 |
Introduction
Introduction
Welcome to the Simon Exchange in Science Claims. In honor of the late Dr. Julian L. Simon, a scholar who battled popular misconceptions with carefully researched facts, the Simon Exchange will employ economic tools to quantify the current consensus about questions of science, technology, and public policy. By implementing Dr. Robin Hanson's theories of idea futures, the Simon Exchange will allow (or if you prefer, force) experts to "put their money where their mouths are" by trading coupons payable in the event that referenced predictive claims come true.
Once operational, the Simon Exchange will generate honest, timely, and exact predictions about controversial and important claims. Simon himself employed a similar technique, albeit on a smaller scale, in his famous wager with Dr. Paul Erlich. Among his other other warnings of environmental doom, Erlich claimed that scarcity would drive resource prices up during the 1980s. Simon, ever the rational optimist, predicted the contrary. Simon won that bet. (Ehrlich ducked a second wager, continued to predict looming environmental disaster, and went on to win a MacArthur "genius" award.)
Simon dedicated an entire book, Hoodwinking the Nation (1999), to explaining and decrying the dissemination of inaccurate news about the environment, resources, and population. He did not offer much hope of a cure; the Simon Exchange, however, just might. By giving reporters a quick and quantified measure of what committed experts really think about the future, the Simon Exchange would provide a counterbalance to the dramatic, idiosyncratic, soundbite-sized forecasts that currently monopolize the media's discussion of scientific, technological, and policy issues. Someday, perhaps, news stories about global warming, ozone depletion, and the like will routinely add, "On the Simon Exchange, the corresponding claim currently trades at . . . ."
The Simon Exchange will not aim to prove doomsayers wrong, however. After all, we will very much want to know if, notwithstanding past performances, they get a forecast right. No one can say now whether a claim of catastrophe will cost little on the Simon Exchange (indicating that few experts believe disaster looms) or a great deal (indicating the contrary). In either event, though, the Simon Exchange will give us an accurate assessment of the current consensus. Doomsayers will have a fair shot at giving us fair warning.
When will the Simon Exchange start running? Several parties have begun trying to implement Hanson's theoretical work on idea futures. You can find the premier play-money exchange at The Foresight Exchange and links to similar exchanges elsewhere on this website. The Simon Exchange will build on such efforts with the goal of eventually offering a U.S.-based, real-money exchange in scientific, technological, and policy predictions. I launched the effort by obtaining the permission of Dr. Rita J. Simon to name the exchange after her late husband, securing SimonExchange.org as its online home, and authoring a study on the legality of markets in science claims.
Thanks to Gregory Newman's hard work, I can now also offer you the Simon Exchange Business Plan [PDF format]. It's a big file-6.2 MB big-so you might prefer to start with the Summary.Daunting hurdles lie ahead, however. The Simon Exchange has of yet no funding or institutional home. I've done what I can to clear some of the legal groundwork, but to make the Simon Exchange in Science Claims a reality will take the combined help of a great many parties. Javien Corp. has already joined the effort by hosting this web page. Please contact me if you, too, would like to help in creating this, a living monument to Julian Simon and the ideals he exemplified.
Tom W. Bell
Professor of Law, Chapman University
Adjunct Scholar, Cato Institute