The second paradigm of psychology was 'functionalism'. As its name implies, the primary interest in this approach is in the function of mental processes, including consciousness. While not the creation of any single scholar, William James was clearly its most famous advocate.
The paradigm of functionalism
The subject matter of psychology: Psychology is the study of mental activity (e.g. perception, memory, imagination, feeling, judgment). Mental activity is to be evaluated in terms of how it serves the organism in adapting to its environment.
The methods of psychology: Mental acts can be studied through introspection, the use of instruments to record and measure; and objective manifestations of mind, through the study of its creations and products, and through the study of anatomy and physiology.
The functionalists tended to use the term 'function' rather loosely. The term is used in at least two different ways. It can refer to the study of how a mental process operates. This is a major departure from the study of the structure of a mental process, the difference between stopping a train to tear it apart to study its parts (structuralism), and looking at how the systems interact while it is running (functionalism). The term 'function' can also refer to how the mental process functions in the evolution of the species, what adaptive property it provides that would cause it to be selected through evolution.
Functionalism never really died, it became part of the mainstream of psychology. The importance of looking at process rather than structure is a common attribute of modern psychology. As an individual approach it lacked a clear formulation and inherited the problems of the structuralist reliance on introspection.
"A towering scholar, talented communicator, individualist, celebrity in his day, and a warmly empathic man who inspired genuine affection and respect... His greatest work, the two-volume Principles of Psychology (1890) is still fresh and informative. Probably the best-known book in all psychology, it is a treasure-house of ideas and finely turned phrases which psychologists continue to plunder with profit."
James was the first American psychologist, he wrote the first general text book on psychology, and he remains one of the most well-liked and famous of all psychologists. While functionalism did not have a specific founder or leader, James is identified as its early spokesperson.
He argued forcibly against the structuralist position that conscious can be broken into constituent parts. Coining the phrase 'stream of consciousness', James proposed that mental life is a unity that flows and changes. In Principles of Psychology he presented illuminating ideas concerning consciousness, attention, memory, habits, and emotions. He eventually concluded that he had contributed all he could to psychology and moved on. His later studies took him in a more esoteric direction.
From James' Varieties of Religious Experience:
"Our normal waking consciousness, rational consciousness as we call it, is but one special type of consciousness, whilst all about it, parted from it by the filmiest of screens, there lie potential forms of consciousness entirely different. We may go through life without suspecting their existence; but apply the requisite stimulus, and at a touch they are there in all their completeness... No account of the universe in its totality can be final which leaves these other forms of consciousness quite disregarded. How to regard them is the question...At any rate, they forbid our premature closing of accounts with reality."