Application Of Knowledge Essay
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to ask is the task
Essay #4 May 2016 – application & value of knowledge
This is the essay about whether there is a need for application of knowledge in order for that knowledge to be valuable. I can’t write the exact title here as IB have copyrighted it – students should ensure that they get the exact title from their teacher.
This is a great essay question – it gives students wide scope to use a range of examples and to develop perspectives. There are a multitude of approaches available for this essay – I will only look at a couple here, but many other approaches are possible & acceptable.
On first reading the title the word ‘valuable’ jumps out – offering lots of opportunity for critical analysis:
Valuable for what ? valuable to whom ? When is it valuable ? How do we measure value ? Is value relative or absolutist ? Is it valuable in a particular AoK but less so in another ? Who judges value ? of personal or of shared value ? what are the underlying assumptions of value ? These questions could continue….,
As we consider ‘value’ then the process of ‘application’ (in the title) becomes more important. We can ask similar questions regarding application:
How / who / when is knowledge applied (by) ? In which situations is knowledge applied ? Is application uniform and universal, or is it more specific, relative and varied ?
My first interpretation of this essay title is in terms of Shared Knowledge and Personal Knowledge structure. It could be argued that application of knowledge in a a shared context is essentially denotive. In this approach the process of application (as referred to in the title) is ‘sharing’ of knowledge. That is that the denotation of a shared meaning is the very definition of Shared Knowledge, without collective dentotation we don’t have an overt shared knowledge system. This, of course, is only one way of understanding the process of application, the IB ToK Guide makes a very specific reference to ‘application’ in Shared Knowledge systems:
Shared knowledge changes and evolves over time because of the continued applications of the methods of inquiry—all those processes covered by the knowledge framework. Applying the methodology belonging to an area of knowledge has the effect of changing what we know.
IBO, Tok Guide, 2015
On the other hand, when we refer to personal knowledge we are usually referring to a more conative aspect of knowledge. This is a form of knowledge application which results primarily in behaviour rather than shared understandings. By recognising the conative aspect of knowledge we start to understand the relationship between different ways of knowing in relation to personal knowledge. We obtain knowledge, at a personal level, through various ways of knowing, as that knowledge means different things to us in terms of emotions, reason and behaviour. It could be argued that ‘application’ of the knowledge, at the personal level, is it’s translation into behaviour. Such an argument could also be generalised to Language, and Memory as WoKs.
In the quote, from The ToK Guide, above it is the application of methods which changes knowledge. If we are to treat knowledge discovery and understanding as inter-related processes then it is in the method of discovery that we can judge the value of the use of knowledge. This argument rests very much in the sphere of academic and practical research processes. For example an understanding of certain mathematical models may be of limited value in the abstract, but when applied to epidemiological research are of immense value.
The temptation with this essay is to discuss usefulness when referring to the term ‘valuable’ in the title. Utility is not necessarily the same as valuable. Students could explore the concept of utility through the lenses of AoKs or WoKs. However, the essay is probably best formed through a discussion of the concept of value through the lenses of various WoKs. What is valuable in terms of emotion, reason, language or memory as ways of knowing ? Is memory based knowledge more ‘valuable’ when it serves emotion or when it serves reason ? Is language most valuable when it serves memory, reason or emotion. Is any language valuable when it serves only one WoK ? I’m sure that you can start to see the potential for breadth of discussion in this debate.
However, the discussion is further developed when we consider whether something which is not useful can actually be valuable ? As such, we could take cultural artefacts and consider both their relative used and value, for example is a piece of art useful or valuable ? Or a contrasting approach – how do we understand the relative use and value of an emotion ?, and are the two domains interlinked ?
Finally, let’s return to the concept of ‘application’. Knowledge can be applied by different people in different ways. There could be a formalised / shared knowledge application e.g the way in which pilots apply knowledge of avionics. On the other hand there is an individualised / personalised application of knowledge, this could be seen in behaviours such as fear of flying, or conversely a particular like of flying.
To further extend the concept of application – it could be looked at through the various lenses of the WoKs/AoKs. Knowledge applied according to one particular WoK may be valuable in ways that it would not be valuable if applied through the lens of a different WoK. For example knowledge of how to boil water may be highly valuable in AoK Natural Sciences but not in Ethics. Or, a WoK based example: knowledge of how to boil water may be highly valuable when applied to knowledge gained through sensory perception, but less valuable when applied to knowledge gained through faith.
To further develop the concept of application we could consider it in terms of the methodology of the Knowledge Framework of the AoKs. Let’s take experiential emotional knowledge, in terms of the formal methodology of the Natural Sciences it would be of limited use. We could contrast that with the methodology of the The Arts, and say that in this context experiential emotional knowledge is of great value. However, such an answer is far too superficial, and cliched. If we look below the surface it is clear that scientists use experiential emotional knowledge in their research (it could be argued that inductive reasoning involves intuitive thought), further the creative processes of The Arts often involved a reasoning framework within which experiential emotional knowledge may be of limited value.
Overall – this is a great essay, with wonderful scope for discussions and use of examples. Enjoy those discussions of what makes something valuable !
18 thoughts on “ essay #4 may 2016 – application & value of knowledge ”.
Dear Mr., After reading your comments on the topic at hand, I feel more confused than when I started. Before I came across your website, I thought that the prescribed title merely dealt with the application and knowledge, and had nothing to do with WoKs. Now while I see how WoKs are related, shouldn’t the claim and counter claims of the essay be focused on claims such as “Knowledge on its own is often not adequate in completing a lot of real-life tasks.” ?
I hope I’m not losing you here. Let me simply rephrase: I understand where you’re coming from in terms of exploring the concept of “value” and personal vs shared knowledge and so on, but how am I supposed to incorporate WoKs in my claims?
Originally, I wanted to work with AoKs: natural sciences and religion, where an example for religion is that application by a man of religion can spread goodness (valuable), or a different application by another “man of religion” could be based on extremist faith and result in the spreading of propaganda and the need to kill infidels (destructive).
Would my example and similar examples work? Can a claim explore value in regards to one WoK and the counter claims be different interpretations of value in regards to other WoKs? Thanks a lot!!!
Hi Jonathon, I do apologise that my post just served to further confuse you. I do usually say that my suggestion is just one of many ways of going about the essay – please do not feel that your proposed structure should be altered in any way. Your own ideas area always the best for you to develop.
I think that your examples are very good – well thought through.
Thank you so much!
Thank you, glad to help.
can i talk about ethics and how the bible and Quran tell us stories and lessons from the past generations. however this knowledge is only applied if we wanted to and depending on the community we live in. just because we dont apply it doesn’t mean it irrelevant and must be diminished. but the counter point is that Most things cant be applied as they don’t relate to our life today as they never mention for example smoking or drugs but they bring up harming our own bodies. but that doesn’t mean it should be forgotten. also some knowledge isnt diminished because it isnt applied but due to memory people loose notion of some knowledge helping it be more diminished and un used in the world
Religious knowledge would be a good RLS to test this essay question, however you need to be careful defining Religious knowledge as Ethics. Certainly you could make the argument that RKS contain a specific brand of ethics, but KA Ethics is far broader than Religion. Anyway, this is beside the point – yes, you certainly could look at whether RK needs to be applied to have value.
Hiii, I’ve now replied to you. Enjoy your TOK writing.
As a current TOK student I am understandably interested in your methods of treating this topic. However, I would like to ask one thing: how does the shared/personal knowledge dichotomy come into play with this title? Is it because this is how value can be generated?
Also, it seems as though the argument then degenerates into an ‘all knowledge is valuable because application is such a broad term’ line. Is this the case?
Yours, J v M
You can take the question in any direction that you see fit, my suggestions are just personal thoughts. They are certainly not the right, nor only, answer. Enjoy your ToK writing.
Thank you very much! I understand completely your reluctance to influence my writing 😀
That being said, would you endorse an approach that considered the ‘demand’ for knowledge as an indicator of value? Analysed through the AOKs of Maths and the Arts?
In dealing with this topic can I use the concept of applied and non applied value instead of personal and shared knowledge?
Hi, the idea of “applied and non-applied value” sounds very interesting, I’m not really sure what these terms mean, but if you are able to construct an argument using those terms then this would seem useful. By ‘non-applied value’ , I assume that you mean that some knowledge can be useful, even if it is not applied. This would very much depend on your definition of ‘applied’. If we were to take applied as meaning having physical utility, then sure – non-applied knowledge could have aesthetic and emotional value.
i am having a huge problem relating my areas of knowledge; imagination and sense perception with my areas of knowledge; mathematics and human sciences. help please!
Imagination in Mathematics – see Fermat’s Theorem, or the development of pi, or the conceptualisation of zero. Imagination in Human Sciences – consider prediction in modelling, or understanding of non-tangible cause & effect. Sense Perception in Mathematics – golden ratio, or symmetry. Sense Perception in Human Sciences – consider the development of correlational models such as economic flows.
how do we measure value of knowledge through benefits? can you suggest to me the area of knowledge that can measured their value?
