July 29, 2003
THIS IS GENIUS
Many people see financial markets as zero-sum games that produce
zero value. In actuality, markets' true benefits are communicating
information about the value of allocated capital in a market economy.
The value of funds at stake in learning near-perfect information about
the true state of companies and their enterprises is enough to fund an
entire industry centered around the market.
href="http://www.nytimes.com/2003/07/29/politics/29TERR.html">The New
York Times reports that a similar effort is being proposed to
bet on a terror futures market. While this initially might seem
grotesque, a market built around betting on the likelihood of
assassinations, attacks, and terror will create a profit-based
incentive for people to monitor terrorist organizations. Granted,
there are organizations like the CIA and the FBI to do such things, but
think of them as the U.S. Postal Services of intelligence
organizations. The only downside here is that such a speculative
market will create a profit motive for committing terror [it was
generally reported that bin Laden himself heavily shorted U.S. equities
before 9/11/01] but opposite actors will have an opportunity to profit
from foiling such plans as well. I doubt this will come to fruition.
Bureaucratic intransigence and anti-market bias will likely kill this
plan before it gets off the ground, but it's nice to see the Bush
administration thinking outside the box.
Posted by Lexiphane at July 29, 2003 10:17 AM
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