In this paper I argue that inconsistencies in scientific theories may arise from the type of causality relation they—tacitly or explicitly—embody. All these seemingly different causality relations can be subsumed under a general strategy developed to defeat the paradoxes which inevitably occur in our experience of the real. With respect to this, scientific theories are just a subclass of the larger class of metaphysical theories, construed as theories that attempt to explain a (part of) the world consistently. All metaphysical theories (...) share a common structural backbone specificially designed to defeat paradoxes, their often wildly diverging ontological claims notwithstanding. This common structure shapes the procedures which govern the invention of ideas in the context of such theories, by codifying some onto-logical a priori assumptions regarding the consistency of reality into its bare conceptual framework. Causality plays a key rôle here, because it implies conservation of identity, itself a far from simple notion. It imposes strong demands on the universalising power of the theories concerned. These demands are often met by the introduction of a metalevel which encompasses the notions of ‘system’ and ‘lawful behaviour’. In classical mechanics, the division between universal and particular leaves its traces in the separate treatment of cinematics and dynamics. The fundamental backbone’s specific gestalt thus functions as a theory’s individual signature and paves the way to a comparative historical approach towards their study. An important part of my paper therefore explores the strong connections between paradoxes as they appear and are dealt with in ancient philosophy and their re-appearance in early modern natural philosophy and science. This analysis is applied to the mechanical theories of Newton and Leibniz, with some surprising results. (shrink)

While in medicine, comparison of the data supplied by a clinical syndrome with the data supplied by the biological system is used to arrive at the most accurate diagnosis, the same cannot be said of financial economics: the accumulation of statistical results that contradict the Brownian hypothesis used in risk modelling, combined with serious empirical problems in the practical implementation of the Black-Scholes-Merton model, the benchmark theory of mathematical finance founded on the Brownian hypothesis, has failed to change the Brownian (...) representation, which has endured for more than fifty years despite the extent of its invalidation by experience. Without any statistical foundations, one mathematical representation has become the established approach, acting in the minds of practitioners as a “prenotion” in the sense the word is used by Durkheim, i.e. a “schematic, summary representation” which has produced a kind of spontaneous epistemology. The question arises of the persistence of this mathematical representation, which has been the basis for every financial risk modelling approach: how can its long life be explained? How was this spontaneous epistemology formed, and why did it prove to be so persistent? To address this question and offer an answer, I will test the various dynamics of scientific knowledge used with reference to financial modelling. All these dynamics are specific ways of describing the relationship between knowledge of a phenomenon and the phenomenon itself. Observing that it is impossible for the positivist approach to solve the financial puzzle, I turn to the three principal postpositivist dynamics, developed by Kuhn, Lakatos and Quine. I shall try to make to speak these representations of science for financial research, in order to reflect on the dominance of the Brownian representation in finance. We shall see that none of the epistemologies examined can explain why the Brownian representation continues to be used in mathematical finance research. I shall then propose an alternative hypothesis, concerning a significant pervading mental model that has irrigated both academics and practitioners in the financial sector: the “principle of continuity” introduced into economics by Marshall in. I consider that this principle of continuity has become a “persistent idea” in the form of a viral approach to representations, and I give this persistent idea the metaphorical name of the “Brownian virus”. Then, to explain the spread of this Brownian virus through the financial sector, the contamination of financial practices by this mental representation founded on the principle of continuity, I introduce the concept of the “financial Logos”, a discourse that structures practices and organisations, calculations, prudential regulations and accounting standards, leading to a general financialisation of society from the 1980s onwards. (shrink)

The explanatory power of structures in analytical sociologists’ agent-based models brings into question methodological individualism. We defend that from an explanatory point of view, the syntactic properties of models require semantic conditions of interpretation drawn from a conceptual research framework; in such a framework, social/relational structures have only partial, explanatory power ; and taking the explanation further through generative mechanism modeling necessitates calling upon methodological individualism’s generic framework of interpretation that relies on social actors’ rational capacity. According to this interpretive (...) framework, forces in action in society are governed by the subjective meaning of/the reasons for individual actions. (shrink)

There exists a fundamental convergence between some major trends of modern epistemology—as outlined, for instance, by Filmer Northrop and Henry Margenau—and the theories actually developed within sciences of the human mind where two types of thought—one implicit and, the other, explicit—tend to refer to two different lines of development. Moreover, these theories can find in the psychology of Lev Vygotsky some seminal hypotheses of a major importance. In order to highlight this convergence, we parallel the role played by structured conceptual (...) systems in Vygotsky’s conception of intellectual development and Northrop’s epistemology. We show how these conceptual systems account for the notion of causality and can explain the success of scientific thought, i.e. its possible match with the real world, while this match falsely justified an overall biological model of intellectual development in Jean Piaget’s work. We conclude that dual process theorists should no longer neglect cognitive tools, and especially conceptual systems, which underpin the awareness and mastery of thought that are characteristic of type 2 processes. This whole analysis leads us to maintain that human psychology is not characterized in the first instance by a need to act, but a quest for meaning. (shrink)