Principles of Social Action
HARRIS, ABRAM L.
Principles of Social Action Intelligence and Democratic Action. By Frank H. Knight. Harvard. 177 pp. $3.75. Reviewed by Abram L. Harris Professor of Economics, University of Chicago THE CAREER OF...
...Not only socialists and liberals of the New and Fair Deals but also old-fashioned liberals and the new conservatives will profit from reading him...
...In his definition, freedom is relevant only to the choices and actions of “normal” adults...
...Literal freedom is impossible and the exercise of discretionary authority by agents is inevitable...
...Knight concludes that the “whole problem of social action centers in the relation between the economic order and the political order...
...Reviewed by Abram L. Harris Professor of Economics, University of Chicago THE CAREER OF Frank H. Knight has been long and distinguished...
...In recent years it has undergone fundamental modifications by political action in all countries, and in Knight’s opinion, its ultimate fate is problematical...
...But among the lay public to whom this little book is addressed, many will be meeting him for the first time...
...According to him this type of politico-economic society was the consequence of the great liberal revolution, dating approximately from the Enlightenment and consisting of: (1) the democratization of politics inseparably connected with the liberation of economic life, i.e., the emergence of the competitive enterprise system, signalized in Adam Smith’s Wealth of Nations...
...The “more the society stresses freedom, mobility, change and variety, the more the functions of government are multiplied and elaborated, and the more it inevitably becomes a government by men and not by law...
...The book comprises six lectures given at the University of Virginia and presents in non-technical language the substance of his reflections over the years on the ethical and economic problems of liberal-democratic society...
...In this book concrete policies of action are discussed only insofar as they relate to the performance of the author’s main task—that of setting forth what in his judgment are the principles of intelligent thought and social action in a society based on freedom...
...The shortcomings and imperfections of the system, which call for some appropriate governmental action, are concentration of economic power, cyclical business fluctuations and income inequality...
...and (3) a radical change, closely aligned with the others, in the meaning of truth from a thing conceived to be certain, final and revealed to the idea of knowledge as provisional, progressive and discovered through free investigation...
...To the large group of scholars who have benefited from his writings in economics and philosophy and his teaching at the University of Chicago, he needs no introduction...
...2) conceit, exaggeration of one’s merits and the expectation of being treated accordingly by others: and (3) stupidity reflecting prejudice rather than ignorance...
...Knight holds, with metaphysical freedom of the will, with Franklin Roosevelt’s “absurd” four freedoms, or with power, although freedom without power is “empty...
...Laissez faire will not do...
...they are made responsible to the public by various political devices and, in economic relations, by the market...
...The knowledge —derived mainly from the social sciences, ethics and history—includes knowing (1) one’s own capacities and the properties of the available technical materials...
...2) a scientific revolution in world view and in the conception of man and society...
...If the government would keep its hands clean of encouraging monopolies...
...The problem is to find the best compromise between freedom and order— how much to leave to individual free choice and voluntary agreement versus what limits to set by enforced general rules...
...It has no meaning for infants and, within degrees, for adults helpless to act...
...A separation of ownership from control in giant corporations does cause some departure in reality from the theoretical model of analysis...
...In economic as well as in political relations organization, and hence a delegation of authority to leaders and other specialists, is necessary...
...2) what changes are possible, the inevitable course of events being separated from factors subject to change by intelligent action...
...Knight equates social with political action and holds that “to be genuinely social it must be democratic,” that is, “decisions must finally be reached through discussion...
...A political system, operating through competition of leaders for the votes of the electorate, and economic enterprises, competing for consumers’ dollars, are considered to be the characteristic institutions of a free society...
...In addition to these requirements, it must be understood that existing and attainable knowledge is greatly limited...
...He describes the obstacles to intelligent action in the field of economic policy as: (1) rebelliousness arising from irrational expectations and discontent...
...In philosophic outlook, Knight is a pluralist, since he believes it is good to have many principles, “to take account of all that are relevant...
...social issues are solvable not by natural science methods, since at bottom they are issues of what is good, and involve right choices among values...
...In his view the “capitalistic” economy is essentially one of risk and uncertainty attended by profit and loss...
...He describes the general objective of action as social progress or “the continuous improvement of society, its organization and its membership...
...nor will appeals to government to remedy anything thought to be wrong without asking whether it is remediable or whether politics will do it better...
...He contends that although the economic man is by no means an image of how man habitually acts, it is an indispensable analytical tool for demonstrating how economic resources are best utilized and how material progress is achieved through saving and investment...
...Because of this, “modern society is...
...a tissue of agency relations...
...But any rigid order excludes all freedom and, hence, all intelligent action...
...The revolution was a liberation of the human mind—a liberation which imposes upon democratic man in his social capacity as citizen the necessity of basing his choices and actions upon intellectual deliberation and decision...
...To achieve this objective the two great requirements are knowledge and agreement on what is desirable...
...As an economic theorist, Knight rejects the Marxian view that the enterprise economy rests upon the exploitation of labor and...
...likewise, Veblen’s disparagement of the economic man...
...All will find him provocative to serious discussion and a challenge to many current preconceptions...
...Furthermore, even in liberal-democratic society the “supreme” value is not freedom but order, involving law and thus compulsion without which freedom of choice and its correlative, voluntary action, are impossible...
...The worst monopolies, Knight contends, are not businesses, but labor unions and restrictionist farm organizations supported by public opinion and political action...
...And the right choice involves not an all-or-none approach but the best combination, a proportioning of conflicting values—e.g., freedom and efficiency, order and security, progress and freedom...
...Political and economic organization based upon individual freedom has occupied but a brief moment in man’s history and its development has been confined to Western Europe and the United States...
...and “to use judgment as to when and how far and in what way to follow each...
...and (3) the consequences to be expected from acting in each of the possible ways...
...This conception of freedom is not to be confused...
...Which, of course, is not to say that the agents act irresponsibly...
...But large-scale corporate enterprise as such is unimportant for general theory, since competitive or monopolistic theory still applies as long as the concern seeks to maximize profit rather than power by political activities...
...In Knight’s conception the root of liberalism is individual freedom, defined negatively as freedom of choice in the absence of restraint by others...
...he says, “much of the problem would very likely take care of itself...
...The economy, in other words, is entrepreneurial in that some one or some group delegates authority to managers, assumes responsibility for their decisions, hires other productive services competitively in the market and assures workers and other property owners an income large or small according to their worth to the enterprise...
Vol. 43 • October 1960 • No. 39
