Tim Johnson — Maths and morals, economics and greed

I recently asked a prominent mathematician who once ran a hedge fund, Doyne Farmer, whether seeking to make a riskless profit was ethical. I don't think he understood the question. Mathematics has always been part of finance but with the re-introduction of derivatives markets in the 1970s and their growth in the nineties, ‘quants’, trained in engineering, physics and mathematics, came to dominate the ‘casino banking’ that is widely criticised. My concern is that the quants are not amenable to questions of morality, and so the problems of finance are going to be difficult to resolve without finding the right way of communicating with the bankers who see themselves as scientists.…

Thoughtful post about a key issue at the heart of neoliberalism. I would add that the problem is beginning with individualism, which is the basis of the concept of homo economicus, rather than society, which is the foundation for the concept of homo socialis. When the objective, positive, and quantitative is emphasized at the expense of the subjective, normative and qualitative, the social outcome is predictably disastrous and potentially catastrophic.

Money, Maths and Magic
Maths and morals, economics and greedTim Johnson | Lecturer (associate professor) in the Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh