The Open-Endedness of Knowledge
Ruminations on the Two Paradoxes of FEE
JUNE 01, 2003 by ISRAEL M. KIRZNER
I intend to explore in this article some aspects of the uniqueness which is FEE, and to express my fervent hope and confidence that such uniqueness will continue to permeate every nook and cranny of FEE’s activities in the years to come. I will begin by noting two related but separate paradoxes that have over the years repeatedly caught my attention.
First paradox: FEE’s style is one of modesty, humility, tolerance, a steadfast refusal to browbeat those who do not agree with us. Now at least superficially, this attitude of tolerance and modesty appears to be inconsistent with what the late Ben Rogge used to call “FEE’s predictability.”
Quite frankly, I know of no other organization on our general side of the street whose position on any given issue is as predictable as FEE’s. No ifs, ands, or buts. No equivocation. Just right down the line, ramrod straight, for a society based on the principle of anything that’s peaceful.1
All of us know how Leonard Read used to detest anything that resembled a “leak.” Well now, surely this inability to compromise, this apparently intransigent attitude would seem difficult to reconcile with the characteristic courtesy, tolerance, and genuine humility of FEE’s style. This is my first apparent paradox.
Let me turn to a second apparent paradox. FEE expresses, by its very being, a passionate belief in the sanctity of individual freedom, in the dignity and profound moral worth of a free society. Well, this profound belief surely seems difficult to reconcile with FEE’s refusal to evangelize for what it believes in so passionately. If freedom is so sacred, then how can we sit back and refuse to sell it? That is my second paradox.
The resolution of these apparent paradoxes, I suggest, brings us close to the very core of FEE’s mission and its identity. I believe the key to all this can be provided by what I shall call the open-endedness of knowledge. Knowledge is open-ended in the sense that no matter how much we know, this is as nothing compared with what we know that we do not know. We all remember Sir Isaac Newton’s remark about playing with pebbles of knowledge on the beach while the great ocean of scientific knowledge remains out there untouched before us—a magnificent and lofty thought.
Surely, one critically important premise of FEE’s philosophy is this very lively awareness of the limits of our knowledge. So, knowledge is open-ended in the sense of always being seen as incomplete. It is always only a fragment of that which is available to be known.
There is a second idea included as an integral part in this notion of the open-endedness of knowledge. Knowledge is open-ended also in the sense that no matter where the limits and boundaries of one’s present knowledge may lie, free human beings possess an innate propensity to transcend spontaneously those barriers, those limits, to continually escape those limits, through discovery of new horizons of knowledge the very existence of which was hitherto unsuspected. Life consists, in this sense, of a never-ending series of spontaneous leaps of discovery. The life of freedom is thus a continual expression of the dynamics of continual discovery. The free life, a life for which the open-endedness of knowledge is a central ideal, is one in which the sense of potential—unending potential, unending discovery—is at the heart of one’s being. Open-endedness in this sense is the very opposite of the state of stagnancy.
I would like to illustrate and explore the significance of this open-endedness of knowledge for each of three separate facets of FEE’s philosophy and approach. First, the basic understanding of economic relationships. After all, FEE is a foundation for “economic education.” Second, the deep commitment mentioned earlier to the dignity and fertility of individual freedom. (The “fertility of freedom” is a phrase coined by the late Fritz Machlup; it expresses a profoundly important idea.) As to FEE’s ideal of a free and peaceful society—what role does the open-endedness of knowledge play in that ideal? Third, what role does the open-endedness of knowledge play in FEE’s soft-spoken, non-aggressive style of communicating its message and its philosophy to the world?
