Tim Johnson — Ethics and actuaries: issues and opportunities

This is an excellent presentation on ethics in finance if you have the time and interest.

Money, Maths and Magic
Ethics and actuaries: issues and opportunities
Tim Johnson | Lecturer (associate professor) in the Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh

Free Markets Mean Zero Economic Profit – or a 99% Profit Markup

Bill Black explains economic rent, rent-seeking behavior, and rent extraction, which neoclassical economics assumes away.


New Economic Perspectives
Free Markets Mean Zero Economic Profit – or a 99% Profit Markup
William K. Black | Associate Professor of Economics and Law, UMKC

Peter F. Drucker — Profit is not the purpose of business and the concept of profit maximization is not only meaningless, but dangerous

I heard Peter say a lot of strange things when I was his student, but this has got to be one of the most unusual that I’d heard up to that time. I think most of my Drucker classmates agreed. Indeed, until Drucker came along most everyone believed the basic “fact” that the purpose of a business was to make money. That is, to make a profit. This belief leads to a corollary, another myth, believed by all—that is, that the goal of any business is profit maximization. Another words, whatever your business, your goal should be to make as much profit as possible. If you accept making a profit as a business’s purpose, the second part just follows naturally. This might even seem worthy to many. To quote Michael Douglas’s famous (or infamous) statement in his role as Gordon Gekko in the 1987 movieWall Street: “Greed is good.” Even today many “know” greed, or profit maximization to be the correct prescription for business success, even if it is amoral or shouldn’t be “good” from a moral perspective. Not so fast, Gordon. As Drucker so often said, whatever everyone knows is usually wrong, Hollywood films not excepted. Drucker told us first that profit is not the purpose of business and that the concept of profit maximization is not only meaningless, but dangerous.

Lessons from Peter F. Drucker
The Purpose of Business Is Not To Make A Profit
William Cohen, Ph.D. | Peter Drucker’s first executive Ph.D. graduate at what is now the Peter F. Drucker and Masatoshi Ito Graduate School of Management. His latest books are Drucker on Leadership (Jossey-Bass, 2010) and Heroic Leadership: Leading with Integrity and Honor (Jossey-Bass, 2010). Cohen is the president of The Institute of Leader Arts and a vice president of the 26 Peter F. Drucker Academies of China and Hong Kong. He is also a retired Air Force general.

Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits by cost-constrained firms employing available information and factors of production, in accordance with rational choice theory. — Wikipedia

Neoclassical economics is at odds with the foremost figure in business management has to say, and which most business people know from experience. "The business of business is business." that is, attracting and retaining customers in a marketplace that is ever-changing. Profit is a by-product of business success, which is the result of efficient and effective management. "Efficiency is doing things right, and effectiveness is doing the right things," is the message of Peter F. Drucker's The Effective Executive.