revealing insider information can be either good or bad. but a concern with prediction markets (or financial markets) is that decisionmakers can profit from creating insider information to trade on. since its generally easier to create bad news than good news, and volatility comes with a premium, this is bad for the institution but potentially good for the decisionmaker.
maybe this happens with journalism: making decisions specifically to leak them to journalists to curry favors. but the potential upside for the decisionmaker is much higher when they can make large anonymous bets on polymarket.
without transparency this sort of behavior might still be manageable in the private sector but public sector principal-agent problems are bad enough already
If the Venezuela investor was also a decision maker - possibly Trump himself - then it's directly relevant. It would be an act of sabotage against the US reputation in order to create insider information for the decision maker to profit from.
I feel like this article misses the point of banning gambling which is that it's a 0 sum way to make money. Polymarket is gambling and maybe I don't want people getting rich off of their particular insider advantages.
I would add on: As a zero sum game it's irrational to bet on Polymarket _unless_ you have an insider advantage. So we expect these markets to attract two groups: insiders, and a lot of rubes who get fleeced.
What strains the analogy with journalism is that journalism, taken in the aggregate, has a positive externality: It informs the populace. The US founders recognized this very explicitly. One could argue that Polymarket prices play a similar role but that's not an argument everyone would buy into.
By any sensible definition of "random," this is patently false. They (as well as Kalshi) publish Brier scores that show their markets are quite well-calibrated.
Great post. I’ve been arguing for some time now that individuals don’t have a right to privacy (unless they stay home and out of sight). Once anyone conducts some form of human action they reveal information about their preferences and dislikes. Moreover, individual dress and appearance (consumer consumption) is also revealing information about their preferences and prejudices as well as future behavior.
I have never fully understood where this sacred domain of privacy originated. I remember reading about privacy in law school circa 1990 in the context of sexual conduct and reproduction, but I would be interested to learn more about our collective outrage over our privacy.
It's simple: if you don't have privacy, then authoritarians can more easily punish you if you fail to conform to their dictates. For instance, theocratic moralists. The punishment can come from enforcement of laws or from social ostracism or from illegal harassment. Privacy gives you greater independence and freedom from the many authorities over you, or from people who aren't really authorities over you but will try to exercise the power to punish you anyway.
Privacy is anti-authoritarian, when wielded by ordinary people against authorities. Authorities keeping secrets from ordinary people is the opposite. It's no surprise that people who advocate privacy for ordinary people tend to also advocate openness and accountability for authorities, and people who advocate no privacy for ordinary people tend to also advocate secrecy for authorities.
I agree with everything you are saying but substitute the word “liberty” for “privacy”.
What I’m not saying is that our government or any state should be allowed to spy on its citizens (or anyone else) or use surveillance to intimidate or control their behavior.
I do agree with your point about authorities wielding privacy against the people but not because it’s privacy. A state or government is nothing more than an organization made up of individuals. No individual or group of them has the right to violate other individuals’ rights, which means using force against them.
I would take a more moderate position than that. We do need some minimum amount of government authority, surveillance, and enforcement of laws by violence (police), otherwise society breaks down and you get bands of warlords running everything and replacing the government, as in some places in Africa.
It's a matter of finding the sweet spot where society functions but people still have a good degree of freedom. Usually, authoritarian states tend to devolve into increasingly authoritarian states, as the leaders find ways to seize ever more power for themselves. The trick is curbing that and keeping authority to a moderate level.
Rights aren't physically real; they're a social construct. So whether people do or don't have a given right depends entirely on the agreements of the society they live in. You could imagine a society where people don't have a right to live (i.e. it's fine for anyone to kill anyone else) or a society where people don't have a right to personal property (i.e. it's fine for anyone to take anything from anyone else).
Presumably, there were selection pressures that lead us to the rights that most modern nations have converged upon. Granting people the right to "life" allows for more slack to certain subsets of the population to specialize in developing skills outside of martial arts (say, perhaps in scientific, technological or medical research that might benefit the community as a whole). Granting people the right to owning private property enables long term investment, which also might benefit the community as a whole.
The right to privacy, in terms of their personal information and preferences, presumably allows for people to entertain and consider ideas that might be "correct" is some epistemic sense but unpopular in the current society they find themselves in. E.g. disagreeing that homosexual people should be physically abused, say. This might also benefit society in the long term.
If you can show me the “agreement with society” that you or I (or anyone else for that matter) signed I might see things more as you do.
As for the “right to life”, try imagining the counter factual; I’ll grant that many people live under that reality (North Korea and Cuba come immediately to mind). Our very existence gives some proof of an implied tolerance of life (at least our ancestors).
The “granting of rights” as you describe it doesn’t fit with America’s original charter: The Declaration of Independence.
