Wednesday, 31 July 2013

Who are the true champions of science?

The Guardian’s Political Science blog is providing rich pickings while I am preparing to argue that the recent financial crises exposes a deeper malaise in (Anglo-Saxon) science at the Edinburgh Fringe on 18 August. What caught my attention was a piece describing how climate change sceptics present themselves as the true voice of science. I have no faith in strong (Baconian,Logical) Empiricism and little time for scepticism. This makes me more French than British and susceptible to thoughts that Anglo-Saxon science is flawed.

Francis Bacon (whose brother was Thomas Gresham’s son-in-law) “insisted that the laws of nature could only be uncovered through collecting and organising massive amounts of data” [Fara2009, p 132] — this is the British Empiricist tradition. A very different approach was taken by the French Rationalist René Descartes. Descartes was born in the Loire valley near Tours in 1596. When he was twenty Descartes qualified as a lawyer, but in 1618 he left France for the Netherlands, then at war with Imperial Spain, and joined the military academy of Prince Maurits. While in the Netherlands, Descartes met a Dutch mathematician, and student of the financial mathematician Simon Stevin, Isaac Beeckman, who sparked an interest in mathematics and the new physics emerging at the time. However, this interest would lie fallow for some ten years as the Catholic Descartes fought Protestants in Bohemia .

Descartes ended his military career around 1621, and, prompted by a series of visions he had had, decided to follow a career in science. He returned to France, sold his property (booty?) and was able to live of investment income for the rest of his life. For the next seven years Descartes travelled around Europe in a fairly aimless manner and in 1627 he accompanied the mathematician Gérard Desargues, who was working for the French army, at the siege of the Huguenot city of La Rochelle.

In the winter of 1628 Descartes went to a lecture by someone called Sieur de Chandoux, hosted by the papal nuncio to France and involving two Cardinals. No one knows what for certain Chandoux said, the story was pieced together by Descartes’ biographers, but it seems to have been some sort of synthesis of Baconian and “neo-AristoleianScholastic philosophy”, possibly linking Bacon’s “truth is what is useful” with Jesuit laxism — choose the opinion you find most convenient (which was an important concept in the development of probability theory).

Most of the audience liked what they heard, however Descartes did not. In the words of the philosopher Paul MacDonald “Descartes’s reaction to Chandoux’s speech can be summed up in a few words: this is utter rubbish and you’ve all been taken in.”. MacDonald tells us that
the young cavalier [Descartes] held forth at some length on the utter lack of grounds and abundant [use of difficult words and complicated sentences to intimidate and deceive] in the [conclusion] which they had just heard. He showed that Chandoux wanted to accept probability as the standard of truth, that opposite conclusions were at least as probable, and that every sceptical trope could be countered with another, turning every truth into a falsehood. Descartes commented that this was the same thing as [Scholasticism] disguised in new terms and unless the principles of a true and reliable method were established there was little point for further scientific enquiries.(MacDonald [2002]. See also Sarkar [2003, pp 1—2])
Whatever the actual merits of Chandoux’s lecture, Descartes seems to have been an astute judge of character, since Chandoux would soon be hanged for counterfeiting.

MacDonald explains that Descartes realised that any skilled speaker, using clever rhetoric and rapier wit developed in the humanist tradition, could persuade anyone of anything and, as a consequence, that much of the contemporary philosophical debate was empty. At the time there were the dogmatics, who would not diverge from Aristotle on any matter. Opposed to the dogmatics were the sceptics, who would not make any judgement, or decision, if there was any degree of uncertainty. This was convenient since it freed the sceptic from making difficult decisions. In the middle of the two camps were the cynics, whose aim was to appear superior to both the dogmatist or sceptic by using their arguments “to pretend what is true is false and what is false is true”.

Descartes, the retired soldier, seems to have been disgusted by the cynicism of Chandoux, angered by the blindness of dogmatism and frustrated by the barrenness of scepticism when these philosophies were confronted with matters of doubt. His response was to abandon the philosophising French and return to the pragmatic Dutch, and their mathematics, what the Dutch called - wiskunde - the ‘art of knowledge’. Descartes settled in the Dutch Republic, were he would remain for the next twenty years and write his most important work, ‘Discourse on the Method of Rightly Conducting One’s Reason and of Seeking Truth in the Sciences’, published in 1637.

The Discourse on the Method is first and foremost a philosophical work that argues that “seeing that our senses sometimes deceive us” Descartes [2008, Part IV] we must “never accept anything for true which [you] did not clearly know to be such”, Descartes [2008, Part II] and this led Descartes to doubt his own existence, a problem he resolved by observing that “I think therefore I am” Descartes [2008, Part IV]. Because the senses were so unreliable, Descartes argued that “we ought never to allow ourselves to be persuaded of the truth of anything unless on the evidence of our reason” and, somewhat in disagreement with Bacon, “not of our imagination or of our senses”. Descartes starts from the “certainty of the existence of the mind” Hall [1962, p 179] from which universal laws of nature can be deduced through “mathematics, on account of the certitude and evidence of [its] reasonings” Descartes [2008, Part I].

While Stevin had established the practical usefulness of mathematics in natural philosophy, Descartes explained why mathematics was so powerful in deducing the reality of nature and turns maths from a calculation tool into a tool of enquiry, as the art of certain knowledge it brushes away doubt. The essence is that Descartes cannot know from the evidence of his senses what are the laws that govern nature, and so he is forced to reason, using mathematics, what they are. This is a very Platonic view of the world — hidden from us are nature’s laws, understood through mathematics, that govern nature. This philosophy was extremely influential in the development of science and would not only influence Newton but many physicists to this day, such as Roger Penrose Hall [1962, pp 181-182].

It seems to me that the issues raised by Warren Pearce’s article are not particularly novel. My argument is that the dominating feature of finance is randomness, pure uncertainty, and so the science — the speculative, agreed-upon inquiry which recognizes and distinguishes, defines and interprets reality and its various aspects and parts, on the basis of theoretical principles, models and methods rigorously cohering — that emerges in finance is of more use to resolving contemporary issues than the science advocated by some of climate change sceptics described by Pearce.


   R. Descartes. A Discourse on Method. Project Gutenburg, 2008. www.gutenberg. org/etext/59.
   P. Fara. Science: a four thousand year history. OUP, 2009.
   A. R. Hall. The Scientific Revolution 1500-1800. Longmans, 1962.
   P. S. MacDonald. Descartes: The lost episodes. Journal of the History of Philosophy, 40 (4), 2002.
   H. Sarkar. Descartes' Cogito Saved from the Great Shipwreak. Cambridge University Press, 2003.  

Monday, 29 July 2013

Probability and the Precautionary Principle: Could Science Learn from Finance

Has science any hope of predicting the future in a meaningful way?  While I was on holiday The Guardian published a series of articles discussing the precautionary principle, which have been published here.  My interpretation of the articles highlights how understanding finance can help understanding science, and suggest that scientific hubris is a dangerous thing..

