Prediction markets currently make money by transaction fees and slices of winnings. They cannot be considered effective information aggregates because in order to operate, or in other words, to generate event contracts that result in winners, you need losers. You need more people with poor insight into the future than people who can accurately identify likely outcomes. It is the ill-informed money that’s up for grabs. This is a key difference between the stock market and the prediction market, which lets people play pretend stocks with real money – there is a higher cost to trading. In this way, prediction markets are not producing “collective wisdom”, they’re sanctioning insider trading against a younger and less financially secure demographic.

In January of this year, just hours before the US attacked Venezuela and captured president Nicolás Maduro, someone made a bet that netted them $400,000 in profit. News media focused on the idea that the military events were possible to bet on, and tried to hypothesise how far this could incentivise the active shaping of world events and the inability to avoid what would be considered insider trading on stock exchanges. This, too, was functionally organic advertising for prediction markets. Far more significant is the fact Polymarket refused to settle the almost $11 million in trades made by users who bet on a US invasion of Venezuela by the end of January. Polymarket declared that the bet referred to “US military operations intended to establish control”, and that “President Trump’s statement that they will ‘run’ Venezuela […] does not alone qualify the snatch-and-extract mission to capture Maduro as an invasion.” These platforms insist that they don’t act as “the house” in the same way a sportsbook or casino does, excusing them from the same regulations. Yet they still make the final call.

Prediction markets are not the financialisation of “difference of opinion”, as Mansour claimed. Prediction markets are liquidity extraction machines, slightly more gentle than a mugging. With their dynamic and dangerously simple-to-use apps, they wrap grown-up gameplay over a funnel. You can lose money as easily as you can make a typo. Like social media and the ads and data that made it valuable, prediction markets are a way to organise people and their attention with a more direct line to what makes both valuable to companies: their money. But prediction markets make it even easier to part users from that money. You don’t have to sell them anything but an illusion of possibility.

A functioning society, and even a functioning economy, needs more than just winners and losers. Prediction market owners and their investors are doing what they pretend to be offering to their users: making money off speculation. And they allow failing institutions the illusion of a participatory regime, much like the US and UK democracies do. The rise of prediction markets demonstrates the degree to which the financialised economy limits prosperity to a few actors while assuring the public their interest remains viable. Betting is an apt container for economic activity in countries where democracy was long ago reduced to a spectator sport.

While news organisations hype prediction markets that are primed to exacerbate the gambling epidemic, immiserating people in pursuit of shareholder value, the modern fascist resurgence has restored Silicon Valley to its defense industry origins. Palantir and Amazon, amongst others, are providing operating software and cloud services to the Immigration and Customs Enforcement, or ICE. Over the last year ICE has resumed aggressive operations, occupying diverse American cities and abducting men, women and children. Several thousand are currently untraceable. This January in Minneapolis, Alex Pretti and Renee Nicole Good were shot dead in separate ICE executions captured on camera. The murders have since been referenced by ICE officers to further threaten those trying to protect their neighbours during spontaneous detentions. Last year, ICE drew headlines for offering signing bonuses of $50,000 to expand their ranks. This month, UK home secretary Shabana Mahmood announced the new National Police Service (NPS), consolidating counterterrorism policing units and regional organised crime units. Time will tell whether this will become the UK’s version of a paramilitary racial hierarchy enforcement organisation akin to ICE. In the meantime, prediction markets primarily draw in young men aged between 18 and 37. Like the governments that claim to represent them, in their embrace of prediction apps these men have opted out of changing the world, though they believe they can still opt in to profiting from it.

The only meaningful “disruption” prediction markets offer is to state revenues. Gambling winnings from sportsbooks are taxed at the same rate as income by the Internal Revenue Service. With no update to tax law, event contracts (including sports event contracts) would be treated like futures contracts. Federal policy incentives betting on prediction markets instead of sportsbooks because through the tax code, losses incurred on the prediction market are fully deductible, in ways sportsbook gambling losses are not. At stake are billions in state revenue generated on taxed sports betting. The collapse of the US is not limited to the decline of its infrastructure or impoverishment of its people, it’s also a culmination of the experiment of federalism playing out across a continent that is not “too big to fail”. The Trump administration has already used the withholding of federal funds as leverage to force states to comply with ICE, targeting states with Democrat voting patterns: California, New York, Illinois, Colorado and Minnesota could miss up to $10 billion in social service funds, including the Child Care and Development Fund and Temporary Assistance for Needy Families.

