I had wondered where Intrade had gone.
http://reason.com/archives/2013/11/25/the-death-of-intradefistful started a thread a week back or so and asked about the difference between gambling and investing.
http://www.armedpolitesociety.com/index.php?topic=42229.0Is there a difference between gambling and investing? To me, the major difference is that investing in a company actually means buying a share of the business, and is necessary to getting a new business of the ground. But you can have a boxing match or a ball game without betting on it, and the gambler doesn't share in the revenues from tickets, etc. Nor does he share the possibility of owning an ongoing money-making concern, or create jobs.
I do not think the distinction so clear cut, as Intrade demonstrated by offering contracts that certain events would occur.
Gambling for Information
"The history of financial regulation is that everything was illegal gambling to start with," says the George Mason University economist and entrepreneur Robin Hanson, one of the founders of the field of prediction markets. "Then exceptions were carved out for things that were no longer gambling. Insurance, stocks, commodities futures, options-if you look back, you'll see that all of these things were illegal. In a world where people don't see a point to it, they saw it as gambling and banned it."
Wagering and speculation have been around for a long time. A Vedic poem called The Gambler's Lament documents betting by Iron Age Indians, while records show that ancient Egyptian gambling fanatics frequently wound up working in stone quarries. But as anyone who has ever spun a dreidel on Hanukkah knows, religions have mixed views on the subject. The Greek word for justice, dike, has roots in the word for "to throw," as in dice. The Catholic Church OKs gambling in moderation as long as the games are not rigged. Officially sanctioned sports betting dates to late-18th-century Europe.
In more recent times, the technology to facilitate speculation has improved, making for faster, more accurate trading and record-keeping, and expanding the potential market of gamblers to anyone with an Internet connection. Intrade markets were little more than simple up-or-down binary contracts-a price of $0 meant the event would not occur before the date, $10 that it would-aggregated at a large scale.
If Intrade was still operating, for example, it's quite likely a market like this would be on offer: "Miley Cyrus will serve time in prison on or before January 1, 2014." Say that contract was trading at $4.99/share. Traders who think Hannah Montana's slutty alter ego is headed for the Big House should buy shares. Those who think she's already hit rock bottom and is going to turn her life around should sell.
As in all markets, more buyers drive prices up and more sellers drive them down. In the simplest reckoning, a share price of $6 was equivalent to a 60 percent probability that an event would occur. Traders could buy and sell at any time, with prices skyrocketing or collapsing based on breaking news. (Mitt's stock was suddenly a hot potato, for instance, after Ann Romney declared that her family would not be disclosing further financial data to "you people.") At the set deadline for the event, though, every market closed either at $0 or $10. On November 6, 2012, the price for "Barack Obama to be re-elected president" hovered just below $7, but the market closed on the 7th at $10.
Intrade provided something more beneficial than cheap thrills and occasional profits for participants: It generated information. As the economist F.A. Hayek explained in his seminal 1945 essay "The Use of Knowledge in Society," the prices produced by a decentralized marketplace can be a better source of information than whatever emanates from powerful central planners or even acknowledged experts. "Without an order being issued, without more than perhaps a handful of people knowing the cause," Hayek marveled, "tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; that is, they move in the right direction."
Of course, once Intrade started having decent success predicting political & market events and undermining the authority of gov't decision-makers and other parasites (lobbyists, pundits, etc.), you don't need a formal market mechanism to see that the parasitic class would seek to destroy the threat.
Upshot:
Yes, they hate you and want to keep you ignorant. One way to do that is to destroy information aggregation tools not under their control.
Do read the entire article, as it is worth your time.
