The Competitiveness of Nations in a Global Knowledge-Based Economy

1.0 Introduction

1.0 Introduction


* Index & Epithet not in published dissertation.



He whose vision cannot cover

History’s three thousand years,

Must in outer darkness hover,

Live within the day’s frontiers.

 Goethe, Westöstlicher Diwan

Epithet to Erich Neumann’s

The Origins and History of Consciousness

Bollingen Series XLII,

Princeton University Press, 1954.

1.0 Introduction

1.         In his April 25, 2005 ‘State of the Union’ address to the Duma, Vladimir Putin, President of the Russian Federation, called the collapse of the Soviet Union in 1989 “the greatest geopolitical catastrophe” of the twentieth century (BBC April 25, 2005).  Whether true or not, this event, accompanied by the nearly synchronistic conversion of Communist China to market economics marked the end of the Market/Marx Wars which had raged and divided the world for almost a century and a half beginning with publication of the Communist Manifesto by Karl Marx and Frederick Engels in 1848. 

2.         The Communist Revolution failed.  The previous Republican Revolution survives.  A world divided and threatened with nuclear winter for almost half a century now rallies around the last ideology standing – market economics with its political and legal corollaries: popular democracy and private property.  This is not, however, the end of ideology (Bell 1960) nor of history (Fukuyama 1992).  Now that the fog of war has dissipated, it is time to reconsider both victor and vanquished.  Glorification of ‘us’ and demonization of ‘them’ are byproducts of war - hot, cold and ideological; reflection and reconciliation are byproducts of peace.

3.         The word ‘ideology’ has many meanings today (Gerring 1997) but was coined simply enough by Condillac, a contemporary of Adam Smith (1776), to mean ‘the science of ideas’ (OED, ideology, 1a).  Separation of Church and State was critical to both American and French Republican Revolutions.  Creation of a secular ‘science of ideas’ to counter the awe and mystery of religious and metaphysical thought and ritual was part of a revolutionary agenda designed to overthrow an Ancient Regime of subordination by birth. 

4.         The antagonistic relationship between religion and secular ideology today appears, in its most virulent form, in the guise of Al Queda and a jihadist radical Islamic campaign of terror against ‘the West’.  However, the West itself remains divided between resurgent religious fundamentalism (faith) and a secular ideology of science (knowledge).  Of this global dilemma, Carl Jung wrote:

The rupture between faith and knowledge is a symptom of the split consciousness which is so characteristic of the mental disorder of our day.  It is as if two different persons were making statements about the same thing, each from his own point of view, or as if one person in two different frames of mind


were sketching a picture of his experience.  If for “person” we substitute “modern society,” it is evident that the latter is suffering from a mental dissociation, i.e., a neurotic disturbance.  In view of this, it does not help matters at all if one party pulls obstinately to the right and the other to the left.  (Jung [1956] 1970, 285)

5.         If technology cum Heidegger (1955) enframes and enables us as physical beings within a human built environment then ideology (inclusive of religion) enframes and enables us as mental beings within local, regional, national and global communities of ideas.  It is this enframing and enabling of minds within systems of ideas that forms, in part at least, what theoretical biology calls the noösphere, i.e., “that part of the world … [consisting of human] conceptual thought… as opposed to the geosphere, or nonliving world, and the biosphere, or living world (Encyclopedia Britannica 2003).

6.         Today, with the exception of North Korea and Cuba, no Nation-State on earth subscribes to economic Marxism while the People’s Republic of China struggles to reconcile private property and the marketplace with the political clarity of Leninism (M. Polanyi 1957, 480).  (In this view, conversion is a necessary yet distasteful, temporary detour on the road to perfect communism.)  Nonetheless, virtually all Nation-States are either current or expectant members of a World Trade Organization (WTO) rooted in the ideology of the marketplace.

7.         Ideologies are, if you will, organisms capable of adaptation, growth, mutation, recombination and symbiosis.  They may also exhibit “avalanches of speciation and extinction” (Kaufmann 2000, 216).  This metaphor of avalanches of change has been extended by Kauffman from molecular biology or genomics to the economy or what he calls the ‘econosphere’.  He draws a parallel with Joseph Schumpeter’s description of technological change as the “gales of creative destruction” (Kauffman 2000, 216; Schumpeter 1950, 81-86).  He also suggests its application to the growth and development of human culture and knowledge.  It should not therefore be surprising that just as the former Second World of centrally planned economies melted into a single global marketplace, the economies of the First World were shifting from a foundation based on manufacturing to one based on knowledge. 

8.         Similarly, it should not be surprising that as the knowledge-based economy emerged the definition of knowledge itself underwent what amounts to a scientific revolution (Kuhn 1996).  An old philosophy of science modeled on the ‘when-then’ causality of physics (Grene & Depew 2004, 95) is increasingly being displaced by causality by purpose, both natural purpose in biology and human purpose in works of aesthetic, intellectual and technological intelligence (Aldrich 1969).  The emerging science of genomics arguably represents a marriage of both natural and human purpose.