You can easily consider the value of knowledge in any AoK. For example in the Arts there is an emotional value, and collective value to knowledge. In Indigenous Knowledge Systems there is a collective, societal and survival value of knowledge etc etc.
hye trump, i got this statement “Given access to the same facts , how is it possible that there can be disagreement between experts in a discipline? Develop your answer with reference to two AOKs”. what is your opinion about the statement and what area of knowledge that is suitable for this one. hope you can help me, thank you!
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Essay On Application Of Knowledge
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Knowledge Is Power Essay- Knowledge is something that will serve you your whole life. The most powerful thing in the world is knowledge because it can create and destroy life on earth . Moreover, knowledge helps us distinguish between humans and animals . Knowledge is the ability to use your knowledge to help others.
Importance of Knowledge
There are very few people out there who truly understand the importance of knowledge. Every educated person is not knowledgeable, but every knowledgeable person is educated. This statement may sound weird but it’s true. In today’s world, almost everyone is educated still they do not have knowledge of the subject that they have studied.
Besides, Knowledge is something that helps you drive a car, ride a bike, solve a puzzle, etc. Knowledge is something that prevents us from making the same mistake twice. It is not something that you can buy from you have to earn it.
Benefits of Knowledge
The knowledge is something that increases the more you share it. It protects your intellectual capital that is your knowledge. Likewise, humans have used their knowledge to create things that we can’t imagine a few centuries back. It helps us to convert our ideas into reality and also it helps us to reach the success that we desire in our life.
Moreover, knowledge assists us to differentiate between what is right and what is wrong. It helps us to overcome our faults, weaknesses, and dangerous situation in life. Also, a person with knowledge is more mentally and morally sound than people with money and less knowledge.
Besides, Knowledge is a very important tool to get positive changes in society or country. Knowledge gives us a vision of our future and what we can do in it. All the countries in the world that use technologically developed tools and machinery and many other things is the result of the knowledge. Weapons and bomb do not make a country powerful but knowledge does.
The growth and development of a nation do not depend on the arms and weaponry the country has. But with the amount of knowledgeable person it has and it is possible only because of the power of knowledge.
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Prospective of Knowledge
Knowledge is something that is so powerful that it can destroy the whole earth and on the other hand is a tool that can restore balance on the earth. The knowledgeable person is the richest person on earth because no one can steal his/her knowledge. But anyone can easily steal your money and power from you any time.
Moreover, it never decreases on use and only increases with time. Accordingly, a knowledgeable person is more important than a rich person because a rich person can give money to the nation but a knowledgeable person can give knowledge to the nation and this knowledge can also increase the wealth of the nation .
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The Value of Knowledge and Its Application
When it comes to a question of knowledge, should its value be greatly determined by how much useful the information is when it comes to application? Does this mean knowledge acquired that is of little or no application is useless? This paper is going to focus on the value of knowledge with respect to its application.
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In the context of knowledge, value can be defined as the worth, usefulness or importance of knowing certain information. This can be further expounded on by looking at the negative impacts associated with lack of the same knowledge. What is it that we could be missing out on had we not had this knowledge? Any attempt to answer this question defines the value of knowledge. On the other hand, putting that knowledge into real life practice is what is referred to as application of the same.
KQ1. In terms of knowledge and application, to what extent do past events play a role in shaping the future? Although it is more important to focus on where you are currently and where you are going, once in a while it is equally important to look back at where you are from. Looking back at the past can serve to be a great source of inspiration and motivation. Seeing the challenges you faced in the past and how you overcame them is enough motivation in itself to keep pressing on. It enhances your determination a great deal. Moreover, knowledge gained in the past can be put in practice in the present day and prepare you for the future. Once bitten twice shy; so they say and without facing the challenges you did in the past your skills and experiences wouldn't be as enhanced as they are. Furthermore, accurate predictions of the future can be made from past events; those who are really good at this twist our minds and call it fate.
KQ2. To what extent are the theories of human science convincing? Whatever grows above reasons falls beyond it. Human beings are curious organisms who try to understand and explain every single thing. I think this is the best definition of a scientist. As the urge to understand different phenomena in the world, so many scientific theories came about each trying in the best way to explain. This does not necessarily prove their validity but instead proves their creativity. True as they may seem, not all worldly phenomena can be explained scientifically. An example is the evolution theory and how it contradicts the biblical creation story.
The Areas of Knowledge explored will be Mathematics and History. Most mathematical knowledge is applied in our everyday lives. We manage our finances best by use of arithmetic calculations. That way we are able to keep track of our wealth. Mathematical data is used in governing: census, distribution of resources and even in elections involving counting of votes. In medicine, the concept of drug preparation is based on calculating moles of certain pharmaceutical substances and mixing them in fixed proportions. In piloting, speed and distance travelled are calculated mathematically. However, there are some aspects of Mathematics that do not have obvious application such as trigonometry and algebra. To date, I have not come across a real life application of the two. However, this does not make these mathematical topics valueless.