And as for things that don’t exist physically, the concept you seem to believe is in control of individuals’ lives—“society” (or “community”)—doesn’t really physically exist. Only individuals exist. Concepts like family, tribe, community, society serve to define the relationship between individuals—we are not cells in a body. These are abstractions like rights, which define the nature of the relationships between and among individuals. If individuals live together in harmony there are rights and communities; if not, there are rules governing a forced organization of individuals—a collective.
What I have described in brief are the two possible relationships between individuals: Freedom versus Control.
Freedom is built upon individual liberty and rights. Control is something less than freedom. Asking permission to act is a clear sign that individuals are not free and have no rights. Grants of rights or regulated liberty is not the same thing as individual rights or liberty.
I've felt that the real reason to ban insider trading is that most traders, especially the big institutional ones, don't have significant inside information on anything. So it is in their interest to ban that, otherwise they would be losing money to the few individuals who do have such information. The banners get their way because they are large and/or numerous.
Note that trading based on secret information available to members of Congress is not banned. This is because members of Congress write the laws, and therefore outrank the institutional investors.
Thanks for providing clarity where obfuscation and misdirection is so common. The increasing tendency of a ‘ we don’t like it so ban it’ attitude is appalling. The attempts of the “speech police” to regulate speech which they find objectionable for whatever reason is the cause demure is appalling, particularly in the US where the founders understood the necessity of the abilty to debate ideas in the marketplace of opinions and made freedom of speech the first Amendment to the Constitution.
At least there may stil be some hope for our country, seeing individuals actually getting sentenced to prison terms in places such as England and Germany for participating in “prohibited speech” has actually come to pass, something that I would not have believed possible when I was a teenager in the ‘50’s. How prescient George Orwell was.
> something that I would not have believed possible when I was a teenager
Was the fact that the US protections for speech so vastly greater than anywhere else in the world not well known or appreciated then as it is now? Or were they NOT so different then, and the US has improved its protections to better match the text of the First Amendment since the '50s?
I'm younger than the person you responded to (not yet born during the 50's), but back when I was a kid, the internet wasn't much of a thing, and so the world was much less connected.
It was very easy to *only* be exposed to American culture, and just assume that other western nations were probably mostly similar. You would have gone through your entire childhood and half your adulthood, never having met someone from Europe (and perhaps never even hearing someone from Europe speak on the radio, television or newspaper) to tell you otherwise.
revealing insider information can be either good or bad. but a concern with prediction markets (or financial markets) is that decisionmakers can profit from creating insider information to trade on. since its generally easier to create bad news than good news, and volatility comes with a premium, this is bad for the institution but potentially good for the decisionmaker.
maybe this happens with journalism: making decisions specifically to leak them to journalists to curry favors. but the potential upside for the decisionmaker is much higher when they can make large anonymous bets on polymarket.
without transparency this sort of behavior might still be manageable in the private sector but public sector principal-agent problems are bad enough already
that is the issue of sabotage, quite a different issue
If the Venezuela investor was also a decision maker - possibly Trump himself - then it's directly relevant. It would be an act of sabotage against the US reputation in order to create insider information for the decision maker to profit from.
I feel like this article misses the point of banning gambling which is that it's a 0 sum way to make money. Polymarket is gambling and maybe I don't want people getting rich off of their particular insider advantages.
ALL financial market trades are zero sum in the sense you are using, relative to holding all assets in proportion to their market caps.
I would add on: As a zero sum game it's irrational to bet on Polymarket _unless_ you have an insider advantage. So we expect these markets to attract two groups: insiders, and a lot of rubes who get fleeced.
What strains the analogy with journalism is that journalism, taken in the aggregate, has a positive externality: It informs the populace. The US founders recognized this very explicitly. One could argue that Polymarket prices play a similar role but that's not an argument everyone would buy into.
Yeah I don't buy it , polymarket is basically random a week before termination date.
By any sensible definition of "random," this is patently false. They (as well as Kalshi) publish Brier scores that show their markets are quite well-calibrated.
They're fine an hour out, not so a week or more out, iirc
Great post. I’ve been arguing for some time now that individuals don’t have a right to privacy (unless they stay home and out of sight). Once anyone conducts some form of human action they reveal information about their preferences and dislikes. Moreover, individual dress and appearance (consumer consumption) is also revealing information about their preferences and prejudices as well as future behavior.
I have never fully understood where this sacred domain of privacy originated. I remember reading about privacy in law school circa 1990 in the context of sexual conduct and reproduction, but I would be interested to learn more about our collective outrage over our privacy.
It's simple: if you don't have privacy, then authoritarians can more easily punish you if you fail to conform to their dictates. For instance, theocratic moralists. The punishment can come from enforcement of laws or from social ostracism or from illegal harassment. Privacy gives you greater independence and freedom from the many authorities over you, or from people who aren't really authorities over you but will try to exercise the power to punish you anyway.
Privacy is anti-authoritarian, when wielded by ordinary people against authorities. Authorities keeping secrets from ordinary people is the opposite. It's no surprise that people who advocate privacy for ordinary people tend to also advocate openness and accountability for authorities, and people who advocate no privacy for ordinary people tend to also advocate secrecy for authorities.
