Do you think this critique has never been considered? If you disagree with the reasons why this is not a problem, go ahead and critique those directly.
Please don't reflexively pooh-pooh an idea you don't really understand.
Today, people have no incentive to do that other than "wanting to watch the world burn". But if you can get rich burning forests, more forests will burn.
I don't doubt Hanson has thought about this. I just haven't seen it addressed.
As for your specific example, starting wildfires is an extremely serious crime that I expect the authorities would spend significant resources investigating, so I don't know how bettors would estimate the ease of manipulation for that market. Even if the prediction market were implemented in a perfectly anonymous system where you're guaranteed to be able to collect (and spend) your money without authorities knowing you were the one who profited from that prediction market, it seems like you have a pretty high risk of getting caught simply for the act of arson itself (not to mention the "risk" of firefighters controlling the fires that you start).
I'm also not sure how many people there are out there who refrain from starting wildfires only because there is no direct financial incentive, and not for other reasons (like not wanting to destroy massive amounts of ecosystem and property and potentially kill many people).
I think you underestimate organized crime. Starting wildfires is easy and skillful criminals won't get caught. The people that pay them take on an even slimmer risk.
This isn't a reason to not allow equities markets.
Also, could you at least summarize some of the counter-arguments or even link to any of the literature?
Do a search for "manipulate" in the text for a simple counter-argument.
tellingly. None of the critiques I see address these counterarguments even, so I suspect knee-jerk responses are mostly whats posted here.
Moreover even among futarchy proponents, many do not advocate for it as the dominant form of government, but only one form for certain operations. Hanson's position is on the more extreme edge here.
If a person can manipulate the market without expense, then they can do it without relying on the profit and the market isn't the problem. It will, however, allow them to bet on the market, providing a good indicator.
How does this work, again?