Book Description
This revolutionary work taught the world how to systematically distinguish between risk — randomness with knowable probabilities — and uncertainty — randomness with unknowable probabilities — in order to accurately and properly ascertain a venture's potential profitability. Knight's methodology served as the foundation of the Chicago School of Economics.
Customer Reviews:
One of the classics in economics.......2005-02-21
Even though the recent research in microeconomic theory has paid attention (somewhat reluctant in my opinion) to the topic of the "uncertainty", i.e. the Knightian uncertainty, it has not been successfully incorporated in the main theoretical framework, yet. The one of the evidences may be that we still cite D. Ellsberg's paper in QJE as the one of the most important work in this field: it is like citing Keynes' "General Theory" in every microeconomic paper as in 1950s and 1960s.
The book is pleasant to read: it is full of insights, usually forgotten by now, including the complemental tendency of the theoretical and empirical works in economics. The most important accomplishment is that he argued that the exisence of the "uncertainty", the event whose probablity cannot be estimated priori or from empirical data, explains the instablity of the perfect competition, the (lucklustre) justification for the monopoly and the oligopoly, and the superiority of the private property system (capitalism). It is noticable that many phenomenons metioned in the book can be still applicable now, and the last part implies the author's thought regarding to the path of the capitalism, which is explored in more depth in Schumpeter's work despite the differences in two economists' predictions.
Knight is one of the economist who lived in the transition of classical into neoclassical economics. The book predicts the emergence of more mathematical economists, but cannot escape from the influence of the former. The same thing can be said of the works of Schumpeter, Viner, and Veblen. Despite being one of the most famous economists, he and Schumpeter has no student who followed their lines of works: is it because their imaginative ways in conducting the reserach, or because of the trends in economics which trapped their students? (Stigler was a student of Knight, but which interest do their works share, except for their interests in history of economic thoughts?)
It is worth reading because it reminds of what economics is or should be about, not because it prescribes the solution which could not be found in the modern economic works. We are witnessing the transition of several countries into the private economics with the mixed results. It should be noted that Hayek's work is the starting point in this field, the transition economics or the comparative economics, but Knight's work is more appropriate, pratical, and dynamical.
Thus, if you are uncomfortable with the current economics, want to explore more idiosyncratic works in economics and think about the big picture in the path of the society, or are tempted to diverge from the dullness of the business books in your bookshelf, then this may what you have been looking for. Unless you are struck with the optimism that cannot be easily found in the present.
Before Knight there was Schumpeter and Keynes.......2004-11-23
Knight's Risk,Uncertainty and Profit(RUP) is a classic work ,especially with respect to Knight's analysis of the distinction between risk and uncertainty and the role each plays in the decision making calculus of the entreprenuer or the firm.For instance,Knight recognized that the negative impact of uncertainty could be reduced for those firms that were able to increase their size and get larger and larger over time.Advertising would allow firms to deal with the uncertainty of consumer responses to the introduction of new products over time ,as well as to changes in consumer preferences.Knight was the first to clearly recognize that economic profit is the return to the successful entreprenuer or owner of the firm to compensate them for the bearing of uncertainty.Knight's analysis of the connection between uncertainty and economic profit corrected the errors of Ricardo and Marx,who regarded economic profit as an unearned surplus .Keynes's integration of expected economic profit into the specification of his aggregate supply function,Z,where Z =P+wN(P equals expected economic profit),can be traced back to Knight's earlier discussions.It is strange that economists still are having trouble specifying Keynes's Z function nearly 70 years after the publication of the General Theory in 1936.However,Knight's theoretical analysis of uncertainty at both the micro and macro level is not as impressive as Schumpeter's analysis of uncertainty in his Theory of Economic Development(1912)or of the path breaking analysis of John Maynard Keynes in chapters 6 and 26 of the A Treatise on Probability(1921).In this latter book,Keynes operationalized a quantitative method of dealing with uncertainty(insufficient weight of the evidence,w)by means of his conventional coefficient of risk and weight,c.This coefficient allows a decision maker to incorporate uncertainty and nonadditive probabilities into a technical analysis of decision making.The only author who comes close to Keynes is D.Ellsberg with his practically identical index to measure ambiguity called rho.There are still some unanswered questions that can be asked in this area of economic thought.Why didn't Knight cite the earlier work of Joseph Schumpeter on the risk versus uncertainty distinction?Further,why didn't Keynes cite both Knight and Schumpeter in his chapters 12 ,17 and 22,where he discussed the issue of the effect of uncertainty on investment in new capital goods and on stock market speculation?
