Joris Luyendijk, the anthropologist who interviews finance professionals for The Guardian has recently published an interview with an LSE academic who  is a quant "of sorts".  Joris, as an anthropologist, has been trained to interview people and distinguish the wheat from the chaff, and appreciate when they are constructing myths to protect their psyche from unpalatable truths. One unpalatable truth that (primarily Anglo-Saxon) academics have to face up to is their role in the current...

When the short lived Edward VI became king of England in 1547, the nation’s wealth was based on the export of one commodity, wool, out of London and into Antwerp [Stone, 1947, p 104]. Edward was succeeded by his Catholic sister Mary, who married Philip of Spain but died young and was followed by her Protestant sister, Elizabeth, in 1559. During the turbulent times of Elizabeth’s reign, security, and not prosperity, became the main object of Tudor economics. Central to managing the economy...

Since John Maynard Keynes rescued a collection of Newton's private papers and declared that "Newton was not the first of the age of reason. He was the last of the magicians" the popular imagination has looked at the influence of esoteric arts on the emergence of Western' science. What is often forgotten is that in almost the same breath, Keynes declared Newton as "one of the greatest and most efficient of our civil servants", in recognition of his work as Master and Warden of the Mint,...

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One of the key critics of Aquinas’ argument that a merchant could charge what heliked, providing the future was uncertain, was Pierre Jean Olivi, who was born near Béziers in Languedoc around 1248. Olivi entered the Franciscan order when he was twelve and was sent to Paris to study theology in 1267, and although he spent four years at the University he did not graduate with a masters degree. When he left Paris he appears to have started working on a theological work that took...

Claiming that the Black-Scholes equation had anything to do with theCredit Crisis of 2007-2009 is a bit like claiming Daimler-Maybach wereresponsible for bombing Hiroshima. Sure the planes used the internalcombustion engine, but the causal relationship is being stretched beyondreason.  The claim that Black-Scholes was involved in the Credit Crisis has been madeby Ian Stewart in a piece, apparently promoting his new book, Seventeen Equations that Changed the World, in The...

The Bayesian algorithm at Amazon recommended David Graeber’s book, Debt:The First 5,000 Years with the product description Economic history states that money replaced a bartering system, yet there isn’t any evidence to support this axiom. Anthropologist Graeber presents a stunning reversal of this conventional wisdom. For more than 5,000 years humans have used elaborate credit systems to buy and sell goods. Since the beginning of the agrarian empires, humans have...

The question is, how did economics change its attitude to mathematicsin the forty years between Håvelmo’s The Probability Approach inEconometrics and his Nobel Prize in 1989, when he was pessimistic aboutthe impact the development of econometrics had had on the practice ofeconomics. Coinciding with Håvelmo’s pessimism, many economists werereacting strongly against the ‘mathematisation’ of economics, evidencedby the fact that before 1925, only around 5% of economics researchpapers were based on...

A research student, working in econometrics has e-mailed me with thecomment I am a little confused why many economists do not see the potential of mathematics.The discipline of econometrics was introduced in the 1940’s with the keymonograph being Trygve Håvelmo’s The Probability Approach in Econometrics.Håvelmo’s motivation for writing the paper is eloquently stated in thepreface The method of econometric research aims, essentially, at a conjunction of...

I, like a lot of technically minded-people it seems, like a good crime thriller.  Having spent a year mesmerised by Sara Lund's sweaters I picked up The Girl with the Dragon Tattoo.  It's a good story, but a bit contrived with the plot being resolved by unexplained and unbelievable computer hacking. So why write about it on a blog about science and finance? The plot is set in the context of our hero, a journalist, Blomkvist and his relationship between two businessmen, ...