A great deal depends on one's perspective. From a western scientific point of view, the mechanisms of acupuncture are largely understood to be neurophysiological but mainly not yet understood. Most of the varieties of western medical acupuncture are based on an understanding that the insertion of needles has an effect on nerves which can release muscles, over-ride brain signals, and so on. There are very often chemical changes in body fluids associated with treatment, and there is a great deal of experimentation on animals to see how various hormones and neurotransmitters are affected by inserting needles in specific areas or points.
From an eastern point of view, the patholology and physiology of the body is understood very differently. This is not just in China, but in Japan, India and other East Asian cultures where acupuncture is practised. The energies of all matter, both organic and inorganic, are thought to be manifestations of a single universal energy or force called 'qi', the movement and balance of which in the human being is seen as directly linked to the health of the individual. Inserting acupuncture needles in specific points is believed to harmonise and improve the flow of qi, and this understanding can be used both locally if the qi of a specific limb is affected, or systemically if the symptoms are an expression of a deeper underlying disorder. Qi in balance allows all physiological functions to return to normal.
The technical terms used to describe systems of medicine viewed in this way is paradigms, and following the work of Thomas Kuhn in the philosophy of science are thought to be qualitatively different to the extent that one cannot be mapped onto another. While this is true on some levels, the one bridging factor between all systems of medicine are the symptoms which the person feels and describes, and the observations and signs which the practitioner makes or sees. There are some rather abstruse arguments and theories being generated on the fringes of orthodox science which are trying to equate the East asian understandings of qi, prana or ki with some of the energies found in sub-atomic and quantum physics, but this is still highly speculative work, however telling some of the similarities may be.
The major difficulty which this paradigm difference presents to traditional acupuncture is that to gain acceptance in the West a great deal depends on claims for efficacy for particular named conditions based on trials which are based on the randomised double blind control trials used for drugs. These try to reduce the variables to a minimum to assess whether a single change has an effect, whereas acupuncture is a world of variables, a form of treatment which evolves and changes in response to feedback, not simply a mechanistic repetition of formula treatment.
In short, though, from an eastern perspective it is simply a way of moving qi, whereas from a western perspective it's mechanism is not fully understood but thought to be neurophysiological.
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