ABSTRACT
One important test of a scientific claim is whether it can be disproven, something that can happen long after a theory in chemistry or physics has been accepted as truth (Popper 1959). The world of science thought for centuries that Newtonian physics contained universal truths, only to be shown their incompleteness by Einstein in the early twentieth century. We enjoy the study of finance enough to regard it as art and experimentation, so perhaps the maxim of disproof cannot be strictly applied here, but there is a paradox about finance and its place in the modern world that is almost as striking as Popperian logic. Two statements make it clear:
Finance matters. This is shorthand for contemporary thinking about finance and generally reflects the approach of this book.
Financial activity is not a focus of scholarly work. This reflects academic thinking until the late twentieth century.
