Philosophy and Science for the Third Millennium
An Essay by Christopher Bek
Summary—Scientific Management follows the development of relativity theory from Archimedes to Einstein—and then takes a parallel line of reasoning in considering the development of portfolio theory.
Give me one fixedpoint and I will move the earth.
To be ignorant of one's ignorance is the malady of the ignorant.
I choose I choose for all men.
History teaches us that we have never learned anything from history.
In the middle of the journey of our life, I found myself astray in a dark wood where the straight road had been lost.
Against Physics recounts the two major physical theories developed during the Twentieth century in context of Ockham’s principle of economy and Dirac’s principle of aesthetic value.
Transcending Uncertainty recounts the events leading up to the paradigm shift of quantum theory in 1925—and then takes a look at what we still have to learn from it. The nanosecond forecast of Philosophymagazine calls for a monumental paradigm shift whereby we will finally orient ourselves to the universe.
The Allegory of One tells Plato’s allegory of the cave and the story of Creation—and then considers how things might have turned out differently had the story of Creation been interpreted allegorically rather than literally.
The Great Cosmic Accounting Blunder compares the two physical fixedpoints in the universe—lightspeed and Planck’s constant—and argues that we have been guilty of double counting up until now and that in fact there is but one fixedpoint—which, as it turns out, is the boundary of the universe.
The Unified Field Theory counts down the Euclidean hits from five to one in categorically nailing the vast majority of this little thing I like to call cosmic pi. At this point in spacetime I would like to pay special tribute to my excellent wingman Albert Einstein (1879-1955).
The Uncertainty Principle contrasts Einstein with Heisenberg, relativity with quantum theory, behavioralism with existentialism, certainty with uncertainty and philosophy with science—finally arriving at the inescapable Platonic conclusion that the true philosopher is always striving after Being and will not rest with those multitudinous phenomena whose existence are appearance only.
The Unpardonable Sin charges all honourables and doctors in Canada with heresy, child abuse and the unpardonable sin that Christ spoke of—which is the deliberate refusal to follow the light when seen.
Singularity identifies the trigger of the looming paradigm shift from the three-dimensionally conscioused Everyman to the four-dimensionally conscioused Superman as the 1935 Schrödinger's Cat though problem—which proves that consciousness is real.
QED Baby presents a complementary view of reality—and argues that the synthesis of this complementary view with the everyday view is necessary for achieving global sustainability. QED is Latin for quod erat demonstrandum (ie. which was to be demonstrated) and is written at the bottom of a mathematical proof.
Archimedes (287-212 bc) was the profoundly practical Greek genius of mathematics and physics who foreran many modern scientific discoveries. He is ranked along with Gauss and Newton as one of the three greatest mathematicians of all time. The calculation of a sphere’s volume and the realization of Archimedes’ principle—ie. Any object immersed in a fluid is buoyed up by a force equal to the weight of the fluid displaced—count among his many greatest triumphs. It could even be argued that his claim—Give me one fixedpoint and I will move the earth—metaphorically represents the starting point for all of science. The need for a fixed starting point can also be found in ancient folklore—For want of a nail, the shoe was lost. For want of a shoe, the horse was lost. For want of a horse, the rider was lost. For want of a rider, the battle was lost. For want of a battle, the kingdom was lost.
Finding the Nail. The Greek Thales (624-546 bc) launched geometry as the very first mathematical discipline. Thales in fact made his monumental contribution to mathematics after having amassed a personal fortune by first forecasting bumper olive crops and then purchasing options on the usage of olive presses. The Greek Euclid (350-300 bc) carried on from Thales by developing Euclidean geometry as described by five simple axioms. Euclid also made immeasurable contributions to mathematics with his landmark thirteen-volume masterpiece Elements.
Finding the Shoe. The French mathematician René Descartes (1596-1650) wrote the brilliant Discours de la méthode as a philosophical examination of the scientific method. An appendix of the text presents the revolutionary idea of geometry as a form of algebra—ie. analytic geometry. After Descartes, the German Mozart-of-mathematics Carl Gauss (1777-1855) laid the foundation for non-Euclidean geometry by proving that additional geometrical systems exist in which only four of the five Euclidean axioms hold—and by arguing that there is no a priori reason for space not to be curved.
Finding the Horse. The Italian physicist and astronomer Galileo (1564-1642) laid down the fundamentals of the modern scientific method by developing a comprehensive, empirical approach to solving problems. He was sentenced to life imprisonment at the age of sixty-nine for supporting the Copernican view that the earth revolves around the sun—a view which had the effect of destroying the notion of the earth as a fixedpoint. Sir Isaac Newton (1643-1727) invented calculus, established the heterogeneity of light, and formulated the three laws of motion and the universal law of gravitation. Both Galileo and Newton asserted, as far as relativity was concerned, that space itself was the universal frame of reference within which the freewheeling of stars and galaxies could occur.
