Blog/2026-03-07/Distributed Espionage

A guy who is absolutely not making a mistake

A common refrain from people in the US is that prediction markets are dangerous for protected information since many individuals are incentivized to participate.

“When public officials use non-public information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” said Merkley. “Perfectly timed bets on prediction markets have the unmistakable stench of corruption. To protect the public interest, Congress must step up and pass my End Prediction Market Corruption Act to crack down on this bad bet for democracy.”

— Merkley for Oregon

I am inclined to agree. Reducing the barrier to corruption in our own society is a foolish thing to do, and prediction markets allow insider trading on information. In this case, the aggrieved party is the government, which is forced to permit many individuals, not all of whom are entirely trustworthy, to have information in order for the accomplishment of some task. And this being a democracy, the aggrieved party is also us, whose government will underperform under these circumstances.

But if this is an effective mechanism of information extraction, then we are fools to not use it to our own ends. Rightfully, no agents of government, legislators, or judges (and the families of any of these) should be permitted to participate in prediction markets. But it is in our great interest that our opponents' agents of government, legislators, and judges do so. To that end, I think I must support legislation like this - though I think it is not sufficiently wide-ranging. Here's someone who is widely celebrated for the truth of a similar statement, that definitely absolutely did not end up being a mistaken view:

True-hearted Men, they will not be corrupted. We of Minas Tirith have been staunch through long years of trial. We do not desire the power of wizard-lords, only strength to defend ourselves, strength in a just cause. And behold! In our need chance brings to light the Ring of Power. It is a gift, I say; a gift to the foes of Mordor. It is mad not to use it, to use the power of the Enemy against him. The fearless, the ruthless, these alone will achieve victory. What could not a warrior do in this hour, a great leader? What could not Aragorn do? Or if he refuses, why not Boromir? The Ring would give me power of Command. How I would drive the hosts of Mordor, and all men would flock to my banner!

— Boromir, The Fellowship of The Ring