"a theory of literary criticism that questions traditional assumptions about certainty, identity, and truth; asserts that words can only refer to other words; and attempts to demonstrate how statements about any text subvert their own meanings."
My personal introduction to Derridian madness was incepted and initiated via exchanges with deconstructionists - on the AOL forums , ca. 1993- who claimed "No REAL Humans were killed at Hiroshima and Nagasaki" only "mental constructions of humans, since the A-bomb was a mental construction of a real bomb". Of course, if NO real humans were killed and they view even an A-bomb as an abstraction, they'd have no qualms about carrying out any kind of killing themselves! Indeed, they'd regard any bombs or other weapons they use as "mental constructions"!
This sort of (literally) insane intellectual and moral "argument" paves the way to moral chaos and insanity since it seeks to conflate automatically what is in the (Derridian's) head with the outside world- thereby trivializing any external, or objective reality as non-existent - reducing it to what can be immediately sensed by the person.
Flash forward to two days ago - when I made a comment on the Financial Times website, after an article about "mathiness" in finance and the reasonableness of mathematics in financial analysis and models. My comment reflected earlier points I've made in previous blog posts that: a) the only math actually justified in finance involves basic statistics, i.e. such as applied to job numbers, GDP, interest rates, inflation etc. and no advanced maths can be applied to models since b) financial and economic models are purely confections of an artificial universe and have no genuine objects of inquiry.
For example, in devising economic models all "externalities" are ignored. This would be analogous to physicists ignoring the role of energy in assorted models, say of stars. In an April 26, 2010 letter of mine published in The Financial Times, I drew attention to the abysmal failure of modern macro-economics (touted as a “science”) to predict the 2008 market meltdown and financial crisis. I pointedly noted that economics ignored too many externalities which included aspects like environmental costs and resources that were omitted from its models, as well as lacking any consistent empirical basis analogous to physics.
Illustration of the Gaussian Copula Formula used by economists to justify credit default swaps.
In the particular case of the failure in predicting the credit crisis and meltdown, academic economics erred by assuming a putatively poorly regulated system was capable of sustaining massive risk entrenched in obscure, poorly understood credit derivatives created by Wall Street “quants” , most of whom had forsaken bright careers in science or mathematics to invent these devious financial instruments for investment banks. The assumption saw all the hinges come loose when the credit default swaps were immersed in securities purported to be safe, since they were given AAA ratings by credit agencies like Moody’s and Standard and Poor’s.
Thus, the forecast failure was predicated on a three-way collapse of the paradigm: 1) commercial banks taking on the risk of investment banks by leveraging their assets to preposterous ratios (sometimes as high as 33:1), 2) credit derivatives designed using the Gaussian Copula Formula which enabled them to be sliced, and spread throughout ordinary securities such as collateralized mortgage obligations, and 3) a failure of the credit rating agencies to take proper note of (2) and in effect, be blinded while assigning bond ratings the securities didn’t deserve.
Since then, it’s become ever more evident why economics is a failure and can’t even be regarded as a science like Physics,
In the case of the Gaussian copula, invented by David X. Li while working at JP Morgan Chase and articulated in his (2000) paper: ‘On Default Correlation: A Copula Function Approach” it isn't a true mathematically sound equation analogous to those used in physics or celestial mechanics.. It is more an intellectual Frankenstein monster that never should have seen the light of day any more than a four-headed baby with a pointed tail. For example, Li's misuse of the distribution functions (FA(1)) and (FB(1)) would appall any genuine mathematician or physicist. Each is actually based upon significant uncertainties via survival law distributions which can vary enormously. There is no way to normalize any probability based on (TA, TB so there is no way to equate Pr[TA, TB] to anything on the left side. The equal sign is dangerous recklessness masquerading as math. Were economists or "quants" know any of this when they cranked out credit default swaps? The evidence of failure to predict the 2008 credit crash shows they didn't.
Getting back to my recent FT website comment, one poster using the monicker "camus_deferral" didn't take kindly to it, basically arguing astrophysics had no "real" objects of inquiry either, since after all black holes couldn't be observed, and how did we know anything about the universe since the distances weren't even "graspable". Besides, he insisted, "all your parameters can change on a dime" - such as the current fact that the expansion of the cosmos is undergoing acceleration.
After patiently trying to explain astrophysics basics, including that black holes - while not directly observable - were nevertheless detectable (i.e. via their x-ray signatures as part of binary systems) we came to an impasse based on what exactly defined a "real object" - assuming any such entity actually existed.
I tried to explain that in empirical science we define a real object as any for which definable properties could be exposed, say following observational or other analysis. This would also enable classification of such objects, for example stars into spectral classes O, B, A, F, G, K, M based on measured temperatures and spectroscopic analysis. Thus, stars were certainly real objects, as were planets which could be grouped into "gas giants" (Saturn, Jupiter, Uranus, Neptune) and "terrestrial type" planets with hard surfaces. Also, we know planets are real objects by the fact space craft have actually landed on a number of them, i.e. Russia's Venera Probe on Venus, Viking and Rover on Mars, etc.
None of this mattered to "camus" who denied any such examples constituted real objects and they could as well all be merely in an astrophysicist's mind. To him it was only real if he could "hold it and touch it". Ironically, he was awarding himself reality perception on the basis of proximity to the senses, but dismissing it for astrophysics - for which he allowed only a Derridian facsimile.
Interestingly, he failed to appreciate his definition would apply even more cogently to entities fabricated in financial models, i.e. using the Gaussian Copula Formula which mixes functions from human actuarial tables, generic survival distribution laws, and a “probability” function based on coupling two financial entities in an actuarial table – then tossing in a correlation coefficient.
Imagine a quantum physicist performing an analogous desecration of his probability density equation, e.g.
Any such quantum physicist would be rapidly deemed insane and trotted off for some needed intervention, including ECT treatments.
I was tempted to suggest as much for "camus". However, I decided to simply end the exchange by observing it wasn't possible to have a constructive debate with anyone incapable of distinguishing reality from unreality - or who didn't even understand basic astrophysics.
Alas, this interlude shows the malformed, deconstructionist legacy of Jacques Derrida remains alive and well. You will even find it in more sophisticated enclaves of the web, such as the Financial Times site.