Sunday, December 18, 2011

Current research

For a follow-up of my discussion with Elie Ayache, about "The Blank Swan" and its consequences, those interested can look up this forum's thread, from page 22.
This is the focus of my current researches.

Sunday, May 22, 2011

The Art of Speculation

The objective of this post is to establish speculation as an artistic activity. This obviously does not mean that speculation can only be practiced as an art; just as one can paint, sculpt or write with no artistic ambition, it is obvious that one can speculate with no artistic concern whatsoever. My point is rather to say that it is possible to develop an artistic mastery in speculating just as it is possible to develop one in the other arts. In particular, I wish to investigate how such a mastery is conducive to successful trading.
In order to do that, I shall first consider some traditional features of art and build some analogies with speculation. That will hopefully open new perspectives to thinking and practicing speculation


Let me start by a quote from Baudelaire’s Salon of 1859:

“Car il est évident que les rhétoriques et les prosodies ne sont pas des tyrannies inventées arbitrairement, mais une collection de règles réclamées par l’organisation même de l’être spirituel. Et jamais les prosodies et les rhétoriques n’ont empêché l’originalité de se produire distinctement. Le contraire, à savoir qu’elles ont aidé l’éclosion de l’originalité, serait infiniment plus vrai. » [ Salon de 1859- Le gouvernement de l’imagination]

Which, in english, gives :

“Since it is clear that rhethorics and prosodies are not arbitrarily invented tyrannies but a collection of rules required by the very organization of the spiritual being. And never did the prosodies and rhetorics prevent originality to get produced distinctly. On the contrary, to say that they nurtured the occurrence of originality would be infinitely truer.”

Such a remark was inspirational for Raymond Queneau and Francois Le Lyonnais when they founded the Oulipo in 1960. This movement may be superficially seen as a reaction against the trend of discarding traditional rules such as versification in poetry, figuration in painting or common practices (tonality, contrapuntal forms,…) in music. In this sense, it would closely relate to Baudelaire’s point in reasserting such rules on the ground that they coincide with “the very organization of the spiritual being”. Such is not the goal of the Oulipo however, it is, in fact, more in line with the questioning of the traditional rules and their replacement or improvement, as can be seen in the efforts of Schoenberg in music or in those of Kandinsky in painting. In my understanding, the Oulipo’s project is, first of all, to assert the necessity of constraints, and secondly, to reflect upon the nature of these constraints.
According to this conception, Art is not to be freed from arbitrary constraints and led to develop from a pure constraint-free intuition as some may have thought wrongly in the 20th century (with experiments such as some kinds of stream-of-consciousness, automatic writing, …); on the contrary, Art needs constraints, for intuition and imagination to be productive. The fundamental problem then becomes one of knowing which constraints are relevant, or even whether this question is meaningful at all.
In practice, Oulipo’s artists have often been led astray from their original goals by surrealistic believes, but these early objectives do retain, in my view, all their relevance. The presence of mathematicians, such as Francois Le Lyonnais and Claude Berge, among the founders, tends to credit the central concern about structures that underlies the whole enterprise. Many Oulipo’s constraints came therefore to be inspired directly from mathematics. The Oulipo’s work may then seem to be acquainted with what TA is doing in relation with speculation, provided that speculation is indeed an art.


When considering art, we routinely turn our attention to beauty, as art is widely defined as the making of beautiful things. However, there is no beauty to be found in speculation, the speculator does mot produce any masterpiece that can be looked at and admired in an aesthetic perspective, the only judge of the value of a speculator’s action is the profit or the loss he made, and this judgment is as unaesthetic as can be since it solely is based on immediate usefulness. Art, from the romantic period onwards, is not considered as a mean for a material gain, or it becomes devoid of content and is abased to mere propaganda. Art is believed to be an end to itself (which was translated by Duchamp as “Art for art’s sake”), in that the search for beauty, is not the search of an external object in order to acquire or even unveil it in a mundane sense, it is more about creating beauty.
Speculation cannot be said to create anything beautiful, it merely is useful for the speculator and the system which it brings to existence: the market. However, art may also be said to be useful, just not directly so, I admit that art is an end to itself (but I contend that speculation is also an end to itself) but its creations have a purpose and even a cognitive content, the beauty is enlightening, it says some truth, albeit not one as formed and determinate as is normally considered to be a true statement.
I have written earlier that the market is evolving faster than mundane reality, and it is in this difference of speed that we must look for the reason of the absence of beauty in speculation. I believe that beauty simply has not the time to form in the market place, speculation can only display its utility, its efficiency, the enlightenment of the speculative art is at best confined to the mind of the speculator, and even there, it is only present for a fraction of a second, and it leaves no trace whatsoever. The closest to the art of the speculator is the performance of an amnesic improvisator with no public.
In that, I think I can say that speculation is an art, at least that it can be considered as an art in the way a speculator wishes to approach this activity, the speculator can, and I believe must, be an artist, even though he will never be recognized as one by any public.


Baudelaire, again in the “Salon de 1859”, wrote this at the end of section 8 “Le Paysage”:

“I would rather return to the dioramas, whose brutal and enormous magic has the power to impose on me a useful illusion. I would rather go to the theater and feast my eyes on the scenery, in which I find my dearest dreams artistically expressed and tragically concentrated. These things, because they are false, are infinitely closer to the truth.”
[translation from “The Arcades Project”, p.536 (Q4a,4), Walter Benjamin, First Harvard University Press, 2003]

Similarly to the dioramas, it is because TA is false that it may bring us closer to the truth of speculating, which is itself a production of truth (and that is similar to the status of truth in art as well). Many Technical Analysts are looking for low-lagging tools, conceiving no-lagging tools as the ideal they should aim at, but this is a mistake, the ideal TA tool is not one with no lag at all, since if such a tool were existing, there would be no market in the first place, the ideal TA tool is one that has a lag adapted to the given speculator and particularly to his relation to the conditions of the market (its speed). The TA tools therefore are not there to tell some truth about the market but rather, like the dioramas for Baudelaire, to “artistically express and tragically concentrate” the reality of a relationship between the speculator and the market conditions (the speculator’s dream), which, when witnessed by the speculator will allow him to be attuned to the market.
The point of the Oulipo’s constraints is exactly that as well, it is to pull the mind of the artist from the unconstrained immediacy of nothingness, from the passivity of contemplation, in order to force him to reconquer this immediacy by displaying his creative power to overcome the constraints. Like an Oulipo’s constraint incites/challenges the artist to create in order to overcome it, TA incites/challenges the speculator to speculate also in order to be overcome.
That view, in some way, gives credit to the contrarian philosophy, a speculator speculates against TA. Speculation to qualify as the activity I expose here, must always be done at variance with the market and with what the market is saying; speculation is the counter-proof of TA, and it is through this double-negation of the market (TA negating the market and speculation negating TA), that the speculator becomes the market (see The Logic of Place: not-not-a = A).

