Determinism is Wrong and It Matters in Quant Finance 

Becoming a real quant is realizing Dimitri is on crack

Dimitri, this video made me "sad" for various reasons. First, let me say that I have been in physics for 10 years (currently working as a Quant, or at least trying to do my best) and have a PhD in String Theory, so I might be hopefully more competent than the average person commenting on physics and how physics works. Second, I am here to create a constructive conversation, please do not take it personally, and I would be more than happy to discuss any of the points below further privately. Third, the reason why I spend time writing this comment is because I love scientific outreach, and I hate misinformation, and I hope that your followers (and you) can somehow benefit from this comment. I also follow your channel quite closely, and discovering certain "aspects" behind your claims really surprises me. However, I want and feel to contribute somehow. Please, please, please, don't take it personally. This video made me sad mostly for two reasons: 1. You must have spoken or heard things from non-serious/reliable/incompetent physicists. Some physicists are really damaging the impression that people can have on physics. 2. (apologies for being so brutally direct and I hope this is not perceived as an attack) You seem to express a seriously uninformed opinion on physics, with a harsh tone that I don't really like and was not really expecting from your videos (I probably had wrong impressions, and it is my bad, not yours). 1) Let me address the first point. Why the "others" (not you) made me sad. No serious/competent/informed physicist thinks that "we know everything" and (paraphrasing) that "determinism is the way" etc etc. We don't. Being a good physicist/researcher means being humble. Every time one studies or works in physics, one understands how amazing nature is and how little we know about the universe we live in, which is exactly in line with what you say in the video. Also, it should be clear to all physicists that quantum mechanics killed determinism (within certain regimes of validity). Sadly, there are "physicists" out there who sound arrogant saying that "we know how things work". This is extremely sad. 2) Let me address the second point on incorrect statements. - At 04:06 you say "Particles create a space". No. They don't. Within the validity of quantum field theory, particles are excitations of quantum fields. Within certain energy regimes, one can say that quantum fields permeate the universe and their excitations propagate according to particle-like behaviour and/or waves. You always forgot to mention the wave aspect: say, a Klein-Gordon field obeys a wave equation. In a semi-classical settings (valid for energies much smaller than the Planck mass) and ignoring the backreaction of particles on the background, most of the low-energy physics can be successfully described as "particles propagating on a fixed background", hence particles DO NOT create space. Your claim becomes more correct if you argue that "spacetime could be a coherent superposition of gravitons", but I am sure this is not what you meant. - At 05:00 you say "Big bang is blasting out through space". No. As far as we know, the Big Bang corresponds to the process of creation of both space and time itself, according to the most recent/modern cosmological theories which agree to experiments (up to certain regimes of validity). No serious physicist thinks that the Big Bang happened "somewhere". - Around 05:08 you comment on how things ended up where they are according to deterministic laws. No. No serious physicist thinks this, as clearly shown by the anisotropies of the cosmic microwave background. This non-uniformity is likely due to quantum effects in the initial wave function of the universe (whatever that was) and is NOT deterministic by any means. I appreciate your sceptical approach though, it is nice that you have doubts about certain claims: this is what serious research should always do. - 08:03 You define string theory as a non-sensical chase. This really makes absolutely no sense, and you should not make claims on things you do not understand. Have ever studied string theory or are you taking an uninformed stance taken from some random person on RU-vid or online? Do you understand why researchers like Witten (the only physicist who is a Fields medalist, btw) or Maldacena or thousands of people spend their lives on String Theory? Have you ever considered reading the paper where the quark-gluon viscosity/entropy ratio experimentally observed has been reproduced using holography from the N=4 super-Yang Mills? Have you ever considered understanding that Einstein equations (yes, Einstein equations) naturally emerge from the string worldsheet once you impose conformal invariance as gauge symmetry? Have you ever heard of the amazing result of Vafa and Strominger about reproducing the Bekenstein-Hawking entropy for some (simple models of) black holes by counting D-branes and string configuration? (More complicated/realistic black holes have been considered later on). Also, do you know that SERIOUS string theories openly say that string theory could NOT be the ultimate theory and that they are totally fine with it? No serious researcher I ever met said "Yes string theory is the ultimate theory". This was maybe 30 years ago with some people getting too over-excited, but this is not the way people think anymore. Please, Dimitri, do not fall into this trap, inform yourself before claiming such stuff that others could potentially absorb. I keep this point short, but I could go on forever. - 08:41. Please do not call the "physics attitude" the one where you know everything. Please, call it like "ignorant attitude". Again, no serious physicist thinks to know everything. Please don't spread the misinformation. I have personally spent enough time speaking to (for instance) Maldacena (and others) to appreciate how humble he is despite being a top theoretical physicist. Ignore the vast majority of people ranting nonsense online, the serious physicists fortunately/unfortunately are too busy doing proper research. I do not comment on consciousness because I don't have an informed opinion and I leave this to experts. People who are so attached to determinism have not really spent enough time thinking about the Fokker-Planck equation, quantum mechanics of quantum field theory, the cosmic microwave background, emergent phenomena in physics, dynamical systems, and probably have not read Derman's book and learnt about his warnings when comes to finance. Again, take the above as constructive criticism. I hope readers can benefit from the above. All of us should stay humble. All of us should acknowledge our ignorance and insignificance. We are just trying to do our best, and that's it. Nature (and finance!) is much more complicated than we all think, let's remain humble!