Model of how economic problems should be analyzed.......2001-03-08
This is the best work of economic theory I have ever read. There is no work in economics that evinces better judgment on the main issues or that does a better job of balancing theory with a sense for the facts. Knight begins by defending theoretical (that is, deductive) economics. Unlike the economic rationalists, however, Knight does not believe that theoretical economics can lead to precise results. The application of the "analytic method" must always be "incomplete," he argues. Theoretical economics thus can only deal with "tendencies," that is, "with what 'would' happen under simplified conditions never realized, but always more or less closely approached in practice." This methodology Knight describes as "the method of successive approximations." Knight also warns of the dangers of rationalism and the necessity of constantly checking one's results against the facts. "When the number of factors taken into account in deduction becomes large, the process rapidly becomes unmanageable and errors creep in... It is better to stop dealing with elements separately before they get too numerous and deal with the final stages of the approximation by applying corrections empirically determined."
Armed with the method, Knight proceeds to tackle several important problems in economics, especially dealing with the theoretical construct of "perfect competition." By always keeping his head firmly within the empirically real, Knight is able to bring a great deal of sound judgment to a number of issues. Knight had a keen sense of human nature and how human beings behave in the real world of fact. He knew that most economists had made men out to be far more rational than they really were. Businesses, he argued, did not merely seek to meet the needs of the consumers; no, they sought to create new needs through innovation, advertising, and even a sort of manipulative hypnotism. In this, Knight argued, we find both progress and abuse, civilization and fraud. Knight also brings a good deal of sense to the problem of interest, demonstrating the psychological inadequacy of all time-preference theories of interest. But Knight's most important contribution consists in his analysis of the difference between risk and uncertainty. Risk, Knight argues, is a measurable probability that something could happen, like the probability that an individual will be struck by lightening or hit by a car. Uncertainty is a kind of immeasurable risk--e.g., predicting short term flucations in exchange rates. Knight's analysis is crucial to understanding economic reality. Knight's distinction between risk and uncertainty, for instance, explains why the rise of derivative securities in financial markets is so dangerous. Derivatives attempt to insure uncertainty, which is immeasurable, as if it were risk (which is measurable).
Get this classic back in print!.......2001-03-02
This is the standard work in the field, give or take some stuff Keynes wrote on risk and capital.
Book Description
This digital document is an article from National Underwriter Property & Casualty-Risk & Benefits Management, published by The National Underwriter Company on June 6, 2005. The length of the article is 1737 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: AIG 10-K reveals overstated income: five-year combined profit cut by $3.9 billion; $850 million A&E charge announced.(SOME UNCERTAINTY REMAINS)(American International Group Inc.)
Author: Michael Ha
Publication:
National Underwriter Property & Casualty-Risk & Benefits Management (Magazine/Journal)
Date: June 6, 2005
Publisher: The National Underwriter Company
Volume: 109
Issue: 22
Page: 6(3)
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Book Description
This digital document is an article from National Underwriter Property & Casualty-Risk & Benefits Management, published by The National Underwriter Company on April 19, 2004. The length of the article is 1299 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: P-C industry sees profits skyrocket in 2003: however, concerns raised about rate hike moderation, Wall Street uncertainty.(Combined Ratio At 100.1)
Author: Daniel Hays
Publication:
National Underwriter Property & Casualty-Risk & Benefits Management (Magazine/Journal)
Date: April 19, 2004
Publisher: The National Underwriter Company
Volume: 108
Issue: 15
Page: 6(2)
Distributed by Thomson Gale
Book Description
This digital document is an article from National Underwriter Property & Casualty-Risk & Benefits Management, published by The National Underwriter Company on August 18, 2003. The length of the article is 1446 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Re recoverables: climate of uncertainty.(Re/International)
Author: Lisa S. Howard
Publication:
National Underwriter Property & Casualty-Risk & Benefits Management (Magazine/Journal)
Date: August 18, 2003
Publisher: The National Underwriter Company
Volume: 107
Issue: 33
Page: 37(1)
Distributed by Thomson Gale
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Reward and uncertainty in exploration programs
Paul G Bradley
Manufacturer: s.n
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ASIN: B00073268E |
Book Description
This book traces, in outline, the development of the principal features of English legal institutions and doctrines from Anglo-Saxon times to the present. The Introduction has become a standard work on the subject. It has now been updated and improved in consequence of the rapid pace of
research in legal history over recent years, which has made this new edition a necessity.
