De gustibus est disputandum: Frank H. Knight's reply to George Stigler and Gary Becker's ‘De gustibus non est disputandum’ with an introductory essay

Abstract

Click to increase image sizeClick to decrease image size ACKNOWLEDGEMENTS Wade Hands deserves thanks for the initial idea of imitating Knight's style. The paper was originally presented at a session on the fact/value distinction in economics, sponsored by the Association of Christian Economists, at the January 1995 ASSA meetings in Washington, DC, and subsequently presented to a Center for Interdisciplinary Research in the Liberal Arts Faculty Colloquium at the University of Alberta, Augustana Faculty in March 1995. The introductory essay was added prior to a presentation of the paper at the History of Economic Thought and Methodology Seminar at Michigan State University in September 1995. While the usual authorial caveat applies, the author wishes to thank John Davis and Wade Hands for their comments on drafts of the entry on ‘De gustibus non est disputandum’ in their Handbook of Economic Methodology (Emmett 1998 Emmett, R. B. 1998. “‘De gustibus non est disputandum’,”. In The Elgar Handbook of Economic Methodology,, Edited by: Davis, J, Hands, D. W and Mäki, U (eds). pp. 93–5. Cheltenham, , UK: Edward Elgar. in [Google Scholar]), and Jeff Biddle and David Levy for their criticisms of earlier drafts of this paper. The Social Sciences and Humanities Research Council of Canada, the University of Alberta, Augustana Faculty and James Madison College, Michigan State University all supported my research. Permission to use unpublished material has been received from the University of Chicago Archives. Notes 1. In a letter to Lionel Robbins, Knight put it this way: ‘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 judgments of facts and judgments of value, is actually the basic error … Stating it another way, I am inclined squarely to reverse the maxim, De gustibus non [est] disputandum, in this regard, and hold that only judgments 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.’ (Knight to Robbins 1934 Knight, F. H. and Robbins, L. 17 February 1934. Frank H. Knight Papers, University of Chicago Archives, Box 61 Folder 17 [Google Scholar], emphasis in original) ‘The possibility of securing agreement is an absolutely essential feature of the scientific criterion of truth. Truth is not merely what is the same for all, but is what is known and recognized as the same … The point is that illusion is what we agree is illusion, and reality what we agree is reality, because in each case it is shown to be so by tests which we agree are valid. It is ultimately a matter of agreement, of common‐sense. Truth is established by consensus as much as by beauty. In both cases, to be sure, it is a consensus of the “competent.” But the competent are selected by agreement, another consensus; and ultimately we must come to principles agreed upon by the great mass of mankind.’ (Knight 1999 [1925] Knight, F. H. 1999) [1925]. “‘Fact and metaphysics in economic psychology’,”. In Selected Essays by Frank H. Knight,, Edited by: Emmett, R.B ed. vol. I, pp. 112–32. Chicago: University of Chicago Press. ‘What is Truth’ in Economics? [Google Scholar]: 117–18) Knight's notion of the value‐ladenness of facts, along with his appreciation for the social nature of value theory makes his epistemology similar to contemporary social constructivism. See Hands (1996 Hands, D. W. 1996. “‘Frank Knight's pluralism’,”. In Pluralism in Economics,, Edited by: Salanti, A and Screpanti, E (eds). pp. 194–206. Aldershot, , UK: Edward Elgar. in [Google Scholar]) and Hammond (1991 Hammond, J. D. 1991. ‘Frank Knight's antipositivism’,. History of Political Economy, 23: 359–81. [Crossref], [Web of Science ®] , [Google Scholar]) for recognition of this similarity. 2. A paraphrase of Knight (1935b Knight, F. H. 1935b. “‘The ethics of competition’,”. In The Ethics of Competition and Other Essays,, pp. 41–75. New York: Harper & Bros.. in [Google Scholar]: 47). 3. A paraphrase of Knight (1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]: 105). 4. Knight's defense of an economics based on the reality of human intentionality stretches over a number of articles. See for examples Knight (1999 [1925] Knight, F. H. 1999) [1925]. “‘Fact and metaphysics in economic psychology’,”. In Selected Essays by Frank H. Knight,, Edited by: Emmett, R.B ed. vol. I, pp. 112–32. Chicago: University of Chicago Press. ‘What is Truth’ in Economics? [Google Scholar]; 1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]; 1935c Knight, F. H. 1935c. “‘Economic psychology and the value problem’,”. In The Ethics of Competition and Other Essays,, pp. 76–104. New York: Harper & Bros.. in [Google Scholar]; and 1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]). 5. In Risk, Uncertainty, and Profit, Knight made the stability of tastes and preferences one of the foundations for the stability of knowledge which undergirded perfect competition: ‘We have, then, our dogma which is the presupposition of knowledge …: that the world is made up of things, which, under the same circumstances, always behave in the same way.’ (Knight 1921 Knight, F. H. 1921. Risk, Uncertainty, and Profit,, Boston: Houghton Mifflin. [Google Scholar]: 204, emphasis in original). But the instability of these foundations in the real world was the source of uncertainty. During the 1920s, Knight introduced an ethical element to the argument: A science must have a ‘static’ subject matter; it must talk about things which will ‘stay put’; otherwise its statements will not remain true after they are made and there will be no point to making them. Economics has always treated desires or motives as … sufficiently stable during the period of activity which they prompt to be treated as causes of that activity in a scientific sense. It has thus viewed life as a process of satisfying desires. If this is true then life is a matter of economics; only if it is untrue, or a very inadequate view of the truth, only if the ‘creation of value’ is distinctly more than the satisfaction of desire, is there room for ethics in a sense logically separable from economics. (Knight 1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 21) 6. A paraphrase of Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 35). 7. Paraphrase of Knight (1947c Knight, F. H. 1947c. “‘Fact and value in social science’,”. In Freedom and Reform: Essays in Economics and Social Philosophy,, pp. 268–92. New York: Harper & Bros.. in [Google Scholar]: 277). See also Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 34). For a slightly different version of the argument, see Knight (1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]: 135–41). 8. A paraphrase using Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 22; 1947c Knight, F. H. 1947c. “‘Fact and value in social science’,”. In Freedom and Reform: Essays in Economics and Social Philosophy,, pp. 268–92. New York: Harper & Bros.. in [Google Scholar]: 278; 1999 [1940] Knight, F. H. 1999) [1940]. “‘“What is truth” in economics?’,”. In Selected Essays by Frank H. Knight,, Edited by: Emmett, R.B ed. vol. I, pp. 372–99. Chicago: University of Chicago Press. ‘What is Truth’ in Economics? [Google Scholar]: 388–9). 9. A paraphrase of Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 36). 10. A paraphrase of Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 36; and 1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]: 125). See also Knight (1930 Knight, F. H. 1930. “‘Fact and interpretation in economics’,”. In Special Lectures on Economics, (US Department of Agriculture, Graduate School) (February–March). [Google Scholar]). On the need for studying history: The fundamental fact in the way of a science of human nature is a familiar characteristic shared by all the higher animals, that the reaction of an individual to an ‘object’ depends not only on or mainly on the individual and the object, but on the previous history of the individual. … Long before he is adult, a being with man's sensitiveness to passing experience and his capacity for conscious and unconscious memory has become such an unique aggregation of attitudes toward meanings that there is no use talking about accurate classification; he has to be treated as an individual. (Knight 1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]: 130) 11. Furthermore, just as it is impossible to avoid recognizing that human beings are observers in a sense ultimately separate from and opposed to perceived data, it is equally impossible to treat them as subjects to be ‘controlled’ without recognizing them at the same time as controllers. Control in society is a mutual relation. Failure to take account of the obtrusive fact reduces most of the voluminous extant discussion of ‘social control’ to the level of word‐churning. The wish and effort to control are present in all the other social units as well as in the ‘scientist’ who discusses them with lofty detachment; and he is subject to any “laws of behavior” which apply to them … Recognition of this mutuality of interest and ‘control’ between our fellows and ourselves becomes of course the corner‐stone of ethical relations, the treatment of humanity as such as an end and never as a means. (Knight 1999 [1925] Knight, F. H. 1999) [1925]. “‘Fact and metaphysics in economic psychology’,”. In Selected Essays by Frank H. Knight,, Edited by: Emmett, R.B ed. vol. I, pp. 112–32. Chicago: University of Chicago Press. ‘What is Truth’ in Economics? [Google Scholar]: 126) 12. A paraphrase of Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 39). 13. A paraphrase of Knight (1947b Knight, F. H. 1947b. “‘Religion and ethics in modern civilization’,”. In Freedom and Reform: Essays in Economics and Social Philosophy,, pp. 194–218. New York: Harper & Bros.. in [Google Scholar]: 194–200). For different versions of the same argument, see Knight (1947a Knight, F. H. 1947a. “‘Ethics and economic reform’,”. In Freedom and Reform: Essays in Economics and Social Philosophy,, pp. 55–153. New York: Harper & Bros.. in [Google Scholar]: 122–35; and Knight and Merriam 1945). 14. A paraphrase of Knight (1999 [1925] Knight, F. H. 1999) [1925]. “‘Fact and metaphysics in economic psychology’,”. In Selected Essays by Frank H. Knight,, Edited by: Emmett, R.B ed. vol. I, pp. 112–32. Chicago: University of Chicago Press. ‘What is Truth’ in Economics? [Google Scholar]: 115). 15. See Knight (1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]). 16. ‘The real sociology and economics must be branches of literature as much as of science.’ Knight (1935d Knight, F. H. 1935d. “‘The limitation of scientific method in economics’,”. In The Ethics of Competition and Other Essays,, pp. 105–47. New York: Harper & Bros.. in [Google Scholar]: 147). See also Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 39–40). 17. Paraphrase of Knight (1935a Knight, F. H. 1935a. “‘Ethics and the economic interpretation’,”. In The Ethics of Competition and Other Essays,, pp. 19–40. New York: Harper & Bros.. in [Google Scholar]: 40).