Emily Skarbek  

From the Archives: Knight on Robbins (1934)

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In spending time in the LSE archives recently, I came across a letter Frank Knight sent to Lionel Robbins on February 17, 1934. In the letter, Knight wishes to amend his review of Robbins's "Essay on the Nature and Significance of Economic Science" published in the International Journal of Ethics (1934).

Before noting his revision, it is perhaps of interest that Knight views Robbins's project as one of "a transplanting onto English soil of the Austrian or 'neo-Austrian' economics" (pg 359), where he is referring to the fact that "the postulates of rational economics essentially stake out a claim to adequacy for a complete analysis of human behaviour in terms of choice between uses of means in realizing ends" (pg 358).

For those familiar with LSE in the 1930s this would not be altogether surprising, as the ideas of Hayek and Mises were first making their way into the English language debate via LSE at the time. But for Knight, Robbins's work has far too much emphasis "on 'precision' and 'being scientific'", a theme that Hayek would go on to develop in distinguishing the methods appropriate for the social sciences from those of the physical sciences.

Knight states his amended position, as follows, in his letter to Robbins:

"...the more I think about it the more I am inclined to say that the fundamental principle stressed so much in your book, of an absolute contrast between judgements of facts and judgements of value, is actually the basic error in the theory of nineteenth century liberalism. Stating it another way, I am inclined squarely to reverse the maxim, De gustibus non disputandum, in this regard, and hold that only judgements of value can be discussed, facts as such not at all. That is, when we disagree about a fact it seems to me we disagree about the validity of observation or evidence, and that every disagreement is essentially a difference in evaluation." (Archive box, Robbins 3/2/8)

Rather than an esoteric comment on a lost debate, Knight's issue is a perennial concern in economics and political economy (see for instance Dani Rodrik's new book, Economics Rules). How much we agree on the evidence is dependent on how valid we believe that evidence to be. Validity in the social sciences is then tied to how we evaluate the methods for attaining knowledge and the criteria or values we use in making those judgements. For Knight, truth judgements can never be absolute, but rather only gain significance with the consensus of practitioners within a community. In this sense, the best we can gain in the social sciences are "relatively absolute, absolutes".

Knight is a fascinating figure in relation to connections between the Austrian school and the work of his student, James Buchanan. For both, subjectivity plays an important role both in how agents perceive the economic world but also in the limits it places on political economy.

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COMMENTS (1 to date)
Jon writes:

Fascinating. It’s a pity it took so much longer for LSE economists and others to “transplant onto English soil” the Austrian epistemology of Karl Popper, and—even more—it’s a pity Popper’s theory of knowledge failed to flourish after it had been transplanted.

Hayek himself eventually recognized that he’d been wrong to draw a methodological distinction between the social and the physical sciences and that Popper was right that there is only “one method of all rational discussion.... The method ... of stating one’s problem clearly and of examining its various proposed solutions critically.” But my impression is that neither Hayek nor any other economist has recognized the significance of the other two elements of Popper’s theory. The first of these is fallibilism, i.e., “The view, or the acceptance of the fact, that we may err, and that the quest for certainty (or even the quest for high probability) is a mistaken quest.” And the second is the distinction between objective knowledge (i.e., ideas that have been given concrete expression in the form of statements, theories, etc.) and subjective knowledge (i.e., psychological dispositions, beliefs, etc.).

The result of this neglect is that, as you say, economists—and intellectuals more generally—continue to think about knowledge in psychologistic or, worse still, in sociological terms. They should, instead, be trying to promote the growth and improvement of mankind's stock of objective knowledge.

Part of the problem, no doubt, is that, to the extent that economists and other intellectuals know Popper at all, they know him through the secondary literature. For some reason that literature mostly ignores the really interesting elements of Popper’s theory alluded to above, and focuses instead on his proposal to use fallibility as a criterion for distinguishing between science from metaphysics. (Adding insult to injury, they invariably get that part of his theory wrong!) What would it take to get economists to actually read Popper?

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