tag:blogger.com,1999:blog-7952730094522081119.post949361887286104893..comments2023-05-12T06:05:26.490-07:00Comments on philosophy up front: The Financial Crisis, Yet AgainAlan Malachowskihttp://www.blogger.com/profile/15562397595916994782noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7952730094522081119.post-18690041251639174362010-02-02T08:54:39.710-08:002010-02-02T08:54:39.710-08:00Good to hear from you. Yes, I remember that talk w...Good to hear from you. Yes, I remember that talk well - mainly because I was concerned that a new kind of business person was emerging: a person for whom morality has no value except as something to be paid lip-service to when necessary - exactly the kind of person who was capaable of creating the crisis we now face. As for finance theory, I haven't changed my view - at that time I was simply trying to get people to recognise that it had great (and highly dangerous)causal power because of its scientistic trappings of mathematical elegance and quasi-empirical stability(though I too thought it was built on sand). I doubt whether you did 'understand' the irrelevance theorem, for example, or the internal significance of option pricing theory - but that, as you rightly said, was actually no big deal.Alan Malachowskihttps://www.blogger.com/profile/15562397595916994782noreply@blogger.comtag:blogger.com,1999:blog-7952730094522081119.post-31663122179772151942010-02-02T04:06:35.740-08:002010-02-02T04:06:35.740-08:00HI Alan. Delighted to read this astute analysis of...HI Alan. Delighted to read this astute analysis of the situation. I agree with everything you are saying here.<br />I hope you will forgive me for cheekily mentioning that I argued a similar line when you gave your talk on Finance Theory to UEA several years ago now: your response at that time was very different. When I claimed that Finance Theory was built on sand, and that crude mistakes in the philosophy of science (in particular, broadly Friedmanian assumptions about abstracting from the humanity of participants in the economy, and about equilibrium, markets, deregulation, etc) were perpetuating the illusion of an escape from the tendency of speculation and deregulation to lead to bust, you demurred and claimed that I hadn't understood how sophisticated the new Finance Theories were! At least, that is my recollection of the meeting. I'm glad to see how you have changed your tune! ;-)<br />[My recent work on this may be of interest to you: see my pieces in IJGE and Eco-politics, for instance. And my persistent arguments across the blogosphere and media for real nationalisation of the banks as the only genuine long-term solution.]Ruperthttps://www.blogger.com/profile/04334135270533978426noreply@blogger.com