We are in the “dog days” of summer. The world is in turmoil. The U.S. presidential elections offer us a stark choice between a traditional establishment candidate and a populist alternative. Populism is on the rise in Europe, exhibited by the Brexit vote. Lone wolf terrorist attacks seem to occur with frightening regularity. China is threatening the U.S.-dominated maritime order of the past seven decades.
Perhaps most disconcerting is that there seems to be a steady dissonance of viewpoints. I often hear comments like, “how can a person think like that?” The internet, for all its power, has been creating virtual thought islands. Essentially, people can tailor their reading and information sources to fit their biases and rarely confront other viewpoints. And, when confronted with other viewpoints, people seem to be at a loss on how to hold a civil discussion on these differences or have the tools to understand positions that vary from their own.
When investors are looking for a hedge fund to invest their money with, they usually look at returns. Of course, the larger the positive return, the better, but what about during major market selloffs? It may be easy to discount a hedge fund's negative return when everyone else lost a lot of money. However, hedge Read More
Last spring, my youngest son took his first philosophy course. He was exposed to the classic thinkers in the Western canon, including Plato, Descartes, Kant, Nietzsche and others. We had long discussions about these thinkers, harkening me back to my Jesuit philosophical training of more than 30 years ago. Our talks forced me to revisit these philosophic issues with three decades of additional experiences. As I thought about these issues, I was absorbed by the relevance of these philosophic questions to our current economic, social, political and geopolitical conditions.
In this week’s report, we will take a detour from our usual analysis of specific global events to a broader analysis of knowledge. Part 1 of this report will offer a short course on the basics of knowledge, focusing on an examination of the three types of knowledge statements. We will then discuss the strengths and weaknesses of all three and how philosophers have tried to resolve the dilemmas that they posed. Next week, in Part II, we will discuss how one uses this information, concentrating on the idea that it is important to match appropriate ways of knowing to the areas we are examining.
These reports will be a bit more personal and academic than most, but given the divergence of opinion in the world now, I believe this analysis can be useful to investors approaching information and positions that differ from their own.
The Quest for Knowledge
There were thinkers and philosophers that predated Plato. 1 Perhaps the most famous was Heraclitus, who is best known for the quote, “One cannot step into the same river twice.” For Heraclitus, the world was in a constant state of flux and thus, nothing could be known with certainty.
This notion horrified Plato. If nothing could be known with certainty, then all knowledge is tentative. This opened the potential for statements to be manipulated for nefarious reasons. The Sophists of Plato’s time specialized in rhetoric and persuasive political argument; in Plato’s dialogues, they were usually portrayed as amoral opportunists. To counter the Sophists, Plato suggested that there were unchanging elements in the universe, called “forms,” which were ideal types that are the constant essences of all that our senses perceive. Knowing the ideal forms gave the user knowledge that was always true. In other words, Plato rejected mere sensory information as the basis of knowledge because it could change—the senses could deceive. His famous student, Aristotle, disagreed with this approach and argued that knowledge began with the senses. He proceeded to suggest that once an observation was considered true, logic should be employed to derive additional truths. These two figures set the contours of philosophical debate for most of the next two millennia. That debate is between the empiricists and the rationalists.
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