OnePeople

Terrorism Futures Market

Admiral Poindexter's Office of Information Awareness is at it again. Fresh from the sound drubbing they received in Congress for their Orwellian information-collection program, they have a new tool they think will help predict terrorist events. Rather than collecting more information, which the intelligence agencies are already drowning in, this program intends to improve the analysis of that information -- which is where the agencies have been failing.

The tool is the Policy Analysis Market. It's a joint venture between the venerable Economist Intelligence Unit and the Defense Advanced Research Projects Agency (DARPA). This should be familiar to anyone who's played the Hollywood Stock Exchange. It is a futures market for events in the Middle East. Traders place bets on when certain events occur, collecting money when they're right and losing money when they fail. The idea is that markets can be excellent indicators for future events -- each analyst's individual opinion is aggregated with the others, creating a consensus which is represented by the price.

The OIA wants to harness the analytic power of this market by opening a seperate market for terrorism futures, alongside the markets for stability and military posture in Syria, Iran, and elsewhere.

"Spending taxpayer dollars to create terrorism betting parlors is as wasteful as it is repugnant," say Senators Byron Dorgan (D-North Dakota) and Ron Wyden (D-Oregon). What's more, they feel that the market would actually influence the terrorists themselves -- if they know when the market thinks the next attack will be, they will obviously try to beat the oddsmakers.

They have a fair point, in that individual actors can more easily subvert the predictions of a theoretical market than any single person could influence the price of gold. Their revulsion at the premise of the market itself, though, is short-sighted. The market would provide a valuable service, in the form of relatively accurate predictions. They are not revolted by the other markets, like the date of the overthrow of the Jordanian monarchy, and it is foolish to say that a terrorism futures market is qualitatively different.

Other comments from the Senators belie the other forces at work: "They still didn’t get the message," Wyden said. "We want to put the final nail in this coffin." It seems that Poindexter's ham-fisted treatment of the controversial OIA surveillance program has permanently poisoned his relationship with Congress, and may have damaged the more useful and less controversial programs.

Update: Tue Jul 29 15:04:48 EDT 2003

After Senate Foreign Relations Committee Chairman read this piece heard of the program, he announced that the committee would "stop all engines on this matter today."