(This post has nothing to do with investing and deals with philosophy)
I ran Alex Hutchinson's thought-provoking article, "Mind Over Matter," in The Walrus recently and, perhaps due to various events unfolding in my life right now, I was reflecting upon something I studied in university. The thoughts in the article deal with the philosophical battle between rationalism and empiricism. The main debate occured a few hundread years ago and one side won and has been influencing society ever since.
Roughly speaking, rationalists believe that additional knowledge can be gained simply by thinking. In contrast, empiricists believed that you can only gain knowledge through your senses (i.e. by testing observations of nature.) As the picture above illustrates, the prominent rationalists were Descartes, Spinoza, and Leibniz; while the main empiricists were Locke, Berkeley, and Hume.
One side won and the debate sort of died off.
The side that won was empiricism. Modern science, which some don't realize is a branch of philosophy, essentially developed out of empiricism. If you look back to your high school days, you'll remember that the core tenets of science revolve around developing a hypothesis and testing it out in real life. That is what empiricist thought entails.
One of the philosophy electives I took in university dealt with this exact topic, of the battle between rationalism and empiricism. I didn't do too well in the course—it was low on my priority list given my other subjects—but it was very influential on me. I havne't done much reading in philosophy but, given how my life is messed up from a career point of view, a part of me says that I should have done that in school. When I studied this topic matter, I was so sure that empiricism was the way. I didn't see what rationalism could provide that empiricism couldn't. Since I was heavily influenced by science, I felt 'reality' depended on real-life experiments.
After reading Alex Hutchinson's article, I am starting to look at this whole debate quite diferently. I wish my prof had mentioned this example:
“At one point, the teacher offhandedly presented Galileo’s argument for why all bodies have to fall at the same rate,” Brown recalls. It’s a classic thought experiment: consider a cannonball, which Aristotle had argued would fall much faster than a light object made of the same material, like a bullet. Now glue them together. If Aristotle were right, the bullet would act as a drag on the cannonball, slowing down the composite object; on the other hand, since the composite is heavier than the cannonball alone it should fall faster. It’s a contradiction that can only be resolved if the two objects fall at the same rate.”...
But is this really new knowledge? Some critics argue that thought experiments are simply logical arguments whose conclusions follow from previous experience; others see them as ordinary experiments that, thanks to our intuitions, can yield results without being executed. Brown stakes out the extreme Platonist position, holding that thought experiments like Galileo’s give us new a priori knowledge about nature....
For an example that is less easily dismissed, though rather more complicated to explain, Brown looks to mathematics. In a 1986 experiment by set theorist Chris Freiling of California State University, San Bernardino, we are asked to imagine throwing darts at a board to select, with infinite precision, a pair of numbers between zero and one, leading us eventually to a conclusion that violates the continuum hypothesis articulated by Georg Cantor in 1878. What’s unique here is that the continuum hypothesis can’t be proven or disproven with conventional mathematics (a fact that, itself, can be proven), so Freiling’s darts offer the only route to a resolution. That means that if you accept the result, you have to join Brown in believing that knowledge can arise from the armchair.
Here is the wikipedia entry about the continuum hypothesis. This is an example of something that requires a rationalist approach.
I still think empiricism will be dominant for a few hundread more years, but I have a feeling that rationalism (or some other related thought process) will re-assert itself. We will likely hit a diminishing curve for empiricial observations and then we probably have to pursue alternative thought systems. As pointed out in the above quote, there may be things that are unprovable by physical evidence or an empirical test. If rationalism gains prominence, it may result in the end of science as we know it.