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Crime, Reason and History: A Critical Introduction to Criminal Law (Law in Context)
Alan Norrie
Manufacturer: Butterworths
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ASIN: 0406932468 |
Book Description
Crime, Reason and History provides an alternative approach to the study of the general principles of criminal law. It emphasises, in contrast to orthodox texts, the tensions and contradictions at the law's heart. The author outlines the themes of responsibility, rationality and justice which govern the orthodox criminal law text. He traces these to the early nineteenth century reform of the criminal law and notes conflicts within reform ideologies relating to the idea of the 'responsible individual'. He then takes the reader through the bulk of the criminal law's 'general part' showing how conflicts from reform ideology emerge within criminal law. An historical and political logic underlies its illogicalities, giving it its 'shape'. The author presents a sceptical critique of the liberal positivist tradition in criminal law scholarship, and a social analysis of both its practical necessity and intellectual impossibility. He shows how the ideology of individual legal justice was imposed as a means of excluding alternative political voices, while recognising its importance for the survival of the liberal polity.
Book Description
In this book one of the world's foremost legal historians attempts to explain what produced the private law of the Western world as we know it today. Professor van Caenegem pays particular attention to the origins of the common law-civil law dichotomy, and how it arose that England and the continent of Europe, although sharing the same civilization and values, live under two different legal systems. The chronological coverage extends from the Germanic invasion in the early Middle Ages to the present day, incorporating analysis of the medieval Roman and canon law (both products of the law schools), and that of the School of Natural Law that inspired the great national codifications of the modern age. He evaluates the role of the lawgivers--emperors, kings, and parliaments--and that of the judges, particularly, of course, in the lands of the English common law. The book is based on both an extensive secondary literature in several languages, and on evidence accumulated by Professor van Caenegem over the past forty years.
Book Description
The English law of obligations has developed over most of the last millennium without any major discontinuity. Through this period each generation has built on the law of its predecessors, manipulating it so as to avoid its more inconvenient consequences and adapting it piecemeal to social and economic changes. Sometimes fragments borrowed from other jurisdiction have been incorporated into the fabric of English law; from time to time ideas developed elsewhere have, at least temporarily, imposed a measure of structure on a common law otherwise messy and inherently resistant to any stable ordering. In this book David Ibbetson exposes the historical layers beneath the modern rules and principles of contract, tort, and unjust enrichment. Small-scale changes caused by lawyers successfully exploiting procedural advantages in their clients' interest are juxtaposed alongside changes caused by friction along the boundaries of these principal legal categories; fossilized remnants of old doctrines jostle with newer ideas in a state of half-consistent tension; loose-knit rules of equity developed in the Chancery infiltrate themselves into more tightly controlled Common law structures. The result is a system shot through with inconsistencies and illogicalities, but with the resilience to adapt as necessary to take account of shifting pressures and changing circumstances.
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An Introduction to Constitutional Law (Clarendon Law Series)
Eric Barendt
Manufacturer: Oxford University Press, USA
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ASIN: 0198762534 |
Book Description
An Introduction to Constitutional Law discusses the general principles of the United Kingdom constitution from a critical, comparative perspective. It emphasizes the principal characteristics of this uncodified constitution, contrasting it with the documentary constitutions of the United States, France, and Germany. There are fewer checks on the power of government in this country than there are under those constitutions, where courts may review the constitutionality of legislation. This book also discusses the `federal' constitution of the European Union, as well as examining its impact on UK constitutional law. Its publication is particularly timely, in view of the programme of constitutional reform on which the Labour government has embarked. That makes it imperative to examine critically the principles of the constitution and explore whether anything may be learnt from the experience of other countries. The book offers a succinct and up to date account of British constitutional law and will be the ideal introduction for all students studying the subject whether as part of a law of politics degree.
