Futarchy, a new form of governance.
Those who know they are not relevant experts shut up, and those who do not know this eventually lose their money, and then shut up.
We are all aware that democracy is not a perfect system, and we may even be over optimistic in believing that a perfectly fair governance system can exist. However, today there is a great driver to political philosophy and science, inspired by research in the area of governance in large organisations due to the popularity of the blockchain and decentralised computing platforms.
The problem many would argue with democracy is the fact that the people in power are not experts, they have access to experts but also the choice to ignore them.
Futarchy, is a concept which can be described very simply, vote on values but bet on beliefs.
Vote on Values
Voting on values simply means, that the people can vote on metrics which are important to them, for example a country may vote ad decide that Gross Domestic Product or Adult Literacy Rates are important to their values.
These are simplified modern day metrics, and in the world of Futarchy the metrics may well look different.
Bet on Beliefs
Coming back to the quote which began this article:
Those who know they are not relevant experts shut up, and those who do not know this eventually lose their money, and then shut up.
This perfectly sums up the way a Futarchy system would work, once the collective has decided on a value (metric) and a maturity, for example GDP in 10 years, the people may bet on the effect various policies which will affect it.
Speculative Markets
This concept is powerful because it makes a very big assumption, and that is that speculative prediction markets are our best known method for aggregating information.
Putting it all together
Image Credit: Ethereum Blog


Governance over Technology
Now while this concept would not work in such a simplified manner as above in the complex context of government. The exciting application is using this form of governance to make decisions on how decentralised software projects should progress.
Lets say our goal is to improve the latency of our system, we may begin with a discussion on some forum or mailing list — there will be some non-technical people and also some who have done not much thinking but have a loud voice. Our new proposal for improving latency would have to be voted on with an economic stake meaning those whom are not sure will be less likely to make far fetched comments, and those who are quite but certain will be incentivised to chime in to win rewards!
What a beautiful idea!
Further Reading
- Futarchy: Vote Values, But Bet Beliefs by Robin Hanson
- An Introduction to Futarchy by Vitalik Buterin