The Precautionary Principle is essentially that risks and opportunities of scientific developments should be understood before such developments are given the go ahead (see my comments on Computer Based Trading).  The first article makes a distinction between "risks", probabilities that can be accurately quantified, from "uncertainties", probabilities that cannot be quantified  This is Frank Knight's distinction from economics that  develops de Morgan's definition of a "risk" as being an error in a  scientific measurement.  As the conventional definition of a "risk" is the possibility of a loss, mathematicians often prefer "chance" to represent a quantifiable uncertainty.

The article goes on to make the comment
Under uncertainty, then, it is not merely difficult in practice to calculate some single definitive "sound scientific", "evidence based" solution. The point is, it is irrational even to try, let alone claim, this.
Let me try and elaborate how I interpret this statement from the perspective of finance.  Ole Peters, a physicist, has recently produced a series of papers arguing that the standard approach to probability employed in physics, taking ensemble averages, fails when we are confronted with financial problems, and we need to take time averages.  Peters arguments are rooted in the famous Petersburg Paradox which was central in eighteenth century discussions of probability in the context of an investment decision.  At the end of the eighteenth century by considering the game it was realised that the conventional approach to probability (based on counting relative frequencies) was only applicable if experiments were repeatable.  If a player, when presented with "Game Over" does not have the option to "Play again", much of statistical theory becomes irrelevant.  This point  had appeared in Pascal's Wager, which is still relevant today in that the player is confronted with an unrepeatable choice which offers an infinite loss, as does fiddling with nature.  When presented with such a choice the player must play safe.

The point from this first article is that while physics often sees uncertainty as a lack of information in a complex, but deterministic system, economists have, for at least a hundred yeas, been thinking that there is something much more significant in the problem of uncertainty.  In particular, post-Keynesian economists place the issue of "non-ergodicity", that the basic parameters governing the determinism universe could change in time (i.e. the parameter G in physics is not a constant),

The second article argues that the precautionary principle is a blunt instrument that will prevent anything good happening and is "a 90s throwback out of place in an era of "smart solutions" and big data".  This implies that "back" in the 90s science was not capable of handling uncertainty, but now with "big data" it is.  This second article reads as if there is no problem with Determinism, just with imperfect humans who need science to unlock the hidden mysteries of the universe and by being cautious human progression to enlightenment is delayed.

The problems of science and technology are embedded in Western culture,  older than science itself appearing in Hesiod's Works and Days, the first European text on economics, predating Thales by a couple of centuries. Works and Days includes the story of Pandora, which starts with the theft from Zeus of the secret of fire and from Hephaestus and Athena the crafts, by the Titan, Prometheus (‘forethought’). Prometheus had created mankind and passed these secrets on to humans. Zeus, not satisfied with punishing Prometheus for the theft by chaining him to a rock and having his liver eaten each day, decided to punish the mortals as well. He asked  Hephaestus to create a the first woman, Pandora, ‘all gifts’ who was given such characteristics as beauty by Aphrodite, cunning by Hermes and the skill to spin thread by Athena. Zeus ensured she was also lazy and foolish.

Pandora was sent to Earth to seduce Prometheus’s dim-witted brother, Epimetheus (‘afterthought’), with a single possession a jar which had been given to her under the strict instruction never to open it. However, Pandora had been given the gift of curiosity, by Zeus’s long-suffering wife Hera, and so one day she opened the jar, which contained all the evils that afflict mankind; disease, strife, war and the need to work, and these all escaped into the world. Realising her mistake, Pandora put the lid on the jar, trapping the last thing left in there – Hope.

My concerns with this article are numerous.  Firstly it seems to suggest that concerns with scientific developments are a modern aberration, which ignores the significance of the Pandora myth. Secondly data, including "big data",  is barren, it only has meaning in relation to a model, and models are invented by fallible humans.  With the best intentions in the world it is possible to apply data to a  model, erroneously believed to be correct, and come to the wrong conclusion.  A notable  example is the recent financial crisis, but science and technology is littered with engineering failures since the Financial Crisis of 2007, for example we have had Fukishima and Deep Water Horizon.

These ideas were touched upon in the third article, which looks to replace the precautionary principle with a less onerous "proactionary principle"
The proactionary principle valorises calculated risk-taking as essential to human progress, where the capacity for progress is taken to define us as a species.
What strikes me is the implicit assumption that the uncertainties of the future is an episemological problem (relating to the bounds of knowledge) rather than an ontological problem (whether an answer actually exists).  This distinction is fundamental to the difference between the economists Knight and Keynes.

While I was working in the oil exploration business, confronting the practicalities of balancing risks and opportunities resulting from an uncertain world, Alex Kacelnik presented the following game.  Consider a small bird in a British  who must find 9 worms in a six hour day to survive a cold winter's night.  If the bird stays in its current location it has a 50:50 chance of finding 1 or 2 worms in an hour, alternatively the bird could fly to another field, using the the energy gained by eating a worm, and there is a 1 in 6 chance of finding 10 worms in the new field, but a 5 in 6 chance of only finding a single worm in the new field.  The first strategy is less "variable" and is conventionally regarded as less "risky", the second strategy is more "risky" and orthodox investment theory (as followed by the firm I was working for)  would argue against it as a strategy.

Consider a bird who has another hour to search for worms but had only found 6 in the preceding 5 hours.  There is no way that the bird can survive by "playing safe", its only rational choice is to hope to get lucky on the risky strategy.  Similarly if a bird takes thae risk in the first our and gets the 9 worms it needs, it can carry on taking a risk all day, potentially building up its breeding reserves with the sure knowledge that it will survive the night.  It turns out that, in general, it is beneficial for both the rich and poor (in resources) to take risks, it is the middle classes who are muddling through precariously that should, rationally, play safe.

The essential point is that it is that risk preferences are elusive and it is impossible to rationally identify the optimal choice when the future is unknown and there is the risk of death/extinction.  For someone with "no future", taking a risky choice is rational, for someone who might become slightly better off by taking the gamble, it is absurd.  The problem for those advocating the proactionary principle is that it is the risk-averse middle classes who, through their taxes, fund the majority of research, and while scientists might be able to produce a number telling them that "all is safe", people are quite capable in arriving at their intuitive assessment of  risks.

The proactioanry principle, with its belief in the ability of well trained scientists to come to the right conclusion, was precisely the principle that lead to the financial crisis.  One of my favourite characters of the crisis was "X" who was rolled out by Goldman Sachs in August 2007 to explain some losses the bank had suffered as the Credit Crisis emerged (the explanation was reported by the FT and commented on here - open access comment).  "X" had invested around $500,000 in an Ivy League degree, followed by a Masters in Statistics from Columbia (not something to be sniffed at) and then a PhD in Finance from Chicago.  One might imagine that the sophisticated Goldman Sachs had gone through the ten step programme of the Proactionary Principle (or similar), never the less they got it spectacularly wrong.

