Crash problems for total futarchy

I question whether it's wise to make new rules during a financial crisis.

But unstable betting markets may be shouting out for new rules in a crisis. We don't know in what direction the betting markets will be compromised.

I'm also less convinced that we can plan, ahead of time, for the best ways of getting through all crises that affect the financial markets. Stupid example: a foreign attack triggers a stockmarket sell off. Doing nothing is not the correct thing to do - but what is? What if it's a misfired nuke from a future somewhat-reformed and apologising North Korea - now complicated decision have to be taken, highly dependent on the exact situation. We can't plan for these situations, so if we can't use the betting markets reliably, we need to preserve some other decision making skills.

Might it be possible to have a kind of uncertainty feedback loop, where volatility in some areas created uncertainty, and therefore volatility, in other areas, until everything was maximally uncertain? :)

I don't see that this information is freely convertible into -decisions-. If you're betting on decisions, effectively you're voting with money.

The governance model is "vote on values, bet on beliefs." It's the "values" part that lets you convert information into decisions.

Isn't it already, in some sense? The whole idea of a futarchy is shareholders voting for their self-interest so it also works in the interests of everyone else. This is pretty much what goes on in companies where shareholders get a vote proportional to their shares held.

That would be a good experiment to run...

Because their current main tools are not correlated with financial crises. So there's no reason to suspect that governments get worse at making decisions simultaneously with financial crises - their processes, good or bad, will work as well as they do in any other crises.

If there's a big disaster (oil spill, earthquake), but the betting markets continue as before, it'll be fine. If the betting markets go haywire for a time, but there's no immediate crisis, we'll probably be ok as well. But when a financial crisis hits, both will be going wrong simultaneously.

A better approach, following Altshuller, is to figure out what features makes markets less than ideal and work on making them do good instead of fighting them.

The task of removing/containing bubbles and crashes from financial markets seems an extraordinarily hard task - and that's what would be needed.

What you suggest is a compromise, which is a fancy word for "inability to see and implement a positive-sum outcome".

Or "when you work with nails and screws, have both a hammer and a screwdriver in your inventory" :-)