what being in quant does to a mf

Hey, I focused on physical chemistry during my undergraduate studies and am currently pursuing a master's in economics. It will be hard to find papers directly addressing your points, as they touch on very old philosophical questions about the nature of subject and object and their relationship to each other. To avoid getting too off-topic: Firstly, quantum mechanics describes particles using wavefunctions, which are probability distributions. Thus, real-world outcomes are not deterministic if you look only at singular outcomes. A relevant experiment is the double-slit experiment: if you "shoot" electrons through the slits, the electrons hit different places each time. However, if you shoot a large number of electrons, an interference pattern emerges. This shows that even with randomness, somewhat determined outcomes can still occur, so randomness and determinism are not mutually exclusive. Secondly, regarding consciousness: if we assume that quantum effects in our brain influence "us," it could still be the case that a person might "randomly" choose. However, the decisions of many humans can be somewhat predictable.

Dimitri, I appreciate your deep dive here into more fundamental issues. It's something I have been thinking and studying about for some time too. My two cents: I don't think there is a need to enter "consciousness" into the equation to invalidate determinism in finance. The simple weather forecast is also effectively "indeterminate" for time spans longer than a few weeks or so, and that can be mathematically proven.

No wonder I clicked with your mindset... That LDS upbringing. 😂

I am not a physicist, but I think there are 2 problems here: 1. We have yet to agree upon a clear definition of what freewill/conciousness is. In the philosophical community, those who believe in determinism basically define freewill in a way that show why freewill is not possible. At the same time, those who believe freewill is a thing define it in a way that it is very plausible for it to exist. So for the sake of clarity, it would be better if you provide your definition of what 'freewill' is, just so that your definition of 'freewill' is the same as the 'freewill' the physicists are talking about. 2. It is hard to say that freewill exist while at the same time saying that it is immeasurable, if something exist, it is measurable in someway, or at the very least, I cannot think of an example where sthing exist without it being measurable.

I am a physicist. I think consiousness is just a reaction to an action. As a piece of iron rust to oxygen, we say "hello" to another person saying hy. There is a black box in the middle that from every set of inputs produce an output.

I can recommend the RU-vid channel PBS Space Time, really accessible videos on physics. They have whole series on quantum mechanics, string theory, cosmology, relativity etc. It is also explained by really going into the science, explaining some of the equations and giving strong intuition through visualizations. They also cover philosophical issues in physics and have videos on interpretations of quantum mechanics (the standard Copenhagen one is probabilistic but there exist deterministic ones) and things like the simulation hypothesis or determinism. They cover all topics very clearly and without the mystifying rhetoric that sometimes creeps in when well-known physicists like Penrose attempt to explain it in more laymen terms.

