For some reason today I can’t stop thinking about the proposal a few years ago by DARPA to create a futures market for terrorism. When the idea was first announced I had the same reaction as most people: it was too macabre an idea. In recent months, a few years on from the project being scrapped, I started to see the good points behind it. The free market tends to bring out any information that someone feels will be profitable, and so the rationale was that a potential informant would be swayed more by the lure of shorting a terrorist attack stock than the prospect of doing the right thing.
However, the free market also entices people to cheat, and so the next worry would be that terrorists could manipulate the futures market by, well, causing more terrorist attacks. In the “legitimate” investment world this untoward behaviour is monitored and punished by the likes of the SEC; in this case I think it’d be tough to get terrorists to subscribe to such governing bodies. So this market would be both macabre and prone to manipulation…manipulation in the form of people dying. Not going to win you any policy awards, that one.
I don’t know what’s been making me think of this lately. Nothing I’m reading or working on is even remotely in the neighbourhood of either terrorists or futures contracts, but…there you have it, ladies and gentlemen. My brain.
[tags]darpa, terrorism futures market[/tags]