 If you accept that there exists absolute Truth (either in a Platonic sense, that Reality exists independent of human thought,  or a Formal sense, that some statements are tautologies) then you will not  worry about Precaution: with a little effort Truth can be identified and progress can proceed from there.  The final article in the series observes that, as with a Teddy Bear's picnic,  "you're sure of a big surprise" when dealing with technology: we cannot be sure of Truth.  This final piece summarises the earlier articles and mentions democracy, but without explaining the relevance of democracy to the scientific process.  My view is that mathematical probability is a rhetorical device developed in order to help in consensus setting in the presence of uncertainty.

When faced with uncertainty society needs to come to some form of consensus as  how to proceed.  Preventing the development of disruptive technologies is potentially harmful to the rich and poor, but disruptive technologies will potentially harm the middle classes.  There is no rationally defensible solution to this dilemma, and so society needs to agree a consensus that the majority "buy into".  Mauss argued that if uncertainty was addressed in the open, science and religion emerged, if it was done in secret, magic evolved.  Scientists should be careful slip into magic and possibly end up burnt.

Friday, 5 July 2013

Moralised Markets

This is an extract from a draft paper A Context for Financial Economics: Ethics in the Face of Uncertainty  I have placed on SSRN.  It forms the basis of the case I will present as part of The Cabaret of Dangerous Ideas at the Edinburgh Festival Fringe on 18 August.