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An Introduction to Early English Law
Bill Griffiths
Manufacturer: Anglo-Saxon Books
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Binding: Paperback
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ASIN: 1898281149 |
Book Description
The diversity and development of early English law is sampled here with a selection of several law-codes in translation; the laws of Ethelbert of Kent, the first code to be issued in England, the laws of Alfred the Great, and short codes from the reigns of Edmund and Ethelred the Unready.
Book Description
The new critical edition of the works and correspondence of Jeremy Bentham (1748-1832) is being prepared and published under the supervision of the Bentham Committee of University College London. In spite of his importance as jurist, philosopher, and social scientist, and leader of the Utilitarian reformers, the only previous edition of his works was a poorly edited and incomplete one brought out within a decade or so of his death. Eight volumes of the new Collected Works, five of correspondence, and three of writings on jurisprudence, appeared between 1968 and 1981, published by the Athlone Press. Further volumes in the series since then are published by Oxford University Press. The overall plan and principles of the edition are set out in the General Preface to The Correspondence of Jeremy Bentham, vol. 1, which was the first volume of the Collected Works to be published. An Introduction to the Principles of Morals and Legislation, Jeremy Bentham's best-known work, is a classic text in modern philosophy and jurisprudence. First published in 1789, it contains the important statement of the foundations of utilitarian philosophy and a pioneering study of crime and punishment, both of which remain at the heart of contemporary debates in moral and political philosophy, economics, and legal theory. Printed here in full is the definitive edition, edited by the distinguished scholars J. H. Burns and H. L. A. Hart. An introductory essay by Hart, first published in 1982 and a widely acknowledged classic in its own right, is reprinted here. It contains an important analysis of Bentham's principle of utility, theory of action, and an account of the relationship between law and morality. A new introduction by the leading Bentham scholar F. Rosen, specially written for this Clarendon Paperback edition, provides students with a helpful survey of Bentham's main ideas and an extensive bibliographical study of recent critical work on Bentham. Professor Rosen's essay also contains a new analysis of the principle of utility in Bentham's philosophy which is compared with its use in Hume and J. S. Mill.
Customer Reviews:
utilitarianism.......2007-03-05
this is a readable piece of philosophy, that lays out the basics of his utilitarianism. the book itself is high quality.
An intellectual feast.......2005-12-20
Jeremy Bentham (IPA: ['ben??m]) (February 15, 1748 - June 6, 1832) was an English gentleman, jurist, philosopher, and legal and social reformer. He is best known as an early advocate of utilitarianism and animal rights.
Bentham was one of the most influential (classical) liberals, partially through his writings but particularly through his students all around the world, including John Stuart Mill and several political leaders.
He argued in favor of individual and economic freedom, including the separation of church and state, freedom of expression, equal rights for women, animal rights, the end of slavery, the abolition of physical punishment (also of children), the right to divorce, free trade, and no restrictions on interest. But, he was not a libertarian, and supported inheritance tax, restrictions on monopoly power, pensions, and health insurance.
In 1776, Bentham published his Fragment on Government anonymously, a criticism of Blackstone's Commentaries, and in 1780 his Introduction to Principles of Morals and Legislation was published.
A truly influential author!
It's all downhill from here........1999-09-13
Jeremy Bentham was an important social reformer and a major figure in the history of ethics. However you might not know it from reading this dense and forbidding tract. Even a short excerpt can be tough going. However, utilitarianism has been, and remains, one of the most influential ethical philosophies of all time, and this was among its modern founding documents.
If one can come away from it with a general sense of what utilitarianism is, what act utilitarianism is, and how it gets from egoism in psychology to neutralism in ethics, one has done pretty well. This should help the reader start thinking about what some of the problems with this theory are, how it measures up to its competitors, and how it can be applied to specific problems.
The best news for those who have braved this text is that Mill and other later thinkers will seem like poetry in motion by comparison.
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Law & Society: An Introduction to Sources for Criminal & Legal History from 1800 (Readers Guides Series No. 14)
Michelle Cale
Manufacturer: Public Record Office Publications
ProductGroup: Book
Binding: Paperback
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ASIN: 1873162308 |
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The New Ministry of Justice: An Introduction
Bryan Gibson
Manufacturer: Waterside Pr
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Binding: Paperback
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ASIN: 1904380352 |
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