A “lack of class mobility”, “downward mobility” and the “K shaped economy” are economic terms for what is more accurately observable as mass impoverishment. The money people earn is losing purchasing power because a few at the top want year-over-year profit increases. The opportunities to earn more are shrinking for the educated, and growing in the unprotected and low-paying positions that demand more work for less pay, such as service work and the gig economy. The UK and US are not “being invaded by the third world”, despite what their respective fascists say. They are on track to become the cliched version of the “third world” that they once looked down on – places with little global soft power and impoverished masses who dream about immigrating somewhere with more opportunities and, in America’s case, less state violence. This story has been building for years, but it was easy to deny. Consumer spending in the US has stayed stable despite political turmoil and public pessimism, at almost 70% of the US GDP. But this is driven by a shrinking population – the top 20% of consumers are making up a growing majority of the spending.

The inflation that has led to unaffordability is creating homelessness, preventable death and debt, all of which erode the load-bearing public on which the economy is built. The entire economy, its structure and operating logic, is a nesting doll of delusion, rentiers and debt. Now the smallest doll is wearing a suicide vest, in the form of consumer debt. Credit card balances have reached a record high, with millions likely to default.

The 2008 crash exposed the vulnerabilities of financialisation. Essentially, the rise of home prices made houses an attractive asset to purchase on debt. Lenders offered mortgages on low interest rates that later adjusted to higher payments, with both the lenders and those accepting the loans overestimating the ability to pay these mortgages. But the loans were sold to investors, meaning homes in America upheld the value of securities around the world. When the mortgages defaulted, the global equity market lost nearly half its value, triggering a recession and bank losses of just over $1 trillion. Since then, those vulnerabilities produced by the incentive structure of the financialised economy have not been remedied as much as they’ve been reiterated.

Today’s equivalent of the subprime mortgages that triggered the 2008 crash are the lines of easy credit available through credit cards and consumer debt financing through pay-later services. Consumer debt has risen 59% since the pandemic. At a 13-year high, and expected to grow, over 12% of American credit card debt was in delinquency. Americans owe a record $1.23 trillion on their credit cards, with an average interest rate of 21.9%. In the UK, more purchasing on credit has coincided with an average interest rate of 35.7%, the highest on record since 2006. The consumer debt bubble is poised to explode economies, much like the 2008 crisis. The Financial Times reported in December that “private credit firms snapped up nearly 14 times as much consumer debt this year as in 2024, piling into riskier areas such as credit cards and ‘buy now, pay later’ debt.” This is, once again, low-quality debt distributed across the global economy by private capital. That is the meaningful economic activity developed countries have insisted on pursuing, besides surveillance technology.

Western societies have an untethered homing signal which is now replicating the only economic structure it was raised in, seeking a captive market to subsidise a minority elite into wealth. It’s the process that established the global north, established Boomer wealth, and continues to underpin the financialised economy. But it only works with a base that can support the extraction. As de-dollarisation allows the world to move on from supporting American consumption at a discount, many during the final days of American hegemony are rooting around like truffle pigs for alternative populations whose losses will make them rich, even if it’s among their own. Wasn’t it the promise of the West that joining its ranks meant you could participate in the plunder? Scaling that to more people through prediction only squeezes out morals and ethics-based ties to the world, if such morals and ethics-based ties existed in the first place.

Financialised economies are Ponzi schemes on the scale of the nation. Speculative capital allows countries to pretend they are rich and well-functioning, while their economic structure is built on the back of taxes used to invest in companies that further exploit the public. ICE and right-wing violence allow men to pretend they’re meaningfully engaged in world-building. Prediction markets allow people to pretend they’re savvy investors. It is pretence all the way down. All of it variations on gambling that treats other people’s futures as a token from which to extract profit.

The era of social web that brought us Facebook and Instagram was first driven by the promise of connection – the thrilling new frontier of digital telecommunications unbound by telecom companies. The mass adoption fostered a burgeoning attention economy. But ads have to constantly shift strategies to adapt to human behaviour, and it’s cheaper to coerce. Doing so quickly became the guiding principle of social web platform design. Personally curated high agency social web experiences devolved into low agency “infinite scroll” feeds, prefabricated lanes you were placed into. In this way, the little squares inside the rectangle of our phones reestablished the passivity and alienation of the suburbs that the early social web had briefly challenged. Today, the social web and the short-form video content that populates it is like a home shopping network, with in-app purchase integration and more aggressive aspirational lifestyle content than any magazine rack, and with more convincing affiliate-linked product demonstrations than any 1990s infomercial. To this was added “buy now, pay later”, and prediction market platforms. You can connect any credit card to Kalshi, or just use Apple Pay.

The same year Facebook purchased Instagram, another tech unicorn was born. It was the Swedish payment deferral service Klarna. The economic culture of the US, and therefore of global capital, has long been to borrow from the future. Look through the most recent bubble of “prediction markets”, and you can see how little future is left. .