Monday 4 August 2003

A market solution

The US government was much criticised for its now withdrawn plan to create a "terrorism futures market". Perhaps, though, the idea had some merit. In Mark Skousen's latest book I read about this research programme at the University of Iowa:
The Iowa Electronic Markets are real-money futures markets in which contract payoffs depend on economic and political events such as elections.
If you want to go long or short in Hillary Clinton futures, this is your place:
2004 Presidential Election Vote-Share Market

The IEM 2004 US Presidential Vote Share Market is a real-money futures market where contract payoffs will be determined by the popular vote cast in the 2004 U.S. Presidential Election. Please see the market prospectus for specific details of this market.

The market is open to all traders world-wide. Consult our on-line trader's manual for additional information

It occurs to me that we could do with this kind of thinking here in Scotland. The Scottish Nationalists are in a financial mess:
The crisis in the SNP deepened last night as it emerged the party is more than half a million pounds in debt, throwing into further doubt its chances of ever winning power.

The official opposition, already battered by a leadership battle and the loss of eight MSPs at the polls, is only keeping afloat thanks to the goodwill of a major bank and activists who have not called in loans.

Half a million in the red and a leadership contest: let's see some innovative thinking. The SNP should organise a futures market in party leaders. The market needn't be restricted to the in-house "Swinneys" and "Wilsons" but could be extended to rival brands: "Blairs" and "Browns", for example. I believe that quite a few of the party's activists work in the financial sector. Let them show a commitment to capitalism and differentiate themselves from the dreary municipal Stalinists in the Scottish Socialist Party.