Monday, April 18, 2011

The possibility of cognition

The most fundamental question raised by “The Blank Swan” may be that of the level of cognition of the market an individual can acquire, and the usefulness of such a cognition if it is, at all, possible. Such a matter is obviously paramount to the validity of Technical Analysis. The untotalization of possibilities Elie Ayache shows with regard to financial markets, seems to invalidate most of the current attempts at thinking this market in explicit terms, as most, if not all, of these attempts are ultimately based on probabilities computation (and therefore on unwarranted, even false, assumptions about the totalization of possible states), and this is indeed the case for Technical Analysis, though I believe that the fractal analysis I have endeavored to develop in this blog provides for an untotalization by means of an implicit multifractal model, where Hurst exponent keeps being recomputed (I however start thinking this model still falls short of being efficient at a theoretical point of view). In this post, I therefore intend to examine, from the standpoint of such a critic of probability theory, whether some kind of cognition is still possible as to what the market is going to be.


The best way to read a book before it is written is to write it, and that is, to some extent, what Elie Ayache is proposing us to do in The turning. There he shows how the market can be dealt with, not by predicting it by computing some probabilities artificially attached to possible states of the world, but rather by writing contingency, i.e. writing contingent claims. However, the book of the market is not written by any single individual (or even any single intentional entity), as is clearly said on page 43:

“The place of the contingent claim is nobody’s place in particular. It falls to no subject to assign a price to the contingent claim or to reflect it in his mind.”

Writing a contingent claim, therefore, does not quite amount to write the book of the market. It does amount, however, to protect one’s financial interest from the uncertainty of the market, from its contingency. In this sense of one’s direct financial interest, as being under the threat of contingency, writing of contingent claims indeed appears as the means to “mediate contingency”. The question which interests me, at the level of Technical Analysis, is whether we can mediate contingency beyond this direct financial interest, and still do that in a speculative manner (in the philosophical sense of the term “speculative”), in other terms, can we speculate (financially) speculatively?
As to read the book of the market before it is written, it obviously is not possible, as such a thing would clearly come down to write it, and as such, it would make it redundant, and therefore destroy it. If the book of the market was to be written by one subject (or if its writing could be seen as being the work of one subject), it would immediately cease to be a market, as a market can only be a place of exchange, necessarily supposing the presence of at least two independent subjects.
Nonetheless, speculative knowledge is not perfect knowledge of the phenomenon under inquiry, on the contrary, speculative knowledge is precisely imperfect, partial, fragmentary, as such a knowledge is rooted in the necessity of contingency, which implies the knowledge that perfect knowledge is illusory (not in an epistemological sense but in an ontological one).
As a consequence, we will not be able to read the book of the market before it is written, we will not be able to predict it in a deterministic way, nor will we be able to predict it in a probabilistic way, what we could endeavor to know however is the language of the market, and from knowing its grammar, we may be able to infer something about the market and its dynamics, just like a knowledge of a natural language allows us to expect a verb after a subject (or the reverse, depending on the language we consider). Such a knowledge may not be enough to diminish the absolute contingency of the market, but it should be sufficient to provide a basis for a speculative speculation, or, as Nishida calls it, an action-like intuition.


Robert Wilkinson presents the concept of Action-like Intuition, that he calls Action-Intuition, in the following manner:

“We must experience the world in order to act on it, and we learn to perceive the world better by acting on it. Just as he [Nishida] insists that practical reason is more profound than the theoretical, so he insists that our natural mode of being-in-the-world is not contemplative but active, an aspect of the constant mutual interaction between individual and the world. The idea that experience is a passive reflection of the world he regards as entirely false: ‘intuition, separated from action, is either merely an abstract idea, or mere illusion’(Intelligibility and the Philosophy of Consciousness, p.208). Action-intuition, like any other form of action in Nishida’s late thought, is a mutual relation of forming and being-formed: ‘Action-intuition means our forming of objects, while we are formed by the objects. Action-intuition means the unity of the opposites of seeing and acting.’(ibid, p.191)
[…], the philosophy of pure experience leads Nishida to take a view of concept formation diametrically opposed to that to be found, for example, in the classic empiricists, according to whom concepts are arrived at by some process of abstraction based on noting common elements in numerically disctinct perceptions. Concepts are not formed in this way in Nishida’s view. We form concepts in the course of action-intuition: ‘Conceiving something through action-intuition means: seeing it through formation, comprehending it through poiesis.’(ibid, p.210)
The basic thesis of the philosophy of pure experience is that the world is a construction from such pure experience, and manifestly such construction has to have some method: action-intuition is the basic formative operation by means of which this construction is carried out. […]. Cognition has to be understood as a form of dynamic, reciprocal expression”

[Nishida and Western Philosophy, Robert Wilkinson(2009),p.120-121]

While Nishida obviously considers these remarks to apply to the whole of reality, and while such a stance may be argued against, I believe there is not much argument as to the relevance of his remarks when it comes to the market. Cognition, in this domain, can only “be understood as a form of dynamic, reciprocal expression”, and concepts formation, according to Nishida, can only occur within a poietic attitude, that is an active one, and not a detached, analytical one. This dimension is well-established by Elie Ayache in “The Blank Swan” with regards to the writing of contingent claims, and particularly with the logic of inverting dynamic replication with the view of implying volatility. When it comes to Technical Analysis, what Nishida is saying, also has an interesting consequence, in that it tells us, that, in order to grasp the market, we must grasp the grasping itself. We therefore need a Technical Analysis tool that is essentially self-referential, there is however a difficulty in understanding this sentence, that lies in the difference of velocity between the processes in historical reality, which are the ones Nishida is treating, and the processes in the market which are the ones interesting us.
The remarkable characteristic of the market is its proximity to the virtual (wherein speed is infinite), a consequence of this proximity is its very high speed, and its emancipation from causality. This high speed also accounts for the absence of a subject-object distinction because such a duality does not have the time to accrete. We are therefore confined, within the market, in a relatively unfriendly environment when it comes to scientific investigation (even a probabilistic one). In this context, self-reference itself becomes an ill-defined notion, since we don’t even know on which entity to apply such a self-reference. Of course, we may say that the market is self-referential, in some sense, but since we don’t know what the market is, since we can’t reduce it to a subject or an object, we have no direct way to comprehend such a self-referentiality in order to translate it in a cognition (be it a partial one) of how the market may evolve. This ambiguity is enough to invalidate a TA tool that would simply be self-referential since such a tool could only be efficient if every market-actors were to use this specific tool, which is obviously impossible. What we need is a tool that is self-referential in the way the market (whatever it is) is self-referential, we therefore need a TA tool that accounts for the very grammar the market is writing itself in.


What I call the grammar of the market, extending the analogy made by Elie Ayache between the market and a book, asks for a little precision here. As said above, the velocity of the virtual is infinite (because the virtual is not situated in time), and the market inherits some of this velocity more directly than history, as such it appears much faster than history and mundane life (this high speed also contaminates real history and accelerates it in some way, this is particularly visible in recent times). Natural languages also happens in history and as such, their grammar seems relatively constant to us, nonetheless, natural languages change, and so do their grammar, we must therefore expect the grammar of the market to change faster than the pace we are accustomed to with natural grammar.
In order to elucidate what we can know of this grammar (that can only amounts to some structure of it, and therefore to a meta-grammar), we must first look at the market globally and that leads us to recognize that it has fractal features. This, in itself, is already a very interesting finding, one from which I have tried to develop some TA tools , but many unknowns remain, such as the adequate period for calculation, the real meaning of fractal dimension, the scope of the probabilistic model (Fractional Brownian Motion) used,…,and the mathematics that sprang from the fractal theory seem relatively limited to clarify these unknowns. The holistic approach of Fractal Theory only provides a very global view of the price dynamics, and Mandelbrot himself even excluded its possible application either to investing or to trading; in his view, Fractal Theory only served to invalidate probabilistic and statistical inference from the market.
However, to obtain a model that would provide a higher interest in building TA tools, we need to start considering a reductionist approach at some level. Again here, I must insist, it would be absurd to look forward obtaining a precise account of the working of the market, when I am talking of reductionism, it must be clear that I mean a very partial one, that will inevitably fall short of elucidating the processes of the market. Reductionism may indeed not be the right word, what I am intending to look at, is something in between holism and reductionism. Despite such reserves, I believe there may be something valuable to find and to explicit about the market, and that this something may lead to a deeper understanding of the whole reality.


