I finally had time to listen to the debate between Mencius Moldbug and Professor Hanson.
The only items on the debate that I had read prior to listening to the debate were Moldbug’s and Professor Hanson’s summaries. From these summaries, I was assuming that Professor Hanson wiped the floor with Moldbug. I would have like Moldbug to make some different points, but I thought he held his own just fine.
First, I would have liked Moldbug to adopt the arguments from this post – on why seasteading will fail – to futarchy. If one understands the arguments in that post, it becomes clear that debating futarchy is silly (or perhaps, dare I say, retarded) because no sovereign entity will ever allow sovereign decisions to be made by markets. Go read the post, it doesn’t take much to see how the arguments against seasteading apply just as well to futarchy.
Second, it’s clear that Professor Hanson has a strong belief in markets – really strong. Moldbug frames himself as a crazy reactionary, which is why we love him. But, I think in a debate, he would have done better to argue that his position, not Professor Hanson’s, is the most market friendly position. In short, such an argument would be: the market has come up with a way of running large bureaucracies. Their method is a single, nearly-all-powerful leader (i.e. a CEO) controlled only by a board of directors, and ultimately controlled by equity investors. Moldbug’s ideal government is simply this method of corporate governance (which has risen to dominance in the free market) applied to sovereign governance. I would have liked to hear Professor Hanson respond if Moldbug had put him in the anti-market position. Why is Professor Hanson creating complicated markets to solve a problem which free markets have already solved?
Third, at the end of the debate, Professor Hanson admitted that the futarchy markets would have to be subsidized. Such a subsidy would be calculated based on "standard formula" for measuring the costs of government action (this was the only time that Moldbug’s X and Y example became solid in my mind). It would have been fun to see Moldbug press this point and get some specifics. Let’s say we’re in 1912 and the US is considering entering WWI. What is the cost of this decision based on the "standard formula?" How, for example, would policy decisions be put in the market? The recent cap-and-trade bill was 2000 pages. Let’s assume there there was 1 idea per 2 pages. Would the market have been given 1000 policy options? Can anyone submitted proposals for decisions to the market? Who would subsidize markets if the market is the sovereign? Can markets work to make good, long-term strategies if they are only provided with discrete, short-term choices? Who would carry out the "decisions" of the market? Who would interpret the meanings of the decisions? Wouldn’t the interpreter, the executives, or the people who get to submit policy questions to the market effectively become the sovereigns?
Finally, what was most interesting about the debate had nothing to do with futarchy. It was much more interesting to compare the way these two (highly intelligent) people think. Professor Hanson allows no room at all for knowledge that can’t be tested in a "lab" or subjected to statistical knowledge. Moldbug allows almost no room for this type of knowledge – at least when it comes to governance. To Moldbug, Professor Hanson is setting out to answer a question that has already been answered – namely how do we get better government. Moldbug turns to history (effectively the revealed word of God, according to Carlyle) to show that this problem was solved a long time ago. We already know how to get good government (interestingly the market has come up with the same solution that Moldbug has come up with). Professor Hanson seems to believe that such knowledge can only come about using lab experiments and regression analysis. It was ultimately for this epistemological disagreement that they ended up talking past each other. The same disagreement makes it hard for Moldbug to speak to any other groups of modern social scientists.