9.         Ideologies, as organized systems of ideas, concern therefore both human nature and Nature herself.  The later are generally called ‘sciences’.  To classify the scientific study of Nature as ideology may sound strange to some but as Michael Polanyi has written “the very substantial flaws which the rigorously positive conception of science contains … requires to be supplemented by fiducial elements - which I shall call ‘scientific beliefs’ - if we are to draw a true picture of science.”(M. Polanyi 1950, 27).

10.        ‘Belief’ is a characteristic of ideology, not of traditionally narrow ‘positivistic’ science.  Ideologies concerned with human nature, on the other hand, even when portrayed as ‘scientific’, e.g., Marxism-Leninism (M. Polanyi 1957), are fundamentally flawed.  This is due to their object – humanity - which remains far more opaque to understanding than Nature revealed over four centuries of the experimental method.  This varying transparency may simply reflect the ascending complexity of physical, biological and intellectual forms or, alternatively, levels of analysis, i.e., geosphere, biosphere and noösphere.

11.        In this presentation I am concerned with the meaning of ‘knowledge’ and how it affects the competitiveness of nations in a global knowledge-based economy.  In a way, such an economy is the ideological part of the noösphere involved with the buying and selling of ideas as well as other knowledge transactions including those in the public domain.  After formal definition of the problem (2.0 Problem: A Flawed Ideology) and the methodology adopted to resolve it (3.0 Methodology: Trans-Disciplinary Induction), I will introduce increasing detailed of definition of knowledge as a noun, verb, form and content.

12.        First, I will define knowledge as a monotonic abstract Platonic noun like Beauty, Truth and Justice (4.0 Knowledge as Noun).  I will demonstrate that this definition is rooted in the undifferentiated but polymorphous biological human need to know.  Knowledge, as noun, also exhibits immeasurability and incommensurability finding general expression through inherently limited and biased human languages including mathematics and English.  Knowledge as a noun will serve as the material cause of knowledge.

13.        Second, I will define knowledge as a diaphonic verb ‘to know’ invoking two alternate yet complementary ways of knowing, i.e., Science and Design, or rather, knowledge acquired through reductive and/or constructive methods (5.0 Knowledge as Verb).  I will examine each, their historic relationship and propose a reconciliation to satisfy Kauffman’s hope “to glimpse a constructivist companion to the reductionist thesis” (Kauffman 2000, 268).  Knowledge as a verb will serve as its efficient cause.


14.        Third, I will define knowledge as physical form including personal & tacit, codified and tooled knowledge (6.0 Knowledge as Form).  The last – tooled knowledge - constitutes what is conventionally called technology, the technology that enframes and enables extending the human senses and grasp of the natural world.  These, in turn, take form as inputs to, and outputs of, a knowledge-based economy.  As inputs, knowledge takes form as: (i) codified & tooled capital, personal & tacit labour and toolable natural resources.  As outputs, it takes form as (ii) the Person, Code and Tool.  I will also demonstrate that codified and tooled knowledge acquire meaning or function only when mediated by a natural Person.  Put another way, all knowledge is ultimately personal & tacit.  Knowledge as form will serve as its formal cause.

15.        Fourth, I will define the content of knowledge (7.0 Knowledge as Content) with respect to etymology (Chapter 8), psychology (Chapter 9), epistemology & pedagogy (Chapter 10), law (Chapter 11) and economics (Chapter 12).  Knowledge as content will serve as its final cause. 

16.        Fifth, I will examine the nature of the Nation-State, consider the shifting sands of sovereignty on which it stands and outline its governance as custodian, facilitator, patron, architect and/or engineer of the national knowledge-base (13.0 The Nation-State).  It is here that the increasing depth and density of definition of knowledge takes hold and hopefully “where knowledge is an essential part of the system, knowledge about the system changes the system itself” (Boulding 1966, 9). 

17.        Sixth, I will then consider the competitiveness of nations using a production function in which all inputs, outputs and coefficients are defined in terms of knowledge.  I will then consider comparative advantage with respect to knowledge as a noun, verb, form and content (14.0 Competitiveness).  Furthermore, I will displace the contemporary sports metaphor of competitiveness - ‘win/lose’ - with the biological metaphor of fitness to adapt to a rapidly changing economic landscape through coevolution and coconstruction with other Nation-States or, more generally, with other “autonomous agents” (Kauffman 2000).

18.        Seventh, and finally (15.0 Conclusions), I will offer three sets of closing comments about knowledge, the production function and the Nation-State.  The first set will involve the causal hierarchy of knowledge, ‘dirty hands’ from its misapplication and ideological commensurabilities between knowledge domains.  The second will concern the production function for a knowledge-based economy.  It is here that I introduce a labour theory of knowledge.  The third and final set of conclusions will concern the fragility of the Nation-State, its role as prime attractor in a global knowledge-based economy, the limits of comparative advantage and the ideological coevolution of the Nation-State and economics.



2.0 Problem: A Flawed Ideology

The Competitiveness of Nations in a Global Knowledge-Based Economy