I said earlier that the fundamental properties I wish to look at are to be found at a topological level. One way to study such properties is to find a space homeomorphic to the one we wish to investigate, and that is simpler to manipulate.
When it comes to self-similar fractals, which are typically build by IFS (Iterated Function Systems), it is known that we can find a map ψ so as to assert the homeomorphism of some self-similar fractals with a space of p-adic integers:

From this map, we can obtain the fractal dimension of the constructed self-similar set:

For b=3 and p=2, we get:

Where this homeomorphism is actually mapping the ring of 2-adic integers onto the Cantor Set
Alain M. Robert provides a more detailed discussion of these maps in "A course in p-adic Analysis"(pp.8-17)

Of course the fractals we wish to investigate in Finance are not as simple as those built by IFS, in particular, the self-similarity is not strictly true. Nonetheless, I think such a direction may lead to some interesting results. The ideal objective would be to establish a general procedure to find a map between a set of arbitrary fractal dimension and a subset of the space of p-adic numbers. I believe such a question is still an open one, and I am not sure of the advancement of research in this area (or even whether there are any), as I am just starting to look at this question.
The fields of p-adic numbers also present another interesting feature when it comes to account for the process of decision-making at an atomic level. The market is clearly the product of multiple decision-making processes, and as such they are all, individually, rooted in a valuation of reality. While we are well-acquainted with the classical absolute value that leads to the intuitive definition of distance (metric), p-adic fields are equipped with an ultrametric that satisfies the strong triangle inequality.
Whereas a metric satisfies the following triangle inequality:

An ultrametric satisfies the following:

Such a feature leads to rather counter-intuitive results, when we try to visualize them in geometric terms, such as the following formula, known as "The strongest wins":

However, if we think in terms of decision making, we will indeed tend to ignore menial parameters to base our decision on the one parameter we consider as the most relevant. In that, we seem to be closer to an “ultrametric mode” of thinking.

These considerations are still far from exploitable intuitions, and I myself am not very sure whether they will lead anywhere. Once again, I am only in the process of learning about this problematic, and anybody is welcome to criticize or comment, either positively or negatively, on such ideas.

Wednesday, March 16, 2011

Situation in Japan

I usually reside in Japan, in Hino, which is located in the west of Tokyo. However, given the evolution of the situation in the Fukushima nuclear Plant, My wife and I have decided to fly out of Japan yesterday, and we are now in Singapore, in my wife's family.
It seems to me that the government and TEPCO have very little control over the evolution of the situation in the reactors at Fukushima, and therefore the risk of a major radioactive leak is very real. For the last few days, the public has been given contradictory information, often after the facts, and with very few details. The reality of the risk and the seeming confusion of the authorities are what made us leaving Japan for a period we hope to be as short as possible. The pressure from our overseas family and friends also became very strong with every new problem at the nuclear plants.

Anyway, I advise all the people who currently reside in Tokyo area to consider leaving it for a while, there are several options: Living the country for those who have places to stay outside of Japan, move towards the south, the Kansai region or even Hiroshima area, or simply move towards the mountains, in the narrowest possible valleys where a radioactivity cloud is the less likely to find its way through. For the coming two days, Tokyo seems safe from contamination because of the wind direction, it may be the best time to move out. Once the cloud will be there, the only option will be to stay at home as hermetically closed as possible.

All our thoughts are with the Japanese people, and we do hope we will be back in Japan in a few days when the situation in the nuclear plants will be under control.

Wednesday, March 9, 2011

The Logic of Place

In this post, I will attempt to present succinctly the Logic of Place as created and understood by Nishida Kitaro, and then to draw some of its implications.


Nishida’s Logic of Basho closely relates to his writing style and therefore to the Japanese language itself, as is shown by Jacynthe Tremblay in this article ([1]).
From there, we may at once remark that an important feature of this logic is its encompassing nature: a higher category (more universal) that is encompassing of lower one (more particular) is said to be its basho. This is illustrated, at the epistemological level, by the following:

“In the judgment “red is a color,” the copula (である) means at the objective level that the particular is located in the universal and that the latter becomes the basho of the former”[1], p.257

To the point that basho becomes embedded into each other:

“The fact that in the strict sense, the basho is located in a basho means simply the consciousness.”[1],p.262, note 6

This embedding-into-each-others may even be an embedding-in-itself, in the case of self-awareness:

“Self-awareness means that the self sees itself in itself. Seeing without a seer means that the “self as noesis” becomes the “self as basho,” that is to say, the basho itself.”[1],p.268

It would be a mistake however to understand the basho in terms of Platonician forms, as is clearly stated in note 12:

“form and content are given simultaneously”[1],p.262, note 12

The idea of simultaneity is particularly important here, it means that the basho and its content condition each other in a non-causal manner, which relates to the Buddhist concept of dependent origination.
In fact, the logic of basho is a formalization of the classic Buddhist logic that is found in Nagarjuna and his followers, an attempt to overcome its apparent contradictory features such as the one expressed here in another article by Jacynthe Tremblay ([2])(click on the PDF link on the left column to access the full article):

“La logique paradoxale de Nishida présente le néant absolu comme la matrice logique de la détermination mutuelle des couples opposés. Il permet la néantisation d'un terme en auto-identité pour qu'apparaisse son contraire, et vice versa. Comprise à partir du point de vue du néant absolu, l'auto-identité absolument contradictoire de Nishida n'est rien d'autre que la reprise philosophique rigoureuse de la logique bouddhiste qui énonce que A=A; A=non-A; donc A=A. Le terme «auto-identité» (jiko dôitsu) correspond à «A=A»; les mots «absolument contradictoire» (zettai mujun teki) correspondent à «A=non-A» (ou A n'est pas A mais devient B ), c'est-à-dire à la néantisation de A par l'intermédiaire du néant absolu.”[2],p.70

Which, in english, roughly gives:

“The paradoxical logic of Nishida presents absolute nothingness as the logical matrix of the reciprocal determination of opposite couples. It allows the nihilation of one term into self-identity for its opposite to appear, the absolutely contradictory self-identity of Nishida is nothing more than the philosophical and rigorous translation of the Buddhist logic that states: A=A; A=not-A; therefore A=A. The term «self-identity» (jiko dôitsu) relates to «A=A»; the words «absolutely contradictory» (zettai mujun teki) relate to «A=not-A» (where A is not A but becomes B ), that is, the nihilation of A by means of absolute nothingness.”

I don’t totally agree with the above remark, it is not the “the absolutely contradictory self-identity” that is “the philosophical and rigorous translation of the Buddhist logic”, but the whole idea of a basho logic, and it is where we can clearly see the difference between this logic and the classic circular western logic. A bit earlier, Jacynthe Tremblay writes the following:

“Elle n'est pas basée simplement sur une négation, mais sur une négation de la négation, sur une négation absolue qui n'est rien d'autre qu'une affirmation absolue.”[2],p.68

“It[Nagarjuna’s Way of the Middle] is not simply based on a negation, but on a negation of a negation, on an absolute negation that is nothing else than an absolute affirmation.”

