The Ethics of Speculation

Abstract

Ethics, speculation, gambling, manipulation, price gouging,

The Ethics of Financial Speculation in Futures Markets

“…This can be easily verified by inspection of the seminal article by Angel and McCabe (2009), again entitled "The Ethics of Speculation". They point to three productive functions.…”

“…As a consequence, one finds the authors still occupied with distinguishing speculation from gambling. According to Angel and McCabe (2009), the decisive criterion of distinction is the underlying motive: People speculate for profit, while they gamble for fun. However, the authors claim that this distinction might be blurred by pathological gambling.…”

Legitimate speculation versus excessive speculation

“…Angel and McCabe (2010) discuss conceptually the issue of ethics and speculation, review the historical debate, and provide what seems to be the generally accepted view on the issue of speculation and ethics, updated with the recent episode surrounding the crude oil bubble of 2008. They conclude that 'legitimate speculation helps economy grow, while excessive speculation can be harmful …', and that 'excessive speculation is hard to define'.…”

“…It seems like a compromising solution, while in fact it creates more confusion. The main source of confusion is, as Angel and McCabe (2010) suggest, that we cannot differentiate between legitimate and excessive speculation, which puts us back to square one of the debate.…”

“…This article aims to advance the debate on ethics and speculation, building on arguments by Angel and McCabe (2010), by attempting to provide a clear distinction between excessive speculation and legitimate speculation. Specifically, I review the literature on trading in financial markets and find examples of complex trading strategies that are clearly defined as manipulative/ predatory, but not necessarily as unethical or illegal, possibly because the discussion on ethics was outside the scope of these papers.…”