Integration of ethical epistemologies into the way we think about fiscal policy and economics is important when we have policymaking discussions --- only the AFF has these ethical underpinnings.

The ascent of finance has changed not only the economy, but the entire society, which have become more and more dependent on the financial markets, for better or worse. Finance is nowadays crucial for our individual and collective life and it deeply affects several dimensions of our prospects, from our education and working life to our psychological, ethical, epistemic well-being. Thus, this multi-dimensional nature of finance demands a rethinking of its role not only in both theory and practice, but also in society and culture in order to better understand and guide it. In particular, I argue that such a rethinking requires a fresh look at the theories on finance and stock markets—a look that is philosophical in kind, since philosophy can provide us with a proper and fruitful multi-dimensional exploration of them. It is worth recalling the relation between philosophy and economics, from which finance stems, has affected the evolution of both the disciplines. On the one hand, economics provides continual inputs to philosophy. A typical example is the economics’ treatment of concepts of rationality and choice, which have deep impact on the philosophy of mind and cognitive science (see e.g. Ross, 2005). On the other hand, economics was born out of philosophy, as Martha Nussbaum (2016) reminds us. Notwithstanding, the marginalist revolution (Walras, 1900) and the rise of neoclassical economics produced a well-known, gradual departure of economics from philosophy. This departure is considered by Nussbaum as one of the main reasons for a lack of real intellectual progress in economics. For example: accounts of welfare and development that are produced without the active and ongoing participation of philosophy leave a lot to be desired. Embarking on serious work on these foundational questions will not be a picnic because they are foundational, and once an economist has really grappled with them, it may turn out that a good deal that has already been done will need to be redone (Nussbaum, 2016, p: 244). Nussbaum displays several areas in which the study of human development needs continual inputs from philosophy. In these areas, philosophy can act as a foundational tool, that is, as a way to improve, clarify, and understand the system. An important contribution to the relation between the two disciplines comes from the ‘naturalistic turn’ in philosophy.Footnote 1 In a nutshell, naturalism maintains that reality, both existential and cognitive, must be explained in natural terms because there is nothing beyond nature that we can scientifically explore: “Certe ultra naturam nihil [Certainly, nothing beyond nature]” as Francis Bacon state his De dignitate et augmentis scientiarum. So, the naturalistic turn has reshaped the interaction between philosophy and the sciences by strongly assimilating them: they are conceived in continuity, as pursuing essentially the same aims through the same methods. Therefore, on one hand, philosophy employs methods and hypotheses from economics in order to pose and solve problems and, on the other hand, economics benefits from philosophy too. In particular, the naturalistic turn has affected economic methodology by shifting the focus on the economic practice (see McCloskey, 1998). A remarkable example in this sense is the construction and use of economic models (Callon, 1998; MacKenzie, 2006) and the status of choice theory, which are largely influenced by recent advancements in the philosophy of action (see Ross, 2005). In more detail, there are at least two ways of characterizing naturalism in philosophy. The first is the Quine’s way (Quine, 1981), the other one is the Dewey’s way (see Dewey, 1920; Cellucci, 2017). In a nutshell, Quine’s naturalism maintains that: 1. Philosophical issues have to be approached using our present scientific tools, methods and theories. 2. Epistemology is contained in natural science simply as a chapter of psychology. Now, Quine claims that “the only point of view” the naturalist philosopher can offer is “the point of view of our own science” (Quine, 1981, p: 181). In particular, a naturalist philosopher provides the view of the present sciences: he “begins his reasoning within the inherited world theory,” that is, within the niche of theory offered by the present sciences, and “tries to improve, clarify, and understand the system from within” (Cellucci, 2017, p: 72). Therefore, “according to Quine, the task of the naturalist philosopher is to improve, clarify, and understand the world theory of the present sciences from within” (Ibid.). The other version of naturalism (Dewey-Cellucci) maintains that Quinean approach is defective since “improving, clarifying, and understanding the inherited world theory is an integral part of the scientists’ work, and scientists are much more competent to the task than philosophers, who do not have the necessary qualification. Moreover, it is limiting to say that the only point of view the naturalist philosopher can offer is the point of view of the present science” (Ibid.). As a matter of fact, philosophy deals with problems that the present sciences are unable to treat and, when successful, may even produce to new sciences and theories. Thus, this view maintains that: (a) Philosophical problems cannot be approached and solved only by means of the present sciences because, if that were so, philosophy would simply be subservient to the sciences. (b) Philosophy is crucial to dealing with problems at the frontier of knowledge—while in Quine’s approach, philosophy could not generate new sciences since epistemology is simply a chapter of psychology. This form of naturalism seems more appropriate to advance finance and its philosophical investigation, since it conceives of philosophy as a way of approaching problems that these disciplines could not tackle by themselves. In effect, we have remarkable examples of how philosophy helps to create new theories also in finance. Three significant examples are the performative theory (Austin, 1962; Callon, 1998; MacKenzie, 2006), reflexivity theory (Flanagan, 1981; Merton, 1948; Popper, 1957; Soros, 1987), and the philosophical reflection on cryptocurrency (see Sect. 2). Thus, if the departure of economics from philosophy (and history) can be regarded à la Nussbaum as a main reason for the flaws of many economic theories, the flaws of financial theory may be better understood by taking a philosophical perspective that can also provide us with tools to guide them. To this end, in the next sections I examine several issues in finance that require a philosophical exploration, and I will focus on both sides of the relation between philosophy and finance, that is, what philosophy offers to finance that it should take into consideration, and vice versa. Of course, this examination is not exhaustive, Footnote 2 but aims at outlining some fruitful lines of research inspired by the interaction between philosophy and finance. First, I examine the contribution that philosophy offers to finance by analyzing a few critical epistemic and methodological issues Footnote 3 in financial theory-building (Sect. 2.1), financial ontology (Sect. 2.2), financial methodology (Sect. 2.3) and financial mathematics (Sect. 2.4). I argue that philosophy is essential to enable finance to achieve a few goals for which it has been designed, not only as an external valuable addition, but also as an internal one. Then, I examine the contribution that finance can offer to philosophy by analyzing issues like the relation between theory and practice (Sect. 3.1), data and hypothesis (Sect. 3.2), and prediction, description and control (Sect. 3.3) in the light of financial systems. I argue that finance can help us to rethink a few tenets about these issues.