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I Championed Prediction Markets. Look What They've Become

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Re: I Championed Prediction Markets. Look What They've Become

#51

Post by class3shock »

Look what they've become? You mean look at what they have been from the get go?

The corrupting influence they are having on society has been obvious from the start and was predicted by anyone with any familiarity of the effects of "traditional" gambling on people. Except the author apparently, because they had seen precisely what gambling can do to people and still pushed this.

"The dream was that markets would surface useful information"

The dream was that the markets would make the people who owned them stupid amounts of money like any casino owner. Pretending otherwise is self-delusion at it's finest but the author seems good at that.

Re: I Championed Prediction Markets. Look What They've Become

#52

Post by Glyptodon »

jongjong wrote: post #30

My position is that prediction markets are bad and harmful but so are all mainstream stock markets. They're all prediction markets. People collaborate to pump up the value of specific assets or contracts, leading to undesirable outcomes. It would be dishonest to ban prediction markets without banning stock markets. The best which can be done, under the current system, is to punish unfair information asymmetries, whic…

I disagree with this - plenty of people treat stock as just wanting a share of profits/ownership and not as value speculation. That said, I do think we should be making rules that devalue speculation, perhaps turn-based trading since there's no particular benefit to the world from high frequency trading or value discovery happening in 5 milliseconds instead of 5 seconds, and making it so that being publicly traded requires not having controlling owners or preferential share classes.

Edit: and with prediction markets you don't own anything. Even with commodity futures you can end up having to take possession of cows or something.

Re: I Championed Prediction Markets. Look What They've Become

#53

Post by runarberg »

crooked-v wrote: post #23
fwipsy wrote: post #20

Earlier quoted context omitted.

Sometimes gambling has some social value then. Isn't trading on the stock market gambling? Do you also support abolishing the stock market? What about issuing loans to someone with poor credit?

Day trading is gambling. Buy-and-hold is investing. Algorithmic micro-trading is investing, despite looking like gambling. It's about whether there's an immediate dopamine release or not.

That is not so simple. The lottery is gambling, but the lottery doesn’t trigger the dopamine receptors like slot machine or scratch tickets (also gambling) do. This is because the response is too far behind the behavior in time (hours or days) for it to trigger the same addictive behavior as slot machines and scratch tickets where the behavior-response cycle is in seconds.

Now I don‘t consider day trading to be gambling (even though it is packaged and marketed to appeal to and sell to gambling addicts). For it to be gambling, it would need to be a game.

It is something far more sinister and far worse then gambling. I consider it exploitation, or more accurately capitalist exploitation. This also applies other aspects of the stock market, even the ones which are not marketed to exploit gambling addicts, including investment backed retirement funds [401(k) in the USA], index funds, and publicly traded companies. To me, all these things are equally bad (well actually the retirement funds may be the most sinister of the bunch) even though day trading might have the ugliest manifestation. These are all exploitation of the working class.

Re: I Championed Prediction Markets. Look What They've Become

#54

Post by runarberg »

satvikpendem wrote: post #43
runarberg wrote: post #40

Earlier quoted context omitted.

> Do you also support abolishing the stock market? An anti-capitalist here: Yes... Oh heavens, yes. There are few things I desire more then to see all the stock markets in the world burn and never to be rebuilt. For me, people who make money at the stock market are participating in a systematic exploitation of the working classes. The siphoning of profits away from the workers who created them and earned them, and in…

What is the alternative? I'm sure there will still be trade of labor even in a socialist economy. This is assuming the labor theory of value is right, which it isn't, but I'll be charitable.

There is no need for an alternative. Trading stocks is not a necessary precondition for trading goods and services. Most of mine, and probably your businesses are done without anybody holding stocks in the stuff you are buying or selling. You can abolish the stock market, and pretty much everything stays the same... except the rich lose one (of many) avenues of systemic exploitation.

