On Logical Difficulties, Philosophy, and the T.C.E. Explanation of the Firm

Stephen Nash and Liza Rybak

Review of Social Economy, 2010, vol. 68, issue 3, 339-363

Abstract: By exploring the implications of the linkage between Knight and Pragmatism, some non-trivial implications can be argued to exist. Specifically, section 2 outlines the T.C.E. literature, and how it exists in an atmosphere mixed with Marshallian competition and Knightian uncertainty. Section 3 then considers the disparate philosophical positions behind the work of Knight and Marshall. Knight's critique of Marshall is seminal, not because of any trivial technical innovations that Knight may have inspired within economic theory, but because Knight grounds his work on a philosophical viewpoint that effectively devastated Hegelian philosophy: American Pragmatism. Section 4 then links together the previous two sections by considering how the T.C.E. literature exhibits a dependency on both Pragmatism and Hegelian philosophy. The non-trivial implications of understanding the T.C.E. literature as a branch of Marshallian economics, which recognises Knightian uncertainty, are developed in section 5. Possible conclusions and a summary of the argument are provided in section 6.

Keywords: uncertainty; Knight; the theory of the firm; Pragmatic philosophy; Hegelian philosophy; Transaction Cost Economics (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1080/00346760902971847

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