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titotal's avatar

Great post!

I think there are wider problems that extend to non-money based systems: as soon as people start making decisions based on prediction markets, people will start deliberately distorting them to achieve desired goals. Like if you want AI safety funding to increase, why not deliberately put an overoptimistic forecast on AGI arriving on metacalculus? The question is weighted the same as way easier ones when it comes to your forecasting questions, so it won't even affect your top forecaster rating by much.

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throwaway's avatar

Prediction markets or speculative markets are useful in any economy with a sound basis. These markets act as signaling when the requirements are properly are met. The difficulty is that the requirements haven't been met for quite a long time now, and they haven't been met because of various forms of money-printing, or betting on leverage which indirectly ties to money-printing (in its infinitely conceivable forms).

When you can bet more than you have, you utilize the full distorting power of money-printing when that bet goes bad. Someone has to pay it, if its not the person making the bet, its everyone holding the currency, and this is what most people misunderstand. The problems we see today aren't problems in small niche areas, they are chasms that have been carved out underneath everyone's feet for decades with most unaware of the danger, seeing small crevasse here and there as merely the small ups and downs of nature.

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