The Competitiveness of Nations in a Global Knowledge-Based Economy
The
Competitiveness of Nations
in a Global
Knowledge-Based Economy
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Abstract
My objective
is to deepen and thicken public and private policy debate about the
competitiveness of nations in a global knowledge–based economy. To do so I first demonstrate the inadequacies
of the Standard Model of economics, the last ideology standing after the
Market-Marx Wars. Second, I develop a
methodology (Trans-Disciplinary Induction) to acquire ‘knowledge about
knowledge’. In the process of surveying
the event horizons of seventeen sub-disciplines of thought, I redefine ‘ideology’
as the search for commensurable sets or systems of ideas shared across
knowledge domains and practices. Third,
I create a definitional avalanche about knowledge as a noun, verb, form and
content in etymology, psychology, epistemology & pedagogy, law and
economics. Fourth, I establish the
origins and nature of the Nation-State, the shifting sands of sovereignty on
which it stands and the complimentary roles it plays as curator, facilitator,
patron, architect and engineer of the national knowledge-base. Fifth, I examine the competitiveness of
nations with respect to a production function in which all inputs, outputs and
coefficients are defined in terms of knowledge.
In the process, I demonstrated that competitiveness, as win/lose against
rivals, is inadequate because it does not account for symbionts and
environmental change. Accordingly, I
propose ‘fitness’ as a more appropriate criterion. Finally, I consider the comparative advantage
of nations given their initial and differing national knowledge endowments.
HHC © February 2006
With
the collapse of the
If
technology enframes and enables us as physical beings creating a human built ecology
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 or that part of the world consisting of conceptual thought
as opposed to the geosphere or nonliving world and the biosphere or living
world.
Ideologies
exhibit avalanches of speciation and extinction. It should not therefore be surprising that
just as the Second World of centrally planned economies melted into a single
global marketplace the economies of the First World shifted from a foundation
based on manufacturing to one based on knowledge. Similarly, just as the knowledge-based economy
emerged the definition of knowledge underwent a revolution with the old ‘positivist’
‘when-then’ causality displaced by causality by purpose, both natural
purpose as in biology and human purpose as in works of aesthetic, intellectual and
technological intelligence. It is in the
emerging sciences of genomics and proteomics that this marriage of natural and
human purpose is most apparent.
I am
concerned with the meaning of ‘knowledge’ and how it affects the
competitiveness of nations in a global knowledge-based economy. It is that part of the noösphere engaged in the
buying and selling of ideas as well as the free exchange of knowledge within the
public domain. Unfortunately in the Standard
Model of economics such an economy is a theoretical contradiction in terms, an
oxymoron.
The
Standard Model is the offspring of a marriage.
In the 1870s, just as socialism was rising, this progeny displaced growth
and division of national wealth among social classes as the primary focus of
economic thought. The ‘felicitous
calculus’ of Jeremy Bentham who, in the early 1800s, reduced
human being to a unit measure of pleasure/pain called the ‘utile’ married
Newton’s calculus of mechanical motion. Satisfying
Descartes’ requirements the new ‘hedonic’ economics became a science through use
of deductive logic based on key assumptions whose conclusions are subject to geometric
and mathematical proof. Graphic
expression was and is critical to its acceptance. The resulting Standard Model, alternatively
called the Marshallian, the Neo-Classical or Perfect
Competition model, led Thomas Kuhn to single out economics among the social
sciences as best approximating puzzle-solving normal science. It is, however, radically materialistic focusing
on the pleasure/pain of agents – the consumer and the producer. The Standard Model became the economic compliment
to Republican politics – one person, one vote – expressed as ‘dollar democracy’
and consumer sovereignty.
Three Standard Model assumptions are relevant. First, assume all consumers and producers have perfect knowledge in which case there can, of course, be no market, i.e., there can be no knowledge-based economy. Second, assume human beings are strictly rational, i.e., they are constantly calculating the probability and magnitude of present and future pleasure/pain. This is ‘calculatory rationalism’. It excludes all forms of knowledge not subject to calculation, e.g.,
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the
aesthetic experience as well as pattern recognition and tacit knowledge in performance
both generally considered critical in a knowledge-based economy. Third, while the utile cannot be
measured assume it can be reified, i.e., an abstraction made concrete, specifically
as money. The presence of money brings
pleasure; its absence brings pain. It is
ironic that the Standard Model achieves what Plato, writing about Art in his Republic, feared most, that: “not law and the reason of mankind, which by common consent
have ever been deemed best, but pleasure and pain will be the rulers in our
State”.
