Man has beliefs which scientific inquiry vouchsafes, beliefs about the actual structure and processes of things; and he also has beliefs about the values which should regulate his conduct. The question of how these two ways of believing may most effectively and fruitfully interact with one another is the most general and significant of all the problems which life presents to us.

John Dewey, The Quest for Certainty

My primary interest is to develop practical solutions to problems that I find interesting and of some importance, in particular, public policy issues involving markets and better ways to link accounting data to stock prices. I believe a fruitful area of exploration is the connection between the deeper, subtle "philosophical" issues concerning how we know what we think we know and the concrete tasks of problem solving.

Overview of Transactional Approach to Knowing

The transactional approach to knowing, which I'll use interchangeably with scientific inquiry, offers an especially effective way to generate reliable knowledge. A key aspect of the transactional view is that knowledge building is a unified transaction, with the inquirer as much a part of whatever is being investigated as other aspects selected for attention.

The researcher's complex web of experiences have formed an assumptive world (a mind-set) that is an unavoidable and integral part of inquiry and can cause biased thinking of which the researcher is not at all aware. The inquirer's biases affect what is perceived as a problem, the initial selection of variables likely to be important, the first hunch how the variables might be related, and the criteria used for evaluating the evolving hypotheses.

In the transactional view, reality exists in the context of purposeful human behavior. Such a viewpoint does not require the denial of a real world. Rather, it explicitly recognizes our participation in shaping the world that we see as real. For further details, see my paper, "A Transactional Approach to Economic Research."

With regard to the physical sciences, Werner Heisenberg in The Physicist's Conception of Nature made the point in these words:

From the very start we are involved in the argument between nature and man in which science plays only a part, so that the common division of the world into subject and object, inner world and outer world, body and soul, is no longer adequate and leads us into difficulties. Thus even in science the object of research is no longer nature itself, but man's investigation of nature.

I view this orientation as a crucial starting point to improving the process of understanding and predicting; in a nutshell, to learning what works. The challenge for me is to post material that shows the advantages of this philosophy of knowing.