Open-Endedness of Knowledge and Economic Understanding
Let us consider the first of these three facets of FEE’s work—the open-endedness of knowledge as a source of economic understanding. Here I may be excused for referring to the essential differences that separate Austrian economics, the economics that we’ve learned from Mises and Hayek, from the standard mainstream view. To the standard mainstream view in economics, since about 1930, the view of the world has been one in which the future is essentially known, in which the participants in markets are in effect completely informed about the relevant decisions made throughout the market by fellow participants. This is a world of equilibrium, a world in balance, a world in which quantitative economic predictions are entirely feasible. Austrian economics has a quite different view of the world, and a quite different view of the way in which economic relations can be grasped. I quote from Ludwig von Mises:
The fundamental deficiency implied in every quantitative approach to economic problems consists in the neglect of the fact that there are no constant relations between what are called economic dimensions. There is neither constancy nor continuity in the valuations and in the formation of exchange ratios between various commodities. Every new datum brings about a reshuffling of the whole price system, the whole price structure. Understanding, by trying to grasp what is going on in the minds of the men concerned, can approach the problem of forecasting future conditions. We may call its method unsatisfactory and the positivists may arrogantly scorn it. But such arbitrary judgments must not and cannot obscure the fact that understanding is the only appropriate method of dealing with the uncertainty of future conditions.2
It was Mises’ disciple, Friedrich Hayek, who fully explained the importance for economic understanding of recognizing the limitations of knowledge. It was as a result of his attempt to explicate the Mises-Hayek side of the celebrated socialist economic-calculation debate that Hayek first articulated the significance for market competition of dispersed information. Hayek taught us that the crucial element in market competition is the circumstance that knowledge is never concentrated in a single mind—always dispersed. We never know everything. None of us. No single mind can possibly know everything. No single mind can possibly grasp the entire economic problem that tends to be solved through spontaneous market processes. In more recent work, Hayek has emphasized the character of market competition as, in his terminology, a discovery procedure—and I quote:
Competition is . . . first and foremost a discovery procedure. No theory can do justice to it which starts from the assumption that the facts to be discovered are already known. There is no predetermined range of known or “given” facts, which will ever all be taken into account. . . . The real issue is how we can best assist the optimum utilization of the knowledge, skills and opportunities to acquire knowledge, that are dispersed among hundreds of thousands of people, but given to nobody in their entirety. Competition must be seen as a process in which people acquire and communicate knowledge; to treat it as if all this knowledge were available to any one person at the outset is to make nonsense of it.3
Hayek’s broader philosophy has proceeded from these fundamental insights to appreciate their even more far-reaching implications. And Hayek in fact says that “Civilization rests on the fact that we all benefit from knowledge which we do not possess.”4
So far it might seem that these Austrian insights rest fundamentally on the awareness of human ignorance, on the limitations of human knowledge, but in fact they rest also on that second element in the open-endedness of knowledge that I have referred to. These insights rest, that is, also upon an appreciation for the propensity within human action to discover what was hitherto unknown—what I like to call the entrepreneurial propensity in human action. It is this propensity that is responsible for entrepreneurial alertness for pure profit opportunities, for entrepreneurial discovery, for bursting asunder the limits of existing knowledge. It is upon this alertness that we rely for the manner in which the market continually propels prices and decisions in the direction of greater mutual coordination. It is entrepreneurial alertness to existing errors that leads to their discovery and their eventual tendency to be corrected.
Commitment to Freedom
Let me turn to the second of the three applications of the open-endedness of knowledge: the importance of the open-endedness of knowledge for our commitment to the dignity of freedom and its fertility in a free society. Here a great deal depends, I would suggest, on our instinctive recoil from the arrogance of benevolent dictatorship. Let me quote Leonard Read here:
There are numerous virtues and vices that account for the rise and fall of societies. Near the top of the list are the two opposites, humility and pride. . . . Pride sprouts and grows from ignorance and self-blindness. Those with a haughty spirit foolishly believe they know the most, whereas they know the least. While they don’t know how to make a pencil, or why grass is green, or who we are, they “know” how to run our lives. In their blind pride, the least taste of political power drives them to become power addicts. Until such persons seek help there is little we can do to curb their addiction. What we can and must do is to develop in ourselves the strength of character to resist the temptations of power.5
I would suggest that our disgust for the arrogance of dictators is only part of the story. Surely, our commitment to a free society rests also on our appreciation for the immensely valuable spontaneous discoveries that the human spirit can generate when left free. It is our admiration for individual creativity that is responsible for our reverence for the free society. So here we have both of those elements in the open-endedness of knowledge—undergirding our regard for freedom in a free society: (1) our recoil, our disgust for the arrogance of those who believe they know how to run other people’s lives, and (2) our awareness, our appreciation for the propensity in human beings to continually expand what they know, what they can create.
Let me turn to the third aspect of FEE’s work and illustrate the significance of the open-endedness of knowledge for FEE’s unique style and approach in communicating its message to the world. Here I think two points of contact ought to be noticed between the open-endedness of knowledge and FEE’s characteristic style. We recall that this style involves first of all an innate courtesy, modesty, and tolerance. (No name-calling, Leonard Read taught us, no arrogance!) Second, the FEE “style” reflects a confidence, a faith, if you like, that those who can benefit from our message will find us almost of their own accord. They will discover us. Certainly this confidence is a remarkable feature of FEE’s style.
