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[TLDR: is the argument in the last quotation a fallacy?]

I'm an (academic) engineer, and I've been reading some papers on cybernetics from the 1950s and 60s. I found it striking how often the authors go off on seemingly unnecessary philosophical tangents, and some of the arguments I've seen come across as dubious at best.

I wanted to share one such example with you, to see if you also think it's pretentious and even worse - just plain wrong.

It's from a highly-cited paper called "On self-organizing systems and their environments", by a person who seems like he was a bigshot at the time. The author states he will be addressing the question:

"How much order can our system assimilate from its environment, if any at all?"

and proceeds to say that:

Before tackling this question, I have to take two more hurdles, both of which represent problems concerned with the environment. [...] I am first of all obliged to show in which sense we may talk about the existence of such an environment.

Frankly, I fail to understand why the author needs to tackle an age-old philosophical dilemma within the scope of a scientific paper, but alas:

The first problem I am going to eliminate is perhaps one of the oldest philosophical problems with which mankind has had to live. [...] We may insist that introspection does not permit us to decide whether the world as we see it is “real,” or just a phantasmagory, a dream, an illusion of our fancy.

Anyway, here's the argument he uses to show this, which to my philosophically-untrained eyes, seems cursory at best, and probably a fallacy. I was wondering if philosophers would share my view:

Assume for the moment that I am the successful business man with the bowler hat in Fig. 2, and I insist that I am the sole reality, while everything else appears only in my imagination. I cannot deny that in my imagination there will appear people, scientists, other successful businessmen, etc., as for instance in this conference. Since I find these apparitions in many respects similar to myself, I have to grant them the privilege that they themselves may insist that they are the sole reality and everything else is only a concoction of their imagination. On the other hand, they cannot deny that their fantasies will be populated by people—and one of them may be I, with bowler hat and everything!

With this we have closed the circle of our contradiction: If I assume that I am the sole reality, it turns out that I am the imagination of somebody else, who in turn assumes that he is the sole reality. Of course, this paradox is easily resolved, by postulating the reality of the world in which we happily thrive.

Having re-established reality [...]

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    You might say his argument ~puts on sunglasses~ lacks imagination. – David H Feb 6 '15 at 0:09
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    Of course the same argument proves that the people in his dreams are as real as he is. There's a sense in which this is true, but it's clearly not the sense to which he is referring. I'm downvoting because I don't think questions of the sort "Look at this silly argument! Don't you agree that it's silly?" should be on topic here. – WillO Feb 6 '15 at 1:04
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    It is unfortunate that a renowned scientist make a poor philosophical argument without relying on the huge philosophical literature on realism and skepticism (I suppose pretty much the same argument had already been made, perhaps better, in ancient greece). There are sophisticated versions of antirealism he does not address whatsoever. – Quentin Ruyant Feb 6 '15 at 14:52
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    Moreover the argument is certainly useless for the rest of his paper and even saying "let's assume realism" would have been useless. Noone will object to a scientific paper "yeah but, what if realism is false? You didn't envisage solipsism". Now he is not the only one with this kind of attitude: today's scientists are no more trained in philosophy and the history of ideas, just as philosophers are not always trained in general science. This is unfortunate. – Quentin Ruyant Feb 6 '15 at 14:52
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    And of course as noted by other answers the argument is not a proof, but an appeal to intuitions (realism seems plausible). – Quentin Ruyant Feb 6 '15 at 14:56
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It sounds like he's begging the question. He's assuming the existence of the external world to prove the external world.

If one assumes nothing beyond appearances, then the existence of objects that behave like me simply mean there are appearances of objects behaving like me. Nothing in the appearances implies that these objects have a subjective inner state like I do. Assuming anything beyond appearances is an inference.

Views that deny the external world (like solipsism) aren't the least bit challenged by his argument. In fact, denying the external world is the kind of position that seems immune from any kind of refutation, for the simple fact that it "absorbs" everything, including arguments that it's not true.

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The first problem I am going to eliminate is perhaps one of the oldest philosophical problems with which mankind has had to live. [...] We may insist that introspection does not permit us to decide whether the world as we see it is “real,” or just a phantasmagory, a dream, an illusion of our fancy

He is really leading his audience on here, but he isn't being unfair. The oldest philosophical problems deal with whether the world is real. Any such debate can cause his argument trouble, so he instead uses this challenging statement to drive home a point: he is only using introspection. He could have worded this much less aggressively (most philosophers agree with him: the meaning of life would be a lot easier to spy if it was available via introspection).

With this we have closed the circle of our contradiction: If I assume that I am the sole reality, it turns out that I am the imagination of somebody else, who in turn assumes that he is the sole reality. Of course, this paradox is easily resolved, by postulating the reality of the world in which we happily thrive.

Here he redefines "I" without mentioning it. "If I assume that I am the sole reality" defines one I. "It turns out that I am [sic] the imagination..." has an I which is imaginary. However, there is a leap of logic to go between them that is lacking. There needs to be a reason why he believe he IS the imaginary version. Why he cannot do things such as "redefine 'I' to be all versions of I that are real or imaginary" is not argued.

A more strict wording which comes to a similar ending is that he cannot prove that he is the sole reality. Any other "I" could make the claim that he is an illusion, and there would be no way to disprove it.

His final sentence lines up with the resolution of my wording: if we assume there exists a "reality" and we are all real, everyone can have a consistent worldview.

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He's describing the yet unsolved (unsolvable?) problem of subject/object. I might imagine how this would be important in the field of artificial intelligence. Does the robot have a sense of 'self' (soul)? The relationship of self to the world, or one's own world (solipism) to the genuine, real, everyday "out-side-of-one's-own-self world" could be difficult if there is no 'commissure' between the right and left halves of the brain. I don't find his language arrogant. Quite common. I understand the language. For me, that alone is an accomplishment. Remember, there are editors at work in the publication to improve writing. Example: "I trust the wisdom, the language in books much more than anything published on-line. It's just easier, faster to read and to comprehend." Editors generally rewrite anything that comes off sounding "full-of-one's-self." Except, of course, in the case of Dawkins, Hitchens, Wright, Waugh, and others (meant to sound more like entertainers). Even Russell had editors.

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