Determining what is is part of epistemology, and Thagard and Beam have noted,
Epistemological theories can be classified into foundational or coherentist. Foundational theories attempt to ground knowledge in a solid base such as sense experience [Empiricism] or a priori reasoning [Realism]. In contrast, coherentists [Pragmatists] argue that there are no foundations for our beliefs, whose justification derives from how well they fit together with each other.[Thagard and Beam2004]
Realism argues that there are immutable truths in an ‘intelligible’ universe and a ‘sensible’ universe that is actually experienced. ‘Truth’ transcends experience and can be established only through abstract thinking (Rationality). Realism, in the Christian and Islamic traditions, goes back to Plato’s Theory of Forms (or Ideas) and was central to Descartes and Kant’s philosophy. In this framework, there is a hierarchy of knowledge with mathematics being closer to ‘truth’ than experimentation. Greek beliefs in the immutability and indubitability of mathematics became embedded in western philosophy with the Neo-Platonists, such as Augustine of Hippo who associated mathematics to a transcendental deity [Augustine of Hippo1993, p 46].
Empiricism argues that there are two types of truth: tautologies, established through formal mathematics or logic; and factual statements that can be verified by employing the ‘scientific method’ to guide observation and analysis. A principal of Empiricism is that while ‘truth’ might be unachievable, the scientific method will converge towards a close approximation of true facts. European Empiricism has its roots in Greek Epicureanism and became dominant in British philosophy through Francis Bacon, John Locke, David Hume and J. S. Mill. Logical Positivism, a form of Empiricism, emerged in Vienna in the early twentieth century and became significant in North America in the 1940s following the emigration from Nazi Germany of, amongst many others, Hans Reichenbach and Rudolph Carnap.
The Empiricists rejected the metaphysics of Realism, but generally did not challenge the status of mathematics and created a special class of truth related to Hilbert’s Formalism. To appreciate the distinction between Realism and Empiricism, a Realist might claim that “2 + 2 = 4 was true at the time of the dinosaurs”, implying the mathematics is independent of human thought (synthetic a priori); an Empiricist would claim the statement is a tautology: 2 := 1 + 1, 4 := 1 + 1 + 1 + 1 and so 2 + 2 = (1 + 1) + (1 + 1) = 4 (analytic a posterior).
Within economics, Realism is associated with Neo-classical theories that employ equilibrium and rationality and resort to ceteris paribus arguments to explain why economic facts (what is experienced) rarely conform to Neo-classical theory [Arnold and Maier-Rigaud2012]. Contemporary economics in the ‘Logical positivist’ spirit includes experimental and behavioural economics (Vernon Smith, Daniel Kahneman) with the field of neuroeconomics being an emerging exemplar [Camerer et al.2005].
Realism and Empiricism, foundational theories, are both built on the idea that ‘truth’ is a static relationship to some reality that is external to the thinker. Pragmatism, on the other hand, argues that ‘truth’ is just ‘warranted assertability’, what ‘competent, rational enquiry’ produces and it is pointless to try and identify some ultimate indubitable and immutable ‘Truth’.
For example, Poincaré argued that if the Earth was covered in thick clouds, so that the stars were never visible, at some point a Copernicus will “come at last” to argue that
It is more convenient to suppose the earth turns round, because the laws of mechanics are thus expressed in much more simple language. [Poincaré1902 (2001), pp 89—91]
and then he goes on to say
these two propositions “the earth turns round,” and “it is more convenient to suppose that the earth turns round,” have one and the same meaning. [Poincaré1902 (2001), p 91]
Pragmatists deal with the contingency of ‘truth’ by adhering to the principle of ‘fallibilism’, an acceptance that we can be wrong in our beliefs and we can be justified in being wrong. Fallibilism is balanced by the principle of ‘experimentalism’; problems can be resolved by trying out different approaches to their solution. The process involves discourse, amongst those who might disagree, so pluralism is admired and ‘Theory’ does not take precedence over ‘Practice’, as it often does with foundational approaches. Critical in preventing Pragmatism from becoming an instrument to attain ends, is that it is not only means that might change as a result of Pragmatic reflection, but also ends. ([Danisch2007] [Putnam2002, pp 97—134])
Pragmatism emerged in the late nineteenth century with Charles Peirce, William James and John Dewey and was revived in the 1970s by Richard Rorty, Hilary Putnam and Robert Brandom. While closely associated with American philosophy, there have been Pragmatic strands in French thought, sometimes associated with Greek Sophism, notably the ‘occasional Pragmatism’ of Henri Poincaré [Heinzmann2010] and Émile Durkheim acknowledged the usefulness of Pragmatism in destroying “the cult of truth” [Laufer2009], [Durkheim and Allcock1983, pp 69-72]. Pragmatism overlaps Empiricism (e.g. Charles W. Morris, W.V.O. Quine) in its criticism of Realism, and Realism (e.g. C.S. Peirce, Hilary Putnam) in its criticism of Empiricism [Rorty1982, pp xvi—xvii].
There are two metaphors discussed by Thagard and Beam [Thagard and Beam2004] that are useful when approaching Pragmatism. Peirce challenged classical Realism by arguing that ‘reasoning’ was not a chain of deductions that is reliant on the ‘weakest link’ holding, but rather a body of knowledge is like a cable with each fibre of the cable representing a belief: if a fibre fails the cable remains in place. Otto Neurath challenged Empiricism by presenting a body of knowledge as a ship and scientists (sailors) must maintain the ship (revise beliefs) at sea, they do not have the opportunity to completely rebuild the ship.
Pragmatism does not assign a special status to mathematics, in the way that Realism and Empiricism do, meaning that mathematics is more tightly integrated into the approach. This is characterised by the fact that a number of significant Pragmatists, such as Peirce, Poincaré and Putnam, were also prominent mathematicians. Putnam argues that
we learn what mathematical truth is by learning the practices and standards of mathematics itself, including the practices of applying mathematics. [Putnam2004, p 66]
Important advocates of a what might be described as a Pragmatic approach to mathematics, challenging both Realism and Formalism and acknowledging the social nature of mathematics, are Philip Davis, Reuben Hersh (e.g. [Davis and Hersh1990], [Hersh1998]) and Sal Restivo [Restivo and Bauchspies2006].
Pragmatism is being associated with a revival of ‘classical economics’ [Martins2011], is close to Pasinetti’s description of the Cambridge School of Keynesian Economics [Pasinetti2005], relates to Deirdre McCloskey’s economics founded on rhetoric (discourse) [McCloskey2010], has been linked to behavioural economics [Khalil2004] and institutional economics [Barbalet2008]. Pragmatic approaches are distinguished by acknowledging ethical features of economic behaviour and place a greater emphasis on uncertainty ([James1896 (2009], [Dewey2005]). For example, Friedman’s argument in The Methodology of Positive Economics appears to share principles of Pragmatism [Khalil2004, p 2]: “[Positive economics’] performance is to be judged by the precision, scope, and conformity with experience” [Friedman1953, p 4]. However, Friedman’s rejection of a normative dimension to economics and a faith in the ability to verify stable economic theories makes it incompatible with mainstream Pragmatism.
Putnam’s criticises the Fact/Value Dichotomy [Putnam2002] with the observation that when Empiricists insist on the distinction, they are exclusive in associating values with ethics. Concepts such as ‘coherence’, ‘plausibility’, ‘simplicity’, and so forth, are also values and Empiricists implicitly regard these values as objective, raising the question whether ethical values are also objective. Central to this observation is the belief that values are embedded in scientific processes; they are so much part of life that we cannot avoid them.
Ethical frameworks, in the Western tradition, are usually classed as being either Deontological, Consequentialist or Virtuous. Deontology can be typified as “Thou shalt / shalt not” and guides action on the basis of laws, rule or principles. Since an individual cannot be subject to a law unless it has been promulgated, Deontology is linked to with philosophical systems that are based on ‘divine’ or ‘natural’ law, such as Realism and Stoicism [Anscombe1958, p 14]. The practical problem with Deontological Ethics is that basic rules such as “Thou shalt not kill” have caveats while other prohibitions become redundant, or need revising, as society evolves. In the context of contemporary economics, Deontological Ethics has been employed in financial regulation (Pillars I & II of Basel II) and has been criticised for being over-bureaucratic and rigid while susceptible to ‘gaming’, adhering to the letter of the law but not the spirit. [Van Staveren2007, pp 23—26]
