2 1 62-85 2016

Discourse ethics for debt markets

Timothy C. Johnson


This article develops a pragmatic theory of finance in which markets are considered to be centres of communicative action in the face of uncertainty. This contrasts with the conventional approach that portrays markets as centres of strategic action in the face of scarcity. The argument follows Habermas and entails that a financial market must address the truthfulness, truth, and rightness of the statements made by its participants (i.e., the prices quoted). I claim that these discursive norms have been implicit in historical financial markets as expressed in the norms of sincerity, reciprocity, and charity. I conclude by proposing that ‘trust’ in commerce is a synthesis of the three discursive norms. The motivation of the article is to address the crisis of legitimacy that the financial system is experiencing, particularly in the United Kingdom (UK) and the United States (US).


Communicative action; markets; ethics; credit; trust; financialisation,

Full Text:



Ackroyd, P. (2001) London: The Biography. London: Vintage.

Altman, J. (1985) Gambling as a mode of redistributing and accumulating cash among Aborigines: A case study from Arnhem Land. In: Caldwell, G., Dickerson, M., Haig, B., and Sylvan, L. (eds.) Gambling in Australia. Beckenham: Croom Helm, 50-67.

Attard, B. (2000) Making a market: The jobbers of the London Stock Exchange, 1800-1986. Financial History Review, 7(1): 5-24.

Auden, W. (2013) The Dyer’s Hand. London: Faber & Faber.

Bagehot, W. (1971) The only game in town. Financial Analysts Journal, 27(2): 12-17.

Berger, H. (2010) Mercifixion in The Merchant of Venice: The riches of embarrassment. Renaissance Drama, 38(1): 3-45.

Beunza, D. and Stark, D. (2012) From dissonance to resonance: Cognitive interdependence in quantitative finance. Economy and Society, 41(3): 383-417.

Bjerg, O. (2014) Making Money: The Philosophy of Crisis Capitalism. London: Verso.

Black, F. and Scholes, M. (1973) The pricing of options and corporate liabilities. Journal of Political Economy, 81(3): 637-54.

Bradbrook, M.C. (1969) Moral theme and romantic story. In: Wilders, J. (ed.) Shakespeare: The Merchant of Venice. A Casebook. London: Macmillan.

Brenner, R. (2003) Merchants and Revolution: Commercial Change, Political Conflict, and London’s Overseas Traders, 1550-1653. London: Verso.

Brenner, R. and Brenner, G.A. (1990) Gambling and Speculation: A Theory, a History, and a Future of Some Human Decisions. Cambridge: Cambridge University Press.

Brenner, R., Brenner, G.A., and Brown, A. (2008) A World of Chance: Betting on Religion, Games, and Wall Street. Cambridge: Cambridge University Press.

Broadie, S. and Rowe, C. (2011) Aristotle: Nicomachean Ethics. Translation, Introduction, Commentary. Oxford: Oxford University Press.

Burgon, J.W. (2004) The Life and Times of Sir Thomas Gresham: Volume 2. Boston, MA: Adamant Media.

Carruthers, B.G. and Stinchcombe, A.L. (1999) The social structure of liquidity: Flexibility, markets, and states. Theory and Society, 28(3): 353-82.

Coghill, N. (1950) The basis of Shakespearean comedy: A study in Medieval affinities. Essays and Studies, 3: 1-28.

Cookson, G. (2003) Quaker families and business networks in nineteenth-century Darlington. Quaker Studies, 8(2): 119-40.

Coolidge, J.S. (1976). Law and love in The Merchant of Venice. Shakespeare Quarterly, 27(3): 243-63.

Crosby, A.W. (1997) The Measure of Reality. Cambridge: Cambridge University Press.

Davis, J. (2008) The turn in recent economics and return to orthodoxy. Cambridge Journal of Economics, 32(3): 349-66.

de Goede, M. (2005) Virtue, Fortune, and Faith: A Genealogy of Finance. Minneapolis, MN: University of Minnesota Press.

