Tag Archives: ethics

The (non-)Ethics of Capitalism

Back in 2018, there was a survey on Gallup, about honesty and ethical standards, per profession

More than four in five Americans (84%) again rate the honesty and ethical standards of nurses as “very high” or “high,” earning them the top spot among a diverse list of professions for the 17th consecutive year. At the same time, members of Congress are again held in the lowest esteem, as nearly 58% of Americans say they have “low” or “very low” ethical standards. Telemarketers join members of Congress as having a majority of low/very low ratings.

One might wonder if there is a correlation between ethics and salary. Using the U.S. Bureau of Labor Statistics (BLS) National Occupational Employment and Wage Estimates data, one could easily get the average salary in the U.S. for some professions. For the others, one has to dig a bit more

Store all those information in a csv file, and then, add the honesty/ethics high-very high percentage,

download.file("https://freakonometrics.hypotheses.org/files/2025/08/gallup_ethics_salaries.csv", destfile = "data.csv")
df = read.csv("data.csv", stringsAsFactors = FALSE)

and we can get a plot.

plot(df$percent_high, df$avg_salary_usd,
     xlab = "Honesty/Ethics rated 'Very high/High' (%)",
     ylab = "Average salary (USD)",
     pch = 19)
# label points (may overlap a bit)
text(df$percent_high, df$avg_salary_usd, labels = df$profession, pos = 4, cex = 0.6)

At best, there is no link between salaries and honesty / ethics.

TD General Insurance Pricing Seminar

Tomorrow, I will give a talk at TD General Insurance Pricing Seminar, on fairness and ethics in insurance. Slides are now online.

After a very general (and long) introduction, to motivate our recent work on discrimination, I will try to explain how to quantify possible discrimination (with respect to a binary sensitive attribute), using Wasserstein distance, and optimal transport

and the use of Wasserstein Barycenter to mitigate discrimination

I will also mention our worshop in May, at Laval University,

“Ethics in Quantitative Finance”

Just before going to the workshop on dependencies in finance and insurance, Tim Johnson (also known as @TCJUK on Twitter), researcher at Heriot-Watt University in Edinburgh and blogger on http://magic-maths-money.blogspot, sent me a copy of his manuscript entitled Ethics in Quantitative Finance: a pragmatic theory of markets. While opening the book, we think of Peter L. Bernstein, his masterpieces Capital Ideas (or the later Capital Ideas Evolving) as well as Against the Gods. But Tim’s book is quite different.  This book is not really about finance, but about financial valuation and actuarial science. We can clearly see the deep interactions between financial mathematics and actuarial science. About uncertainy, prices and probabilities. And all those topics are embeded with a philosophical perspective

the argument is presented that financial markets are radically uncertain environments, where correspondence theories of truth are meaningless since there are no matters of fact about an uncertain financial future. In the face of this uncertainty, markets are places where “the opinion which is fated to be ultimately agreed to by all who investigate” is sought and opinions are expressed through asset prices. This implies that markets are centres of communicative action and money is behaving as a language. Using Jürgen Habermas’ analysis, this implies that market prices ‒ statements of opinions ‒ must satisfy objective, subjective and social truth criteria. The argument presented is that reciprocity guarantees the objective truth, sincerity guarantees the subjective truth and charity guarantees the rightness of a price. This explains why reciprocity is embedded in financial mathematics.

Continue reading “Ethics in Quantitative Finance”