Futarchy

Futarchy is a proposed governance system where we "vote on values, bet on beliefs." Citizens define the goals they care about through democratic processes, then prediction markets determine the policies most likely to achieve those goals. The logic is that markets aggregate dispersed information more efficiently than debates, committees, or elections. When people risk real money on their beliefs about policy outcomes, cheap talk evaporates and informed opinions dominate. Robin Hanson proposed futarchy as a solution to the core problem of democratic governance: voters are good at expressing what they want but bad at evaluating which policies will deliver it. By separating values (democratic) from means (market-driven), futarchy promises more rational policy selection — though it raises hard questions about market manipulation, thin markets, and the difficulty of specifying measurable outcomes.

Apply futarchy logic wherever you need to separate what matters from what works. Let stakeholders define success metrics democratically, then use information-aggregation mechanisms — prediction markets, structured bets, conditional forecasts — to evaluate which strategies are most likely to achieve those metrics. The key is specifying outcomes precisely enough that they can be measured and settled, and ensuring participants have skin in the game.

Futarchy separates democratic values from evidence-based policy selection, using prediction markets to determine which approaches best achieve democratically chosen goals. The core insight — separate what matters from what works — applies to governance at any scale.