How did we decide on the content and pedagogy in The Economy? This is a MB download. Are you sure you want to proceed? Please note that on some epub readers the support for our interactive features will vary. The epub file is not Kindle compatible. Yes No. Home The Economy. The Economy. Read the free ebook.
Featured teaching packs. Prediction, however, is not possible in the sciences of human conduct. Fortunately what economics can provide democratic discussion is an appreciation for the unintended consequences of intentional conduct: not predictions, but a critical understanding in a Weberian sense of what will not work and what might.
One could perhaps forgive Hutchison, then, for being surprised when Knight attacked him for his effort to render economics more scientific in order to improve its predictions. The most important assumption that had to be removed, Knight argued in , was that of certain knowledge. During the s, Knight reformulated his approach to economics through a reading of Max Weber.
Since ideal types are not empirically testable, there is no need to develop a theory of the position in between the ideal types of perfect competition and monopoly, a suggestion he had made in Risk, Uncertainty, and Profit Knight , p. In the review of Hutchison, Knight picked up the logical positivist argument that there are two types of knowledge, and countered with the argument that knowledge of human conduct required at least one more type of knowledge — that of human intentions, which could be neither empirical nor logical.
His argument has led some commentators to associate him with Austrian economics, at least in his methodological position Blaug , p. In fact, in other articles during the s, Knight identified as many as five or six different types of knowledge of human conduct he hints at this in Knight [b] , p. His argument was that each of these types of knowledge was legitimate, and that each had their appropriate place in explaining human conduct.
As Knight became less concerned about the predictive capacity for economics as a social science after Risk, Uncertainty, and Profit, he became more concerned about what kind of knowledge economics could provide to participants in the social discussion of policy in a liberal democracy.
That knowledge was necessary but limited: general economic principles provided some guidance on questions of price and cost changes resulting from changes in the law Knight [b] , pp. What society ultimately needs is good judgment, not economics. Secondly, what the planners need is instrumental knowledge of how best to meet the goals set for them by the firm or the government. We have already seen that Hutchison and Knight disagreed with each other over the relevance of theories of imperfect competition: Hutchison using the reality of oligopoly in the market as part of his argument for the need for a more empirically grounded theory; Knight countering that citizens engaged in social discussion in liberal democracy need only general principles as the anchors for their judgments.
But what about government planners? What does Hutchison believe they can provide society and what knowledge do they need? Using the methodological conclusion of the book — that most of the economic propositions of economic theory have empirical justification, but its central assumptions are either empirically false or tautological — Hutchison sets out to show that the argument against collectivist planning rests primarily upon those aspects of economic theory which are empirically empty.
Empirical study will improve both our foresight and technical capacity. Despite the claims of the defenders of laissez faire, there is no reason, therefore, to doubt the potential for economic planning, while at the same time, there are many reasons to doubt the efficiency of individual consumption and entrepreneurial decisions.
For Hutchison, the danger posed by over-reliance on economic liberalism is the substitution of a rationalistic creation — the world of perfect competition — for empirically grounded knowledge of the world we actually live in. Hutchison, in fact, aimed his methodological criticism of economic theory at a similar target: the economic objectives of all societies would be achieved sooner if planners were guided by an empirical economic science.
Conclusion: from Knight — Hutchison to Friedman The Knight — Hutchison debate ends in a draw: neither side concedes a point; each walks away believing the other to misunderstand either the fundamental necessity of theorizing within the context of a free society or the necessity of empirical verification for the fundamental presuppositions of our economic knowledge. With Knight contra Hutchison , Friedman argued that empirical justification of the assumptions of economic theory was irrelevant.
Incorrect predictions required either a modification of the tools, or a decision by economists to use different tools. Emmett lead him to advocate the removal of price theoretic principles from the toolbox altogether. He would probably counter that he never needed to: they worked more often than not.
What Knight and Friedman share in common is agreement with the argument that the relevance of economic principles to policy evaluation trumps the empirical realism of the assumptions those principles are built upon. The dynamism comes from the constant, intentional change in human values and wants.
As Knight said earlier in his career, any act of consumption is simultaneously a maximizing decision to satisfy a given set of wants and an explorative judgment as to whether that set of wants is the set the individual really values Knight [] Friedman assumes that the process of Knightian social discussion will generate the convergence of values among individuals in society, because the alternative is for groups to become entrenched in their values and have no alternative but to fight , p.
A positive question, for which economics provides the best answers. One issue remains between Knight and Friedman: the role of the economist in a democratic society. True enough, but this remains: Knight and Friedman continued their common defense of free society against the Keynesianism and socialism that Hutchison defended in the appendix to Significance, and Hutchison continued to argue that they were appealing to a Utopia.
Acknowledgements The author wishes to thank two anonymous referees for comments that improved the paper. Journal of Economic Methodology Notes 1. Chamberlin studied economics as an undergraduate student at the University of Iowa during the s, at the time Knight dominated the department there.
References Bacon, F. Alban, and Lord High Chancellor of England, eds. Spedding, R. Ellis, and D. Heath, New York: Garrett Press, pp. Blaug, M. Buchanan, J. Sills, New York: Macmillan, pp. Caldwell, B. Chamberlin, E. Emmett, R. McNamara and L. Hunt, New York: Palgrave Macmillan, pp. Friedman, M. Hammond, J. Hands, D. Salanti and E. Screpanti, Cheltenham: Edward Elgar, pp.
Hutchison, T.
0コメント