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.Viner, Jacob (1960), The intellectual history of laissez faire , Journal of Law and Economics, 3 (October),45 69.Viner, Jacob (1968), Adam Smith , in David L.Sills (ed.), The International Encyclopedia of the SocialSciences, Vol.14, New York: Macmillan and Free Press, pp.322 9; reprinted in Douglas A.Irwin (ed.)(1991), Essays on the Intellectual History of Economics, Princeton, NJ: Princeton University Press, pp.248 61.This chapter was first published in Young, Jeffrey T.(ed.) (2009), Elgar Companion to Adam Smith,Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp.346 57. 4 The Economic Organization, by Frank H.Knight:a reader s guideRoss B.EmmettIntroductionGenerations of students at the University of Chicago during the 1930s and 1940s wereintroduced to economics by Frank H.Knight s little textbook, The Economic Organization(EO).Originally written for classroom use at the University of Iowa in the mid-1920s, thematerial in EO was intended as part of a larger textbook project.1 Knight continued to workon an economics textbook throughout the 1930s and early 1940s, but no book was everpublished.EO, therefore, contains the only textbook material of Knight s ever published.In 1932, the four chapters Knight wrote in Iowa were included in the preliminarycourse reader for the newly formed general social sciences course in the College of theUniversity of Chicago, at the suggestion of economist Harry Gideonese (Social ScienceStaff 1932).The publication of the four chapters as a booklet with the title The EconomicOrganization (Knight 1933) a year later made them available to students elsewhere in theuniversity.Henry Simons required the booklet in conjunction with his course (Simons2002), and it circulated widely among graduate students taking Economics 301.Thebooklet was reprinted as necessary for classroom use throughout the 1930s and 1940s,while the version included in the general social science course reader removed the thirdand fourth chapters in 1936.We do not know when the university discontinued publi-cation of the booklet (copies continued to circulate among students long after publica-tion ceased), but EO s publication by Augustus M.Kelley in 1951 made the book morewidely available (Knight 1951).EO, Jim Buchanan tells us, contains the elements of theory that helped to establishfor Chicago its eminence in neoclassical economics (Buchanan 1968, p.425).In con-trast with other textbooks of the time (for example, Ely et al.1923), Knight s little bookpresented almost no historical or institutional details of the American (or any other)economy, spent only seven pages on monopoly and did not contain the words socialcontrol anywhere in the text.Instead, it introduced the basic functions of an economyand the circular-flow diagram, highlighted the division of the market period into fourdistinct periods (see Knight 1921a) and condensed the treatment of price theory Knighthad provided in Risk, Uncertainty and Profit (RUP) (Knight 1921b) in a clear, straight-forward manner amenable to undergraduate students.After reading the book, studentsunderstood how, in a free enterprise economy, the price system solved simultaneouslythe problems of valuation and imputation across all goods and factor markets.Whilethis presentation is old hat to the textbooks of today, the result was nothing less thanrevolutionary in the context of the 1930s and 1940s.The four chapters of EO:1.Social economic organization;2.The price system and the economic process;52 The Economic Organization: a reader s guide 533.Demand and supply and price; and4.Distribution: the pricing of productive products individually,can be divided into two sections.However, the sections can be divided in two differentways.First, chapters 1 and 2 can be divided from chapters 3 and 4, on the basis of theobservation that the last two chapters comprise the essence of price theory.Chapter 3introduces the basics of demand and supply theory, elasticity and the problem of timein connection with the determination of price (the market period ).Chapter 4 examinesthe problem of imputation, and then addresses the determination of wages, interest, rentand profit from a price-theoretic framework.In a price-theoretic perspective, chapters 3and 4 are the core of the book; the first two chapters are important, but introductory.2The price-theoretic perspective will be adopted in the discussion that follows, althoughmore attention will be paid to the introductory chapters than the more familiar pricetheory chapters.The other possible division of the four chapters comes with the adoption of a socialorganization perspective.In the first chapter, Knight argues that all economies performthe same functions, but that their forms of organization differ.The second, third andfourth chapters then go on to examine the functioning of the free-enterprise form ofeconomic organization, which operates through the price system [ Pobierz całość w formacie PDF ]