Re: I Championed Prediction Markets. Look What They've Become

#55

Post by class3shock »

mind-blight wrote: post #33

I don't like prediction markets, but I think a lot of people in this thread are assuming that gambling vs. not is clear cut. Insurance was illegal at different times in history because it was considered gambling. Ditto for commodity trading. Even you look at the structure of a futures contact, the basics look really similar to a bet that can be traded with someone else. The main differences are the regulatory environ…

Is their "greyness" between gambling and day trading? Sure.

Prediction markets are obviously, blatantly, gambling. There is no "greyness", we've skipped the slippery slope and gone straight to the bottom of the ravine.

Re: I Championed Prediction Markets. Look What They've Become

#57

Post by tgma »

crooked-v wrote: post #29
tgma wrote: post #19

Earlier quoted context omitted.

The uniquely problematic aspect of prediction markets is not really the personal aspects of gambling. There are plenty of speculative vehicles. The problem is it subverts natural incentive structures that society has evolved to reward, by introducing another incentive signal; one that sometimes can be many times bigger, thereby manipulating the natural, real-world, outcomes. If you were playing in the World Cup in th…

You're just describing the preexisting problems that led to bans and regulations on sports gambling.

Yes, just one obvious example -- extrapolate to general life. That said, ease of access and scale beyond a critical point can make it qualitatively different.

Re: I Championed Prediction Markets. Look What They've Become

#58

Post by intended »

runarberg wrote: post #54
satvikpendem wrote: post #43

Earlier quoted context omitted.

What is the alternative? I'm sure there will still be trade of labor even in a socialist economy. This is assuming the labor theory of value is right, which it isn't, but I'll be charitable.

There is no need for an alternative. Trading stocks is not a necessary precondition for trading goods and services. Most of mine, and probably your businesses are done without anybody holding stocks in the stuff you are buying or selling. You can abolish the stock market, and pretty much everything stays the same... except the rich lose one (of many) avenues of systemic exploitation.

Eh.

Stock markets serve(d) a function as vehicles to invest in risky ventures. In other words, a way to channel investment.

In the average case scenario, removing the stock market results in rich people being the ones who can afford to fund projects, and thus owning the outcomes.

The underlying case would be for wealth concentration and therefore power concentration. Addressing that would give the working class more options to fund projects or work, more than being the right type of person in the right network to land a rich patron.

Re: I Championed Prediction Markets. Look What They've Become

#59

Post by atmavatar »

crooked-v wrote: post #23
fwipsy wrote: post #20

Earlier quoted context omitted.

Sometimes gambling has some social value then. Isn't trading on the stock market gambling? Do you also support abolishing the stock market? What about issuing loans to someone with poor credit?

Day trading is gambling. Buy-and-hold is investing. Algorithmic micro-trading is investing, despite looking like gambling. It's about whether there's an immediate dopamine release or not.

> Algorithmic micro-trading is investing, despite looking like gambling.

It's skimming.

Re: I Championed Prediction Markets. Look What They've Become

#60

Post by runarberg »

intended wrote: post #58
runarberg wrote: post #54

Earlier quoted context omitted.

There is no need for an alternative. Trading stocks is not a necessary precondition for trading goods and services. Most of mine, and probably your businesses are done without anybody holding stocks in the stuff you are buying or selling. You can abolish the stock market, and pretty much everything stays the same... except the rich lose one (of many) avenues of systemic exploitation.

Eh. Stock markets serve(d) a function as vehicles to invest in risky ventures. In other words, a way to channel investment. In the average case scenario, removing the stock market results in rich people being the ones who can afford to fund projects, and thus owning the outcomes. The underlying case would be for wealth concentration and therefore power concentration. Addressing that would give the working class more…

If they ever served such a function, they no longer do so. Today’s risky ventures are funded by venture capital and the results are disastrous. I propose an alternative system where you fund your risky venture by taking out a loan at your local credit union, by crowd-sourcing it, or better yet, just don’t. I think we can give risky ventures a brake for 20-100 years.

Maybe concentrate our efforts on undoing the damage this era of capitalism has wrought us, maybe starting with reinstating consumer protection, dismantling the state surveillance system, protecting against the effects of the climate disaster. If you have a good idea on any of those, run for office, or get a degree and work with your local (state funded) university on the matter.

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