  This paper argues that the fundamental principle of contemporary financial
economics is balanced reciprocity, not the principle of utility maximisation
that is important in economics more generally. The argument is developed by
analysing the mathematical Fundamental Theory of Asset Pricing with reference
to the emergence of mathematical probability in the seventeenth century in the
context of the ethical assessment of commercial contracts. This analysis is
undertaken within a framework of Pragmatic philosophy and Virtue Ethics. The
purpose of the paper is to mitigate future financial crises by reorienting
financial economics to emphasise the objectives of market stability and social
cohesion rather than individual utility maximisation.
