Dead Peasants Insurance
In their modern American form, prediction markets have been around since 1988, when three University of Iowa economists started the Iowa Electronic Markets as an academic experiment to study the forecasting power of markets. The resulting group of predictions markets remained a relatively small and niche product for decades. It spawned several imitators, and the largest one of the pre-Kalshi era, PredictIt, received CFTC approval to offer event contracts on elections in 2014 by virtue of its association with a New Zealand university. The 2016 presidential election was a high-water mark for the industry, with hundreds of millions of dollars trading hands.
Justice Oliver Wendell Holmes once argued that a contract of insurance on a life in which the buyer has no interest “gives the insured a sinister counter-interest in having the life come to an end.” Despite this, Holmes upheld the industry’s right to resell these policies anyway. Life insurance had become, Holmes reasoned, “one of the best recognized forms of investment and self-compelled saving” and ought to have the ordinary characteristics of property. By 1911, respectability had become its own argument. The industry had grown too big to constrain.
While prediction market bets on the deaths of world leaders, the bombings of countries, or the burning of forests feel scandalous and obscene to many Americans, they are the direct descendants of those British underwriters betting on the sinking of ships or the starvation of helpless migrants—as well as the death bets of the viatical and life settlement industries. The plumbing of the American economy is corroded with all sorts of heinous shit like this, and all of it is at worst celebrated and promoted as prudent financial investments and at best completely ignored by the vast majority of Americans.
I'M CASHING YOU OUT UNCLE SAM - SAYONARA GLOBOCOP
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