I agree with everything you are saying but substitute the word “liberty” for “privacy”.
What I’m not saying is that our government or any state should be allowed to spy on its citizens (or anyone else) or use surveillance to intimidate or control their behavior.
I do agree with your point about authorities wielding privacy against the people but not because it’s privacy. A state or government is nothing more than an organization made up of individuals. No individual or group of them has the right to violate other individuals’ rights, which means using force against them.
I would take a more moderate position than that. We do need some minimum amount of government authority, surveillance, and enforcement of laws by violence (police), otherwise society breaks down and you get bands of warlords running everything and replacing the government, as in some places in Africa.
It's a matter of finding the sweet spot where society functions but people still have a good degree of freedom. Usually, authoritarian states tend to devolve into increasingly authoritarian states, as the leaders find ways to seize ever more power for themselves. The trick is curbing that and keeping authority to a moderate level.
I would then recommend Michael Huemer’s book, The Problem of Political Authority.
You and I stand very far apart on this issue of state authority but, I think, we agree on a general principle of liberty when it comes to individuals.
Rights aren't physically real; they're a social construct. So whether people do or don't have a given right depends entirely on the agreements of the society they live in. You could imagine a society where people don't have a right to live (i.e. it's fine for anyone to kill anyone else) or a society where people don't have a right to personal property (i.e. it's fine for anyone to take anything from anyone else).
Presumably, there were selection pressures that lead us to the rights that most modern nations have converged upon. Granting people the right to "life" allows for more slack to certain subsets of the population to specialize in developing skills outside of martial arts (say, perhaps in scientific, technological or medical research that might benefit the community as a whole). Granting people the right to owning private property enables long term investment, which also might benefit the community as a whole.
The right to privacy, in terms of their personal information and preferences, presumably allows for people to entertain and consider ideas that might be "correct" is some epistemic sense but unpopular in the current society they find themselves in. E.g. disagreeing that homosexual people should be physically abused, say. This might also benefit society in the long term.
If you can show me the “agreement with society” that you or I (or anyone else for that matter) signed I might see things more as you do.
As for the “right to life”, try imagining the counter factual; I’ll grant that many people live under that reality (North Korea and Cuba come immediately to mind). Our very existence gives some proof of an implied tolerance of life (at least our ancestors).
The “granting of rights” as you describe it doesn’t fit with America’s original charter: The Declaration of Independence.
And as for things that don’t exist physically, the concept you seem to believe is in control of individuals’ lives—“society” (or “community”)—doesn’t really physically exist. Only individuals exist. Concepts like family, tribe, community, society serve to define the relationship between individuals—we are not cells in a body. These are abstractions like rights, which define the nature of the relationships between and among individuals. If individuals live together in harmony there are rights and communities; if not, there are rules governing a forced organization of individuals—a collective.
What I have described in brief are the two possible relationships between individuals: Freedom versus Control.
Freedom is built upon individual liberty and rights. Control is something less than freedom. Asking permission to act is a clear sign that individuals are not free and have no rights. Grants of rights or regulated liberty is not the same thing as individual rights or liberty.
I've felt that the real reason to ban insider trading is that most traders, especially the big institutional ones, don't have significant inside information on anything. So it is in their interest to ban that, otherwise they would be losing money to the few individuals who do have such information. The banners get their way because they are large and/or numerous.
Note that trading based on secret information available to members of Congress is not banned. This is because members of Congress write the laws, and therefore outrank the institutional investors.
What are the motives of people who want to kill Polymarket?
Disliking some (or all) members of the following set: {"techbros", "crypto", "gambling", "markets", "swindle"}.
Thanks for providing clarity where obfuscation and misdirection is so common. The increasing tendency of a ‘ we don’t like it so ban it’ attitude is appalling. The attempts of the “speech police” to regulate speech which they find objectionable for whatever reason is the cause demure is appalling, particularly in the US where the founders understood the necessity of the abilty to debate ideas in the marketplace of opinions and made freedom of speech the first Amendment to the Constitution.
At least there may stil be some hope for our country, seeing individuals actually getting sentenced to prison terms in places such as England and Germany for participating in “prohibited speech” has actually come to pass, something that I would not have believed possible when I was a teenager in the ‘50’s. How prescient George Orwell was.
> something that I would not have believed possible when I was a teenager
Was the fact that the US protections for speech so vastly greater than anywhere else in the world not well known or appreciated then as it is now? Or were they NOT so different then, and the US has improved its protections to better match the text of the First Amendment since the '50s?
I'm younger than the person you responded to (not yet born during the 50's), but back when I was a kid, the internet wasn't much of a thing, and so the world was much less connected.
It was very easy to *only* be exposed to American culture, and just assume that other western nations were probably mostly similar. You would have gone through your entire childhood and half your adulthood, never having met someone from Europe (and perhaps never even hearing someone from Europe speak on the radio, television or newspaper) to tell you otherwise.