In History, past human behaviors are relevant to the intellectual growth and development of the present individual. In the same area of knowledge, knowledge of the past prevent from repeating past mistakes in the future. Without application of the same, development and intellectual growth would be limited. The same applies to past mistakes which would recur in the future due to failure in learning, understanding the mistakes and lack of definite solutions.
In Science, it is evident that knowledge in this field has greatly enhanced our lifestyle by making it easier. Innovation of machines such as vehicles, computers and televisions has revolutionized the way we live. These innovations have made our lives better in more ways than one and the simple lives we lead as compared to the ones who preceded us can be attributed to Science.
Real Life Situations that can be used to illustrate this idea are the historical World Wars. These wars were characterized by massive loss of lives and economies of so many countries were crippled. Needless to say these wars were so destructive and after their happening and documentation on books and print media, people have greatly learned about the losses associated with them and cannot afford to indulge in such any time soon.
Another example of Real Life Allusion of this idea is in the transport sector. In the olden times, the main means of transport was animals such as donkeys and horses. This sector has faced rapid development in the name of inventions. First, there was invention of the railway transport where we learn in history about how slaves would work tirelessly in the construction of the same. This was followed by invention of vehicles and later the invention of aircraft by the Wright brothers crowned it all. In modern day, the sector of transport has been greatly enhanced and has made travelling more comfortable and fun.
In Arts, application of such knowledge is expressed in form of drawings, paintings, music, and movies. As it stands, so many people are making a sincere living in this industry while at the same time being a source of entertainment to millions of people worldwide. Safe to say, how you apply the knowledge you acquire in real life situations greatly enhances its value.
However, it is important to realize that the value of information and knowledge varies from one person to another. Knowledge about weather and climate of a place may not be as important to an accountant or a teacher as it is to a pilot or a fisherman. The same way knowledge about law will definitely not be as important to a doctor as it is to a politician.
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"The Use of Knowledge in Society"
By friedrich a. hayek.
What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions. The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses. [From “The Use of Knowledge in Society”]
First Pub. Date
American Economic Review. XXXV, No. 4. pp. 519-30. American Economic Association
The text of this edition is copyright ©: 1945, American Economic Review, XXXV, No. 4; September, 1945, pp. 519-30. Reprinted with permission.
Table of Contents
The use of knowledge in society.
What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions. The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.
This, however, is emphatically not the economic problem which society faces. And the economic calculus which we have developed to solve this logical problem, though an important step toward the solution of the economic problem of society, does not yet provide an answer to it. The reason for this is that the “data” from which the economic calculus starts are never for the whole society “given” to a single mind which could work out the implications and can never be so given.
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
This character of the fundamental problem has, I am afraid, been obscured rather than illuminated by many of the recent refinements of economic theory, particularly by many of the uses made of mathematics. Though the problem with which I want primarily to deal in this paper is the problem of a rational economic organization, I shall in its course be led again and again to point to its close connections with certain methodological questions. Many of the points I wish to make are indeed conclusions toward which diverse paths of reasoning have unexpectedly converged. But, as I now see these problems, this is no accident. It seems to me that many of the current disputes with regard to both economic theory and economic policy have their common origin in a misconception about the nature of the economic problem of society. This misconception in turn is due to an erroneous transfer to social phenomena of the habits of thought we have developed in dealing with the phenomena of nature.
In ordinary language we describe by the word “planning” the complex of interrelated decisions about the allocation of our available resources. All economic activity is in this sense planning; and in any society in which many people collaborate, this planning, whoever does it, will in some measure have to be based on knowledge which, in the first instance, is not given to the planner but to somebody else, which somehow will have to be conveyed to the planner. The various ways in which the knowledge on which people base their plans is communicated to them is the crucial problem for any theory explaining the economic process, and the problem of what is the best way of utilizing knowledge initially dispersed among all the people is at least one of the main problems of economic policy—or of designing an efficient economic system.
The answer to this question is closely connected with that other question which arises here, that of who is to do the planning. It is about this question that all the dispute about “economic planning” centers. This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals. Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning—direction of the whole economic system according to one unified plan. Competition, on the other hand, means decentralized planning by many separate persons. The halfway house between the two, about which many people talk but which few like when they see it, is the delegation of planning to organized industries, or, in other words, monopoly.
Which of these systems is likely to be more efficient depends mainly on the question under which of them we can expect that fuller use will be made of the existing knowledge. And this, in turn, depends on whether we are more likely to succeed in putting at the disposal of a single central authority all the knowledge which ought to be used but which is initially dispersed among many different individuals, or in conveying to the individuals such additional knowledge as they need in order to enable them to fit their plans with those of others.