Consequentialism attempts to judge the value of an action in terms of its consequences. This approach has its roots in ancient Chinese Mohism and Greek Epicureanism, developed in opposition to Platonism and Stoicism. The approach became fully developed in the nineteenth century with a trio of British philosophers, Bentham, Mill and Sedgewick, who argued that one should “Act always in such a way as to promote the greatest happiness to the greatest number”.
On the basis of Consequentialism and David Hume’s distinction of ‘what is’ and ‘what ought to be’, ‘value—neutrality’ was established in economics: since we have ‘objective access’ to the empirical world’ and are ‘rational beings’, we are able to calculate the consequences of our economic actions [Wilber and Hoksbergen1986]. A problem with this value-neutrality, described by Robert Heilbroner, is that it misses the critical fact that
the objects observed by the social scientist all possess an attribute that is lacking in the objects of natural universe. This is the attribute of consciousness — of cognition, of “calculation”, of volition [Heilbroner1973, p 133]
The importance of ‘volition’ had been recognised by Oskar Morgenstern, who objected to perfect foresight based on calculation because
always there is exhibited an endless chain of reciprocally conjectural reactions and counter-reactions. This chain can never be broken by an act of knowledge but always through an arbitrary act — a resolution. [Mirowski1992, quoting Mogernstern on p 129]
Practically this means that while we could incorporate the possibility of a Japanese earthquake into the modelling of asset prices, it would be impossible to account for the behaviour of Nick Leeson in destroying Barings’ Bank.
As well as questioning the basic ability to predict in an social context, Consequentialism has been criticised because obviously immoral acts, such as the execution of the innocent, could be justified either by the hope of good consequences or the fear of bad [Anscombe1958, p 14]. In response to these problems, many argue that ethics should focus on the judgement of the agent taking the action that has consequences, or Virtue Ethics.
Virtue Ethics, in the European tradition, is associated with Aristotle, in particular Nicomachean Ethics in which virtues are the “characteristics that enable individuals to live well in communities” [Pojam1998, p 247]. Aristotle’s ethics do not distinguish reason and emotion, as Hume did in the eighteenth century, nor do they define absolute standards, rather Virtue is a consequence of personal reflection [Van Staveren2001, pp 6—8]. This opens Virtue Ethics to the criticism that it cannot be codified into a set of rules that any person could apply to determine ethical action in any situation. However, this criticism assumes such a reduction is possible, and implicit in this is that the environment is stable and predictable. The advantage of Virtue Ethics is precisely that it can accommodate unforeseen circumstances.
However, Virtue Ethics is open to the criticism of Relativism. For example, Abelard, who was the first western European to highlight the tripartite classification of ethics in Dialogue of the Philosopher with the Jew and the Christian, was condemned as a heretic on the basis that he argued that those who were responsible for the crucifixion of Jesus Christ were not necessarily doing wrong if they believed they were fulfilling their social obligations [Luscombe1997, p 53].
Medieval Scholars approached Virtue Ethics using the same framework that they used to study physics or medicine, by blending elements, or humours, in the right manner. They identified seven elements of morality, the four ‘Cardinal’ virtues; Courage; Justice; Temperance; and Prudence, and three, so-called, ‘Christian’ virtues: Faith; Hope; and Charity. For example, blending (tempering) Justice, Courage and Faith result in honesty [McCloskey2007, p 361]. An ethical life was one that exhibited all, not just some, of the virtues and anyone, priest prince or merchant, was virtuous providing they got the balance right.
While Virtue Ethics is often associated with Catholicism, all seven virtues, including Faith, Hope and Charity, existed in pre-Christian Greek and Roman philosophy, which influenced both Judaic and Islamic thought. Chinese and Indian philosophy both have their own versions of Virtue Ethics that can be mapped onto the Catholic framework. Particularly relevant is the first century Mahayana Buddhist Vimalakirti Sutra that tells the story of how a virtuous merchant instructs both kings and monks.
While it is conventional to associate Deontology with Realism and Consequentialism with Empiricism, it is not so well established to associate Virtue Ethics with Pragmatism, but there are links.
Aristotle notes that intellectual excellence develops with teaching while excellence of character [ethike] derives from ‘habituation’ [ěthos] [Broadie and Rowe2011, 1103a15—20]. This can be related to the technical term ‘Pragmatism’, which is derived from the Greek word describing ‘deed, act, affair, matter, business’ [pragma] and both words are more closely associated with ‘practice’ rather than ‘theory’,
Khalil notes that “true [Pragmatic] inquiry cannot take place in an ivory tower” [Khalil2004, p 2] and discourse is central to Pragmatism. Putnam admires Jürgen Habermas’ position on ‘communicative action’. Habermas defines a ‘norm’ as a “universally valid statement of obligation”, where as a ‘values’ are culturally specific. The “binding universal norm” is ‘communicative action’, “norms of communication governed by the ideal of rational discourse” and the ideal of rational discourse is governed by
the norm of sincerity, the norm of truth-telling, and the norm of asserting only what is rationally warranted †[and] is contrasted with manipulation. [Putnam2002, pp 113-114]
Putnam goes on to say
assuming we have a community of human beings who do regard the ends of others as important, and who do not assume that there own ends should override — Habermas’s approach is to assume that disagreement about what ethical life concretely requires of us is a fact of life, something that will not go away. [Putnam2002, p 115]
Ethics in Pragmatism is not dependent on an act or its outcome, but the agent performing an act which may have unforeseen consequences.
Albert Hirschman has provided a description of four different views on the relationship between markets and morality: doux-commerce, self-destruction, feudal-shackles and feudal-benefits [Hirschman1982].
The idea that commerce improved society was prevalent throughout the eighteenth century. In 1704 technical text on commerce argues “Commerce attaches [men] to one another through mutual utility”, while in The Rights of Man (1792) Thomas Paine writes “[Commerce is a pacific system, operating to cordialise mankind”. In the intervening years Montesquieu, Hume, Condorcet and Adam Smith all agreed that commerce was a powerful civilising agent, promoting honesty, industriousness, probity, punctuality, and frugality, in contrast to the excesses of absolute monarchies.
Following the Industrial Revolution, these attitudes all but disappeared and were replaced by views that blamed the collapse of morality on the influence of capitalism. Commerce was seen as commodifying human interaction, “custom is replaced by contract”, and on this basis Romantics saw capitalism as being un-natural, undermining conservative hierarchies while Marxists believed that the alienation of the proletariat along with capitalism’s instabilities would lead to revolution. Others believed that the success of capitalism, founded on frugality and probity, would eventually be so great that society would become dissolute, seeking instant gratification, echoing the rise of Republican Rome and the fall of Imperial Rome.
Both the doux and self-destructive views of commerce represented capitalism as a powerful force driving social change. When capitalism did not collapse, the emphasis changed and capitalism was not seen as strong but weak: the bourgeoisie were unable to escape traditional social forces. Marx, while arguing that English capitalism would destroy itself, also argued that German capitalism was hindered by antiquated social and political structures. For Schumpeter, in The Sociology of Imperialisms written during World War I, Weber’s ‘spirit of capitalism’ was no where in the warmongering of the age. Schumpeter’s views contrasted to the optimism of the pre-war sociologists Durkheim and Simmel who both saw echoes the ties that bound traditional societies in contemporary commercial relations.
