Abstract. This chapter discusses Frank H. Knight's thought under three major themes, namely subjectivism, interpretation and social economics. Knight's economics starts with a conscious mind construct, which is able to infer under partial knowledge. Conscious human action is purposive, forward looking and extends towards other individuals. Rejecting neoclassical positivism, Knight points to the need for economics to reconceptualize itself as an interpretive study, a methodology in the Weberian tradition. Furthermore, his allure for phenomenological economics opens a methodological possibility for the Austrian School of Economics. This chapter concludes that Knight’s insight earns himself a place in the history of subjectivist economics.

Introduction

Frank Knight is regarded as one of the founding fathers of the Chicago School of Economics (Brouwer 2000: 13; Emmett 2001). However, Knight's economic methodology has never been developed into the mainstream thought of the Chicago School. Contrary to Friedman's positive empiricism, Knight's works exhibit a heavy subjectivist tone. He is one of the few American economists who adopts a neo- Kantian philosophy. According to Ross Emmett, Knight combines contributions of Walrasians, Austrians, Marshallians, Ricardians, Marxists and Institutionalists. Despite the broad range of Knight's interests, this chapter argues that Knight is not an eclecticist. There is an underlying unity to his thought. Specifically in methodology, he maintains the Weberian tradition of interpretation and a common- sense approach to economic understanding. His contributions to economic methodology, theories of human agency, entrepreneurship and economic organization have left much to be appreciated by neoclassical mainstream economists in general and Austrian scholars in particular. Following an introduction to Knight’s intellectual origins (Section 2), this chapter discusses Frank Knight's thought under three major themes: subjectivism (Section 3), method of interpretation (Section 4) and socioeconomic approach to understanding (Section 5). It will be concluded that Knight's insight earns himself a place in the history of subjectivist economics (Section 6).

Knight's Intellectual Origins

Knight's intellectual roots can be traced back to three major sources; namely, the subjectivist philosophy of William James and Henri Bergson, the theory of human agency from the Austrian School and the German social science giant, Max Weber.

On the philosophical front, Knight's thought is indebted to subjectivist philosophers: William James and Henri Bergson (McKinney 1977: 1438– 39; see also Foss 1996: 79).