It will at once be evident that on this point the position will be different with respect to different kinds of knowledge; and the answer to our question will therefore largely turn on the relative importance of the different kinds of knowledge; those more likely to be at the disposal of particular individuals and those which we should with greater confidence expect to find in the possession of an authority made up of suitably chosen experts. If it is today so widely assumed that the latter will be in a better position, this is because one kind of knowledge, namely, scientific knowledge, occupies now so prominent a place in public imagination that we tend to forget that it is not the only kind that is relevant. It may be admitted that, as far as scientific knowledge is concerned, a body of suitably chosen experts may be in the best position to command all the best knowledge available—though this is of course merely shifting the difficulty to the problem of selecting the experts. What I wish to point out is that, even assuming that this problem can be readily solved, it is only a small part of the wider problem.
Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances. To know of and put to use a machine not fully employed, or somebody’s skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques. And the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.
It is a curious fact that this sort of knowledge should today be generally regarded with a kind of contempt and that anyone who by such knowledge gains an advantage over somebody better equipped with theoretical or technical knowledge is thought to have acted almost disreputably. To gain an advantage from better knowledge of facilities of communication or transport is sometimes regarded as almost dishonest, although it is quite as important that society make use of the best opportunities in this respect as in using the latest scientific discoveries. This prejudice has in a considerable measure affected the attitude toward commerce in general compared with that toward production. Even economists who regard themselves as definitely immune to the crude materialist fallacies of the past constantly commit the same mistake where activities directed toward the acquisition of such practical knowledge are concerned—apparently because in their scheme of things all such knowledge is supposed to be “given.” The common idea now seems to be that all such knowledge should as a matter of course be readily at the command of everybody, and the reproach of irrationality leveled against the existing economic order is frequently based on the fact that it is not so available. This view disregards the fact that the method by which such knowledge can be made as widely available as possible is precisely the problem to which we have to find an answer.
If it is fashionable today to minimize the importance of the knowledge of the particular circumstances of time and place, this is closely connected with the smaller importance which is now attached to change as such. Indeed, there are few points on which the assumptions made (usually only implicitly) by the “planners” differ from those of their opponents as much as with regard to the significance and frequency of changes which will make substantial alterations of production plans necessary. Of course, if detailed economic plans could be laid down for fairly long periods in advance and then closely adhered to, so that no further economic decisions of importance would be required, the task of drawing up a comprehensive plan governing all economic activity would be much less formidable.
It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan. The belief that changes, or at least day-to-day adjustments, have become less important in modern times implies the contention that economic problems also have become less important. This belief in the decreasing importance of change is, for that reason, usually held by the same people who argue that the importance of economic considerations has been driven into the background by the growing importance of technological knowledge.
Is it true that, with the elaborate apparatus of modern production, economic decisions are required only at long intervals, as when a new factory is to be erected or a new process to be introduced? Is it true that, once a plant has been built, the rest is all more or less mechanical, determined by the character of the plant, and leaving little to be changed in adapting to the ever-changing circumstances of the moment?
The fairly widespread belief in the affirmative is not, as far as I can ascertain, borne out by the practical experience of the businessman. In a competitive industry at any rate—and such an industry alone can serve as a test—the task of keeping cost from rising requires constant struggle, absorbing a great part of the energy of the manager. How easy it is for an inefficient manager to dissipate the differentials on which profitability rests, and that it is possible, with the same technical facilities, to produce with a great variety of costs, are among the commonplaces of business experience which do not seem to be equally familiar in the study of the economist. The very strength of the desire, constantly voiced by producers and engineers, to be allowed to proceed untrammeled by considerations of money costs, is eloquent testimony to the extent to which these factors enter into their daily work.
One reason why economists are increasingly apt to forget about the constant small changes which make up the whole economic picture is probably their growing preoccupation with statistical aggregates, which show a very much greater stability than the movements of the detail. The comparative stability of the aggregates cannot, however, be accounted for—as the statisticians occasionally seem to be inclined to do—by the “law of large numbers” or the mutual compensation of random changes. The number of elements with which we have to deal is not large enough for such accidental forces to produce stability. The continuous flow of goods and services is maintained by constant deliberate adjustments, by new dispositions made every day in the light of circumstances not known the day before, by B stepping in at once when A fails to deliver. Even the large and highly mechanized plant keeps going largely because of an environment upon which it can draw for all sorts of unexpected needs; tiles for its roof, stationery for its forms, and all the thousand and one kinds of equipment in which it cannot be self-contained and which the plans for the operation of the plant require to be readily available in the market.