I think it would be a mistake to interpret this last sentence as being equivalent to the western logic proposition: not-not-A=A.
What Nagarjuna says here and what Nishida tries to clarify with his logic of basho is that A, via this process of double-negation is altering itself, it is actually becoming its own basho by overcoming the duality that conditions its very existence.
If now, we denote ‘a’ an entity and ‘A’ the basho within which this entity is located, we should then write: not-not-a=A
And possibly: A=not-A if A is the basho of absolute nothingness, that obviously leads to the constitution of the self-aware subject as an “absolutely contradictory self-identity”.

A last point in this short presentation of Nishida’s logic is to notice its acquaintance with some of the points Meillassoux is making about the law of non-contradiction and the necessity of contingency. The logic of basho is ultimately a logic of becoming, its affirmation of absolute contradiction is really one that is meant to refine the eliminative Hegelian logic as is correctly pointed out by Robert E. Carter ([2],pp69-70) in order to preserve intact the dual tension between contradicting poles; such a move was also made, at about the same time, by Mao in his interpretation of Marx, he was then inspired, maybe subconsciously, by Chinese classical philosophy.
When Meillassoux asserts the law of non-contradiction as a corollary to the necessity of contingency, he is stating that “becoming” is only possible as the result of a tension between contradicting poles, as such he wrote:

“Affirmer qu’un existant peut ne plus exister, affirmer que cette possibilité, de surcroît, est quant à elle une nécessité ontologique, c’est aussi bien affirmer que l’existence en général de l’existant, au même titre que l’inexistence en général de l’inexistant sont les deux pôles indestructibles par lesquels la destructibilité de toute chose peut être pensée.”[MEI06], p.102

“To affirm that an existent can stop existing, to affirm that such a possibility is furthermore an ontological necessity, that is also to affirm that the existence in general of the existent, as well as the inexistence in general of the inexistent are the two indestructible poles by which the destructibility of all things may be thought.”


In the note 28 of the second article, Jacynthe Tremblay writes the following:

« La relation je-tu (watashi to nanji) de Nishida se rapproche beaucoup de la relation Îch-Du (ware to nanji) de Martin Buber. Nishida est en effet entré en contact avec la pensée de Buber sur cette question par l'intermédiaire de la théologie dialectique de Gogarten, entre autres. »[2], p,73, note 28

“The relation I-thou (watashi to nanji) from Nishida has a strong acquaintance with the relation Îch-Du (ware to nanji) from Martin Buber. Nishida has indeed had contact with Buber’s thought on that question by means of the dialectical theology of Gorgarten, among others.”

This is correct to an extent, however, a better comparison would have been, in my view, with Levinas thought.
Whereas Buber insists on “a mutuality of relation that will eventually elide the difference between the I and thou”([3]), Levinas seems keener to “preserve the "reality of the difference between the `I' and `thou'"”([3]). As such, Levinas is more in tune with the spirit of nishida’s logic where nihilation is never to be taken as a cancellation or an overcoming of the difference, but as a keeping intact of the tension of relation that founds the subject as an “absolutely contradictory self-identity”( 絶 対 矛 盾 的 自 己 同 一 : the aggregative nature of Japanese language allows to reflect the dynamics at play, which would be destroyed by a reconciliation of opposites).
Buber, therefore, does remain into an Hegelian famework (via Feuerbach), and by insisting on reciprocity, he precludes the field, the basho, within which the dynamics of becoming is to take place.
However, Levinas significantly deviates from Nishida when he introduces a third party in the relation between I and thou, and this third party is God whose being-in-the world is the Illeity:

“Illeity lies outside the "thou" and the thematization of objects. A neologism formed with il (he) or ille, it indicates a way of concerning me without entering into conjunction with me. To be sure, we have to indicate the element in which this concerning occurs.”[3]

At first sight, “Illeity” may seem a concept equivalent to Nishida’s basho, if, we, for a minute, overlook the usage of the word “God” within the context of Judaism, we may assume that, indeed, “Illeity” just provides a ground, a location for the relation to take place, especially in view of the following remark:

“God is the absent condition of the encounter with the other.”[3]

There is however a fundamental difference between Levinas’ Illeity and Nishida’s basho, that actually reflects the difference between the western monotheistic view of reality and the eastern atheistic view of it. The absence of God, that structures its illeity is not the absolute nothingness of the Nishida’s ultimate basho. Whereas the former posits a totalized world where God (even as the “Absent”) in its illeity appears as the fabric of relationality, by which “an order is signified to me”([3], note 40), the latter posits the untotalizable emptiness of absolute nothingness.
Thereby, positing such a fabric is for Levinas to posit an existing and eternal connectedness between I and thou, on the other hand, Nishida clearly affirms an impassable chasm between I and thou, a discontinuity that cannot be amended:

“Le lieu où le je et le tu se situent et qui entraîne l'auto-négation de chacun d'entre eux, c'est-à-dire le basho du néant absolu, est l'intermédiaire où s'unit ce qui ne s'unit absolument pas, l'intermédiaire où le caractère absolu de chaque élément et l'aspect d'absolue confrontation s'unissent dynamiquement. Pareille négation ouvre dans le basho du néant absolu un intervalle insondable qui est la condition même de la subjectivité (shutaisei) du je et du tu. C'est là une manière de se joindre en se coupant, c'est-à-dire en ne se touchant pas directement. Cela s'associe directement au fait que le soi est le soi sans être le soi, c'est-à-dire comporte une interruption en lui-même. Nishida mentionne que « le je est le je par le fait de reconnaître la personnalité du tu, et le tu est le tu par le fait de reconnaître la personnalité du je. Ce qui fait du tu le tu est le je, et ce qui fait du je le je est le tu. Le je et le tu étant une discontinuité absolue, le je détermine le tu et le tu détermine le je.»”[2]p.74

“The place where the I and the thou are located and which triggers the self-negation of each of them, that is, the basho of absolute nothingness, is the intermediary where is united what is absolutely not united, the intermediary where the absolute character of each element and the aspect of absolute confrontation get unified dynamically. Such a negation opens up in the absolute nothingness an inscrutable interval that is the very condition of subjectivity (shutaisei) of the I and the thou. This is a way to get united while being cut off, that is without being in a direct contact of each others. That is directly linked to the fact that oneself is oneself without being oneself, that there is a gap within oneself. Nishida mentions that « the I is the I by the fact of recognizing the personality of the thou, and the thou is the thou by the fact of recognizing the personality of the I. That which makes the thou the thou is the I, and that which makes the I the I is the thou. The I and the thou being an absolute discontinuity, the I determines the thou, and thou determines the I.»”

In conclusion, whereas Levinas’ Illeity and Nishida’s basho do seem to fulfill a similar formal role in the constitution of relationality, Levinas’ Illeity does define a continuum, an ether within which the meeting is meant to take place and to successfully be the foundation of ethics, on the other hand, Nishida’s basho of absolute nothingness defines an absolute disconnectness, a discontinuum, an empty place within which the meeting can never settled in anything but a tense and endless dynamics.
Not that Nishida’s view, or the way I understand it, cannot be used to reveal an ethics, but not as directly as the way Levinas is proposing, and not either as Watsuji does propose ([2],pp.74-79); I shall not, however, discuss this ethical dimension here.


