Scientists doing Humanities

[BaalChatzaf]

We have now come to the point where we have most of the answers in philosophy that can be answered without special tools. We now need studies of game theory, complexity theory, system dynamics, evolutionary psychology, studies of bounded rationality, neuroscience, positive psychology, probability theory, Monte Carlo simulation, statistics etc.

"Karl Popper, the great philosopher of science, once divided the world into two categories: clocks and clouds. Clocks are neat, orderly systems that can be solved through reduction; clouds are an epistemic mess, "highly irregular, disorderly, and more or less unpredictable." The mistake of modern science is to pretend that everything is a clock, which is why we get seduced again and again by the false promises of brain scanners and gene sequencers. We want to believe we will understand nature if we find the exact right tool to cut its joints. But that approach is doomed to failure. We live in a universe not of clocks but of clouds."

http://www.wired.com...ssay_particles/

Recommended on "Organizations and Markets" blog by Peter Klein

Modern physics is not longer strictly mechanistic. It has not been so for over a hundred years. Chaotic processes cannot be understood in a mechanistic reductionist way nor can quantum processes.

Ba'al Chatzaf

[syrakusos]

Much of what I described above is an attempt to describe complex systems, not predict them.

Well, as for clouds, when you consider weather, our predictions are weak, but identifying the phenomena seems strong. In aviation, we learn to stay a mile away from clouds, laterally, whenever possible. You can fly above the cloud layer, but what we perceive as a "cloud" exists beyond our immediate perceptions. This is especially true of cumulu-nimbus thunderheads with their updrafts and downdrafts. When I lived on the Florida coast, I learned about lightning strikes in clear weather, truly a "bolt out of the blue," caused by masses of air moving in from the ocean. Just to say, as you would probably agree, that things are more complex than we know, and prediction always seems to be goal.

... we can often describe its distribution of outcomes and determine whether a given market instrument is fairly priced given that distribution.

That is the great paradox of insider trading: everyone thinks they have special knowledge or insight not shared by everyone else. Whether an instrument is "fairly priced" is a decision all participants make ... and despite our arithemetical approaches to economics, I do not see that claims of prediction have been substantiated. You can predict successfully -- and we do -- that political controls will have economic consequences. Predicting the price of coffee tomorrow is a bit harder.

It is an easy prediction -- see John Braithwaite Crime and Public Policy (London: Routledge &. Kegan Paul, 1979) -- that disparities in income correlate wtih (if not cause) crime. The harder question is "how much?" In fact, in Braithwaite's book, at the detail level societies that were socially similar had different rates of different crimes and, conversely and contrarily, societies with similar crime patterns had different sociologies. Nonetheless, the broad patter -- the "cloud" -- seems real enough.

[Philip Coates]

Michael Marotta: "Karl Popper, the great philosopher of science, once divided the world into two categories: clocks and clouds. Clocks are neat, orderly systems that can be solved through reduction; clouds are an epistemic mess, "highly irregular, disorderly, and more or less unpredictable." The mistake of modern science is to pretend that everything is a clock, which is why we get seduced again and again by the false promises of brain scanners and gene sequencers. We want to believe we will understand nature if we find the exact right tool to cut its joints. But that approach is doomed to failure. We live in a universe not of clocks but of clouds."

Thanks for that great passage. Clocks and clouds are a very illuminating pair of examples.

I would disagree with the last statement, though. We live in a universe of both.

[James Heaps-Nelson]

Much of what I described above is an attempt to describe complex systems, not predict them.

Well, as for clouds, when you consider weather, our predictions are weak, but identifying the phenomena seems strong. In aviation, we learn to stay a mile away from clouds, laterally, whenever possible. You can fly above the cloud layer, but what we perceive as a "cloud" exists beyond our immediate perceptions. This is especially true of cumulu-nimbus thunderheads with their updrafts and downdrafts. When I lived on the Florida coast, I learned about lightning strikes in clear weather, truly a "bolt out of the blue," caused by masses of air moving in from the ocean. Just to say, as you would probably agree, that things are more complex than we know, and prediction always seems to be goal.

... we can often describe its distribution of outcomes and determine whether a given market instrument is fairly priced given that distribution.

That is the great paradox of insider trading: everyone thinks they have special knowledge or insight not shared by everyone else. Whether an instrument is "fairly priced" is a decision all participants make ... and despite our arithemetical approaches to economics, I do not see that claims of prediction have been substantiated. You can predict successfully -- and we do -- that political controls will have economic consequences. Predicting the price of coffee tomorrow is a bit harder.

It is an easy prediction -- see John Braithwaite Crime and Public Policy (London: Routledge &. Kegan Paul, 1979) -- that disparities in income correlate wtih (if not cause) crime. The harder question is "how much?" In fact, in Braithwaite's book, at the detail level societies that were socially similar had different rates of different crimes and, conversely and contrarily, societies with similar crime patterns had different sociologies. Nonetheless, the broad patter -- the "cloud" -- seems real enough.

Michael,

The best traders on Wall Street don't "predict prices". Look at Nassim Taleb, who is a Karl Popper fan. He simply says that many financial distributions have fat tails and kurtosis. He also knows the common problems with standard risk assessment models like Black-Scholes using mathematically tractable Gaussian and Poisson distributions. If you know how Merton, Debreu and other highly recognized economists are wrong and that rare events in general tend to be underweighted in financial markets, you can buy out of the money options, wait for a rare event and make a killing.

Jim

[syrakusos]

E.O. Wilson, in his book Consilience, called for a continuation of the Enlightenment in science, an extension project where science reaches up into the humanities to put it on firmer footing. I think ...

The best way for us to be on the same page is to be on the same page. A is A. So, having just completed a maste's I now have an alumni card at my university library and they have this book on the shelf, two copies, in fact. So, let me read it.

As for Wall Street, I tend to look at Gordon Gekko, rather than Bud Fox. The mathematics is just the crystal ball they gaze into. If it were quantifiable, everyone would do it.

The gut itself literally feeds gut feelings; think of butterflies in the stomach when a decision is pending. The gut has millions of nerve cells and, through them, a "mind of its own," says Michael Gershon, author of The Second Brain and a professor at Columbia University. Still, gut feelings do not originate there, but in signals from the brain.

That visceral punch in the paunch is testament that emotions are an intrinsic part of all gut feelings.

From "Gut Almighty" By Carlin Flora, published on May 01, 2007 - last reviewed on July 19, 2007 Psychology Today here.