A Mengerian Theory of Knowledge and Economic Development

Erwin Dekker, Pavel Kuchar

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Abstract

This paper reconstructs a Carl Menger’s theory of economic development centered around the growth of knowledge. Menger made knowledge central to the economic process, long before this was done more widely in economics. His work draws attention to two different types of knowledge, shared cognitive and institutional frameworks which help create coherent and integrated markets on the one hand, and, on the other hand, private – increasingly specialized and differentiated – knowledge used in the production of heterogenous (capital) goods. We situate Menger’s work on economic development in the evolutionary endogenous growth tradition going to Bernard Mandeville and Adam Smith, and later developed by Alfred Marshall, Allyn Young, Ludwig Lachmann, and others. We use these insights to suggest that one of the crucial questions of economic organization is (1) the complementarity between the two types of knowledge we identify here, and (2) the extent to which knowledge is a part of shared social infrastructures rather than being organized privately within firms and other organizations.
Original languageEnglish
Pages (from-to)24-34
JournalCosmos and Taxis
Volume10
Issue number5-6
Publication statusPublished - 4 May 2022

Keywords

  • Economic Growth
  • Knowledge
  • Division of Labor
  • Carl Menger
  • Endogenous Growth

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