The United States of America, not bound by “feudal—shackles” seemed to have an advantage over Europe between 1914 and the sixties. Capitalism, led by America, seemed to rediscover its confidence in solving society’s problems after the Second World War. But this confidence was lost with the mass movements of the late sixties and the subsequent economic malaise of the seventies. The problem had been foreseen by Louis Hartz in The Liberal Tradition in America (1955): because America did not have the feudal past of Europe it did not have social and ideological diversity and so reforms, such as Roosevelt’s New Deal, were vulnerable to a “tyranny of the majority”; America missed the feudal—blessings.
The doux-commerce thesis is a powerful argument in favour of markets yet rarely figures in neo-classical economics and Hirschman explains this omission by pointing out that the neo-classical program depends will not accommodate sociological considerations. Hirschman does acknowledge that economics was changing in the early 1980s, with the introduction of behavioural economics, in particular results such as Prisoner’s Dilemma that highlighted the role of co-operation in economic affairs.
Marion Fourcade and Kieran Healy [Fourcade and Healy2007] have recently returned to Hirschman’s characterisation and argue that it is still valid today, but have added a fifth characterisation: Moralized Markets.
Fourcade and Healy identify four strands of the doux-commerce thesis in recent scholarship. Deirdre McCloskey argues that markets nurture “bourgeois virtues” and summarise this view with the observation that
Commerce teaches ethics mainly through its communicative dimension, that is, by promoting conversations among equals and exchange between strangers. [Fourcade and Healy2007, p 287]
Seabright and researchers performing empirical studies on the Ultimatum Game (introduced the year of Hirschman’s thesis, [Güth et al.1982]), argue that commerce fosters co-operation, particularity amongst strangers while others support Hayek’s argument that “Capitalism makes you free”. Finally, some economists look for evidence that markets are the best motor for innovation. In opposition to these strands, economists are arguing that instead of virtue we have envy, instead of co-operation there is coercion, freedom does not equate to populism and creativity is being stifled by copyright.
While economists seem to focus on the robust nature of markets, able to create or destroy society, sociologists tend to study the feebleness of markets. Following Weber, some authors argue that markets are consequences of cultural legacy, of institutions, or that Capitalism takes on different forms in different societies. The Moralized Markets thesis goes further, it characterises markets as ‘cultures’, not simply a consequence of culture, which “are explicitly moral projects, saturated with normativity.” [Fourcade and Healy2007, pp 299-300].
Fourcade and Healy identify three strands of the Moralized Markets thesis. Firstly, there is the view that markets have a role in creating moral boundaries, as McCloskey argues. This approach follows Durkheim, who argued that morality is not fixed by some ‘Ontological’ ethical standard (that is, one fixed and derived from a single issue [Putnam2004, p 19]), rather, morality is defined by the group. This is problematic in that it is virtually impossible to evaluate the role of markets neutrally.
The second strand builds on the first by turning to the sociology of science, where an emphasis is placed on impartiality in evaluating scientific knowledge (i.e. it studies failures as well as successes). A key theme in this approach is to study what Michael Callon called the ‘performativity of markets’, that economic theory drives economic behaviour, rather than economic theory describes economic behaviour (in the words of Donald MacKenzie, financial economics is “An engine not a camera”).
While the second strand focuses on behaviour at the micro level, the third strand considers economic rules at the macro level and how they are saturated with normative considerations. For example, when Friedman made the case for positive economics it was “to make correct predictions” [Friedman1953, p 4] he ignored the question of what determines ‘correct’, and this driven by mutable normative values. For example determining ‘correctness’ has changed with the emergence of the value ‘efficiency’ and the decline of ‘social cohesion’.
Gambling is today regarded as profane, but this was not always the case. For the Greeks, the brothers Zeus, Poseidon and Hades cast lots to divide up the universe. The Hindus believe the world was a game of dice played between Shiva and his wife and at the heart of the epic tale Mahabharata is an, unfair, dice game between the Kauravas and the Pandavas.([Sahlins1972 (2003), p 27], [Brenner and Brenner1990, p 1—5]). Divination by casting lots played an important role in Judaism and the Bible refers to the ‘judgement’ of Urim and Thurim, which scholars today think were two dice ( Exodus 28:30, Leviticus 27:20-21, Samuel I 14:41 see [Brenner and Brenner1990, p 2]).
Gambling was often associated with sacrificial practises that were widespread and are generally known by their Native American name, potlach. Potlach involved the destruction of goods, and seems to have evolved in nomadic groups because they could not store what was not needed and gambling was a means avoiding waste by re-distributing goods before any excess was destroyed. Similar ceremonies are described in Vedic scriptures ([Keynes1936, pp17-19], [Graeber2011, p 56]).
The role gambling plays in archaic societies has been studied by Jon Altman and William Mitchell. Altman studied an Australian aboriginal group around 1980 [Altman1985]. The community had access to social security payments and there was often a surplus left over after essentials had been bought. However, some individuals were excluded from social security payments by the government and there was an “inter—household variability in access to cash”. This variability was seen as a subjective discrimination within the community by the Australian government and gambling “acted effectively to both redistribute cash †[and] provided a means for people with no access income to gain cash” [Altman1985, pp 60-61]. This was important in non-hierarchical communities because it meant that one arbitrary bestowal of money was not corrected by another subjective distribution, such as redistribution by a chief. William Mitchell has considered the role that gambling plays in disrupting hierarchical social structures, such as the Indian caste system, by studying the Wape in New Guinea [Mitchell1988]. The conclusion was that the non-hierarchical society of the Wape was maintained through gambling.
The pervasive nature of gambling in archaic communities, appearing in the Vedic scriptures, potlach ceremonies, aboriginal Australia and New Guinea and the Hazda [Sahlins1972 (2003), p 27] can be explained because it is an objective, ‘fair’, mechanism for the redistribution of wealth. What needs to be recognised is that this process remains valid only so long as no single entity accumulates enough wealth that it can bankrupt all the others.
Gambling had been outlawed in the medieval period, usually because time spent gambling could be better used [Brenner and Brenner1990, p 58]. However, building on Roman practice, lotteries began to be used as means of raising public-finance in the later Medieval period. The first private lottery appeared in the sixteenth century in Italy and the mechanism spread to France and England [Brenner et al.2008, pp 133—138]. The practice culminated in The Million Adventure lottery set up by the English government and drawn in November 1694 [Murphy2009, p 34].
The seventeenth century economist, William Petty, observed that lotteries were “a tax upon unfortunate, self-conceited fools” and from the start of the eighteenth century gambling became increasingly associated with “the waste of time and money; the neglect of familial and business duties; the erosion of social trust; and the severed link between hard work, talent and gain.” [Daston1998, p 161]. However, by the end of the century ‘gambling’, in the form of insurance, had become a legitimate practice if based on rational foundations ([Zelizer1979], [Daston1987]) and in 1774 the Life Assurance Act distinguished between legitimate insurance and illicit gambling and became known as the Gambling Act.
Gabrielle and Reuven Brenner argue that the de-legitimisation of lotteries, and gambling in general, comes about because during the seventeenth and eighteenth centuries there was significant social and economic change. In this environment gambling and speculation provided the ‘lower classes’ with a means to climb up the social ladder [Brenner et al.2008, pp 98—104]. While the lotteries enabled this disruptive social mobility, they were a necessary tool of public finance that prevented the stagnation and crises suffered by states reliant on taxation [Nash2000]. By the start of the nineteenth century, finance had developed to such an extent that governments could tax more effectively, notably the incomes of the middle classes, or to borrow from the middle and upper classes. The working classes could be excluded from the opportunities to get rich that participating in public-finance provided.