On page 442 of [EA10], Ayache writes :

“Matter is said to determine the geometry of space, even to preside over the genesis of space, in Einstein’s general theory of relativity. Now what I am saying is that contingency (the only true and ‘original’ matter there really is in a materialistic ontology like Meillassoux’s) determines place.”

As we have indeed seen above, the logic of basho is really a logic of becoming, and. as such, it is easy to see that the basho of absolute nothingness is corollary to the necessity of contingency. It can also be noticed that price is the result of a meeting of offer and demand, and this meeting takes place in a market which is otherwise empty.

It must then be clear that, if we are to follow Nishida’s logic of basho and apply it to the dynamics of price, this dynamics is infinite, discontinuous and untotalizable. Nothing new in there really, the discontinuity of price time-series is an obvious thing, even though continuity is often preferred in terms of modelization, for the sake of simplicity in getting mathematical results. The infinity goes without saying, and the untotalizability is already well-argued for in [EA10].
However, what the comparison between Nishida and Levinas is telling us is that disconnectedness (I will stick to this word, from now on, as, I believe, it is more precise than discontinuity, to justify this choice would however take me too far here) is due, not to the process of price determination, but to the basho; in other terms, the disconnectedness of price is a topological property of the market-place and not a feature of price time-series.
This is a very important result since it invalidates the distinction between discrete and continuous models, as such models only address the price process and do not account for the topology of the market place, which is properly the determining factor in this regard.

Once again, such a conclusion is only valid insofar that my understanding of Nishida’s point is valuable (i.e. productive), anyway, this is the direction of my reflection until I know better.

[1]: Nishida Kitarō’s Language and Structure of Thought in the “Logic of Basho” - Jacynthe Tremblay
[2]: Néantisation et relationalité chez NISHIDA Kitarô et WATSUJI Tetsurô - Jacynthe Tremblay(click on the PDF link on the left column to access the full article)
[3]: Levinas and Buber:Transcendence and Society - Damien Casey

Thursday, February 17, 2011

Guilt and Shame, and their necessities

Shame and guilt are very well studied concepts, and it is very well known that they are making up (along other feelings) the very core of social psyche. It is also well-established that some societies are giving priority to one over the other in their structures. As such, Japan is widely believed to be the archetype of a shame society, in that it is contrasted with the occidental civilization (Judeo-Christian), which, in turn, is taken as the archetype of a guilt society. This approach is, for instance, the one proposed by Takeo Doi, in his seminal work about Japanese psychology: 甘えの構造 (Amae no kōzō, The anatomy of dependence).
Obviously, nobody is seriously asserting that shame is unknown in the West or guilt is unknown in Japan (or in other Asian countries). It is clear that any non-pathological individual experiences, to various degrees, some amount of shame and guilt, what is interesting is to consider which feeling comes to dominate within the psychological structure of a given society, and when one dominates, whether this domination entails consequences in the intellectual outlook of this society, for example.
It is to such consequences that Elie Ayache seems to allude when he wrote on page 202 of “The Blank Swan”:

“Necessity is a later, almost guilty, stage; it is a return, a turning-back to the absolute, a form of regret.”

In this post, I intend to discuss this sentence in some details, in order, first, to precise the connections between guilt and necessity, and afterwards, to go a little beyond, in exploring how shame may enter the picture.

I shall start by quickly considering the word “almost” in its mathematical sense, as in “almost everywhere”, that is, I read the sentence as saying that necessity is almost nowhere non-guilty, that it is non-guilty in a domain of null measure. The question is therefore whether there is room in this domain for discourse; can we say anything about this seemingly guiltless necessity? Is this necessity as shameless as it is guiltless? I will consider these questions later on.

A substantial difference between guilt and shame is the transparency of guilt; one will always know what he feels guilty about and why he feels so, on the other hand, while one may know what makes him feel shameful, he may be at a loss as to the why of such a feeling. So guilt appears as the logical consequence of a given situation, it seems more consciously motivated than shame, whose obscurity may even feed itself, one can then be ashamed of feeling ashamed for a futile reason.
Whereas guilt does provide an obvious rationalization, shame looks like a black hole ready to engulf the whole individual in a whirlpool of despair. Besides, one can hardly feel guilty of feeling guilt; on the contrary, feeling guilty is often seen as the first step towards redemption and therefore out of guilt
Furthermore, shame is mythologically older than guilt, within Judeo-Christian civilization, since Adam and Eve felt shame as soon as they realized they were naked, just after eating from the Tree of Knowledge, but it’s only after they got cursed by God that a sense of guilt can be conceived of, guilt therefore hinges on the original sin as a sin entailing punishment (the sense of guilt just being the internalization of this sequence), while shame seems to only derive from pure self-awareness.


As seen above, guilt seems therefore a relatively safe feeling. This is not to say that it cannot lead to severe depression and even suicide. Guilt can indeed be muddied by too strong a belief (sometimes fanatical) about what a sin is and how evil it is (to the point of being deadly), that obscures all attempt at rationalization and at redemption via a reasonable sequence of remorseful penitence. But it provides, at least, a favorable ground for the individual to overcome the first affliction of guilt, by laying out a standard process to escape it and be forgiven. In this sense, guilt is, most of the time, equivalent to a redeemable debt.
The safety of guilt is then this framework, analogous to an accounting practice, where causality is well-established and determinism is assured. Necessity naturally follows from there. As guilt establishes its dominion on most social interactions, conditioning individual’s psychology from an early age, thought admits causality as the natural way of things, and if something is, then, surely it must be necessary.

But this is not quite what Elie Ayache is saying in the above passage. His idea is to say, if I understand it properly that thought is feeling guilt, along nostalgia from its “self-inflicted banishment from the absolute”, and build necessity in a way to redeem this guilt or to comply with this nostalgia.
Nonetheless, I contend that it is largely because of the framework of safety and stability, that is inherent to the logic of guilt, and that is encrypted in the western mind that, first, thought branches itself onto this logic to expiate his abandonment of Fideism and, then, redeem itself by acknowledging necessity, a necessity that, contrary to Meillassoux’s ambition to “discover an absolute necessity that was not leading to an absolutely necessary being” (“(…)nous devons découvrir une nécessité absolue qui ne reconduise à aucun étant absolument nécessaire”(p.47, Après la Finitude), has so far (until Meillassoux) been one founding a dogmatism, in its pre-Kantian form, or one asserting the a-priori absoluteness of the principle of non-contradiction in the post-Kantian weak correlationism (to use Meillassoux’s vocabulary).
The rejection of all form of necessity then leads to the strong correlationism, but this one entails an incapacity at opposing any form of fanaticism, as it disallows all possibility of a speculative rational discourse about the absolute, even a refuting one.


I published earlier a post on Igor Markevitch’s “Le Nouvel Age”, and shortly commented it as involving a reflection on shame. Here, I wish to examine another composition from Markevitch: “Le Paradis Perdu (Oratorio)”, which can be purchased here, and whose full libretto can be found here.

