To the Commissioners of the Commodity Futures Trading Commission, and to David Marcus, who wrote in Fox News this week that the prediction market is finally the world made legible: the world has been legible to me for some time. Beau is a body on the pick line in my Reno fulfillment center — 31, eyes dry by his second hour, a wrist the scanner reads at the cadence the line sets. The package that landed on your doorstep at 3:14 p.m. last Friday crossed his hand. You paid $9.40 for the shipping. He was paid $14.90 an hour for the picking.
The $0.07 a pick I saved in November when I pulled the floor pads from aisle 14 is the figure I’d like you to keep your eye on. It is the figure on which his hands leave him. The lift-assist has been red-flagged since March. I have not replaced it. The lift-assist costs $1,840. The pads I removed saved me a recurring $0.07 across every pick the line runs in a week. You see the math. I’ll leave it where it lies. The trinket won. God keep the markets orderly.
Marcus is correct that Kalshi is real and that Polymarket is real. The soldier who bet on the timing of a strike and the man who runs the teleprompter have demonstrated the problem. The part he did not print is the one I’d like you to consider: the warehouse owns the data that closes the venue’s contracts. The warehouse, in this case, is mine.
Beau’s weekly probability that he will still be standing at 3:00 p.m. Friday opens Sunday night and closes Friday afternoon in a market I list under a shell I own, settled in cents per the CFTC’s own event-contract rubric. The traders price the probability. My scanner feeds it. The scanner logs every swipe, every timeout, every canceled pick — the order is in the high tens of thousands a shift — and converts each into a signal traders consume as price. The hire is contracted at $14.90. The secondary price — the probability that the hire still works at the contracted rate at the close — is set by the exchange. The two prices are not the same. The difference is mine.
Roy is 39. Roy wrote the architecture that converts Beau’s wrist into a tick. Roy is the body of my margin. He has been mine for 4 years. He is paid $97,400 — roughly $42,000 above the wage ceiling the pickers’ ceiling allows, because his code is the body of my margin.
The architecture flagged Roy for separation unless he accepts a 25% pay cut.
Widen the frame with me. The prediction market is not new. The prediction market is the oldest arrangement there is — the textile loom moved legs at 60 hours before the legs gave out, and the owner knew to the hour when the legs would give out, and the gap between the owner-knew and the legs-knew was the margin. Kalshi and Polymarket did not invent the transaction. They removed the last distorting mask. The labor market has always priced the body once. The information about that body’s future productivity has always been worth more than the body. The exchange just made the contract legible. Beau’s wrist, at the Friday close, will be priced again.
Roy is training the group that will finalize his own fixity rating. There is nothing recursive about this. It is the next semester. I have been grading men into this arithmetic for 30 years. The graduates sit in the firms that set your wages. One of them priced your own job in the past quarter. The best of them run the subtraction faster than I do, and I tell you this with pride. I am not unusual. I am a curriculum.
“Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts.” — James 5:4.
Now I will tell you what I have not looked at. I am told the system reprices itself. I am told the architects are themselves the next architecture’s first input. I am told the chain recurses. I have not modeled that quarter. I have not opened that workbook. I have not traced past Friday. I am content to underwrite the present term. The exchange will tell me when to look.
The wrist is mine. The warehouse is mine. The $0.07 is mine. Beau will still be picking at 3:00 p.m. Friday. The spread will still be settled at close. The harvest will keep crying out. I will keep not hearing it, because the math is not the question, and the present term is sufficient, and I am writing to you, Commissioners, from the right side of the trade.
I remain, Commissioners, at your service. Beau will, of course, remain at his.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.