Bet or be silent.
A brief history of prediction markets (FUN PARTS VERSION)
About 12000 years ago a man got drunk somewhere in the steppe region of central Asia. His friends, also drunk, decided to try and convince the man to do something stupid for their amusement.
They teased and prodded him about his horseman ship skills until he stood up too quickly and promptly fell face first in the dirt. He then righted himself, burped gloriously, brushed himself off and with a wag of the finger headed towards a very concerned sheep.
After a moment full of kicking, baying and and screeching the man, located a horse, not his horse of course, mounted it and began riding around in circles. Facing backwards but solidly on the horse. Proudly displaying his skills. He likely wagged his tongue at his friends in victory and probably bit it off. No one knows because none of his friends were paying attention.
They were all quickly placed bets on how many laps of the camp he would make before he fell and split his head open.
As long as humans have had fingers they have been willing to risk them gambling. Take this literally. Mumblety-peg is an example.
About 3000 BCE, in central Asia a game called bo was invented to make gambling available when there weren’t horses around. Though the rules are lost to history it was probably like chess meets dominos. Dice likely fell for the first time about the same time.
During the Five Dynasties period (9th century - 956 AD), a lowly foot soldier from the Xing Tang Prefecture in Wei Prefecture, which is now Daming County, Hebei Province, named Huangfu Hui lost all his money playing bo or dice in a military camp.
In order to avoid paying back his debt, he came up with a plan. A plan only WallstreetBets can really process the brilliance and logical soundness of. A plan of such supreme brilliance it is almost unexplanable and alien to mere mortals.
There were just two steps to his plan. You should take a deep breath and sit down before continuing.
He would kidnap his boss (1) (well his boss’s, boss’s boss) and get him to cancel the debt by over throwing the entire country (2).
It was so simple. So elegant. So impossible to foil he preceded to carry it out immediately. I don’t want you in suspense here.
This plan totally worked. Hui was the RoaringKitty of 10th century China.
What followed his plan’s creation became known as the Anyang Rebellion. The emperor sent his brother to quell the rebellion but after hearing the story of Hui’s misfortunate with the dice, and the kidnapping of the general, he turned around and decided he should be emperor instead. Obviously, this crazy person was thinking soundly.
The only problem was his brother currently sat on that bit of the floor labeled “emperor.” So he decided to do the natural thing and kill him.
Hui, whose idea this was, had his debts forgiven and he went from foot soldier to courtier. (This is true. I shit you not. This happened.)
Now, it is unknown if there were side bets on the outcome of this rebellion. But, there probably were. My guess is a lot of people lost a lot of money who doubted Hui’s plan.
In Europe, after the dark ages and the invention of bonds, people in Italy grew very bored. They were enlightened and rich.
This was before soccer and before Fascism. There was really nothing to do. Back then things worked a little differently. A group of names were put in a hat (I presume a funny shaped hat) and then drawn at random. Whoever’s name was drawn got to choose a person to run for office. And then the names offered were voted upon. This little drawing of the names was a perfect thing to bet on. But, this alone was only a short high. Two seconds and it was over. Very unsatisfying for the Italian degenerate.
But every now-and-then, not often, but sometimes, once a decade or so, something truly amazing would happen.
The Pope would get poisoned and die.
This was like the Olympics for Italians. The event everyone talked about for weeks and everyone attentively watched a smoke stack like it was the Superbowl and they needed the lineman to allow one more sack or their wives would cut their balls off.
You may think I am joking. But, statistically if you were Pope around the same time Hui was trying to avoid paying his debt, a natural death was the least likely scenario.
John VIII (872–882), poisoned and then clubbed to death. (This is the most boring account on this list.)
Stephen VI (896–897), strangled after exhume the corpse of a previous Pope to try him of something.
Leo V (903), poisoned and then strangled
John X (914–928), allegedly smothered with a pillow while also in prison.
