Frank Knight and the Problem of the Twentieth Century
No 2023-06, Working papers from University of Connecticut, Department of Economics
Much has been written, especially in economics and management, about Frank Knight’s account of uncertainty and entrepreneurship. This paper attempts to put that theory in the larger context of the intellectual currents, and to a significant extent the economic history, in which Knight found himself. In response to rapid economic growth and the emergence of the large industrial enterprise in the U. S. in the late nineteenth and early twentieth centuries, many came to believe that the classical liberalism of the nineteenth century would need to be amended – if not jettisoned entirely. Frank Knight was among these. He was, along some dimensions, a Progressive and an Institutionalist. What set him apart from Progressives like John Dewey, however, was his theory of economic knowledge. Whereas Dewey and others insisted on the panacea of science as the solution to the “social question,” Knight understood that in a world of uncertainty, the cognitive faculty of judgment was essential and unavoidable, thus providing a new intellectual underpinning for many of the institutions of nineteenth-century liberalism. Yet Knight did not follow the implications of his theory of knowledge all the way to their conclusions. This is because – perhaps among other reasons – he began with a well-developed model of perfect competition, which, unlike such contemporaries as Joseph Schumpeter and F. A. Hayek, he was never willing to relinquish as a normative ideal. Perhaps surprisingly, Frank Knight was a Progressive and an Institutionalist because he believed in the neoclassical model of the economy.
Keywords: Frank Knight; uncertainty; entrepreneurship; liberalism; democracy; central planning (search for similar items in EconPapers)
JEL-codes: B25 B3 B52 L2 (search for similar items in EconPapers)
Pages: 39 pages
New Economics Papers: this item is included in nep-ent, nep-his, nep-hme, nep-hpe and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2023-06
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