This is, perhaps, also the point where I should briefly mention the fact that the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form. The statistics which such a central authority would have to use would have to be arrived at precisely by abstracting from minor differences between the things, by lumping together, as resources of one kind, items which differ as regards location, quality, and other particulars, in a way which may be very significant for the specific decision. It follows from this that central planning based on statistical information by its nature cannot take direct account of these circumstances of time and place and that the central planner will have to find some way or other in which the decisions depending on them can be left to the “man on the spot.”
If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used. But the “man on the spot” cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.
How much knowledge does he need to do so successfully? Which of the events which happen beyond the horizon of his immediate knowledge are of relevance to his immediate decision, and how much of them need he know?
There is hardly anything that happens anywhere in the world that might not have an effect on the decision he ought to make. But he need not know of these events as such, nor of all their effects. It does not matter for him why at the particular moment more screws of one size than of another are wanted, why paper bags are more readily available than canvas bags, or why skilled labor, or particular machine tools, have for the moment become more difficult to obtain. All that is significant for him is how much more or less difficult to procure they have become compared with other things with which he is also concerned, or how much more or less urgently wanted are the alternative things he produces or uses. It is always a question of the relative importance of the particular things with which he is concerned, and the causes which alter their relative importance are of no interest to him beyond the effect on those concrete things of his own environment.
It is in this connection that what I have called the “economic calculus” proper helps us, at least by analogy, to see how this problem can be solved, and in fact is being solved, by the price system. Even the single controlling mind, in possession of all the data for some small, self-contained economic system, would not—every time some small adjustment in the allocation of resources had to be made—go explicitly through all the relations between ends and means which might possibly be affected. It is indeed the great contribution of the pure logic of choice that it has demonstrated conclusively that even such a single mind could solve this kind of problem only by constructing and constantly using rates of equivalence (or “values,” or “marginal rates of substitution”), i.e., by attaching to each kind of scarce resource a numerical index which cannot be derived from any property possessed by that particular thing, but which reflects, or in which is condensed, its significance in view of the whole means-end structure. In any small change he will have to consider only these quantitative indices (or “values”) in which all the relevant information is concentrated; and, by adjusting the quantities one by one, he can appropriately rearrange his dispositions without having to solve the whole puzzle ab initio or without needing at any stage to survey it at once in all its ramifications.
Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan. It is worth contemplating for a moment a very simple and commonplace instance of the action of the price system to see what precisely it accomplishes. Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose—and it is very significant that it does not matter—which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all his without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes. The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.
We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid. (Even when quoted prices have become quite rigid, however, the forces which would operate through changes in price still operate to a considerable extent through changes in the other terms of the contract.) The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.
Of course, these adjustments are probably never “perfect” in the sense in which the economist conceives of them in his equilibrium analysis. But I fear that our theoretical habits of approaching the problem with the assumption of more or less perfect knowledge on the part of almost everyone has made us somewhat blind to the true function of the price mechanism and led us to apply rather misleading standards in judging its efficiency. The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. This is enough of a marvel even if, in a constantly changing world, not all will hit it off so perfectly that their profit rates will always be maintained at the same constant or “normal” level.
I have deliberately used the word “marvel” to shock the reader out of the complacency with which we often take the working of this mechanism for granted. I am convinced that if it were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind. Its misfortune is the double one that it is not the product of human design and that the people guided by it usually do not know why they are made to do what they do. But those who clamor for “conscious direction”—and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously—should remember this: The problem is precisely how to extend the span of out utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do.
The problem which we meet here is by no means peculiar to economics but arises in connection with nearly all truly social phenomena, with language and with most of our cultural inheritance, and constitutes really the central theoretical problem of all social science. As Alfred Whitehead has said in another connection, “It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.” This is of profound significance in the social field. We make constant use of formulas, symbols, and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess. We have developed these practices and institutions by building upon habits and institutions which have proved successful in their own sphere and which have in turn become the foundation of the civilization we have built up.
The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coördinated utilization of resources based on an equally divided knowledge has become possible. The people who like to deride any suggestion that this may be so usually distort the argument by insinuating that it asserts that by some miracle just that sort of system has spontaneously grown up which is best suited to modern civilization. It is the other way round: man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible. Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the “state” of the termite ants, or some other altogether unimaginable type. All that we can say is that nobody has yet succeeded in designing an alternative system in which certain features of the existing one can be preserved which are dear even to those who most violently assail it—such as particularly the extent to which the individual can choose his pursuits and consequently freely use his own knowledge and skill.
