[OPE-L] Adam Smith's "knowledge economy" ?

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Sep 02 2006 - 09:39:27 EDT

As an Education graduate, I have to admit I find the concept of a "knowledge
economy" rather difficult to define exactly. Marx may have defined
"economising" generally in terms of the saving of human labor-time, but I
think what is meant here - in the Smithian sense - is the trade in
knowledge, i.e. "economy"="trade"="commerce" (the classical bourgeois
equation), thus, a knowledge economy is an economy based on trading
knowledge, dealing in knowledge.

Such trade has obviously existed since time immemorial, and so the challenge
really is to pinpoint its historical specificity in our day and age, as an
anthropologist might, looking at the forces and relations of production

The central question of political economy is "who benefits and who
doesn't?", and knowledge gives power. Clearly the "ideology" of a "knowledge
economy" advantages those e.g.:

(1) who know something (some specialist knowledge) that is worth knowing and
is consequently amenable to sale (tradeable knowledge),
(2) those who produce tradeable knowledge,
(3) those who are the intermediaries between those who have the knowledge,
and those wanting to buy.

It disadvantages e.g. those who:

(1) Are ignorant or know nothing that is tradeable
(2) Those who are in the position where they have to buy knowledge services
because they cannot produce them.
(3) Those who are in some way shut out from access to knowledge.

One would thus be tempted to say that the "knowledge economy" is a
middleclass ideology (of professionals and technocrats), but as soon as you
need a plumber it is clear that a university degree might not help you very
much. The inescapable fact is that knowledge is lodged in the living bodies
of human knowers, and that gaining the skills and experience required for a
specific knowledge means foregoing the opportunity of acquiring other
knowledge, that might be just as essential.

The main thing that seems to happen these days is, as Michael Perelman
suggests in his book "Steal This Idea", that an "enclosure movement in the
garden of knowledge" occurs (i.e. effectively the privatisation of knowledge
as property, and the transformation of its communicative transmission into a
transaction) in which the enforcement of exclusivity of access to knowledge
becomes very important, and in which the valuation of knowledge becomes
defined in terms of its exchangeability (tradeability).

Knowledge becomes viewed as a product and a consumable good, and education
is more than ever focused on definite learning outcomes (demonstrable
competence to perform a task). A much more refined hierarchisation of
knowledges occurs in the division of labour, according to their economic
value in the market, in which market actors aim to gain monopoly over
knowledges that can trade for the most money with the least effort. Of
course, having a specific knowledge may not mean anything yet, some hustling
and huckstering may be necessary to capitalise on it.

The dialectic of knowledge as commodity is quite complex and not easily
captured in formalisms, e.g. because exclusivity of access is countered by a
far great ability to acquire and disseminate knowledge, and the more we are
bombarded by information, the more it is who you know (a knower) and where
you are located ("ability to relate", the ability to acquire/command
specific knowledge when you need to have it), and not necessarily what you
know, that counts.

The epistemic question is raised (a frequent management problem), "how do we
know that somebody knows something?" in the "takes one to know one" sense,
and this may take considerable detective work in markets which are opaque or
segmented, rather than transparent. Personal style and communicative skill
can become even more important than real ability to advance in the social
hierarchy, but that is of course not something especially new, only the
extent of it might be novel; it creates a bigger social pressure on the
ability to prove that you really have a (tradeable) knowledge, skill or
experience, and a battle to persuade somebody of that.

One of the pioneers on this question in the 1960s was Kenneth E. Boulding,
e.g. "The Economics of Knowledge and the Knowledge of Economics"
and his "Knowledge as a Commodity", in: Beyond Economics: Essays on Society,
Religion and Ethics", Ann Arbor, Michigan: University of Michigan Press,
1968. For an Austrian economics perspective, see e.g.

As I have suggested in a wiki article
http://en.wikipedia.org/wiki/Exchange_value , anthropologically
commodification has as its main preconditions some or all of the following:

- the existence of a reliable supply of a product, or a surplus of it that
can be traded
- the existence of a social need for it (a definite monetarily effective
market demand) that must be met through trade, or at any event cannot be met
or substituted otherwise.
- the legally sanctioned assertion of private ownership rights to the
- the enforcement of these rights, so that ownership is secure.
- the transferability of these private rights from one owner to another.
- the (physical) transferability of the commodity itself, i.e. the ability
to store, package, preserve and transport it as necessary from one owner to
- the imposition of exclusivity of access to the commodity.
- the possibility of the owner to use or consume the commodity privately.
- guarantees about the quality and safety of the commodity, and possibly a
guarantee of replacement or service, should it fail to function as intended

In this sense, knowledge is obviously a problematic or unstable commodity,
because it can be difficult to guarantee some or all of these conditions,
and for any length of time. Knowledge can in an instant become commercially
worthless for example, simply because one of these conditions does not
apply. But yet another characteristic of knowledge is that one type of
knowledge may depend on the existence of a chain of other knowledges, and if
the chain is broken, the knowledge is not there or is useless, i.e. the
knowledge may very much be a collective product or result. Hence the concept
of "knowledge management", i.e. the leading and control of a group of
knowers (a former teacher of mine coined the concept of "collective
intelligence" - see Phillip Brown and Hugh Lauder, "Capitalism and Social
Progress", Palgrave 2001). Apart from uncertainty about its value, knowledge
can be highly context dependent, and that context may involve a lot of

I would expect that in future economics will more and more mutate into a
technology of commerce. Economics (and political economy) used to be mainly
the ideology of managers, but that ideology has limited practical use,
whereas the technology of trade does have practical uses - it is, in
particular, the techniques of social organisation that are becoming more and
more important. It's not just that traditional disciplinary boundaries
demarcating knowledges change, it is that they have become permanently
flexible, and a site for contestation and empire building. This is a direct
implication of the mentioned variability of the economic value of knowledge,
and the epistemic difficulties involved in choosing and selecting

The concept of lifelong learning is fashionable, projecting the joy of
forever learning new things, but what is often ignored is the alienating and
political aspects of this - the strain of constantly having to learn things,
or being forced to learn things that maybe you don't even want to know, and
the politics of the division of people into learners (the ignorants) who
must submit to teachers (the knowers, known as "coaches") which gives rise
to all sorts of new forms of ascriptive discrimination and new boundaries
being drawn between "insiders" and "outsiders". "Uncooperative" or
"non-compliant" may become synonymous with "unwilling to learn", and
"learning" may become synonymous with "modifying one's behaviour to fit with
the standard commanded".

Marx wrote: "The materialist doctrine concerning the changing of
circumstances and upbringing forgets that circumstances are changed by
people and that it is essential to educate the educator himself. This
doctrine must, therefore, divide society into two parts, one of which is
superior to society. The coincidence of the changing of circumstances and of
human activity or self-changing can be conceived and rationally understood
only as revolutionary practice."

A revolutionary aspect of the so-called "knowledge economy" seems to be that
it makes possible the contestation and diffusion of power to a far greater
extent, and indeed a sign of the times is that there is more and more
uncertainty and confusion about what the real power relations really are,
and how they can be asserted. You can see this again in Israel's war against
Lebanon and the mystical "war against terror" - a lot of people and property
are destroyed, but it is not clear that it really changes the balance of
power very much anyway. Ultimately, the bourgeoisie trusts in killing power,
in military enforcement, raw imposition of the will of some over others, but
in the "knowledge economy" that may not in fact solve any problems anymore,
except that it is ever clearer that the problems of some are solved at the
direct expense of others.

Well, that's a few ideas anyway...


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