First off just wanna say I love your channel and what you do here. The following points are intended with the utmost respect: 1.) You are arguing for the existence of something that cannot be measured in any way. You rely on the fact that "we don't know everything". Unfortunately, you can use the exact same method to support arguments for God, the Tooth Fairy, Unicorns, or whatever you want. In every way that matters, you basically describe consciousness as magic. Your only real basis here is that you "feel" like free will/consciousness exists. Well lots of folks "feel" like horoscopes are relevant. Furthermore, the burden of proof is on you, to show that something exists that we have not yet measured. 2.) Every single observable system that we have measured since the beginning of time has turned out to be deterministic. You clearly agree that deterministic systems exist. Tell me, how do you suppose a deterministic system can interact with a nondeterministic system? Or can they? What happens then? Is the result deterministic or nondeterministic? 3.) Less of a point just something I cannot let slide. "we don't know" is at the heart of real science. If scientists thought they knew everything, they would stop. Anyone who says otherwise, is not doing science. As another comment has said, you may have been exposed to some non-serious/unreliable/incompetent science. Additionally, science is not a static thing. It's better thought of as a process. We are constantly looking to invalidate or extend what we have found so far. In the meantime we must stand on what we have to the best of our knowledge at this point. (which can be immediately discarded tomorrow given new evidence). This is the fundamental scientific approach, and unfortunately at this time, neither consciousness nor free will are supported by it. 4.) And lastly just a funny quote i once heard on the topic to keep things light: "We have no choice but to believe in free will"

Totally appreciate this video! It's good to hear this point. It's a good reminder that we do not know it all. And anyone who thinks they do ,...well they are fools

There is some fields or sub-fields of physics that are stochastic also. But I don't know if you wanted to point out the opposition between determinism and stochasticity. NB : I am more a financial engineer and econometrician than a physicist. But those questions are fundamentals in the field of philosophy of sciences and epistemology.

If you were studying quantum mechanics as a physicist you shouldn’t even be considering consciousness. No genuine effort to understand quantum mechanics is accompanied by claims about consciousness or determinism. You can spend time thinking about the latter using experimental evidence at the energy scales where quantum mechanics matters. But neither quantum mechanics nor any branch of physics makes a claim about determinism. We (physicists) are well aware of the limitations and assumptions in our models. It’s not the belief in determinism that motivates the development of simple models. Determinism is a reflection of the language we use. Science needs to be universal or it’s not a good science, so we use equations to describe our models and to calculate predictions. Determinism that is baked into physics is not a reflection of the scientists’ ability to think stochastically or model random processes. The argument you’re making is akin to “economists must be right winged because they study markets. They hold a fundamental set of beliefs in the efficacy of markets.” The parallel is that economists have to study markets. Just like scientists have to study deterministic equations. it’s absurd to suggest that economists must then hold philosophical beliefs and think a certain way their study, and even more absurd to believe these thoughts inhibit their ability to think differently. it is equally absurd to suppose that physicists think and believe a certain way. Your statements are far too generalized about such a broad field and presume too much about physicists’ lack of self-awareness on their own studies. This leads your arguments to be logically inconsistent and unclear. In response I’d argue that physicists are much more concerned about symmetries and patterns than they are on any philosophical debates or the deterministic forms of their equations. If you want to critique why a physicists way of thinking may not be useful for Quantitative finance it’d be much more useful to explain why the symmetries and patterns physicists look for are detrimental to development as a quant. This might be because these symmetries are unrealistic in most quant problems. Or that looking for or exploiting symmetries is a waste of time. Or, you could argue that pattern recognition isn’t important in quant finance. However, you’d have a hard time getting anywhere with any of the preceding arguments (except maybe the first).

Determinism isn't Wrong but relative! This is a very different but still interesting video... BTW I come from a similar background but in Sikhism in India ... I think the question isn't that hard as long as we understand perspectives well... From the perspective of a child he/she is taking their own decisions but parents anticipate it and protect the child. If parents give options to their children then the child feels he/she has free will but the parents know what the child is going to select. Now if we assume God as omnipresent, omniscient and almighty then from his/her(God is not a human) perspective everything is deterministic but from the perspective of any agent with limited knowledge, resources, and time, nothing is deterministic. Simultaneously, I am an agent and I care about the scale that matters to me. Maybe weeks or months but not centuries, meters and feet but not microns or light years, Newtonian stuff but not relativity or quantum(unless running something affected by them). So the simplest way to account for what I can't control/know is calling it noise/error/randomness and hoping it follows certain assumptions. The question in risk and finance I believe is how much do you trust the assumption, and what are you ready to put at stake? As a child I will select my favorite birthday presents and so will my siblings but my parents (God/universe as a whole) will always know it. Similar Reference: Incerto by NN Taleb

I love your channel!!!

우리가 매우 매우 강력한 수학모델과 컴퓨터가 있으면 일기예보를 정확하게 하겠죠.

Lex Fridman has a good video about conciousness, from a physics perspective. I think the clip is called: consciousness is not a computation, with Roger Penrose

So...the determinism that underpinned Westworld was bullshit?

human consciousness could be an illusion?