It is in many ways fortunate that the dispute about the indispensability of the price system for any rational calculation in a complex society is now no longer conducted entirely between camps holding different political views. The thesis that without the price system we could not preserve a society based on such extensive division of labor as ours was greeted with a howl of derision when it was first advanced by von Mises twenty-five years ago. Today the difficulties which some still find in accepting it are no longer mainly political, and this makes for an atmosphere much more conducive to reasonable discussion. When we find Leon Trotsky arguing that “economic accounting is unthinkable without market relations”; when Professor Oscar Lange promises Professor von Mises a statue in the marble halls of the future Central Planning Board; and when Professor Abba P. Lerner rediscovers Adam Smith and emphasizes that the essential utility of the price system consists in inducing the individual, while seeking his own interest, to do what is in the general interest, the differences can indeed no longer be ascribed to political prejudice. The remaining dissent seems clearly to be due to purely intellectual, and more particularly methodological, differences.
A recent statement by Professor Joseph Schumpeter in his Capitalism, Socialism, and Democracy provides a clear illustration of one of the methodological differences which I have in mind. Its author is pre-eminent among those economists who approach economic phenomena in the light of a certain branch of positivism. To him these phenomena accordingly appear as objectively given quantities of commodities impinging directly upon each other, almost, it would seem, without any intervention of human minds. Only against this background can I account for the following (to me startling) pronouncement. Professor Schumpeter argues that the possibility of a rational calculation in the absence of markets for the factors of production follows for the theorist “from the elementary proposition that consumers in evaluating (‘demanding’) consumers’ goods ipso facto also evaluate the means of production which enter into the production of these goods.” *1
Taken literally, this statement is simply untrue. The consumers do nothing of the kind. What Professor Schumpeter’s “ipso facto” presumably means is that the valuation of the factors of production is implied in, or follows necessarily from, the valuation of consumers’ goods. But this, too, is not correct. Implication is a logical relationship which can be meaningfully asserted only of propositions simultaneously present to one and the same mind. It is evident, however, that the values of the factors of production do not depend solely on the valuation of the consumers’ goods but also on the conditions of supply of the various factors of production. Only to a mind to which all these facts were simultaneously known would the answer necessarily follow from the facts given to it. The practical problem, however, arises precisely because these facts are never so given to a single mind, and because, in consequence, it is necessary that in the solution of the problem knowledge should be used that is dispersed among many people.
The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world.
That an economist of Professor Schumpeter’s standing should thus have fallen into a trap which the ambiguity of the term “datum” sets to the unwary can hardly be explained as a simple error. It suggests rather that there is something fundamentally wrong with an approach which habitually disregards an essential part of the phenomena with which we have to deal: the unavoidable imperfection of man’s knowledge and the consequent need for a process by which knowledge is constantly communicated and acquired. Any approach, such as that of much of mathematical economics with its simultaneous equations, which in effect starts from the assumption that people’s knowledge corresponds with the objective facts of the situation, systematically leaves out what is our main task to explain. I am far from denying that in our system equilibrium analysis has a useful function to perform. But when it comes to the point where it misleads some of our leading thinkers into believing that the situation which it describes has direct relevance to the solution of practical problems, it is high time that we remember that it does not deal with the social process at all and that it is no more than a useful preliminary to the study of the main problem.
Without Application In The Real World: The Value Of Knowledge
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For centuries, philosophers have applied sets of normative principles in effort to distinguish if an action is morally right or wrong. The purpose of normative ethics is to help guide society on how humans ought to act. These theories provide justifiable and reliable outcomes to determine if an action is moral or immoral. Two principles that play a significant role in normative ethics are consequentialism and Kantianism. When faced with a moral dilemma, these theories may agree or conflict with one another.…
Compare And Contrast John Stuart Mill And Aristotle's Ethical Theory
In class, we have been discussing ethical theories as well as practicing placing these theories to cases. Ethical theories are a set of principles of right conduct and a system of moral values. The field of ethics involves systematizing, defending, and deciding different concepts of right and wrong behavior. In this day, philosophers are known to separate ethical theories into either metaethics, normative ethics, or applied ethics. I’ve chosen to focus on John Stuart Mill and Aristotle’s opposing argumentative theories which help teach me to analyze the cases provided to me.…
Michael Young Education
In this assignment, I will be outlining and analysing two academic papers written by Michael Young and John White and discussing their key arguments, whilst comparing and contrasting throughout. The key argument in Michael Young’s paper is comprised of a number of aspects related to schooling. The main question that is being addressed is “What are schools for?” One associated factor of this argument mentions that every passing generation has to ensure they attempt to answer this broad-ranging question, due to the significance of how schools have a distinctive role to play for the future of academic individuals.…
- Deontological ethics
- Scientific method
- Normative ethics
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Project Management : The Application Of Knowledge, Skills, Tools, And Techniques
It project management vs construction project management.
