This week the What is The Future for Cities? podcast turned its focus to innovative governance and the forces shaping human progress. Episode 389R featured a debate on Robin Hanson’s 2000 paper proposing futarchy – a system where society votes on values but bets on beliefs to guide policy. Episode 390 brought Robin Hanson himself for a wide-ranging discussion on cultural evolution, innovation’s limits, and practical applications of his ideas. These episodes combined critical scrutiny with forward-thinking theory.

1. Innovation drives wealth but faces deep resistance

A core thread was innovation’s role in creating prosperity. Hanson explained that modern riches stem from accumulated innovations over generations, yet society underinvests because innovators capture only a fraction of the value they create. Cities amplify this: denser populations foster specialisation, idea exchange, and economic gains. Larger cities enable niche roles, diverse services, and faster progress. However, regulations on housing and building often stifle growth, keeping cities smaller and less dynamic than they could be. The debate highlighted markets’ edge in aggregating knowledge for innovation, outperforming experts or votes in head-to-head tests.

2. Cultural evolution demands adaptability for long-term survival

Hanson warned of cultural maladaptation as a growing threat. Falling fertility rates – now below replacement in much of the world – could lead to population decline, emptying cities and shifting resources to ageing populations. Cultures evolve through natural selection: adaptive traits spread, maladaptive ones fade. Values like democracy or free speech risk disappearing unless bundled with adaptive features that ensure their spread. Futurists often overlook this, focusing on advocacy without tying ideals to enduring packages. In cities, this means governance must evolve. Declining populations could mean fewer megacities, more emphasis on efficiency, and experiments to attract residents.

3. Futarchy separates values from beliefs for better decisions

The research episode dissected futarchy’s core: vote democratically on what society wants (a “GDP-plus” metric including lifespan, leisure, equality), then use betting markets to predict which policies achieve it. Markets excel at incentives – bettors stake money, losing influence if wrong. This weeds out bias, unlike voter ignorance or academic flaws. However, risks like manipulation, volatility, or gaming the welfare metric were flagged. Recursion offers a fix: broad policies enable localised sub-markets for specifics, with vetoes if short-term welfare drops.

4. Cities need simple, hard-to-game metrics for governance

Hanson suggested property values as a straightforward city metric: sum all private property worth to gauge attractiveness. High values signal a desirable place; declines prompt fixes. This avoids complex measures prone to exploitation. For nations, citizenship market caps could work similarly. In futarchy, such metrics guide bets. Cities’ scale makes them ideal testing grounds – denser interactions demand responsive rules, but legacy systems often fail. Betting could align decisions with collective knowledge.

5. Real progress requires embracing the messy beyond elegant ideas

Both episodes stressed that innovation starts simple but succeeds through iteration. Futarchy’s elegance – markets aggregating beliefs – needs tweaks for secrecy, externalities, and corruption. Hanson’s great filter hypothesis applied: advanced civilisations may self-destruct via maladaptation. For cities, this means testing variations like 3D property rights or market-driven choices. Declining fertility could force adaptation, but without experiments, stagnation looms.

This week’s exploration revealed governance as a pivotal urban challenge. Cities concentrate innovation and wealth but risk cultural drift without adaptive systems. Futarchy proposes a radical fix – harnessing markets’ predictive power while anchoring to democratic values. Yet questions linger: can we define welfare without loopholes? Will experiments scale amid resistance? Episodes 389R and 390 are available now. The debate provides balanced critique; the interview offers theoretical depth.

So here’s the question this week leaves us with:

If betting markets could guide city decisions – from zoning to budgets – would you back it?

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Next week we are investigating climate resilience and urban solutions with Sebastian Pfautsch!

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Share your thoughts – I’m at wtf4cities@gmail.com or @WTF4Cities on Twitter/X.

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