Steven Greene points to piece on the Pentagon’s "terror futures" market written by professors of economics at the Stanford Graduate School of Business. They argue that the idea of a futures market for world events is an idea that could very well work.
Even if the futures market isn’t that great an idea, the real damage is in the way Congress and the Pentagon brass reacted. We need to be rewarding innovation and thinking outside the box in the war on terror. We cannot afford complacency in any form. The message Congress sent to DARPA is that anything outside the status quo will cause heads to roll, and that kind of message only hurts the ability of this nation to defend itself against terrrorism.
UPDATE: Oliver Kamm argues that the futures market was a bad idea – but so was the reaction from Congress. He’s got some very salient points about why a predictive market for terrorism might encourage false intelligence.