The Pentagon is planning to set up an online trading market in which bets could be made about future terrorist attacks and other major political developments.
The idea is to try to improve the prediction and prevention of events by using the expertise of the open market instead of relying on government agencies which have often failed in the past.
One example used on the website set up for the programme is the possible overthrow of King Abdullah of Jordan.
But the plan has already run into fierce opposition in the US Congress.
Senators Ron Wyden of Oregon and Byron Dorgan of North Dakota, both Democrats, have written to the Pentagon urging it to abandon the idea.
"The idea of a federal betting parlour on atrocities and terrorism is ridiculous and it's grotesque," said Senator Wyden.
Senator Dorgan said that it was "useless, offensive and unbelievably stupid". He said he had trouble in persuading other people that it was not a hoax.
"How would you feel if you were the King of Jordan and you learned that the US Defence Department was taking bets on your being overthrown within a year?" he asked.
Market vision
The US Defence Department defended the initiative and compared the proposed market to those predicting the price of petroleum, the results of elections and even the demand for cinema tickets.
"Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information," it said in a statement.
" Markets have done this in economics for some time and the Iowa Electronic Markets does it for US presidential elections, so it is not really novel "
Merli Baroudi
Risk Services
"Futures markets have proven themselves to be good at predicting such things as election results; they are often better than expert opinions."
The scheme is called the Policy Analysis Market (PAM) and it is run by a Pentagon unit known as the Defence Advanced Research Projects Unit.
This is under the control of retired Admiral John Poindexter who has been involved in another controversy recently in a plan for a sweeping electronic intelligence operation.
The market would work by getting traders to deposit money in an account and using that to buy and sell contracts. They would make their money if a particular event actually happened.
Invitations have gone out online for an initial 1,000 traders to register on 1 August and the programme is designed to start on 1 October.
Source:
http://news.bbc.co.uk/1/low/world/americas/3106559.stm
The idea is to try to improve the prediction and prevention of events by using the expertise of the open market instead of relying on government agencies which have often failed in the past.
One example used on the website set up for the programme is the possible overthrow of King Abdullah of Jordan.
But the plan has already run into fierce opposition in the US Congress.
Senators Ron Wyden of Oregon and Byron Dorgan of North Dakota, both Democrats, have written to the Pentagon urging it to abandon the idea.
"The idea of a federal betting parlour on atrocities and terrorism is ridiculous and it's grotesque," said Senator Wyden.
Senator Dorgan said that it was "useless, offensive and unbelievably stupid". He said he had trouble in persuading other people that it was not a hoax.
"How would you feel if you were the King of Jordan and you learned that the US Defence Department was taking bets on your being overthrown within a year?" he asked.
Market vision
The US Defence Department defended the initiative and compared the proposed market to those predicting the price of petroleum, the results of elections and even the demand for cinema tickets.
"Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information," it said in a statement.
" Markets have done this in economics for some time and the Iowa Electronic Markets does it for US presidential elections, so it is not really novel "
Merli Baroudi
Risk Services
"Futures markets have proven themselves to be good at predicting such things as election results; they are often better than expert opinions."
The scheme is called the Policy Analysis Market (PAM) and it is run by a Pentagon unit known as the Defence Advanced Research Projects Unit.
This is under the control of retired Admiral John Poindexter who has been involved in another controversy recently in a plan for a sweeping electronic intelligence operation.
The market would work by getting traders to deposit money in an account and using that to buy and sell contracts. They would make their money if a particular event actually happened.
Invitations have gone out online for an initial 1,000 traders to register on 1 August and the programme is designed to start on 1 October.
Source:
http://news.bbc.co.uk/1/low/world/americas/3106559.stm