Wagers of sin

Imagine, if you will, that there’s a gun pointed at Paul Wolfowitz’s head.

Now, quickly, place your bets: Will the trigger be pulled within the next minute? How about the next 24 hours? Within the week?

Or maybe betting on the brains of Bush strategist Wolfowitz isn’t your cup of tea. You might prefer a Kennedy, an Arafat or perhaps the repurposing of a few airline flights.

Last week, the same Bush leaguers who brought us Total Information Awareness unveiled a new program that takes the administration’s cult-like obsession with free-market economics to its illogical conclusion. The Department of Defense-sponsored “Policy Analysis Market” (PAM) was designed as an online opportunity for high-rollers to anonymously place bets on future terrorist attacks. Already existing “futures markets,” which allow participants to buy and trade shares of commodities before they are actually produced, have demonstrated limited predictive powers. “Terror futures” advocates speculate that, by treating catastrophe as a commodity that can be bought and sold, a closely watched market could provide advance warning of terrorist activities.

The Pentagon’s Defense Advanced Research Projects Agency (DARPA) essentially bet on the idea that Americans, having already allowed ourselves to be exploited for increasingly unsavory purposes, would go along with this latest scheme.

No such luck.

Last Tuesday afternoon, nearly all traces of the canceled program’s existence were eradicated from the Internet, including search-engine caches. But like everything flying through cyberspace, PAM left behind its own little vapor trail, one that tells us more about the folks running our government than we ever wanted to imagine.

Wolfowitz, who disavows any prior knowledge of the program, has casually dismissed the whole thing as a “brilliantly imaginative” group of people getting a bit “too imaginative.” That raises the question: Who exactly were these people, and what were they thinking?

Well, of course, there’s pardoned criminal John Poindexter, the Iran-Contragate conspirator turned DARPA mastermind whose resignation from the Bush administration is being offered in exchange for us putting this embarrassing incident behind us. But the program clearly owes a spiritual debt to William Bennett (everyone’s favorite compulsive gambler) and Newt Gingrich (who rivals L. Ron Hubbard in his ability to blur social movements and speculative fiction).

Still, aren’t these characters all a bit old to be sitting around playing the ultimate game of Risk—even if it is with other people’s money, other people’s lives, and other people’s futures? Perhaps the old guard has found some young blood to bring even more apocalyptic visions to fruition.

Someone like Robin Hanson.

An academic who, judging by the photo on his Web site, resembles Richard Carpenter’s evil twin, Hanson pioneered the concept a decade ago. “I suggest a new social institution, called ‘idea futures,’ which can create a visible expert consensus with clear [read: monetary] incentives for honest contribution,” wrote Hanson in the ever-popular Extropy: Journal of Transhumanist Thought. “Like cryonics, idea futures is another way to take advantage now of the fact that the future should be rich with power and knowledge. We create good incentives now by letting the future settle our bets.”

In fact, the future’s so bright that Hanson’s having himself frozen. On his Web site, the Alcor cryonics customer says, “For a few hundred dollars a year, I estimate I’m buying a >5% chance of living for thousands of (subjective) years.”

A professor at George Mason University, Hanson describes himself as a “6-foot, 185-pound, 40-year-old, well-educated, married, white, male American” who has two kids and little patience for “those whose thinking is sloppy, small or devoid of abstraction.” He’s a fan of the men’s movement and says he’d “love to specialize in the economics of science fiction.”

Hanson brought his “idea futures” concept to DARPA. It couldn’t have been that hard a sell, given what had been witnessed in the aftermath of the World Trade Center and Pentagon attacks. The government already was investigating wild market fluctuations in United Airlines’ and American Airlines’ parent-company stocks in the days leading up to 9/11, a fact that found its way into the Bloomberg news service and the Los Angeles Times but that has been largely overlooked otherwise.

Some 13 months before PAM went online, DARPA sponsored a conference in Arlington, Va., where agency program manager Michael Foster invited Hanson to present his theories on prediction markets. Based on a conference abstract, the workshop Hanson took part in was to “focus on the ability of markets to address military and security issues.” Citing the value of oil futures to industry decision-makers, the document asks whether a market can be designed specifically to “predict and provide advance warning of terrorist activities.”

It’s entirely possible that Hanson, though eccentric, is motivated by nothing more nefarious than a quest for knowledge, a few too many role-playing games, and a misreading of Koushun Takami’s dystopian novel Battle Royale. But the same, sadly, cannot be said for the gang he hooked up with in Washington. After the rigging of the Florida elections and gaming of the California energy market, George W. Bush’s extended family must have loved Hanson’s idea for a profit-driven speculative market on terrorism.

Even with cryonics, the likelihood of Hanson living to see his terror-futures market come to fruition is now severely diminished. More likely, this administration’s love for apocalyptic extremism will finally push matters to a point where the wheels of impeachment and resignation turn again.

Just don’t bet on it.