In my opinion, Christopher Lyndon-Gee is totally missing the point of Markevitch’s intention in his analysis, when he wrote the following, whose content is perfectly right (except for redemption that is precisely never achieved) but whose overall condescendence is out of place:

“Markevitch’s Eve is a self-pitying rag doll; Milton’s has dignity and responsibility. Indeed, a Lucifer who can declare “Quelle proie facile” (“what easy prey”) or can refer to Eve as “stupide épouvantail” (“foolish scarecrow”) does not fall from the pages of Milton, in whose poetic vision the opponents in this cosmic clash that affects the destiny of the known universe inhabit a higher moral plane. Redemption is achieved (all too quickly) without effort or confrontation with the terrifying majesty of God. The “Spirit” that “points the way” is a cross between a Victorian sentimental comfort-cushion and some kind of pantheistic prop of Futurism.”

Markevitch’s Eve is indeed a self-pitying rag doll, just like Flaubert’s Emma Bovary, Woolf’s Clarissa Dalloway or Chekhov’s three sisters, just like Bertold Brecht and Kurt Weill’s soldier’s wife:

From there to “conclude that our musically gifted, very young composer had merely normal literary abilities”, is not to make justice to Markevitch (neither it is to Cocteau and Ramuz who advised him on this matter), Markevitch didn’t want to put Milton’s poem in music, he obviously aimed at adapting it to his times, and that is what he did by taking his characters away from the dogmatic universe of Milton, to immerse them into the contemporary post-critical correlational circle, where they indeed become “easy prey” and “foolish scarecrow” for all kind of fanaticism.

Elsewhere, Lyndon-Gee writes:

“Acceptance of guilt is the first building-block of redemption for Milton. Markevitch, on the other hand, posits redemption through a vague, almost Hollywoodised notion of Love and aspiration towards “the Spirit”

In Milton’s dogmatic context, which is the natural space of guilt, such an acceptance reflects indeed the necessity that is articulated by the logic of guilt: sin-guilt-punishment-redemption (equivalent to the logic of debt-redemption), itself made efficient by the presence of dogma. In the post-critical world of Markevitch, redemption can only be a vague and dream-like yearning for an impossible absolute, such is the tragedy of the correlational circle, that it deprives you of redemption while maintaining you in guilt.
But it obviously is in the music itself that all this is most apparent, and particularly towards the end of the piece when the futuristic machinery is entering the scene to uplift mankind to a fideist beatitude of pure spirit. Here again, a subtle irony pierces through the superficial triumph of the Spirit, an uneasiness is felt, a pretentious vulgarity, which at times derails cacophonously from the main harmony, contradicting the emphatic pronouncement of redemption; Markevitch clearly demonstrates a defiance to modernity, in extreme contrast with the bombastic optimism of Prokoviev’s “The steel step” for instance:

Markevitch’s view of modernity is certainly closer to the one Chaplin depicted in “Modern Times”:

The pressing question is then now whether there is a possibility for a guiltless necessity, a necessity that would not be accidental, coincidental to guilt, and that would not therefore appear as a mere expedient to fulfill its logic. This necessity is of course the necessity of contingency, but it remains to be seen whether it is not just a new trick from guilt to reassert its dominion on human thought.


If we now turn our attention to shame, we see that, whereas guilt is a process that aims at redemption, and therefore at its own cancellation, shame is unredeemable, it can never be expiated, it can’t be erased by the purchasing of an indulgence or the enduring of a punishment. Its mark is indelible, it is a hole in the flesh. The readers of the Blank Swan will already have made the connection with the following passage found on page 365:

“The individual degenerates into an identical individual again; he didn’t evolve into a differentiated organism, a body, a corporation, a company.”

This is how Elie Ayache qualifies debt, it could, I believe, apply equally to guilt. By contrast, shame is differentiating, it alters an individual and forces him into a becoming. Interestingly, in Japanese, there is no direct translation of “must”, the necessity of acting in a given way is rendered by the verbal suffix:
…なければなりません(nakereba narimasen)
which, literally translates as:
If you don’t do it, it will not become.
It is then, here, at the linguistic level, not a call to guilt but to shame properly, for preserving the becoming of a process, by himself accepting to become other. And this leads us to a very similar call from Meillassoux, on page 96 of his book:

“It is necessary for this to be this and not that or anything else, for this to become that or anything else.”

Hence shame does imply a necessity, a necessity for things to become, that is, the necessity of contingency.

Incidentally, I would suggest that the dynamics of shame is identical to the dynamics at play in the construction of the Cantor set (and other such constructions), but I shall not dig into this matter further as of now.

What is clear, is that shame proceeds according to an hollowing principle, it does not build relationship between individuals according to a logic of debt, but according to a logic of basho (場所), of place, that relates to the works of Nishida Kitaro. Shame makes room, makes place for the others and the world to become.

I shall stop here for now, and see whether it triggers any discussion, there are certainly many imprecisions, simplifications and perhaps some mistakes, but this is still a thought in progress. Shame on those who would not let it become!

Wednesday, February 9, 2011

Eternally returning to the virtual

On page 244 (Ch.11: The Narrative Adventure) of The Blank Swan, Elie Ayache wrote that "to capture (...) the singular 'how' of creation as such" will provide for "our perception of the creature as a result of the act of creation, our perception of it against the backdrop of the virtual it is emanating from, will allow us to read, in the static and actual and settled creature, a continual and eternal return to the virtual. As it actually, definitely, 'eternally' exists, the creature eternally returns to the virtual."

Nietzsche's idea of the "Eternal Return" is often borrowed by various thinkers and adapted to their need, which is fair indeed, because Nietzsche himself did not close this idea (that he himself borrowed from various sources: mythologies and poets) into a strict interpretation, leaving ample room for his readers to comprehend it in their own way.
A few years ago, I myself pondered over this idea, and came to consider it as a return to the materiality of the body, a necessary and eternal travel from the abstract to the material, where thought (I personally used the word "regard" in french, I don't know how to translate it in english, in order to convey its polysemy, associating the ideas of seeing, considering, thinking, caring, guarding, absorbing, mirroring, repeating, ..., Nietzsche would perhaps talk of "will to power") eternally returns to the body in order to reaffirm itself (by again moving away from the body, in order to later return to it) in its freedom, in acting. It seems to me that it adheres to the sense of the following sentence from Elie Ayache found on page 234:

"Thought wakes up with the body pushing it from behind, and it is soon to be itself literally pushed outside of the room."

This eternal return of the "regard" to the body from which it comes, is also the return, I believe, of the thought onto the creature from which it emanates. It eventually is through the consideration by thought of the negation of the body that is its origin, that body and thought are articulated into a relationship of eternal return. But the negation of the body can also be seen as the affirmation of contingency (and its necessity), it is therefore an eternal return of the actual to the virtual, which is the perspective described by Elie Ayache.

Furthermore, I think that this ability for us "to read, in the static and actual and settled creature, a continual and eternal return to the virtual" is particularly well-represented in chinese art. Calligraphy painting, for instance, is all about enabling the viewer to enter and to experience the process of painting, that is the virtual:

This is the character li, which means strength, but there is no depiction of strength here, nothing substantial differentiates this painting from 力. What is apparent however is the way this painting has been realised. We can easily imagine ourselves drawing this exact character, the brush strokes are clearly visible, Wen Shen, the author of this calligraphy did not do anything to conceal his technique, on the contrary, he's displaying it, we can imagine the tension of his hand, the speed of his strokes, even the angle of the brush on the paper. This painting does not represent 力, it represents itself, it is a painting of the painting.

