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Magic, Maths and Money wrote a new blog post titled Ethics and actuaries: issues and opportunities
I was invited by the “London Markets Actuarial Group”, made up of general insurance actuaries, to speak at an ethics workshop. This post is about some observations I have from this experience. My observations are critical. This does not mean I believe actuaries are not well-intentioned, rather there might be gaps in their understanding that inhibit clear ethical reasoning. The purpose is to highlight how ethical assumptions are always questionable and it is by asking questions that an individual becomes ethical. The context is that the professional body of UK actuaries, the IFoA, requires...
127 days ago
Magic, Maths and Money wrote a new blog post titled Mathematician, heal thyself
I attended the second “Ethics in Mathematics” conference held at the University of Cambridge and organised by Maurice Chiodo. I had come across Maurice about twelve months ago when I was working with a Norwegian academic on the issue of ethics in maths. Maurice has developed into the Henry Oldenburg or Maurice Fréchet, though I suspect being a central node in a network is not as career enhancing for Maurice as it was for Oldenburg and Fréchet because the concern is ethics. In my experience mathematicians don’t really want to face up to ethical issues associated with their discipline. Ethics...
144 days ago
Magic, Maths and Money wrote a new blog post titled Anti-Semitism is the socialism of fools
This post is my response to the warning from the former Chief Rabbi Lord Jonathan Sacks of the dangers of "doing nothing" to combat anti-Semitism. The concern raised by Lord Sacks is that anti-Semitism appears widespread in the far left, as well as in its normal home in the far right. I will write about what I think I understand, meaning I will not venture into the issues relating to actions of the state of Israel. None of my best friends (that I know of) are Jewish though I have yet to meet an Israeli Jew who whole-heartedly supports the actions of the Israeli government.   The...
478 days ago
Magic, Maths and Money wrote a new blog post titled The Golden Rule
There are two versions of the Golden Rule. The standard is “ Do to others what you want them to do to you” and appears in most developed religions. Colloquially it is “Those that have the gold, make the rules”. Someone raised this distinction on my work in financial ethics by asking “Are you saying participants in financial markets should be benevolent in how they price instruments?” They answer rhetorically with the observation that the reality is that the markets are motivated by greed and fear with leading market participants acting in a ‘brutish’ manner that motivates the rest to conform....
550 days ago
Magic, Maths and Money wrote a new blog post titled Mathematical Finance
I wrote this piece for the National Institute for Economic and Social Research's Rebuilding Macroeconomics project.There are three types of mathematicians: those that can count and those that can’t. This aphorism challenges the public perception of mathematics as being concerned with calculation and is liked by mathematicians because it enables them to highlight what mathematics is concerned with, which is identifying and describing relationships between objects. A more sophisticated misunderstanding relates to the way mathematics is conducted. The error originates in how mathematicians...
568 days ago
Magic, Maths and Money wrote a new blog post titled Antifragility and justice
p { margin-bottom: 0.25cm; direction: ltr; line-height: 120%; text-align: left; }a:link { color: rgb(0, 0, 255); } Towards the end of last week I noticed a flotsam on my Twitter feed coming from a storm involving NN Taleb and the prominent British classisist Prof Beard. The origins were in a BBC schools animation that depicted a Roman soldier as dark skinned. This elicited a response on Infowars that the BBC was re-writing history. I was interested in this because that week my family had driven down to theVindolanda and Roman Army Museums on Hadrian’s Wall and I had been struck that a...
775 days ago
Magic, Maths and Money wrote a new blog post titled Why mathematics has not been effective in economics
p { margin-bottom: 0.25cm; line-height: 120%; } There are three types of mathematician: those who can count and those who can't. It takes a few seconds to get this joke the first time you hear it, and every once and a while when I tell it to a class one student will raise a hand and asked for the 'third type'. Its a good joke because it challenges assumptions, here the assumption is that mathematics is concerned with arithmetic, which is just a minor branch of number theory. At the end of June, before I went on holiday, I had been thinking about the role of mathematics in democracy. This...
786 days ago
Magic, Maths and Money wrote a new blog post titled Political and Financial Crises
My book, Ethics in Quantitative Finance, was motivated by the wish to understand the relationship between mathematics and financial ethics in the aftermath of the Credit Crisis (GFC).  While the GFC occured a decade ago, the topics discussed in Ethics in Quantitative Finance are still relevant today as the UK endures a "Great Political Crisis", a year after voting to leave the European Union.  Had someone drawn a connection between mathematics, ethics and politics for me in 2006 I would have ignored them, suggesting that the scholarship underpinning the book is transformative. A...
820 days ago
Magic, Maths and Money wrote a new blog post titled Egyptian and Mesopotamian approaches in economics
My previous post was born out of my frustration that some feel that there is a 'clash of cultures' that will inevitably lead to conflict between east and west/Islam and Christianity.  My view is that within Europe, the Middle East or China there are tensions between liberalism and authoritarianism with any society being susceptible to becoming dominated by either strand.  Every individual needs to decide whether to place there faith in authoritarianism or liberalism, a decision which will be dominated by their experience. I believe a person's attitude to uncertainty will be...
831 days ago
Magic, Maths and Money wrote a new blog post titled A Financial Approach to the 'Clash of Cultures'
Noah Smith has posed a question that resulted in a tweet thread Question for historians: Has anyone written of a unique, deep-rooted enmity between Europeans and Middle Easterners? https://t.co/O5pJP1BkFl— Noah Smith (@Noahpinion) May 17, 2017 He later highlighted a book on the question of the ‘east-west divide’.  Noah’s question seems to have been prompted by discussion of the activities of Stephens Bannon and Miller in attacking Islam. I read this book laying out the thesis of a long-standing Europe-ME conflict: https://t.co/JjgeUuvK94 It was an OK book.— Noah Smith (@Noahpinion)...
