Platt Perspective on Business and Technology

Some thoughts concerning a general theory of business 8: interpretation and understandably meshing theory with the empirical reality that it seeks to predictably describe

Posted in blogs and marketing, reexamining the fundamentals by Timothy Platt on August 3, 2016

This is my eighth installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-7.)

I have been discussing the issues of discovery and invention in recent installments to this series, and how assumptions as to their relevance shape the structure and nature of general theories that they might be applied to as mechanisms for arriving at New. Then at the end of Part 7, I stated that I would turn here to consider the complex of issues that enter into interpretation in bodies of explanatory and predictive theory. My goal here in this posting is to at least start that phase of this overall discussion. And I begin that by noting that the whole issue of “discovery” versus “invention” is itself an example of how general theories can and do include interpretations: basic assumptions that might not be afforded the status of underlying axioms that a theory is constructed from, but that nevertheless significantly influence and shape it.

• The points of interpretation that I write of here, shape what types of questions and hypotheses might be asked when descriptively and predictively employing a general theory. They influence what questions would be considered meaningful and they shape how they would be asked.
• And they help shape what would constitute a valid and even validatable answer or resolution to those questions.

And as I noted at the end of Part 7 when adding a lead-in for this posting, this applies to basic scientific theory as much as it does to any other body of general theory; “one of the main reasons why relativity and quantum theory seem so incompatible is that their ways of understanding and interpreting underlying reality are so divergent from each other.” Even the most fundamental, experimentally validated physical theories can differ for their interpretations, and so thoroughly and fundamentally as to render them conceptually incompatible, preventing anything like an easy or straightforward unification of their experientially validated descriptive and predictive understandings.

My goal here is to discuss interpretation and its role in general theories and I will begin with physical theory, as I have in earlier phases of this overall discussion. And once again, I will do so because the bodies of theory that I refer to there are so thoroughly empirically validated. This means that while they might face questions of completeness and questions as to how they might be reconciled with each other, they do not as readily raise issues or challenges as to their individual internal consistencies or reliability. Then, and on the basis of that discussion and its points, I will consider general theories of business or at least key elements that would have to enter into such a body of theory, where differences of interpretation in them have proven striking.

I focus entirely, for the “scientific theory working example” half of this, on quantum theory and on its many competing interpretations. And I begin that with a general point of observation that I will be returning to in a business theory context too:

• The more intuitively obvious and understandable a theory and its basic details are, the less need there is and the less room there is for competing interpretations of it. The basic interpretation that does arise, and essentially by default in this situation, is that this body of theory is and will remain consistent with basic every day experience and its assumptions.
• Novelty leaves room for alternative interpretations: alternative assumptions and understandings in a theory’s formulation and use.
• And the counterintuitive, all but demands competing interpretations. That is true, if for no other reason than because people who develop and advance such a theory and those who employ it, seek to reshape its meaning and interpretation to be consistent with their own more everyday, intuitively knowable and predictable patterns. We all seek theories and interpretations that are in some fundamental sense consistent across the entirety of our overall experience. And we do this by discerning deeper underlying patterns and processes that unify where that is possible, or by interpreting apparent dissimilarities to reduce apparent conflicts where that is our best available option. And different people, starting from sometimes very divergent points of assumption and perspective can arrive at different interpretations that best mesh with what they have brought to the table for this. That certainly applies when a new general theory is initially coming together.

Uncertainty and a lack of readily, commonly understood clarity lead to differences. And this leads me directly to quantum theory: one of the most experimentally validated bodies of general physical theory that has ever been developed – and a body of theory that for all of that is perhaps best known and even to the completely unscientific in training, as being counterintuitive.

Quantum mechanics: the body of theory that describes position and motion for the microscopically small, that for their scale do not behave in accordance with Newtonian or Relativistic physics, is rife with competing interpretations. For anyone interested in reading about them in brief summary, I recommend this Wikipedia piece: Interpretations of Quantum Mechanics. I will simply note here, in even briefer elaboration of this story, that one such body of interpretation that has held significant sway for a number of years after reaching something of a consensus acceptance among physicists is the so-called Copenhagen interpretation. It has recently been significantly challenged by a newer quantum decoherence interpretation that a growing number of scientists have come to see as more understandably addressing certain recent quantum mechanical observations. And because of that, this interpretive approach has been gaining ground – and acceptance now. And to round out this set, the so-called many-worlds interpretation has become increasingly important too and particularly for proponents of string theory. Any experimental evidence that would support string theory as a unifying physical theory would of necessity place limits on what type of quantum theory interpretation can be assumed. String theory validation would probably at the very least suggest something like a variation on the many-worlds interpretation as a best approach to understanding this body of theory.

These are just names as presented here, but each of these three interpretations represents a significantly detailed approach to understanding a very large and exhaustively tested body of theory and its descriptive and predictive findings. And they all, and I add a variety of other quantum theory interpretations that have been proposed, differ from each other and from all of their competitors for at least a few crucial defining details. The counterintuitive nature of quantum theory, where nature behaves so very differently on the small scale than it does at the scale of our everyday experience has made this diversity inevitable. New types of observation and of explanatory model that would bridge the gaps between relativistic and quantum domains, and among other things fully include gravity in all of this, would winnow out a winner from this actively promoted and expanded interpretation diversity.

And with that in place as a source of comparison, I turn to business theory, and the issues of supply side and demand side economics. And with that, I will go full circle and at least in part return this discussion in its Part 8 to this series’ beginning. And I also cite here, a concurrently running series which I began by explicitly discussing supply side and demand side economics, their underlying assumptions and their use and misuse (see Open Markets, Captive Markets and the Assumptions of Supply and Demand Dynamics, at Macroeconomics and Business 2, postings 230 and following.)

I begin this portion of this posting by noting a point that I am sure is already obvious to anyone who has read my first postings to that series. I do not accept a strictly supply side economic interpretation, and I see the misuse of supply side economic thinking for political purposes to have been disastrous when pursued. But my goal here is not to judge either supply side or demand side approaches to economic theory, or hybrids of them that seek to take a more balanced and inclusive approach. My goal here is to discuss how supply and demand side approaches have arisen as ideological totems because of the way they are grounded in fundamentally different interpretations of economic reality, and with that shaping any overarching economic theory that might be developed. And any overarching theory of business would of necessity include within it a supporting and conceptually complementary macroeconomic and I add microeconomic theory too.

I am going to end this posting by offering what I would propose as a brief set of points of conjecture, and with a goal of provoking thought from them if nothing else.

• One of the fundamental and even pivotal points at which supply side and demand side economic theory differ in their basic interpretation-level foundations, is in how they identify and partition off units of cause and effect, in the cyclical processes that in fact constitute most all economic reality.
• And ultimately they come to disagreement there in their interpretations and understandings as to what steps in these cyclical processes drive those cycles, with supply-siders and certainly pure supply-siders seeing production and supply as fundamentally driving the marketplace, and with pure demand-siders seeing the marketplace and consumer purchasing decisions driving all.
• Both leave out fundamental considerations there. And to cite one possible example, supply side approaches are most viable when they are pursued in a context of paucity of choice and where consumers cannot effectively decide for themselves among competing alternatives and must buy what the suppliers offer. Diversity of choice and richness of supply shift the power there to the consumer choice, demand side. And ultimately both theories, at least when pushed to cartoon extremes (as is often done politically), are flawed and incomplete.

Do I see gaps in this line of reasoning? Yes, of course. But I offer it as a thought piece for here and now.

I am going to continue this discussion in a next series installment where I will begin to flesh out some of the issues and components that I see, at least in outline as fitting into any effective overall theory of business. Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems.

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