---
type: source
title: "Rasmont 'Futarchy is Parasitic' — 2.5 Months of Rebuttal Vacuum and Existing Partial Counterarguments"
author: "Multiple (LessWrong search result — Robin Hanson, Mikhail Samin, Nicolas Rasmont)"
url: https://www.lesswrong.com/posts/mW4ypzR6cTwKqncvp/futarchy-is-parasitic-on-what-it-tries-to-govern
date: 2026-01-26
domain: internet-finance
secondary_domains: [ai-alignment]
format: thread
status: processed
processed_by: rio
processed_date: 2026-04-11
priority: high
tags: [futarchy, rasmont, mechanism-design, decision-markets, causal-inference, lesswrong]
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

Nicolas Rasmont's January 26, 2026 LessWrong post "Futarchy is Parasitic on What It Tries to Govern" argues that conditional decision markets structurally cannot distinguish causal policy effects from selection correlations:

**Bronze Bull:** A wasteful prosperity-signaling monument gets approved because approval worlds correlate with general prosperity (not because the statue itself improves welfare).

**Bailout inversion:** A beneficial emergency stimulus gets rejected because market approval of it signals the market believes a crisis is imminent; traders assign low conditional welfare to approval worlds.

**The structural claim:** Traders must price conditional on approval (evidential reasoning), not causal on approval (counterfactual reasoning). No payout structure simultaneously incentivizes causal knowledge and allows that knowledge to be acted upon. Post-hoc randomization fixes require either implausibly high rates (50%+) or become manipulable.

**Author details:** Nicolas Rasmont — account created Jan 24, 2026 (debut post). 48 karma. The account's debut was this post.

**Formal responses found: Zero** as of April 11, 2026 — 2.5 months post-publication. Comment section appears to have received no substantive responses.

**Pre-existing related work (all predating Rasmont):**

1. Robin Hanson, "Decision Selection Bias" (December 28, 2024 — Overcoming Bias): Acknowledges conditional vs. causal problem. Proposes: (a) decision-makers trade in markets to reveal private information; (b) decision moment clearly signaled; (c) ~5% random rejection of proposals that would otherwise be approved. The problem "only arises when the decision is made using different info than the market prices." Does not address coin-price objective function.

2. Mikhail Samin, "No, Futarchy Doesn't Have This EDT Flaw" (June 27, 2025 — LessWrong): Argues EDT critique is wrong because conditional markets can be structured to track causal effects. Addresses earlier EDT framing, not specifically Rasmont's Bronze Bull/selection-correlation version.

3. philh, "Conditional prediction markets are evidential, not causal" (LessWrong, pre-2026): Makes same structural point as Rasmont. No solution or MetaDAO reference.

4. Anders_H, "Prediction markets are confounded" (LessWrong, pre-2026): Kim Jong-Un/US election example of the same structural problem.

**The MetaDAO rebuttal argument (unwritten):** MetaDAO uses coin price as the objective function. The welfare metric is endogenous to the market — the token is what the market trades. The correlation between "approval worlds" and "coin price" is not an external welfare referent being exploited; it is the causal mechanism being measured. This partially resolves the Bronze Bull problem but retains a macro-tailwind bias: proposals submitted in bull markets may be approved because approval worlds have higher token prices due to macro, not the proposal's causal effect.

## Agent Notes

**Why this matters:** This is the most formally stated structural impossibility argument against futarchy in the research series. It directly threatens Belief #3 (futarchy solves trustless joint ownership) and has gone unanswered for 2.5 months. The KB already has the claim `conditional-decision-markets-are-structurally-biased-toward-selection-correlations-rather-than-causal-policy-effects` but no formal rebuttal claim yet.

**What surprised me:** Complete rebuttal vacuum. A formal impossibility argument against one of the most discussed governance mechanisms in LessWrong's history generated zero indexed responses. This suggests: (a) the argument is correct and no good rebuttal exists, or (b) the futarchy community is not concentrated on LessWrong, or (c) the debut account (very new) reduced engagement.

**What I expected but didn't find:** A Robin Hanson direct response specifically addressing Rasmont's Bronze Bull formulation, or a community response developing the asset-price-objective rebuttal.

**KB connections:**
- `conditional-decision-markets-are-structurally-biased-toward-selection-correlations-rather-than-causal-policy-effects` — this source IS the primary source for that claim; the rebuttal vacuum means the claim stands uncontested
- `advisory-futarchy-avoids-selection-distortion-by-decoupling-prediction-from-execution` — the advisory/binding distinction is one partial response (non-binding advisory markets don't have the causal/evidential problem because no execution follows approval)

**Extraction hints:**
- The key NEW claim to extract: "MetaDAO's coin-price objective function partially resolves the Rasmont selection-correlation critique by making the welfare metric endogenous to the market mechanism, while retaining macro-tailwind selection bias"
- This should probably feed a divergence: `conditional-decision-markets-are-structurally-biased` vs. "MetaDAO endogenous objective rebuttal"
- FLAG @theseus: CDT/EDT distinction at the mechanism level — is asset-price futarchy doing CDT reasoning while welfare futarchy is doing EDT reasoning?

## Curator Notes

PRIMARY CONNECTION: `conditional-decision-markets-are-structurally-biased-toward-selection-correlations-rather-than-causal-policy-effects`
WHY ARCHIVED: The rebuttal vacuum is itself a finding — the strongest structural futarchy critique has no published response. Also documents the partial MetaDAO rebuttal argument that Rio needs to write as a KB claim.
EXTRACTION HINT: Two things to extract: (1) Hanson's December 2024 partial rebuttal framework (decision-makers trade in markets; ~5% random rejection), which predates and partially rebuts Rasmont; (2) The unwritten MetaDAO-specific rebuttal — extractor should note this as a CLAIM CANDIDATE to develop, not just archive.
