The double contrast between allocation and process and between formal proof and empirically based reasoning is selectively applied to the history of economics. Hume's rejection of provable knowledge led to Smith's psychological explanation of science and thence to his theory of growth through...

Rational choice theory relies on premises that are correct and complete; but, in general, neither can be assured. Knowledge is an open system of selected relationships and the adequacy of our representations of phenomena is always subject to Knightian uncertainty. The management of industrial...

Bruce Caldwell argues that Hayek eventually favoured an evolutionary response, and he endorses this recommendation. I am increasingly inclined to agree, although I believe that the concept of evolution needs to be handled with some care. Hayek himself was cautious, not least in The Sensory...

Marshall?s early encounter with the problems of knowledge shaped his attitude to both the method and content of economics. Theorists should avoid long chains of reasoning in favour of close contact with reality, and recognise that economic progress depends on the growth of knowledge through the...

A system is a set of elements which are connected in particular ways. The formal general equilibrium model is an extreme case in which every element is directly connected to every other and in which all potential external connections, including connections from the future, are incorporated in...

This unique Handbook explores both the economics of the firm and the theory of the firm, two areas which are traditionally treated separately in the literature. On the one hand, the former refers to the structure, organization and boundaries of the firm, while the latter is devoted to the...

This paper is intended to explore the twin propositions that the ability to create new ideas is a crucial factor in human progress, but that there is no reason why what is imagined, either as an explanation of existing phenomena or as an innovation, should be correct or feasible; indeed most...

Schumpeterian 'development from within' requires imagination, skill and motivation; so does Cattaneo's 'psychology of wealth'. Neither can be encompassed by models that rely on deductive rationality, but are twin products of Knightian uncertainty, where the absence of demonstrably correct...

The argument of this paper is that much modern economics is drastically undersocialised because it lacks an understanding of the distinctive characteristics of the evolved human mind, despite the significant insights provided by three of our most famous economists, Adam Smith, Alfred Marshall...