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What Can We Learn about Frank Knight’s Economic Theory from the Prefaces to the Reprints of Risk, Uncertainty and Profit?


In 1933, Lionel Robbins asked Frank Knight if he could republish Knight’s Risk, Uncertainty and Profit (RUP) in order for students at the London School of Economics to continue to have access to the book. He also asked Knight to write a preface to provide an update on Knight’s changing economic views. Between 1933 and 1957, Knight wrote four new prefaces for reprint editions of RUP outlining changes in his views. In the prefaces, he identified four aspects of the theory expounded in RUP that he came to reject: (a) the method of successive approximation; (b) the separation of production from distribution; (c) the tri-partite division of the factors of production; and (d) any notion of a period of production. These rejections placed him squarely in opposition to F. A. Hayek’s theoretical work. He also identified the key features he had sought to develop in a monetary theory that would oppose J. M. Keynes and John Hicks. At the same time, he sought to identify the new theoretical ideas he was developing, including an enterprise-based theory of market exchange, and the adoption of a unitary resource, called capital. He also pointed to the work in social philosophy that he had begun in the 1940s, especially the need for a combined approach to social science using economic theory, ethics and social philosophy. The prefaces came to serve as a bridge between Knight’s original theory and what he would argue at the conclusion of his career.




The author would like to thank Krzysztof Moszyński for the English translation of the preface to the Japanese translation, Aiko Ikeo for providing a copy of the prefatory materials from the Japanese translation, the librarians of Arizona State University for help tracking down every reprint edition or translation to sort out the configuration of prefaces, three referees for comments which have improved the chapter, and Mario Rizzo, Malte Behal-Dold and Eric Mason for meeting and providing comments despite New York University’s closure due to snow on March 3, 2019 which canceled my presentation to the Colloquium for Market Institutions and Economic Processes.


Emmett, R.B. (2021), "What Can We Learn about Frank Knight’s Economic Theory from the Prefaces to the Reprints of Risk, Uncertainty and Profit?", Fiorito, L., Scheall, S. and Suprinyak, C.E. (Ed.) Research in the History of Economic Thought and Methodology: Including a Symposium on Frank Knight's Risk, Uncertainty and Profit at 100 (Research in the History of Economic Thought and Methodology, Vol. 39C), Emerald Publishing Limited, Bingley, pp. 55-73.



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