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a man slumped on his desk, from 'The Sleep of Reason Produces



bridging systems of survival

A throwaway comment from a friend noted that their scintilla of respect for Balaji Srinivasan had actually increased after he made his lose-lose bet on Bitcoin reaching $1 million dollars in 90 days. I agree! I (currently) approve of betting on beliefs! Or at least, trying to tie more weight to a stated opinion than just the words. I’ve often wondered about how to attach such bets — in fake money, or real — to my writing, without breaking either the flow or the law.

Then again: isn’t every statement you make a bet on your reputation? I’m intrigued by prediction markets as much as I have an instant reaction against reputation systems. Why is that? Well, I know that my allergy to reputation systems is just because I’ve come to see them as such a hand-wavey solution to a set of really thorny, probably insoluble problems. But surely prediction markets are a similar simplification: and a simplification with equally known problems?

I’m mulling here: Like yesterday, I don’t have the time or the facts to come up with a tidy opinion solution, but there is a sense in which prediction markets do indicate some ability to operate: when they fail, they fail in ways that are in some sense unsurprising to me. Reputation systems fail like reputation does: bloodily, with chaotic consequences. Also, I guess, bets give people a chance to minimize the damage. You can calibrate to your own resources, rather than having to either bet everything on every turn of the roulette wheel — or more practically, just avoid ever having to have to pay your debts.

I guess reputation systems are attempts to make poor models of a complex social phenomenon. Prediction markets are an attempt to hive off a part of the social phenomenon in a tractable, useful way. Sensible minds can disagree as to whether any market has ever been a success story of this hiving-away, whether the interconnection between the social and the marketplace has every led to good results. I think it does, in the same way that language is a model that has served us well, despite its messy connections with reality (I love a good markets=language analogy).

Have you read Jane Jacobs’ Systems of Survival? In it, she talks of two different ethical schemes: the commercial and that of the “guardian” (I’ve seen this mapped to soldiers in some reviews, and the political space to others). Maybe we are in line for an explosion of new ethical schemes, as Europe did in the reformation, incommensurable, but consistent, and we need to work out how to tie them together, because we need all their functionality. Can we set up an “ethical” reputation-money exchange? Clearly not, because we already have a damning word that: whitewashing. So then, how do we wire these systems together?

I need to re-read Jacobs. (Also, apparently, I need to find a better ebook reader for Linux. Any suggestions?)

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petit disclaimer:
My employer has enough opinions of its own, without having to have mine too.