Decock, W. (2012) In defense of commercial capitalism: Lessius, partnerships and the Contractus Trinus. Max-Planck-Institute for European Legal History Research Paper Series, 1(4): 1-36.

Dickinson, J.W. (1962) Renaissance equity and Measure for Measure. Shakespeare Quarterly, 13(3): 287-97.

Duhon, T. (2012) How the Trading Floor Really Works. London: Wiley.

Fabian, A.V. (1999) Card Sharps and Bucket Shops: Gambling in Nineteenth-Century America. New York, NY: Routledge.

FCIC (Financial Crisis Inquiry Commission) (2011) The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Washington, DC: US Government Printing Office. Available at: . Accessed 21 July 2016.

Ferber, M. (1990) The ideology of The Merchant of Venice. English Literary Renaissance, 20(3): 431-64.

Fibonacci, L. and Sigler, L. (2003) Fibonacci’s Liber Abaci: A Translation Into Modern English of Leonardo Pisano’s Book of Calculation. New York, NY: Springer.

Flyvbjerg, B. (1998) Habermas and Foucault: Thinkers for civil society? The British Journal of Sociology, 49(2): 210-33.

Franklin, J. (2001) The Science of Conjecture: Evidence and Probability before Pascal. Baltimore, MD: Johns Hopkins University Press.

Fraser, N. (1990) Rethinking the public sphere: A contribution to the critique of actually existing democracy. Social Text, 25/26: 56-80.

Goetzmann, W.N. (2004) Fibonacci and the financial revolution. National Bureau of Economic Research Working Paper Series, No. 10352. Available at: . Accessed 21 July 2016.

Gollancz, I. (1931) Allegory and Mysticism in Shakespeare: A Medievalist on The Merchant of Venice. London: Folcroft Library Editions.

Graeber, D. (2011) Debt: The First 5,000 Years. London: Melville House.

Habermas, J. (1985) The Theory of Communicative Action: Reason and the Rationalization of Society. Boston, MA: Beacon Press.

Habermas, J. (1990) Moral Consciousness and Communicative Action. Cambridge: Polity Press.

Hadden, R.W. (1994) On the Shoulders of Merchants: Exchange and the Mathematical Conception of Nature in Early Modern Europe. Albany, NY: State University of New York Press.

Hamlin, H. (2013) The Bible in Shakespeare. Oxford: Oxford University Press.

Haug, E.G. and Taleb, N.N. (2011) Option traders use (very) sophisticated heuristics, never the Black-Scholes-Merton formula. Journal of Economic Behavior & Organization, 77(2): 97-106.

Homer, S. and Sylla, R. (1996) A History of Interest Rates. Third edition. Brunswick, NY: Rutgers University Press.

Hume, D. (2007) Essays: Moral, Political and Literary: Political Discourses. London: Lightning Source [orig. pub. 1752].

Jadlow, J.M. (1977) Adam Smith on usury laws. The Journal of Finance, 32(4): 1195-200.

Johnson, F.R. (1940) Gresham College: Precursor of the Royal Society. Journal of the History of Ideas, 1(4): 413-38.

Johnson, T.C. (2011) What is financial mathematics? In: Pitic, M. (ed.) The Best Writing on Mathematics: 2010. Princeton, NJ: Princeton University Press, 43-46.

Johnson, T.C. (2015) Reciprocity as a foundation of financial economics. The Journal of Business Ethics, 131(1): 43-67.

Judson, L. (1997) Aristotle on fair exchange. In: Taylor, C.C.W. (ed.) Oxford Studies in Ancient Philosophy 15. Oxford: Oxford University Press, 147-75.

Kaye, J. (1998) Economy and Nature in the Fourteenth Century. Cambridge: Cambridge University Press.

Keynes, J.M. (1936) The General Theory of Employment, Interest, and Money. London: Macmillan.

Kimball-Stanley, A. (2008/2009) Insurance and credit default swaps: Should like things be treated alike? Connecticut Insurance Law Journal, 15(1): 241-66.

Kirsch, A. (2008) Auden and Christianity. New Haven, CT: Yale University Press.

Knight, F.H. (2006) Risk, Uncertainty, and Profit. New York, NY: Cosimo [orig. pub. 1921].

