Frank Knight quotes

Frank Knight was an influential American economist, recognized as one of the founders of the Chicago School of Economics. His work on risk, uncertainty, and profit helped shape modern economic theory. He made lasting contributions with his analysis of uncertainty and the role of entrepreneurship in the economy. Here are 26 of his quotes:

All science is static in the sense that it describes the unchanging aspects of things.

Frank Knight

In the long run all producers are forced to use the most efficient methods or give place to others who do.

Frank Knight

Economics and ethics naturally come into rather intimate relations with each other since both recognizedly deal with the problem of value.

Frank Knight

We have to adapt and overcome, that's all we can do.

Frank Knight

In Professor Pigou's study the argument that free enterprise lead to excessive investments in industry having relatively upward-sloping cost curves is developed with the aid of concrete example, the case of two roads; Suppose that between two points there are two highways, one of which is broad enough to accommodate without crowding all the traffic which may care to use it, but is poorly graded and surfaced; while the other is a much better road, but narrow and quite limited in capacity. If a large number of trucks operate between the two termini and are free to choose either of the two routes, they will tend to distribute themselves between the roads in such proportions that the cost per unit of transportation, or effective returns per unit of investment, will be the same for every truck on both routes. As more trucks use the narrower and better road, congestion develops, until at a certain point it becomes equally profitable to use the broader but poorer highway.

Frank Knight

Market competition is the only form of organization which can afford a large measure of freedom to the individual.

Frank Knight

The possibility of saying anything about a thing rests on the assumption that it preserves its identity, or continues to be the same thing in the respect described, that it will behave in future situations as it has in past.

Frank Knight

Conflicting economic interest is relatively unimportant as a cause of war.

Frank Knight

...even professors of economics, to say nothing of the public, do not generally have scientific minds.

Frank Knight

In spite of all the foregoing, there is a science of economics, a true, and even exact, science, which reaches laws as universal as those of mathematics and mechanics. The greatest need for the development of economics as a growing body of thought and practice is an adequate appreciation of the meaning, and the limitations, of this body of accurate premises and rigorously established conclusions. It comes about in the same general way as all science, except perhaps in a higher degree, i. e., through abstraction. There are no laws regarding the content of economic behavior, but there are laws universally valid as to its form. There is an abstract rationale of all conduct which is rational at alt, and a rationale of all social relations arising through the organization of rational activity.

Frank Knight

[In 1932, Lionel Robbins declared economics ‘the science of choice' (Robbins 1932). In the same year, when students at the University of Chicago opened their social sciences course reader, they read Knight's response:] Such definitions come too near to saying that economics is the science of things generally, of everything that men are for practical reasons interested in. Such a definition is useless and misleading.

Frank Knight

A civilization which is dominated by this matter-of-fact insight must prevail against any cultural scheme that lacks this element. This characteristic of western civilization comes to a head in modern science, and finds its highest material expression in the technology of the machine industry.

Frank Knight

Most striking feature... is the author's failure to understand the elementary mechanics of the competitive economic organization.

Frank Knight

[Weber] is the only one who really deals with the problem of causes or approaches the material from that angle that can alone yield an answer to such questions, that is, the angle of comparative history in the broad sense.

Frank Knight

Of the American institutionalists, his most generous comments concerned Commons's work, work that he regarded as hopelessly unsystematic but highly ‘suggestive and valuable'

Frank Knight

[We may view the] economic organization as a system of prize relations. Seen in the large, free enterprise is an organization of production and distribution in which individuals or family units get their real income, their "living," by selling productive power for money to "business units" or "enterprises", and buying with the money income thus obtained the direct goods and services which they consume. This view, it will be remembered, ignores for the sake of simplicity the fact that an appreciable fraction of the productive power in use at any time is not really employed in satisfying current wants but to make provision for increased want-satisfaction in the future; it treats society as it would be, or would tend to become, with progress absent, or in a "static” state.

Frank Knight

Never waste any time you can spend sleeping.

Frank Knight

Knowledge is more a matter of learning than of the exercise of absolute judgment. Learning requires time, and in time the situation dealt with, as well as the learner, undergoes change.

Frank Knight

The truth seems . . . to be that in the ultimate and essential problem the economic factor is relatively superficial and unimportant.

Frank Knight

Goods move in response to price differences from points of low to points of higher price, the movement tending to obliterate the price difference and come to rest.

Frank Knight

In spite of all the foregoing, there is a science of economics, a true, and even exact, science, which reaches laws as universal as those of mathematics and mechanics. The greatest need for the development of economics as a growing body of thought and practice is an adequate appreciation of the meaning, and the limitations, of this body of accurate premises and rigorously established conclusions. It comes about in the same general way as all science, except perhaps in a higher degree, i. e., through abstraction. There are no laws regarding the content of economic behavior, but there are laws universally valid as to its form.

Frank Knight

The Ethics of Competition is a book of Frank H. Knight's writings on a common theme: the problem of social control and its various implications. Knight believed in free economic institutions but was also aware that the competitive economic system could be improved. One of the central figures of neoclassical economics in the twentieth century, Knight pursued a lifelong campaign against irrationalities of nationalism, religious fanaticism, and group conflict, while conceding that these were fundamental orientations of human action that might yet frustrate his own work as an economist. While Knight vigorously defended human freedom and the liberal order, he also was sufficiently moved by the shortcomings of liberalism as to condemn it as rife with abuse.

Frank Knight