The politics of betting

Ephraim Clarke is no longer a lonely man. Professor of finance at Middlesex University Business School in the UK and head of risk consultancy Countrymetrics, Clarke has spent years working on a methodology to develop derivatives securities that could be used to manage country risk.

But in late July the Pentagon’s Defense Advanced Research Projects Agency (Darpa) launched a pilot project called the Policy Analysis Market (Pam), which would forecast political events through a speculative fi