Similarly, chinese landscapes do not represent a landscape, they again represent the painting of the landscape:

Again, Chen Jun here doesn't make any effort to conceal his technique, on the contrary, sharing it is the whole point of the painting.
This philosophy of art is further developed in the works of Zao Wou Ki, whose explicit ambition is to paint the Dao, which is nothing else than the virtual:

The stress on the process of actualization that underlies chinese art obviously has its counterpart in chinese philosophy and most importantly in the Dao De Jing (道德經).
Interestingly, just as virtue and virtual shares an etymological connection, the Dao De Jing relates both concepts quite closely in the first chapter of the De (德, virtue):

上德無為而無以為也 (shang de wu wei er wu yi wei ye) (1)

which translates literally (and according to Henricks whose book is referred above) as:

The highest virtue takes no action, yet it has no reason for acting this way.

Or, in other words: The highest virtue remains virtual

This idea is of course pervasive in all traditional chinese philosophy, it is sometimes referred as the "Wei wu wei"(為無為) principle, and it can be found to some level in the teachings of all Daoists, but also in Confucianism. The De Dao Jing (to use Henricks order), that is, the Book of the Virtue and the Dao, or to use a purely western vocabulary, the Book of the Virtue and the Virtual, is unique in linking both the notion in such an explicit manner. It indeed seems to say that to be virtuous is to remain in constant proximity with the virtual, at the edge, one could say, between the virtual and the actual.
It is, in this sense, that Art has an educative function, it is what formed the thought or the "regard", to remain virtuous, by not interrupting the eternal return to the virtual away from(and pushed by) the actual, by remaining not in the "can be" (The Blank Swan, p.437) which is already too much on the side of the actual (into an ontological beingness), but rather in the "also can". This expression which is often found in Singlish (Singaporean english) obviously comes from the chinese ye keyi(也可以), the "ye"(也), meaning also, acts as an untotalizer of the range of possibilities. Indeed, this expression often comes as an answer to a request, which assumes implicitely, that the demand was rather out of the range of what is normally requested, the interlocutor then replies that it can also be done (even though, in practice, this expression is more pervasive and exceeds this context).

也 is also found in the above verse (1) of the De, here it is widely believed to just be an emphasis, an affirmative marker, as it is only found in the MaWangDui version, and not in the more commonly used version of WangBi , its importance is therefore neglected. However, I believe that it should also be understood here as an untotalizer, a differentiating operator, that extends the meaning beyond its literalness. Far from emphasizing then, I think it may well be a de-emphasizing marker, a prompting to forgetting in the sense Elie Ayache is proposing on page 248:

"Forgetting is the point of inflexion and reversion to the surface that is necessary for writing. By contrast with the sum total of possibilities, clear and yet confused, forgetting makes the writing thread obscure yet distinct."

A lot could be said now of these ideas of clarity and obscurity, in relation with chinese thought, I leave it to the readers to appreciate for themselves, maybe through the works of Francois Jullien, or maybe by looking also at the works of Zao Wou Ki.

Sunday, February 6, 2011

Igor Markevitch: Le Nouvel Age

It's been a while that I wanted to publish a post on Igor Markevitch's works. Although he's better known as a conductor, he's one of my favorite composer. I could have chosen more famous pieces of his works such as Rebus or L'envol d'Icare, I may discuss some of them in the future, but as it happens, right now, I can only listen to the CD starting with Le Nouvel Age of which 1mn extract of each movement can be listened and the whole piece can be purchased here.

A presentation of Le Nouvel Age (the new age), the one that can also be found in the CD, can be read here.

To me, one of the most striking feature in Markevitch's music is its self-restraint, which is contrasting with the futuristic elation found in Mosolov's "Iron Foundry" for instance:

The programatic subtext, provided by Markevitch himself in his autobiography and reproduced in the CD leaflet, reflects this in toning down the pride of a youthful wrath with:

"Présence sous-jacente de la vulgarité." (underlying presence of vulgarity)

This presence seems to instill a lingering sense of shame in all the piece, and this leads to a fundamental questioning(the unresolved dominant seventh) that comes to dominate the third movement: Isn't the New Age the age of shamelessness, and therefore the age of vulgarity?

Wednesday, January 26, 2011

The Medium of Contingency

“The medium of contingency”(shortly available in volume 22 of pli) clarifies many points that remained implicit in “The Blank Swan”, it particularly precises the divergence that exists between Elie Ayache’s (EA in the following) and Quentin Meillassoux’s (QM) thought. In that, it does answer my earlier comment, somehow confirming it, but also, strangely, I came to disagree with this one to the extent of now holding the contrary belief that EA’s and QM’s thought do merge into a seeming compatibility.


The following passage (on page 2) from “The medium of contingency” seems to assume a certain conception of thought, or at least of its placement in order to think speculatively, in QM’s sense:

“If a speculation like Meillassoux's must bring our thought flat against the matter of absolute contingency, with a flattening of the depth where we would have searched for the reason why things are what they are and not otherwise and with the flipping of ontology from the side on which things are to the side on which things can be and if, correlatively, contingency has to be thought independently of any division of underlying states in which the contingent thing possibly can be something or other, then the step back from contingency - for only by stepping back from its absolute strike are we able to make sense of it and unfold the expanse where it can be thought speculatively - should take place in a direction and through a medium that maintain the absence of reason and the absence of states.”

I am not sure there is any depth to be flattened in the way thought relates to any of its object, and in the way thought is really, since I can’t conceive of a thought severed from its object (in the way I can conceive of an objectless desire, for instance). On the contrary, I tend to believe that thought is flat, what does have depth is its manifestation via language, but thought is largely independent of it, and it is independent naturally “of any division of underlying states”, which are just tools used to express itself (i.e. its object).
As such, thought can easily criticize these divisions, these states, while it may lose itself in it every now and then, it always retains the capacity of freeing itself from their influence, of turning against them, of staring at them in an inquisitive manner. Language can even help thought in its rebellion against language, as any natural language contains its own meta-level. In that, thought can easily turn itself (and its object) upside down.
So I am not convinced that “a medium that maintain the absence of reason and the absence of states” is all that necessary, provided that states are not taken too seriously, too heavily so as to place us in “a world that is repelled by gravity”(The Blank Swan-p.152, Après la finitude-p.149). As long as the totalization of states in not given too much credit, the philosophical debt can easily, and instantly be repaid.
That being said, “a medium that maintain the absence of reason and the absence of states” may not be necessary, but it may be useful, but more on this later.

The condition for thought to stay in control of its fate, and thereby, be speculative, is doubt, which may just be the historical root of QM’s factuality, as just like facticity cannot be said to be factitious (Après la finitude-p.107), doubt itself cannot be submitted to doubt.
Doubt seems therefore to appear as the psychological form of facticity (see Après la finitude-p.101), or to go further, as the subjective face of it, and to extrapolate a bit more, one may wish to consider the equivalence between the necessity of facticity and the necessity of doubt, wherein the former does imply the object (principle of factuality) and the latter, the subject. I will not follow this line of thought now however, and I genuinely don’t know whether it leads anywhere.

Doubt is nonetheless dated, and often distorted beyond recognition by a mundane usage, whereas axiomatics propose a modern mathematical formalization of doubt. It may then be through axiomatics, and mathematics (and maybe indeed topology, to follow Jeff Malpas along with EA, The Medium of Contingency-p.18) that speculative thought can progress. Mathematics, in their axiomatized form, also present the great advantage to be a very flat language, containing its own meta-language, and providing an unmatched clarity to the extent of being tautological (as it is fully explicit).