852 days ago
Magic, Maths and Money wrote a new blog post titled Where do experts come from?
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935 days ago
Magic, Maths and Money wrote a new blog post titled Some implications of the Bank of England comparing itself to the MetOffice
At some point over the Christmas break I was cursing the fact that I was finding  it difficult to find a weather map.  That is a weather map with isobars and fronts marked on it not one with icons of cloud, rain and sun.  My favourite subject as a final year physics student was Atmospheric Physics: I was fascinated by how the differential equations delivered different weather, particularly cloud formations, based on different inputs.  Underpinning this academic interest my father taught me to sail and until I left the oil industry for academia, and lost money and free time...
986 days ago
Magic, Maths and Money wrote a new blog post titled Quaker bankers: building trust on the basis of sincerity, reciprocity and charity
This post follows discussions of the norms sincerity, reciprocity and charity in financial markets. It suggests that the success of Quaker finance, that funded the British Industrial Revolution (the Darby's of Coalbrookdale, the Stockton and Darlington Railway) was based on trust built on the norms. A full argument is in a working paper Discourse Ethics for Debt Markets.Trust is defined as “a firm belief in the reliability, truth or ability of someone”. Accounts of how trust is developed vary, however they involve terms connected to sincerity, such as: honesty, integrity,...
1321 days ago
Magic, Maths and Money wrote a new blog post titled Sincerity - the subjective rationality of markets
The Vietnamese have a proverb: two women and a duck make a market. This simple saying highlights the inter-subjective nature of markets, there is an asset (the duck) who’s price is determined through the discussion of two subjects. The foundation of this paper is in the claim that financial markets should be perceived as centres of communicative, as opposed to strategic, action. This claim rests on recognising a distinction between markets based on market-makers (in England, ‘jobbers’) and those based on brokers. A broker, whether an individual or a firm, makes their money by arranging...
1338 days ago
Magic, Maths and Money wrote a new blog post titled Why did Shakespeare portray the Merchant of Venice as Christ-like?
I have been interested for a few years in the idea that Antonio, the eponymous Merchant of Venice, is the personification of agape, Christian love, in Shakespeare's play.  While the argument I offer here in the week before Christmas has its basis in Christian doctrine as an atheist and a pragmatist I think the case is equally valid for secular pragmatists in emphasising the need to temper facts with values in order to escape the 'iron cage of rationality'.Shakespeare’s The Merchant of Venice is thought to have been written between 1596 and 1598 and was performed by the King’s Men at...
1370 days ago
Magic, Maths and Money wrote a new blog post titled The problem of voluntary slavery for utilitarianism
Reciprocity is a norm, a rule embedded in financial mathematics, which permits high rates of interest to poorer, higher risk, borrowers. This means that phenomena such as debt-bondage can become prevalent (von Lilienfeld-Toal and Mookherjee, 2010). Voluntary slavery is a limiting expression of debt-bondage (Genicot, 2002) and by considering the case of voluntary slavery we can highlight limitations of, not just, basing lending decisions solely on the norm of reciprocity, but also, of weaknesses of the utilitarian argument upon which much neo-classical economic theory is founded....
1375 days ago
Magic, Maths and Money wrote a new blog post titled Be Together. Not the Same. Can maths address big data in banking
I recently attended the Alan Turing Institute summit on Data Analytics for Credit Risk and left wondering if statistics is well placed to address the problems of big data and if there were skills in the humanities that were more appropriate.  It also lead me to wonder if the neo-classical synthesis' criticism of institutional economics for not being able to deliver predictive theories is reasonable.  I end up arguing that bankers should build their businesses on the human and social sciences,  not an algorithm driven mathematical science. While some of the presentations...
1412 days ago
Magic, Maths and Money wrote a new blog post titled Building real markets for the good of the people
The Bank of England is seeking to build an 'Open Forum' Building real markets for the good of the people. I am participating in this forum and here I seek to address the questions Are reforms creating the soft and hard infrastructure to ensure FICC markets are effective and  retain their social licence?Where has too little been done?  In some areas, might reform have gone too far?   Does the reform agenda form a coherent whole or are there gaps and inconsistencies? How should the programme of reform be made dynamic and adaptive to current and future innovations in...
1460 days ago
Magic, Maths and Money wrote a new blog post titled Does the hidden hand need to hold a stake in society?
As the father of a four year old daughter, I have been to the cinema to see the the Disney film, Tinkerbell and the Pirate Fairy.  When I took my daughter to the cinema I had taken an mp3 player as I anticipated I would need a diversion, however I became engrossed in the film. The film tells the story of how a 'fairy scientist', Zarina,  undertook an experiment, which went wrong.  In response, Zarina left the fairy kingdom, taking pixie dust, and got involved with the young Captain Hook.  Hook had convinced Zarina that they were a team, but in fact the pirate was using...
1551 days ago
Magic, Maths and Money wrote a new blog post titled Finance and Mathematics: where is the ethical malaise?
This is a draft of an article that has been accepted by The Mathematical Intelligencer and offers an argument very similar to Romer's 'mathiness' argument as discussed in my previous post. Discussions of the role of mathematics in finance appearing in The Mathematical Intelligencercan be split into two classes. Marc Rogalski [26] and Jonathan Korman [18] capture a widespread fury at a collapse in commercial ethics while Ivar Ekeland [6] and Peter Haggstrom [13] offer economic facts. The conclusions of Rogalski and Korman can be summarised as that mathematicians should spurn the...
1568 days ago