John XII (955–964), allegedly murdered by the jealous husband of the woman with whom he was in bed. This guy was really incredible. He was elected Pope at 18, and was basically the Jeffery Epstein of the 10th century. Then was murdered at 27. So picture is of a guy in his 20s who basically ran a casino and brothel in his house for seven years.
Benedict VI (973–974), poisoned and the strangled in prison. His successor has the cute nickname the “antiPope.”
John XIV (983–984), died either by starvation, ill-treatment, or direct murder
Clement II (1046–1047), poisoned by lead tainted sugar.
We can only hope the Republican party goes through such a period.
Being elected Pope was like being told by your teacher garbageman is a respectable profession. You know your life was likely over.
But, after the murder, the papal selection committee would need to elect a new Pope. And, Italians went ape shit gambling on who that Pope would be.
In Spain, people ran with Bulls to get their kicks in Italy people wagered on which dude would be get to wear the white pointy hat. In Switzerland, people skiied. In Germany, they carved anatomically correct bears out of the hardest fucking wood.
In Italy, the wagered on whether or not anyone would ever again be elected Pope. And gamble how long they would live for if a new one was elected. Which, leads to an obvious and unseemly potential very immoral problem.
Can you see what it is? If your wife is allowed to wager $100 you won’t live through Christmas she has an incentive to accidentally drop a piano on your head.
It got so bad that the Pope banned betting on the process entirely. Or tried. Actually a few Popes tried. Didn’t stop anything though.
We ruined the legacy of Joe Jackson because of the Black Sox Scandal and Pete Rose the greatest Superman impersonator in world’s history is banned from the baseball hall of fame because he bet on himself to win.
But, in Italy in the 10th century it’s quite possible people were wagering on a certain Pope dying and then going out certifying that bet themselves.
By the election of 1549, it was an open secret that even cardinals themselves had wagers on the outcome. By 1878, the New York Times reported that wagering on the election of a new Pope left Italians “in a state of excitement that is indescribable.”
You can’t keep fun down it seems. Fun. Endures. And spreads. Like herpes.
Long before soccer made it to Italy in the 1880s, betting on the death (or the aftermath) of famous people had made it London.
And America.
And really everywhere.
It had a name now: political betting.
On a personal note, I would prefer a world where every major city had a running of the bulls but that’s just me.
The phrase “bet or be silent” stems from the reign of William the Orange who ruled in the late 17th century and was shaped like an orange. (This is not true.) In London, at the time, what constituted a proper and correct British opinion on any topic was whatever the betting line predicted. (This is true.)
If you didn’t wager you were essentially told to shut up about it. This practice needs to be brought forward in time and slapped on the internet. This was the wisdom of the crowds approach before Francis Galton ever said those words.
What is happening now, the rise of Polymarket, Kalshi and curiously timed oil futures contract trades right before Trump tweets, is not new.
It’s just new to us.
As most of speculation around political events fell out of favor or was banned over a hundred years ago. It’s just new to us.
I don’t want to make this too long. If you are interested the Reform Act of 1832 led to massive uplift in political betting which eventually led to numerous scandals which led to The Gaming Act of 1845.
In the US, newspapers stopped posted “odds” in political elections around the 1890s.
Because, 100 years ago Americans in Iowa were much smarter than people in Iowa today. And it’s in Iowa, a State with a over inflated sense of importance due to it having a caucus, where political betting which we now calling prediction markets started up again in 1988.
Getting to see a cow made out of butter at the county fair wasn’t exciting enough so a small group of people decided to wager on the outcomes of the conventions. Michael Dukakis vs. Al Gore vs. Richard Gephardt on the Democratic side and George H.W. Bush vs Bob Dole vs Pat Robertson on the Republican side.
Like almost all truly stupid ideas, this one was thought up by economists - Robert Forsythe and Forrest Nelson.
We learned a lesson and then forgot it.
Again.
I met Forsythe in graduate school. I remember he waddled like a duck and was shaped like an orange.