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.Viner, Jacob (1960), The intellectual history of laissez faire , Journal of Law and Economics, 3 (October),45 69.Viner, Jacob (1968), Adam Smith , in David L.Sills (ed.), The International Encyclopedia of the SocialSciences, Vol.14, New York: Macmillan and Free Press, pp.322 9; reprinted in Douglas A.Irwin (ed.)(1991), Essays on the Intellectual History of Economics, Princeton, NJ: Princeton University Press, pp.248 61.This chapter was first published in Young, Jeffrey T.(ed.) (2009), Elgar Companion to Adam Smith,Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp.346 57. 4 The Economic Organization, by Frank H.Knight:a reader s guideRoss B.EmmettIntroductionGenerations of students at the University of Chicago during the 1930s and 1940s wereintroduced to economics by Frank H.Knight s little textbook, The Economic Organization(EO).Originally written for classroom use at the University of Iowa in the mid-1920s, thematerial in EO was intended as part of a larger textbook project.1 Knight continued to workon an economics textbook throughout the 1930s and early 1940s, but no book was everpublished.EO, therefore, contains the only textbook material of Knight s ever published.In 1932, the four chapters Knight wrote in Iowa were included in the preliminarycourse reader for the newly formed general social sciences course in the College of theUniversity of Chicago, at the suggestion of economist Harry Gideonese (Social ScienceStaff 1932).The publication of the four chapters as a booklet with the title The EconomicOrganization (Knight 1933) a year later made them available to students elsewhere in theuniversity.Henry Simons required the booklet in conjunction with his course (Simons2002), and it circulated widely among graduate students taking Economics 301.Thebooklet was reprinted as necessary for classroom use throughout the 1930s and 1940s,while the version included in the general social science course reader removed the thirdand fourth chapters in 1936.We do not know when the university discontinued publi-cation of the booklet (copies continued to circulate among students long after publica-tion ceased), but EO s publication by Augustus M.Kelley in 1951 made the book morewidely available (Knight 1951).EO, Jim Buchanan tells us, contains the elements of theory that helped to establishfor Chicago its eminence in neoclassical economics (Buchanan 1968, p.425).In con-trast with other textbooks of the time (for example, Ely et al.1923), Knight s little bookpresented almost no historical or institutional details of the American (or any other)economy, spent only seven pages on monopoly and did not contain the words socialcontrol anywhere in the text.Instead, it introduced the basic functions of an economyand the circular-flow diagram, highlighted the division of the market period into fourdistinct periods (see Knight 1921a) and condensed the treatment of price theory Knighthad provided in Risk, Uncertainty and Profit (RUP) (Knight 1921b) in a clear, straight-forward manner amenable to undergraduate students.After reading the book, studentsunderstood how, in a free enterprise economy, the price system solved simultaneouslythe problems of valuation and imputation across all goods and factor markets.Whilethis presentation is old hat to the textbooks of today, the result was nothing less thanrevolutionary in the context of the 1930s and 1940s.The four chapters of EO:1.Social economic organization;2.The price system and the economic process;52 The Economic Organization: a reader s guide 533.Demand and supply and price; and4.Distribution: the pricing of productive products individually,can be divided into two sections.However, the sections can be divided in two differentways.First, chapters 1 and 2 can be divided from chapters 3 and 4, on the basis of theobservation that the last two chapters comprise the essence of price theory.Chapter 3introduces the basics of demand and supply theory, elasticity and the problem of timein connection with the determination of price (the market period ).Chapter 4 examinesthe problem of imputation, and then addresses the determination of wages, interest, rentand profit from a price-theoretic framework.In a price-theoretic perspective, chapters 3and 4 are the core of the book; the first two chapters are important, but introductory.2The price-theoretic perspective will be adopted in the discussion that follows, althoughmore attention will be paid to the introductory chapters than the more familiar pricetheory chapters.The other possible division of the four chapters comes with the adoption of a socialorganization perspective.In the first chapter, Knight argues that all economies performthe same functions, but that their forms of organization differ.The second, third andfourth chapters then go on to examine the functioning of the free-enterprise form ofeconomic organization, which operates through the price system [ Pobierz całość w formacie PDF ]