The prohibitions on gambling had an important impact on the development of finance. In 1851, following a dispute between two counterparties in a forward contract, English law established that there needed to be ‘intent to deliver’ for a derivative to avoid being classed as an illegitimate gamble [Swan1999, pp 211—213]. While English courts avoided becoming involved in derivative markets, U.S. courts were much more active in restricting speculative behaviour and were vigorous in prosecuting “idlers who made profit even while they slept” [de Goede2005, p 62, quoting Fabian]. One case, brought by the Chicago Board of Trade (CBOT)against Christie-Street Commission Company, which was offering its customers bets on the grain futures prices published by the CBOT, eventually reached the U. S. Supreme Court, who ruled in 1905 that
People will endeavour to forecast the future, and to make agreements according to their prophecy. Speculation of this kind by competent men is the self—adjustment of society to the probable. [de Goede2005, p 71]
Hirschman presents the ‘Industrial Revolution’ as being the “most plausible explanation for the eclipse of the doux-commerce thesis” [Hirschman1982, p 1470]. However, there have been similar societal changes that did not lead to similar attitudinal changes, raising the question as to whether there is a more specific explanation to the eclipse of the doux-commerce thesis.
In 1932 Lionel Robbins defined economics as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”. This can be traced back to John Stuart Mill’s 1836 definition of political economy as being
concerned with [man] solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. [Mill1967]
Mill defended Thomas Malthus’ An Essay on the Principle of Population, which focused on scarcity, in Principles of Political Economy of 1848. Mill was writing at a time when Europe was struck by the Cholera pandemic of 1829—1851 and the famines of 1845—1851 and while Alfred, Lord Tennyson, was describing nature as “red in tooth and claw”.
Between Mill and Robbins is Alfred Marshall who synthesised Mill’s approach to economics with Darwinian metaphors of competition ([Backhouse1985, 10.1], [Thomas1991]). Malthus, Darwin and Mill all worked in culture infused with a belief that chance was being defeated and Aristotle’s class of events that were unpredictable was becoming empty. While contemporary Darwinists reject the idea that evolution is random [Kiontke et al.], in the presence of uncertainty economics becomes an exercise in optimisation, such as of maximising utility. Even when it is acknowledged that there is uncertainty in the future, the economic system is assumed to be ergodic, to have stable parameters, and the economic exercise is one of maximising expected utility. This is a strong assumption with wide implications [Feller1949, p 417—418].
A confidence in determinism has been challenged by the Pragmatists and financial events since the Nixon Shock. In the 26 years between 1945 and autumn 1971, the Bank of England changed its lending rate 41 times, with 30% of these changes occurring between 1966 and 1971. In the 26 years after 1971, it changed them 216 times. After the collapse of Bretton—Woods, a key economic factor had gone from being fairly stable to being a random process. What links contemporary culture with that before 1700 is the understanding that uncertainty has to be accommodated. What characterised much of the nineteenth and twentieth century was a confidence in uncertainty and a concern for scarcity.
We refine Hirschmann’s explanation that the ‘Industrial Revolution’ was responsible for the decline in the doux-commerce thesis by identifying the emergence in a faith in determinism and certainty coinciding with a concern for scarcity. This is not a new observation, Moses ben Maimon (Maimonides) argued that God’s punishment after the Fall of Man was not so much about scarcity but uncertainty in his Guide for the Perplexed, written in 1190 and an influence on the Scholastics. In the Garden of Eden humans had perfect knowledge, which was lost with the Fall, and it is the loss of this knowledge which is at the root of suffering: if we know what will happen we can manage scarcity [Perlman1997].
The relationship between uncertainty and scarcity is a component of the distinction between legitimate investment and illicit speculation. In an attempt to understand this moral distinction Gabrielle and Reuven Brenner identify the three types of market participant, facing the problems of scarcity and uncertainty. Investors are preoccupied with scarcity and defer income. Because uncertainty exposes the investor to the risk of loss, investors wish to minimise uncertainty at the cost of potential profits. Gamblers will bet on an outcome taking odds that have been agreed on by society such as with a sporting bet or in a casino. Gambling is rational in two circumstances, when the gambler has an excess of resources and can afford to lose the stake: on course betting for the rich has never been restricted, or when the gambler is facing certain ruin/extinction and so they have nothing to lose but much to gain by taking the gamble. ‘Speculators’ bet on a mis-calculation of the odds quoted by society and explains why speculators are regarded as socially questionable: they have opinions that are explicitly at odds with the consensus, they are practitioners who rebel against a theoretical ‘Truth’ ([Brenner and Brenner1990, p 91], [Beunza and Stark2012, p 394]). This is captured in Arjun Appadurai argument that the leading agents in modern finance
believe in their capacity to channel the workings of chance to win in the games dominated by cultures of control †[they] are not those who wish to “tame chance” but those who wish to use chance to animate the otherwise deterministic play of risk [quantifiable uncertainty]”. [Appadurai2011, p 533-534]
The philosophical antecedents of the modern speculators, betting against determinism can be found in medieval Franciscans such as Pierre Jean Olivi and John Duns Scotus. The Dominican, empirical rationalist, Aquinas argued that knowledge rested on reason and revelation and so God could be understood by rational examination of nature. The fideist Scotus argued that this placed unjustifiable restrictions on God, who could interfere with nature at will: God, and nature, could be capricious [Luscombe1997, p 127].
Appadurai was motivated to study finance by Marcel Mauss’ essay Le Don (‘The Gift’), exploring the moral force behind reciprocity in primitive and archaic societies. The relationship between fairness, reciprocity and markets has been studied in the context of the so—called ‘Ultimatum Game’ [Thaler1988]. The ‘Golden Rule’ of reciprocity appears to be behaviour learnt in the social context of market exchange and is fundamental to human civilisation ([Murnighan and Saxon1998], [Henrich et al.2004], [Henrich et al.2006], [Jensen et al.2007]).
Appadurai notes that the contemporary financial speculator is “betting on the obligation of return” [Appadurai2011, p 535]. The role of this balanced reciprocity in finance can be seen as an axiom in that it lays the foundation for subsequent analysis, it can also be seen as a simplifying assumption: if the future is uncertain what mechanism ensures that agreements will be honoured. When Daniel Beunza and David Stark observe, echoing Ramsey, that in finance “to be opportunistic you must be principled, i.e. you must commit to an evaluative metric” [Beunza and Stark2004, p 372], the assumption in reciprocity is part of this evaluative framework.
David Graeber also recognises the fundamental position reciprocity has in finance [Graeber2011], but where as Appadurai recognises the importance of reciprocity in the presence of uncertainty, Graeber essentially ignores this fundamental issue in his analysis that ends with the conclusion that “we don’t ‘all’ have to pay our debts” [Graeber2011, p 391]. In advocating that reciprocity need not be honoured, Graeber is not just challenging contemporary capitalism but also the foundations of civil society in the Golden Rule, based on equality and reciprocity [Graafland2010, p 235].
In the presence of uncertainty, society needs reciprocity, if there is no certainty in what the future holds we need to trust that our debts, whether physical or metaphysical, are going to be repaid. Determinism emerged as the dominant scientific principle, initially with the Augustinian probabilists of the seventeenth century, then with the post Revolutionary science of Laplace. As life became predictable, an emphasis of dealing with uncertainty was replaced by one of dealing with scarcity and the fact/value dichotomy became embedded into culture.


