The Organisation of Knowledge and Knowledge as Organisation

In contrast to the focus on the requirements for efficient allocation and the possibilities for meeting these requirements, which have been the prime theoretical focus in economics during the last century, Alfred Marshall’s primary concern as an economist was the organisation of the growth of knowledge in firms and industries, in ways which properly reflected both the limitations and the potential of the individual human mind—notably in the process of problem-finding, in which the tendency to variation may be crucial. Of particular interest is the conversion of John Whitaker, who was trained in post-Marshallian ways, to a focus on Marshall’s intellectual history, and notably on his early interest in the human mind, and its implications for his account of how economic systems develop through differentiation and integration—in which time is often crucial, and partial equilibrium normally a condition of progress. Andrew Skinner’s exploration of Adam Smith’s work, which was powerfully influenced by David Hume’s insistence on the necessary limitations of the potential of every human brain, explains both the impossibility of a general equilibrium which is based on proven knowledge and the continuing—and potentially dangerous—appeal of such a conception. Hayek offers a similar warning in The Sensory Order that, since we can never prove the truth of any supposedly universal proposition, our apparent knowledge may be false—as Adam Smith warned us. Therefore, as Nicolas Stern observed, when President of the British Academy, the inability to predict applies to both analysts and economic systems.