Finding the Rider. In 1881 two Americans Albert Michelson (1852-1931) and Edward Morley (1838-1923) performed a monumentally important experiment which established, beyond a doubt, that the speed of light is invariably fixed at 186,284 miles per second—regardless of relative motion. In 1904 the Dutch physicist Hendrik Lorentz (1853-1928) formulated a group of algebraic transformations relating to electricity. Mathematicians use transformations as tools for revealing fundamental underlying properties that remain invariant under transformation.
Winning the Battle. The Michelson-Morley experiment presented a problem in that, according to Newtonian physics, velocities are additive, thus contradicting the invariance of lightspeed. The young Albert Einstein (1879-1955) resolved the dilemma in 1905 with his special theory of relativity by revealing that space and time are variable, interrelated quantities. In paralleling Newtonian physics, Einstein theorized that the laws of nature are the same for all uniformly moving bodies. But unlike Newtonian physics, which only concerns itself with mechanical laws, special relativity also accounts for the behavior of light and other electromagnetic radiation. Einstein dismissed the separate notions of space and time by replacing them with the combined, fixed notion of spacetime. In other words, according to special relativity, space and time are actually manifestations of each other. Space becomes time and time becomes space at speeds approaching lightspeed in accordance with the transformations of Lorentz.
One Lazy Dog. At its inception, special relativity was little more than a set of algebraic equations that made only a modest impact. It was not until 1909 when Hermann Minkowski (1864-1909) presented a geometric interpretation of relativity—as characterized by the four-dimensional spacetime continuum—that the scientific community took notice. Ironically, Minkowski was also Einstein’s university professor and had described Einstein as a lazy dog who never bothered with mathematics at all—which makes sense given that Einstein sought elemental conceptual pictures first before considering mathematical complexities. Einstein eventually warmed up to the idea of geometrization, and presented general relativity in 1915 as a geometric representation of special relativity that incorporates the concepts of gravity and curved space. With special relativity, Einstein refurbished Newtonian physics in respect of uniformly moving bodies traveling along straight lines. General relativity then upgrades special relativity so as to account for bodies traveling at varying speeds along curved lines.
Losing the Kingdom in the Math. Einstein had become mathematically adept by the time the foundation of quantum theory was laid in 1925. But unlike relativity, which concerns itself with the very large, quantum theory is directed towards understanding the very small. In fact, the great revelation of quantum theory is that atomic phenomena are indeterminate—thus making it a statement of probability. But Einstein did not believe in cosmic risk, as evidenced by his claim that God does not play dice. And so in dismissing the notion of risk, Einstein actually overlooked the makings of a cosmic fixedpoint. He eventually strayed from his original conceptual approach and spent much of the last thirty years of his life withdrawn in the world of obscure mathematics and twisted geometries.
Fixedpoint. Harry Markowitz
developed portfolio theory as a way of constructing optimally balanced
portfolios that maximize reward for given levels of risk.
Markowitz forever linked reward with risk in the same way that
Einstein linked space with time in that both the expected outcome and the
attendant uncertainty of outcome are required to complete the picture.
Markowitz wrote a fourteen-page paper entitled Portfolio Selection
as a graduate student at the University of Chicago in 1952—and then shared
the Nobel Prize for economics with two others in 1990.
His original approach employs regression analysis to forecast, matrix
algebra to aggregate risk, and linear programming algorithms to then
determine optimal asset allocations. In
many ways the discoveries of Einstein and Markowitz parallel each other.
Both men were unknown mid-twenty year-olds who wrote brief, modest
papers with far reaching implications.
The main difference so far being that we have yet to realize the vast
untapped potential for portfolio theory.
Kill all the Accountants. While Galileo and Newton believed space itself to be the fixedpoint of the cosmos, most companies today subscribe notionally to the market as capitalism’s fixedpoint. Yet a closer look at the market reveals it to be mostly neurotic and chaotic—and anything but fixed. And so if companies genuinely wish to acquire a fixed, internal decisionmaking frame of reference, they must resolve to undertake the scientific work necessary to properly implement portfolio theory. While Einstein lost the holy grail of physics, unified field theory, in the math—companies today are losing the holy grail of capitalism, shareholder value, in the balance sheet. The great challenge now lies in learning to transform the entrenched accounting mindset into the new scientific management mindset.
Conclusion. Consider how the notion of connecting two personal computers with modems a few decades ago has managed to become the all powerful internet. Then consider how corporate officers and directors can begin rolling out scientific management by first nailing down scientific management conceptually in their minds—never forgetting that science is not a spectator sport. Scientific management is firstly an exercise in seeing the forest for the trees—and secondly an exercise in seeing the trees for the forest. Portfolio theory gives us the overall perspective of the forest, while scientific management tools like Monte Carlo simulation, intertemporal riskmodeling and advanced optimization algorithms have the potential, in the hands of scientists, to provide us with an accurate representation of the trees.