Over the past few years, project managers and Project management has shown tremendous growth. Project management has evolved over the past several years from an activity in an organization to a discipline in its own right. Many professional bodies exist today to represent project management as a discipline, Some of which include, PMI, Prince2 Foundation, PM Bok.
Functional Areas of Business Essay
As with Human Resources, Project Management is a functional area of business that is currently evolving to meet the changing demands of the modern business. Whereas in the past Project Management could be described as taking a task from start to finish, in the modern workplace there is much more emphasis on ensuring a task is completed as efficiently as possible with little or no downtime between projects.
The Edinburgh Tram System - Failures
‘Project management is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements’ (Project Management Institute, 2009, p12). Once a project has been approved a project manager is assigned to the project, and ‘is expected to integrate all aspects of the project, ensure that the proper knowledge and resources are available when they are needed, and ensure that the results are produced in a timely, cost-effective manner’ (Meredith and Mantel, 2010, p5). In order to allow this to happen there are several key aspects of a project which need to be carefully thought out and controlled.
The Orion Shield Case Analysis Essay
Executive Summary Project management is the science of planning, organizing, executing, and managing the resources needed to achieve a specific goal. Effective project managers (PM) strategically facilitate the entire project management process to ensure the project’s success. To do this the PM must adequately meet the specific requirements (i.e., time, scope, quality, and cost) set forth by the project and its stakeholders. It is theorized that PM must possess a set of core competencies in order to successfully manage a project. Those competencies are development of project management knowledge areas, application of appropriate project management tools and techniques, understanding of the project
Pm567 Quiz 1 Essay
Project management is the performance based process focus on one o more deliverable. It is the process of identifying a problem or need coming up with possible solution, deciding on the best one and completing the project in a manner that is acceptable to
New Jersey Institute Of Technology
Project Management is the art of arranging, sorting out, spurring, and controlling resources to attain specific objectives. A project is a brief endeavor intended to deliver a unique product, service, attempted to meet extraordinary objectives and goals, commonly to achieve helpful change or included quality.
Achieving Project Goals Simulation Paper
Project management is defined by BusinessDictionary.com as, “Approach to management of work within the constraints of time, cost, and performance requirements.” Project management requires careful planning and studying all of the factors involved with in the project. Project Managers must first establish the needs of the stakeholders and provide a project plan which includes the cost and time frame the project will be completed. In addition, projects requirements should be clear and concise to ensure the Project Manager stays within
Mgt/437 Project Management
In this paper, I, a student of University of Phoenix will explain and discuss project management. I will address three main points. I will first answer what is a project. Secondly, I will discuss what are the basic phases of the project lifecycle and their purpose. Finally, I will explain why it 's important for organizations to use project management to accomplish tasks.
Project Management Ethical Issues
Project management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives. It is often closely related to program management (Wikipedia).
Project Management : A Collaborative Or Individual Entity Essay
A project is a collaborative or individual entity which is temporary and unique in nature. In a
Assignment 1 Assess Organizational Readiness no name
Larson, E.W. and Gray, C.F. (2012, p. 214). Project Management: The Managerial Process, 5th Ed. McGraw-Hill Learning Solutions. Boston, MA.
Project Management For Dummies
The author of this book defines a project as simply a unique specific deliverable that meets a specific purpose. Each project has three components which affect the others: specific scope, schedule, and required resources. Specific scope is the desired results or product while the schedule establishes beginning and ending dates for the project. Required resources are the number of people, funds or other resources needed to complete the project.
Human Resorce Management vs. Operations Management vs.Preoject Management
Project management is managing the work to develop and innovate or even change within an existing operation. There are five steps in this management: Initiating the project, Planning and controlling all activities to keep the project on schedule, executing every phase of the projects process, monitoring/ controlling reviewing and regulating the progress and performance of all phases of the project, Closing process this is where all processes are finalized and completed to officially close the project out.
Agile vs Traditional Project Management
What is project management? Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. (PMBOK 2004)
What Are The Five Basic Functions Of Project Management
Project management is a series of steps taken in sequence to manage a project through all phases from conception to completion. The steps are documented in a strategic plan. The plan is used to ensure that all parties are working towards a common goal. Project management requires applying knowledge, skills, tools and techniques to specific activities in accordance with established standards and guidelines. There are five basic functions of project management: planning, organizing, staffing, directing, and controlling. Basic activities of project management include: identifying project requirements to define the outcomes; addressing various needs, concerns and expectations of others; setting up, maintaining and carrying out communications; managing others; creating project deliverables; and balancing competing project constraints.
- Project management