Are prediction markets not actually useful? No, it is the reality who is wrong.
Also I want to rant once again about the stupid way these people evade the insider trading problem, because there's a particular failure at play that I keep finding expressed in new and interesting ways.
So the argument goes that while insider trading may be bad for a financial market it actually just allows insiders to add their information to increase the predictive power of the market. Which would be true enough if we assume nothing else changes, but the same would also be true for price discovery in a normal asset market. Clearly we're missing something.
So why is it insider trading bad? Because it turns people without insider info into the dumb money you can take advantage of. And people, very reasonably, aren't going to participate in a system where their main role is being taken advantage of. Their departure means that the insiders don't have access to a pool of dumb money to take so they stop interacting with the system, and the market itself breaks down.
Now if you assume that the majority of people are "NPCs" or aren't very "agentic" or whatever then they're not going to act in systemically meaningful ways no matter how obvious the incentives to do so. You could also cast it as a version of the libertarian-as-housecat notion that markets simply exist as a natural system, rather than being pieces of economic infrastructure that require a lot of management and work to keep functioning at all, even before we get to the question of whether they operate to the public's benefit. So many of the problems with these ideologies spring from this belief that only some people actually matter in a systemic sense by dictating rules and Building Things and being big men, rather than systems being constantly created and shaped by all the people who interact with them through those interactions.
You know, I kept expecting both this racist and the racist he was arguing with to start making the very obvious argument for why the racism is not only evil but also dumb. And instead they just kept being racist.
To summarize and spare anyone else curious, the argument is about immigration. Racist 1 argues that since some people are objectively better than others [citation desperately needed but not wanted] we should have free migration so that our superior quality of life can attract all the best people so that we can be the best place. He (correctly) notes the absurdity of Racist 2 arguing that although some people are objectively better than others we need to protect ourselves from all foreigners even if they are the best people because their foreignness would hurt our "magic dirt." I'm pretty sure I've seen this criticism elsewhere and from a better and less obviously racist writer elsewhere because the phrase "magic dirt" sounds real familiar.
Also, because I am trying everything back to my particular bugbear today, I have to note that the fundamental and wrong argument that some traits being heritable makes some people objectively better than others is yet another manifestation and justification of what I'm going to start calling the Great Man Theory of Everything. If you start from the position that history, politics, economics, and basically all forms of human activity are fundamentally driven by the actions and decisions of a few people who are for one reason or another destined for power and greatness, you can derive an impressive amount of the libertarian/Rationalist worldview, and if you additionally accept that those people are disproportionately rich white dudes and we shouldn't think too hard about that fact you can get most of the rest of the way there.