The idea that markets might be better judges of political reality than polls, pundits, or panel shows did not come out of political theory. It came out of embarrassment. Specifically, the repeated embarrassment of people who were paid to explain events watching markets quietly get there first.
Economists, traders, and policy analysts began noticing something awkward. Markets that allowed people to bet on real-world outcomes kept getting things right while the experts got them wrong. Not occasionally. Repeatedly. And not because markets were clever or moral, but because being wrong cost money.
That observation was later spelled out by people like Robin Hanson, though anyone who has watched markets for a while had already clocked it. The logic is not complicated. If you want to know what people really think will happen, make them risk something. In surveys, you can posture. On television, you can bluff. In markets, fantasy is punished quickly.
As these ideas resurfaced through modern prediction markets, the same pattern reappeared. They moved early on Trump’s 2016 win, long before polite opinion was ready for it. They refused to believe inflation would be “temporary” after Covid. They assumed interest rates would stay high longer than ministers promised. They priced wars as grinding on rather than wrapping up neatly for the evening news. Again and again, the market shifted before the official story did.
That is where the comparison with Asimov comes from. Not because anyone thinks history is mathematically inevitable, but because of the underlying insight. Individuals are emotional, tribal, unreliable. Large groups, taken together, often behave in predictable ways. Prediction markets apply that idea, clumsily but usefully, to politics and policy.
But here is the distinction that actually matters, and which tends to get lost. Markets do not respond to opinion. They respond to power.
Opposition parties can promise the earth, denounce the government, and dominate the airwaves. Markets barely notice. Not out of cynicism, but because those people cannot actually do anything yet. They cannot set budgets, change laws, impose tariffs, or send troops anywhere. Until they can, their ideas are just words.
Governments are different. When a government acts, markets react immediately. A budget is announced. Rules change. Trade barriers go up. Sanctions bite. The moment policy becomes real, prices move. Not because the market agrees or disagrees, but because consequences are now unavoidable.
This is why election polling is such a poor guide to reality when treated as fate. Polls measure mood. Markets measure impact. A surge for an opposition leader is gossip until it turns into votes and then into decisions. A policy announced by a government is tested instantly. One is theatre. The other has consequences.
Look at how this plays out now.
In Britain, markets are calm under Starmer. Sterling is steady. Government borrowing costs are dull, which is not an insult. There is no hint of the panic seen during the Truss episode, which still looms large in institutional memory. That alone tells you the verdict. Stability is expected. Chaos is not. But neither is growth. British companies are still cheap, foreign buyers are still bargain hunting, and expectations of rising productivity remain low. The judgement is blunt. Competent management of a damaged economy, but no obvious route to rapid improvement. Stability without momentum.
In the European Union, markets do not really judge individual leaders at all. They judge the machine. Germany is still treated as the anchor. France causes occasional nerves. Southern Europe is watched carefully but no longer treated as a crisis waiting to happen. The EU is seen as solid, slow, and heavily constrained by its own rules. It is not expected to fall apart. It is also not expected to move quickly. Endurance, not dynamism.
In the United States, the message is more conflicted. Share prices remain high and money still flows in, which is what people point to when they want to sound confident. But underneath that sits unease. Long-term borrowing costs suggest worry about rising prices and rising debt. Trade tariffs are treated as likely to push costs up, not bring them down. Trump is not being judged as a mystery. He is being priced as a known risk. Markets are not panicking, but they are charging extra for unpredictability.
And then there is China.
China is different because its markets are not free to speak openly. Prices there are shaped by heavy state control, capital restrictions, and political intervention. Even so, signals leak through. They always do.
What those signals say is fairly clear. The era of effortless growth is over. Property no longer looks like a one-way bet. Local governments are under strain. Confidence is fragile. Beijing can still command banks, direct resources, and suppress panic. What it cannot easily do is force people to feel optimistic or to spend freely.
Outside China, this is reflected quietly. The country is no longer priced as the unstoppable engine of global growth. It is priced as a powerful but cautious state, focused on control and stability rather than expansion. That is not collapse. But it is a change of phase.
Put together, the picture is not flattering to anyone.
Markets are not excited by today’s leaders. They are relieved by some, wary of others, and inspired by none. Stability is rewarded. Chaos is punished. Grand promises are ignored unless they come with the power to deliver.
This is why prediction markets and real pricing make people uncomfortable. They expose how much of modern politics is performance. A market that calmly prices the failure of a flagship policy cannot be accused of bad faith. It cannot be shouted down. It cannot be spun away. It just sits there, quietly contradicting the story.
This is not psychohistory. These tools are imperfect and sometimes wrong. They miss things decided in private rooms. They can be distorted. They are human.
But they do something quietly radical. They separate noise from agency. They remind us that only those in power shape outcomes, and that once they act, reality follows whether anyone likes it or not.
Asimov imagined a future where emperors feared mathematics. Today’s leaders face something less dramatic, and more awkward.
They are being audited in real time.
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