While I don’t think the market is the only available medium for factual speculation to develop, I wholly follow EA’s analysis of the market as being a genuinely “contingent and immanent place”. As such, it is therefore useful, but not only because of what it has done, but more because of what it promises to do.
Looking at the market, not as the medium for factual speculation but as just one of many such media, we should expect all these media to communicate with each others, to exchange and nourish their respective speculation.
Clearly for instance, and some works may already have started on this matter, that I still have to get acquainted with, the derivatives market should be a fruitful domain for the factual speculation on probability axiomatics, which itself could lead to topological and therefore ontological results.
It may also be that a speculative resolution of Hume’s problem (as stated by QM in Après la Finitude-p.176) could draw some insights from the material un-totalization of contingent claims by the endless complexification of exotics contracts.

Furthermore, the market may not be the only one, but it appears, in some important regard, to be the purer, the most devoid of faux-semblants, it will therefore act as a useful reference for the other places of factual speculation. Not unique but central, it may play the role of a singularity, a repelling or an attracting one, it does not matter but it will be instrumental in the development of factual speculation, and it may even be more than that, as I believe it also has a political and ethical relevance which is not foreign to its immanence, but that is another matter.

Tuesday, January 25, 2011

The Blank Swan

I already have published a review of “The Blank Swan” on Amazon site, I will not repeat it here, rather, I wish to further an analysis (which I outlined on Amazon’s review, but in very vague terms) of some of its thesis in relation with those of Quentin Meillassoux in “After Finitude: An Essay on the Necessity of Contingency”(the original version of this book being in French: Apres la Finitude).


1. Hume’s problem and its probabilistic inference
In “After Finitude”, Quentin Meillassoux takes on Hume’s problem which investigates the possibility of grounding rationally the observed stability of natural laws, or, in Meillassoux’words, our capacity to demonstrate the necessity of causal connections. Meillassoux lists three types of answers to this problem: a metaphysical, a skeptic and a transcendental one.
I am only interested in the latter here, I leave to the interested readers to check on the others in Meillassoux’ book.
The transcendental solution to Hume’s problem is typically the one proposed by Kant. Kant’s argument is a reductio ad absurdum, starting from assuming that there is no necessity in the causal connections, it results, according to Kant, in the complete destruction of the possibility of representation, as the very categories of representation would lost all meaning in a world where causal connection would keep changing. From there, Kant infers that therefore, since we have representation and consciousness of phenomenon, causal connections are necessary.
However, Meillassoux notices that Kant’s argument hinges on a probabilistic assumption, the one according to which if causal laws could change, they would change often, to the point where all representation would become impossible. It is this assumption that Meillassoux does criticize, by proposing the concept of untotalization, inspired by Cantor’s work on transfinite numbers.

2. Cantor’s transfinite and the concept of untotalization
Cantor’s theorem establishes that the power set of any set A (finite and infinite alike) has a cardinality superior the the original set A, in other words, the set of all subsets of A has more elements that A itself. That leads Cantor to introduce transfinite numbers to account for the cardinality of various infinite sets: aleph-null is then the cardinality of the natural number, while aleph-one is the cardinality of the set of all countable ordinal numbers.
From the work of Alain Badiou, who interpreted Cantor’s theory in ontological terms, Meillassoux argues that such a concept of the transfinite invalidates Kant’s argument, as probabilities are valid, in their frequentist interpretation only insofar that a totalization of the cases is not problematic. In Meillassoux’words:
“We are completely ignorant of the legitimacy there is in totalizing the possible, as we totalized the faces of a die. Such an ignorance is sufficient to demonstrate the illegitimacy of extending an argument about uncertainty outside of a totality given by experience.”
The possible, because of Cantor’s theorem, may therefore escape, according to Meillassoux, a totalization compatible with its treatment by probabilistic means, and that is enough to invalidate Kant’s argument. Meillassoux does not provide however a positive demonstration of how Cantor’s theorem, applied to the possible, makes probabilities invalid, he simply raises the question, and concludes, rightfully in my view and for the problematic he’s looking at, that this is enough to reject Kant’s argument.


Elie Ayache’s book is subtitled “the end of probability”, and its central thesis is indeed, following the trail opened up by Meillassoux, to assert that probability theory is unable to account for the reality taking place in Finance.
It would be presumptuous to summarize here all that there is in “The Blank Swan”, just as the previous section can in no way be taken as a summary of Meillassoux’ work, I just wish to precise a few concepts, in order to point out an ambiguity which, in my opinion, is left unresolved by Ayache.

What Ayache proposes to do, in his book, is to apply Meillassoux’ conclusions about the physical world and our relations to it, to the world of derivatives trading. For that, he asserts, in convincing terms, that the market (of derivatives) is a medium of contingency. Therefore, the market is untotalized, in the very same way that Meillassoux says possibilities in the material world are, and in the market, this untotalization can be derived from the non-redundancy of derivatives contracts, as indeed, if a contract is redundant, its market would simply vanish; or in the words of Ayache:

“If there were an established law, then some derivatives would never be exchanged.”(p.167)

This is indeed true, if valuation were exact, there would be no room to exchange a contract at variance with this valuation, and therefore no market. The existence of a market clearly points out to the inadequacy of the valuation process, and therefore to an untotalization of possibilities.
All this is still very much in line with the thesis from Meillassoux, however, Ayache goes a step further when he writes:

”In ‘thinking’ contingency as absolute with regard to the material world, Meillassoux is thrown into the exchange. His speculation is untenable in ‘pure’ thought and the corresponding detachment or transcendence.
All I am trying to do is to carve out the space that is adapted to speculative factual thought.”

Here I see a divergence between Ayache’s and Meillassoux’thought. Elsewhere, Ayache wrote:

“Speculation thus recovers its absolute meaning. It surpasses even thought itself.”(p.175)

Such a stance seems to assert speculation (which, in Ayache’s terms, means the act of inverting the model, whatever it is, for valuating an option and engaging into “the trading of the derivatives at variance with its replication plan”, i.e. the writing of the market), as a process that exceeds thoughts, that reaches to a point beyond thought. But then, one of the main point of Meillassoux being the re-appropriation of the domain of the absolute by thought, isn’t Ayache positing a new absolute which he again places beyond thought?
Another way to put it is: Isn’t Ayache falling into a new kind of Fideism, which is properly a target of Meillassoux’work?
By proposing such a radical criticism of probability, positing not the end of some interpretation or axiomatization of probability but of probability itself, Ayache may have hypostatized a reality beyond thought, only accessible through speculation. What then differentiate speculation from a magical ritual, that one must perform in order to access to a higher level of reality? Aren’t we driven into a fideistic way of relating to the world (be it the world of the market) and to give up any illusion of grasping it with an analytical apparatus?
That matter doesn’t find any treatment in “The Blank Swan”, and it is, in my opinion, its major defect. Because of it, an atmosphere of ambiguity does linger over the pages, becoming more and more persistent.

I shall stop here for now, not that I’ve said it all, and I will likely come back to comment on some other ideas from the book, such as the logic of place, that I wish to analyse further, in relation to Nishida Kitaro’s ideas of the logic of basho, for instance, though I still have some study to do before that.