Futarchy is one of such surprises. I took time to read the whole paper written by Hanson and it brought me mixed feelings of both irresponsible laughter and the responsibility of refuting the whole thing for those who might think it has some plausible statements.

The paper starts infamously with the following statement: “The space of possible forms of government is vast and largely unexplored”; what is this supposed to mean? People should experiment more with governance? It continues but it doesn’t improve: “1. Current democracies fail largely by not aggregating enough available information.”; what democracies have actually failed? “3. It is feasible to, after the fact, tell rich happy nations from poor miserable ones.”; No it’s not. It is feasible to tell rich nations from poor ones, but it’s not feasible to tell happy nations from miserable ones.

Happiness is not accountable, there are no indexes for it. That’s precisely what instigated Locke in his Liberalist works in contrast with Rousseau’s. For Rousseau, it’s the nation duty to provide happiness to its citizens, anyone against the nation’s will (and policies) is insane and should be locked. While for Locke, only the individual may decide what provides him happiness so the state must restrain itself, as far away as possible, thus allowing the citizen to search for his own happiness as he wills too.

Hanson links “bad democracy” to lack of information and, in overall, to voters stupidity. Where “bad democracy” would be the one that doesn’t provide an increase of “Nation’s wealth”. Well, according to Schumpeter, democracy is not really about increasing anything except the legitimacy of the government. On the contrary, the greatest economic boosts ever seen came from authoritarian regimes: Nazi Germany, Fascist Italy, Stalin’s and Mao’s communist regimes, etc.

Also the lack of foresight when choosing representatives is always criticized from the point of view of a well-fed intellectual, but a short-term result is sometimes the only option from a starving population. Its not a matter of lack of information it’s a matter of survival.

“Since speculative markets do so well at a task that democracies have troubles with, it is tempting
to try to improve democracy by making them rely more on speculative markets.”. No wonder why: they are designed to do different things. As a matter of fact, one of the incumbencies of a democratic government is to put brakes in the speculative market.

Hanson also likes to cite GDP as a good index to bear policies “a good policy will increase GDP”, but that’s not true at all. All mid-eastern countries have excellent GDPs due to oil revenues but that by itself says nothing about the country. HDI – Human Development Index - has succeeded GDP on the last 15 years as a social indicator. It includes health, wealth, leisure and the environment in a composite formula in order to take a snapshot from the social structure of a country. HDI may be refined to portrait a specific neighborhood or coarsen to demonstrate a whole country mean.

After screening by several nonsensical paragraphs, I actually agree that Hanson’s Futarchy is not at all worthless. It does have some value. It may be used strictly as proposed on a Star Trek episode as base for the Ferengi Race legislature. This is, hoping that the screenwriters that made up the fictional basis for the characters wont put up a lawsuit for plagiarism.