   J. Altman. Gambling as a mode ofredistributing and accumulating cash among Aborigines: a case studyfrom Arnhem Land. In G. Caldwell, M. Dickerson, B. Haig, and L. Sylvan, editors, Gambling in Australia, pages 50—67. Croom Helm, 1985.
   G. E. M. Anscombe. Modern moralphilosophy. Philosophy, 33(124):1—19, 1958.
   A. Appadurai. The ghost in the financial machine. Public Culture, 23(3):517—539, 2011.
   D. Arnold and F. Maier-Rigaud. The enduring relevance of the model Platonism critique for economics and public policy. Journal of Institutional Economics, 8:289—294, 2012. 
   Augustine of Hippo. On Free Choice of the Will translated by T. Williams. Hackett, 1993.
   R. Backhouse. A History of Modern Economic Analysis. Blackwell, 1985.
   J. Barbalet. Pragmatism and economics: William James’ contribution. Cambridge Journal of Economics, 32(5):797—810, 2008.
   D. Beunza and D. Stark. Tools of the trade: the socio-technology of arbitrage in a Wall Street tradingroom. Industrial & Corporate Change, 13(2):369—400, 2004.
   D. Beunza and D. Stark. From dissonanceto resonance: cognitive interdependence in quantitative finance. Economy and Society, 41(3):383—417, 2012.
   R. Brenner and G. A. Brenner. Gambling and Speculation: A theory, a history and a future of some human decisions. Cambridge University Press, 1990.
   R. Brenner, G. A. Brenner, and A. Brown. A World of Chance, Betting on Religion, Games, Wall Street. Cambridge University Press, 2008.
   S. Broadie and C. Rowe. Aristotle: Nicomachean Ethics: Translation, Introduction, Commentary. Oxford University Press, 2011.
   C. Camerer, G. Loewenstein, and Drazen Prelec. Neuroeconomics: How neuroscience can inform economics. Journal of Economic Literature, 43(1):9—64, 2005.
   R. Danisch. Pragmatism, Democracy, and the Necessity of Rhetoric. University of South Carolina Press, 2007.
   L. J. Daston. The Domestication of Risk: Mathematical probability and insurance 1650—1830. In L. Kruger, L. J. Daston, and M. Heidelberger, editors, The Probabilistic Revolution: Volume 1: Ideas in History. MIT Press, 1987.
   L. J. Daston. Classical Probability in the Enlightenment. Princeton University Press, 1998.
   P. J. Davis and R. Hersh. The Mathematical Experience. Penguin, 1990.
   M. de Goede. Virtue, Fortune and Faith. University of Minnesota Press, 2005.
   J. Dewey. The Quest for Certainty: A Study of the Relation of Knowledge And Action. Kessinger Publishing, 2005.
   É.D. Durkheim and J.B. Allcock. Pragmatism and Sociology. Cambridge University Press, 1983.
   W. Feller. On the theory of stochastic processes, with particular reference to applications. In J. Neyman, editor, Proceedings of the First (1945/46) Berkeley Symposium on Mathematical Statistics and Probability, pages 403—432. University of California Press, 1949.
   M. Fourcade and K. Healy. Moral views ofmarket society. Annual Review of Sociology, 33:285—311, 2007.
   M. Friedman. The methodology of positive economics. In M. Friedman, editor, Essays In Positive Economics, pages 3—43. Univ. of Chicago Press, 1953.
   J. J. Graafland. Do markets crowd out virtues ? An Aristotelian framework. Journal of Business Ethics, 91:1—19, 2009.
   J. J. Graafland. Calvins restrictions on interest: Guidelines for the credit crisis. Journal of Business Ethics, 96(2):233—248, 2010.
   D. Graeber. Debt: The first 5,000 years. Melville House, 2011.
   W. Güth, R. Schmittberger, and B. Schwarze. An experimental analysis of ultimatum bargaining. Journal of Economic Behavior & Organization, 3(4):367 — 388, 1982.
   R. L. Heilbroner. Economics as a ‘Value-Free’ science. Social Research, 40(1):129—143, 1973.
   G. Heinzmann. Henri Poincaré’s and his thoughts on the philosophy of science. In E. Charpentier, E. Ghys, and A. Lesne, editors, The Scientific Legacy of Poincaré. American Mathematical Society / London Mathematical Society, 2010.
   J. Henrich, R. Boyd, S. Bowles, C. Camerer, E. Fehr, and H. Gintis. Foundations of Human Sociality. Oxford University Press, 2004.
   J. Henrich, R. McElreath, A. Barr, J. Ensminger, C. Barrett, A. Bolyanatz, J. C. Cardenas, M. Gurven, E. Gwako, N. Henrich, C. Lesorogol, F. Marlowe, D. Tracer, and J. Ziker. Costly punishment across human societies. Science, 312:1767—1770, 2006.
   R. Hersh. What Is Mathematics, Really? Vintage, 1998.
   A. O. Hirschman. Rival interpretations of market society: Civilizing, destructive, or feeble? Journal of Economic Literature, 20(4):1463—1484, 1982.
   W. James. The dilemma of determinism. In W. James, editor, The Will to Believe and Other Essays in Popular Philosophy, pages 145—183. Longmans Green & Co. (Project Gutenburg), 1896 (2009).
   K. Jensen, J. Call, and M. Tomasello. Chimpanzees are rational maximizers in an ultimatum game. Science, 318:107—108, 2007.
   J. M. Keynes. The general theory of employment, interest and money. Macmillian, 1936.
   E.L. Khalil. Dewey, Pragmatism, and Economic Methodology. Routledge /Chapman & Hall, 2004.
   K. Kiontke, A. Barrière, I. Kolotuev, B. Podbilewicz, R. Sommer, D. H. A. Fitch, and M.-A. Félix. Trends, stasis, and drift in the evolution of nematode vulva development. Current Biology, 17(22):1925 — 1937.
   R. Laufer. New rhetoric’s empire: Pragmatism, dogmatism, and sophism. Philosophy and Rhetoric, 42(1):326—348, 2009.
   D.E. Luscombe. Medieval Thought. Oxford University Press, 1997.
   N. Martins. The revival of classical political economy and the cambridge tradition: From scarcity theory to surplus theory. Review of Political Economy, 23(1):111—131, 2011.
   D. N. McCloskey. The Bourgeois Virtues: Ethics for an Age of Commerce. University of Chicago Press, 2007.
   D. N. McCloskey. Bourgeois Dignity: Why economics Can’t Explain the Modern World. University of Chicago Press, 2010.
   J. S. Mill. On the definition of political economy; and on the method of investigation proper to it. In J. M. Robson, editor, The Collected Works of John Stuart Mill, Volume IV - Essays on Economics and Society Part I,. Routledge, 1967.
   P. Mirowski. What were von Neumannn and Morgenstern trying to accomplish?. In E. R. Weintraub, editor, Toward a History of Game Theory, pages 113—150. Duke University Press, 1992.
   W. E. Mitchell. The defeat of hierarchy: Gambling as exchange in a Sepik society. American Ethnologist, 15(4):638—657, 1988.
   J. K. Murnighan and M. S. Saxon. Ultimatum bargaining by children and adults. Journal of Economic Psychology, 19:415—445, 1998.
   A. L. Murphy. The Origins of English Financial Markets. Cambridge University Press, 2009.
   R. C. Nash. The economy. In J. Bergin, editor, The Seventeenth Century: Europe 1598-1715. Oxford University Press, 2000.
   L. L. Pasinetti. The Cambridge School of Keynesian Economics. Cambridge Journal of Economics, 29(6):837—848, 2005.
   M. Perlman. Looking for ourselves in the mirror of the past. In B. B. Price, editor, Ancient Economic Thought, chapter 3, pages 61—75. Routledge Studies in theHistory of Economics, 1997.
   H. Poincaré. Science and hypothesis. In S. J. Gould, editor, The Value of Science: Essential Writing of Henri Poincaré. Modern Library, 1902 (2001).
   L. P. Pojam. Classics of Philosophy. Oxford University Press, 1998.
   H. Putnam. Ethics without Ontology. Harvard University Press, 2004.
   Hilary Putnam. The Collapse of the Fact/Value Dichotomy and Other Essays. Harvard University Press, 2002.
   S. Restivo and W. Bauchspies. The will to mathematics: Minds, morals, and numbers. Foundations of Science, 11:197—215, 2006.
   R. Rorty. The Consequences of Pragmatism: Essays, 1972-1980. University of Minnesota, 1982.
   M. Sahlins. Stone Age Economics. (Routledge), 1972 (2003).
   E. J. Swan. Building the Global Market: A 4000 year history of derivatives. Kluwer Law, 1999.
   P. Thagard and C. Beam. Epistemological metaphors and the nature of philosophy. Metaphilosophy, 35(4):504—516, 2004.
   R. H. Thaler. Anomalies: The ultimatum game. The Journal of Economic Perspectives, 2(4):195—206, 1988.
   B. Thomas. Alfred Marshall on economic biology. Journal of Financial Intermediation, 3 (1):1—14, 1991.
   I. Van Staveren. The Values of Economics: An Aristotelian Perspective. Routledge, 2001.
   I. Van Staveren. Beyond utilitarianism and deontology: Ethics in economics. Review of Political Economy, 19(1):21—35, 2007.
   C. K. Wilber and R. Hoksbergen. Ethical values and economic theory: A survey. Religious Studies Review, 12(3/4):208—214, 1986.
    V.A.R. Zelizer. Morals and Markets: The Development of Life Insurance in    the United States. Columbia University Press, 1979.