Can markets achieve more optimal public social choice outcomes?

Obviously, I believe that the answer is, "OF COURSE!"

In fact, it is quite likely that we would be better LOT better off if we used a continuously-updated MARKET [like the Intrade prediction markets] to elect the body of people who we select to make our laws, administer our policies ... I suppose we might be stuck with party politics, but political parties really should find a way as quickly as possible to start using something like one fo the Crowdliness social choice mechanisms that function like the Intrade markets [with opportunities to bring in more information via blogs, videos, debates and all kinds of information] for members of those parties to discuss, debate, collaborate and select the most fit nominees and best policy positions -- a MARKET would furnish the candidates best able to take on the opponent and the platform that would conform to the will of the party members ... apart from political parties, markets would work a lot better than a winner-take-all election to select the incumbent dictators who hold power for the next term.  Two hundred and some years ago, we didn't have electronic markets -- so democratically-elected rulers were basically a better deal than a monarchs ... but now we have a lot better mechanisms.

I would not suggest an immediate overthrow of the government ... but we should start thinking about more market-driven mechanisms to drive more of the things that currently believe should come from government ... after all, democracy is more subject to manipulation of media, hysteria of the masses and tyranny of the majority than markets are ... a lynch mob, for example, is an effective, expedient democratic process ... all democratically-elected governments basically "hang the opposition" until the next election cycle ... election cycles drive bureaucracy and bad policy.  Disastrously-bad housing policy [resulting in a terrible misallocation of resources/people] and the lack of regulatory oversight that was supposed to have prevented the crisis was the result of influence-peddling by [formerly] democratically-elected officials who manipulated government policy and enforcement.

All in all, I am generally a much bigger fan of the outcomes provided by markets than I am of the distortions that we get from democratically-elected governments.  We should be exploring many more market mechanisms -- there simply is no other social choice process that we have yet developed that works better at revealing information and discovering preferences than a continuously-traded, highly-liquid (i.e. unfettered participation) ubiquitously-transparent market.  Every significant market failure that we have ever experienced is the result of a distortion introduced by a bureaucratic [democratically-elected] governing body.