I have one final quote from Ben Rogge, taken from a high school commencement address. He was talking to these youngsters about what they might expect of college. Ben said: “Hopefully, you will . . . come to know how little you know, in fact how little is known about man and his world by even the most knowledgeable around you. This is to say that you may come to carry with you through life a deep sense of wonder and of awe, not of what you do understand, but of the deep and mysterious processes which neither you nor anyone else fully understands.”6
Open-endedness of knowledge is the root of FEE’s modest, tolerant style. But then we said there was another aspect to that style—the confidence, the faith, that those who can benefit from our teachings, from what we have to offer will find us out, will seek us out. Listen to Leonard Read:
Forget the “selling freedom” notion! Right method calls for concentration on the improvement of the most approachable person on earth—one’s self. This is practical because accomplishment is possible. This tactic disposes of the numbers problem, the impossible—selling the masses. Do not seek followers! . . .What seek ye then? The achievement of understanding and clarity of explanation . . . so that those who wish to learn may come upon enlightenment. If you are successful, those with inquiring minds will find you out.7
Here, surely, we have Leonard Read thinking of the spontaneous discovery potential that will bring our audience to our doors. If we hold up the standard, if we show them what a free society means, they will find us out.
Let us return to the two apparent paradoxes that I mentioned earlier. I believe that it should be easy to see that these paradoxes dissolve immediately just as soon as we recall the significance of this open-endedness of knowledge. We asked how a passionate commitment to freedom could be reconciled with an attitude that refuses to go out and sell the freedom principles to others. We asked how FEE’s refusal to compromise, refusal to recognize exceptions could be reconciled with its attitudes of modesty and tolerance. But these questions are easily answered.
A passionate love of freedom as well as FEE’s modest style and courtesy both grow out of our awareness of our own fallibility and of the arrogance of those who presume to know enough to control others. We know how little we know!
If we appear uncompromising, this is because we are absolutely sure of this one thing that we know with certainty; that is, that human knowledge is open-ended and inescapably limited.
Concerning this item of knowledge, we cultivate no false modesty. We know for sure how little we know. And we know for sure how this open-endedness of human knowledge is responsible for the spontaneously coordinated operation of free markets. And we know for sure how this vitiates so much fashionable economics.
We have begun to understand the open-endedness of human knowledge—including the potential for spontaneous discovery that rests in the human breast. This understanding nourishes our conviction that what we need to do is to deepen our own understanding of the nature of a free society with full confidence that others will seek us out. We do not need to sell. We do not need to attack, to indulge in name-calling.
The Formula for FEE’s Future
In a word, FEE’s unique style, its unique and quietly passionate commitment to a free society, its commitment to the basic principles of sound economic understanding—all of these fit cohesively into a single integrated whole. This I submit is an important element in FEE’s formula. I believe that a renewed self-appreciation for these basic principles can continue to provide stimulation and motivation for FEE’s activities for many years to come.
I believe that by mobilizing the dedicated and informed enthusiasm of those many thousands of persons connected with FEE, we can proceed to translate these abstractions—and they are abstractions—into the day-to-day activities of FEE.
Let us never lose our courtesy and our tolerance. Let us never forget our distaste for the arrogance which lies at the root of all threats to a free society. Let us never lose our confidence in the intellectual alertness of a free citizenry. Let us persevere in our search for understanding in our economic studies.
We need never fear new ideas. We need never be unsure concerning new proposals, provided we appraise each one of them against our own standards and our own criteria involving leak-proof economic understanding, unified with unfailing courtesy to others in the way in which we reveal our own passionate love of freedom. Let the open-endedness of human knowledge be our inspiration and our guide as we navigate our way through a future of limitless possibilities for free human beings.
- Benjamin Rogge, “The Power of Tomorrow: Whither FEE?” mimeographed version of talk given to FEE Fall meeting, November 18, 1979, p. 4.
- Ludwig von Mises, Human Action (New Haven: Yale University Press, 1949), p. 118.
- F. A. Hayek, Law, Legislation and Liberty, Vol. 3: The Political Order of A Free People (Chicago: University of Chicago Press, 1979), p. 68.
- F. A. Hayek, Law, Legislation and Liberty, Vol. 1: Rules and Order (Chicago: University of Chicago Press, 1973), p. 15.
- Leonard E. Read, Liberty: Legacy of Truth (Irvington-on-Hudson: Foundation for Economic Education, 1978), p. 15.
- Benjamin Rogge, Can Capitalism Survive? (Indianapolis: Liberty Press, 1979), p. 280.
- Leonard E. Read, Liberty: Legacy of Truth, op. cit. p. 62.
Filed Under : Central Planning, Entrepreneurship