Krippner, G.R. (2005) The financialization of the American economy. Socio-Economic Review, 3(2): 173-208.

Levy, J. (2012) Freaks of Fortune: The Emerging World of Capitalism and Risk in America. Cambridge, MA: Harvard University Press.

Lewalski, B.K. (1962) Biblical allusion and allegory in The Merchant of Venice. Shakespeare Quarterly, 13(3): 327-43.

MacKenzie, D. (2008) An Engine, Not a Camera: How Financial Models Shape Markets. Cambridge, MA: MIT Press.

MacKenzie, D. (2011). The credit crisis as a problem in the sociology of knowledge. American Journal of Sociology, 116(6): 1778-841.

Mackenzie, D. and Millo, Y. (2001) Negotiating a market, performing theory: The historical sociology of a financial derivatives exchange. Conference of the European Association for Evolutionary Political Economy [Online], August. Available at: . Accessed 21 July 2016.

McCloskey, D.N. (1998). Bourgeois virtue and the history of P and S. The Journal of Economic History, 58(2): 297-317.

Midgley, G. (1960) The Merchant of Venice: A Reconsideration. Essays in Criticism, 10(2): 119-33.

Millo, Y. (2003) Where Do Financial Markets Come From? Historical Sociology of Financial Derivatives Markets. Unpublished doctoral thesis. University of Edinburgh.

Mirowski, P. (1998) Machine dreams: Economic agents as cyborgs. History of Political Economy, 29(1): 13-40.

Mitchell, W.E. (1988) The defeat of hierarchy: Gambling as exchange in a Sepik Society. American Ethnologist, 15(4): 638-57.

Mols, R. (1974) Population in Europe, 1500-1750. In: Cipolla, C. (ed.) The Fontana Economic History of Europe: The Sixteenth and Seventeenth Centuries. London: Collins/Fontana, 15-82.

Mowatt, B.A. and Werstine, P. (eds) (n.d.). The Merchant of Venice. Washington, DC: Folger Shakespeare Library [Online]. Available at: . Accessed 21 July 2016.

Muniesa, F. (2007) Market technologies and the pragmatics of prices. Economy and Society, 36(3): 377-95.

Murphy, A.L. (2009) The Origins of English Financial Markets. Cambridge: Cambridge University Press.

Nash, R.C. (2000) The economy. In: Bergin, J. (ed.) The Seventeenth Century: Europe 1598-1715. Oxford: Oxford University Press.

Newman, K. (1987) Portia’s ring: Unruly women and structures of exchange in The Merchant of Venice. Shakespeare Quarterly, 38(1): 19-33.

Nicholas, D. (2006) Economy. In: Power, D. (ed.) The Central Middle Ages. Oxford: Oxford University Press, 57-90.

Outhwaite, W. (2013) Bourdieu and Habermas: ‘Linguistic exchange’ versus ‘communicative action’? A reply to Simon Susen. Social Epistemology, 27(3-4): 247-49.

PCBS (Parliamentary Commission on Banking Standards) (2013) Changing Banking for Good [Online], June. Available at: . Accessed 21 July 2016.

Peirce, C.S. (1957) Essays in the Philosophy of Science. Indianapolis, IN: Bobbs‒Merrill.

Perlman, M. (1997) Looking for ourselves in the mirror of the past: With what does economics cope? and the differences in the Jewish and Christian rationales for handling usury. In: Price, B.B. (ed.) Ancient Economic Thought. London: Routledge, 58-72.

Pindyck, R.S. (2013). Climate change policy: What do the models tell us? Journal of Economic Literature, 5(3): 860-72.

Poisson, S. (1837) Recherches sur la Probabilité des Jugements en Matière Criminelle et en Matière Civile. Paris: Bachelier.

Poitras, G. (2000) The Early History of Financial Economics, 1478-1776. Cheltenham: Edward Elgar.

Poitras, G. (2006) Life annuity valuation. In: Poitras, G. (ed.) Pioneers of Financial Economics: Contributions Prior to Irving Fisher. Cheltenham: Edward Elgar, 79-99.

