A Mengerian Theory of Knowledge and Economic Development

May, 2022

This paper reconstructs Carl Menger’s theory of economic development centered around the growth of knowledge. Menger made knowledge central to the economic process, long before this was done more widely in economics. His work draws attention to two different types of knowledge, shared cognitive and institutional frameworks which help create coherent and integrated markets on the one hand, and, on the other hand, private—increasingly specialized and differentiated—knowledge used in the production of heterogeneous (capital) goods. We situate Menger’s work on economic development in the evolutionary endogenous growth tradition going back to Bernard Mandeville and Adam Smith, and later developed by Alfred Marshall, Allyn Young, Ludwig Lachmann, and others. We use these insights to suggest that one of the crucial questions of economic organization is (1) the complementarity between the two types of knowledge we identify here, and (2) the extent to which knowledge is a part of shared social infrastructures rather than being organized privately within firms and other organizations.

Bourgeois Knowledge

November, 2020

One of the defining features of modern social science and economics in particular is the hard break it posits between everyday and scientific knowledge. French philosophers have called this characteristic the epistemological break. One of the key consequences of this break is that scientists have access to superior knowledge and are in a position to inform and steer the behavior of individuals. We believe that a large epistemological break is incompatible with science in a liberal democratic society. In this paper we analyze the extent to which the writings of Deirdre McCloskey contributed to bridging the epistemological break given that her early work, and the work of some members of younger Chicago School of economics more generally, was strongly influenced by the epistemological break. In the first decade after The Rhetoric of Economics McCloskey did much to strip scientific knowledge of its special elevated status. In her later work on the bourgeoisie there is also a renewed appreciation for everyday knowledge of economic actors. Yet important tensions remain, the appreciation for bourgeois knowledge has not been generalized to an appreciation for all everyday economic knowledge. And the tension between the economist as teacher, and the economist as student of society, which is already present in the Chicago tradition, is still visible.

The Ostrom Workshop

August, 2021

This paper analyzes the Ostrom Workshop as a site of interdisciplinary collective knowledge production. We provide an overview of the history of the Workshop and its most important outputs in terms of ideas, artifacts, and facilities for research. We argue that the Workshop’s contributions to social science came about by way of three types of collective knowledge production: team production, co-production and joint production. Team production, the collaboration on research projects is well recognized in the literature, but we demonstrate how the extra-departmental position of the Workshop and its ethos of artisanship greatly facilitated it. Co-production of knowledge was achieved through the active engagement with self-governing communities and the agencies governing the provision of public goods. In these exchanges the goal was not merely the study of governance, but also the crafting of good governance with the relevant communities which was congruent with the idea of co-production of public services emphasized by scholars of the Ostrom Workshop. Finally joint production of complementary outputs took place by way of individual research projects on governance and institutions, and led to the gradual emergence of conceptual language and framework for the analysis of institutions, the Institutional Analysis and Development framework.

Governing Markets as Knowledge Commons

October, 2021

Knowledge commons facilitate voluntary private interactions in markets and societies. These shared pools of knowledge consist of intellectual and legal infrastructures that both enable and constrain private initiatives. This volume brings together theoretical and empirical approaches that develop and apply the Governing Knowledge Commons framework to the evolution of various kinds of shared knowledge structures that underpin exchanges of goods, services, and ideas. Chapters offer vivid and illuminating case studies that illustrate this conceptual framework. How did pooling scientific knowledge enable the Industrial Revolution? How do social networks underpin the credit system enabling the Agra footwear market? How did the market category Scotch whisky emerge and who has access to it? What is the potential of blockchain-ledgers as shared knowledge repositories? This volume demonstrates the importance of shared knowledge in modern society.