

Prediction markets are nothing more than such a means of information lying within the compass of men in private….stations. As such it appears exactly the kind of resource of which the Founding Fathers would have approved.

In their day information aggregation was primarily performed by the coffeehouse broadsheet, and in ours there doesn’t seem a sound argument not to consider adding well-designed markets into the mix.