Prior, A. and Kirby, M. (2006) The Society of Friends and Business Culture, 1700-1830. In: Jeremy, D. (ed.) Religion, Business and Wealth in Modern Britain. London: Routledge, 115-36.

Rainbolt, G.W. (1990) Mercy: An independent, imperfect virtue. American Philosophical Quarterly, 27(2): 169-73.

Ramsey, F. (1931) Truth and probability. In: Braithwaite, R. (ed.) Ramsey, 1931: The Foundations of Mathematics and Other Logical Essays. London: Kegan, Paul, Trench, Trubner & Co., 156-98.

Roberts, H. (2003) Friends in business: Researching the history of Quaker involvement in industry and commerce. Quaker Studies, 8(2): 172-93.

Roffe, J. (2015) Abstract Market Theory. Basingstoke: Palgrave Macmillan.

Rothbard, M.N. (1996) Economic Thought before Adam Smith. Cheltenham: Edward Elgar.

Sahlins, M. (2003) Stone Age Economics. London: Routledge [orig. pub. 1972].

Schneider, I. (1987) The probability calculus in the nineteenth century. In: Kruger, L., Daston, L J., and Heidelberger, M. (eds.) The Probabilistic Revolution, Volume 1: Ideas in History. Cambridge, MA: MIT Press, 191-214.

Seaford, R. (2004) Money and the Early Greek Mind: Homer, Philosophy, Tragedy. Cambridge: Cambridge University Press.

Seppänen, R., Blomqvist, K., and Sundqvist, S. (2007) Measuring inter-organizational trust: A critical review of the empirical research in 1990-2003. Industrial Marketing Management, 36(2): 249-65.

Sharp, R.A. (1986) Gift exchange and the economies of spirit in The Merchant of Venice. Modern Philology, 83(3): 250-65.

Sisk, J.P. (1969) Bondage and release in The Merchant of Venice. Shakespeare Quarterly, 20(2): 217-23.

Sotiropoulos, D.P., Milios, J. and Lapatsioras, S. (2013) A Political Economy of Contemporary Capitalism and Its Crisis: Demystifying Finance. London: Routledge.

Smith, A. (1986) An Inquiry into the Nature and Causes of the Wealth of Nations. London: Penguin Classics [orig. pub. 1776].

Stern, N. (2008) The economics of climate change. American Economic Review, 98(2): 1-37.

Susen, S. (2013) Bourdieusian reflections on language: Unavoidable conditions of the real speech situation. Social Epistemology, 27(3-4): 199-246.

Swan, E.J. (1999) Building the Global Market: A 4,000-Year History of Derivatives. Leiden: Kluwer Law.

Swedberg, R. (2012) Theorizing in sociology and social science: Turning to the context of discovery. Theory and Society, 41(1): 1-41.

Tett, G. (2009) Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan was Corrupted by Wall Street Greed and Unleashed a Catastrophe. London: Little Brown.

Triana, P. (2009) Lecturing Birds on Flying: Can Mathematical Theories Destroy the Financial Markets? London: Wiley.

van Staveren, I. (2007) Beyond utilitarianism and deontology: Ethics in economics. Review of Political Economy, 19(1): 21-35.

von Lilienfeld-Toal, U. and Mookherjee, D. (2010) The political economy of debt bondage. American Economic Journal: Microeconomics, 2(3): 44-84.

Walvin, J. (1998) The Quakers: Money and Morals. London: John Murray.

Waterworth, J. (1848) The Council of Trent: The Canons and Decrees of the Sacred and Oecumenical Council of Trent. London: Dolman.

Watts, M. (2012) JP Morgan and the CRM: How Basel 2.5 beached the London whale. Risk Magazine [Online], October. Available at: Accessed 21 July 2016.

Wilson, M.J. (1994) Views of justice in Shakespeare’s The Merchant of Venice and Measure for Measure. Notre Dame Law Review, 70(3): 695-726.

DOI: https://doi.org/10.2218/finsoc.v2i1.1664


  • There are currently no refbacks.