In
summary, the Standard Model treats knowledge as a probabilistically certain,
culturally blind, monotonic public good that affects the production function of
a firm or Nation-State by increasing output, i.e., it is an input. It
does not recognize knowledge as a final, highly differentiated output, i.e.,
as an end in-and-of-itself. The source
and nature of knowledge is of no concern, only its quantitative impact on
output. Even within this constrained
framework, however, knowledge exhibits non-diminishing marginal product and
increasing returns to scale incompatible with a competitive outcome leading instead
to monopoly – the bête noir or ‘black beast’ of the Standard Model.
The Standard
Model is empirically flawed given a poly-differentiated global knowledge-based
economy encompassing
Given
the inadequacies of the Standard Model and the thinness of public policy debate
about the knowledge-based economy, a methodology was required to reach beyond
the disciplinary frontiers of economics to collect, compile and collate
‘knowledge about knowledge’. My solution
was Trans-Disciplinary Induction (TDI) used to harvest knowledge about
knowledge from the event horizons of five disciplines of thought and
interdisciplinary fields of study: economics, philosophy, psychology, science
and technology. My findings are a
sampling of seventeen of their sub-disciplines plus etymology, i.e., the
origin and meaning of words.
TDI,
in effect, redefines ideology as the search for commensurable sets or systems
of ideas shared across knowledge domains, practices, disciplines,
sub-disciplines and specialities of thought.
Given the increasing incommensurability of knowledge such common
conceptual structures may permit “a glimpse of a constructivist companion
to the reductionist thesis”. I first summarize
findings about the nature and causes of knowledge. I then define the Nation-State and management
of the national knowledge base. Finally I
apply findings of ‘knowledge about knowledge’ to the competitiveness of nations
in a global knowledge-based economy.
I present my findings by overlapping and mutating two of the oldest theories of knowledge (epistemologies) in Western civilization: Pythagoras’ Tetraktys and Aristotle’s Four Causes of why things are the way they are. In genomics such a creature would be called a ‘hybridomas’. To change my metaphor, I will toss a snowball down the slopes to transform into an avalanche of increasingly detailed definition of knowledge as noun, verb, form and content. This is done in Boulding’s belief that “where knowledge is an essential part of the system,
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knowledge about the system
changes the system itself”. I also do so
in imitation of Kauffman’s patchwork procedure to optimize understanding by
considering each of its critical facets.
Knowledge is an abstract Platonic noun like beauty, truth and
justice. It corresponds to Pythagoras’
Monad, i.e., that out of which all
proceeds, and Aristotle’s material cause, i.e.,
that out of which something is made. As
a Monad knowledge is also
“a succession of sounds at the same pitch” or a monotone
which introduces another characteristic of knowledge – Time. Other than the changing seasons, sun and stars,
the first human time piece was music. Music
paces human activity in dance and celebration and at work and war. It should be remembered that music was the
first experimental science. Thus
Pythagoras (about 530 B.C.E.), using the strings of musical instruments,
revealed an audible, measurable, cognate relationship between number and matter
- one of the most important bits of ‘knowledge’ inherited from the Ancient
World.
According
to Heidegger human thought operates only in Time, not in Space. Movement along and across timelines is
alternatively called memory, planning, intentionality or imagination of spaces,
places and times without leaving the comfort of one’s own head. The uni-dimensionality
of thought with Space folded up into Time produces what Descartes called “the
ghost in the machine” or our sense of the ethereal, spiritual or
transcendental. For my immediate purposes
it is sufficient to say that knowledge exists like a focal monadic ‘I know’ located
in Time but nowhere in Space.
A
Platonic noun describes an abstract concept that exists independent of any name
given it. Such nouns do not exist in all
languages. Where they do, they have an
‘awe’ factor, or ‘numinosity’ and hence the attraction of phrases like
‘knowledge-based economy’. This awe
results from the polymorphous biological human need to know, the
immeasurability and incommensurability of knowledge and its general expression
through inherently limited and biased human language including mathematics and
English.
According
to William James “unless consciousness served some useful purpose, it would not
have been superadded to life”. That
useful purpose is that “all knowledge is orientation” for “finding one’s way in
an environment”. Every organism
perceives an active environment in which it must make a living or die seeking
information about “invariants” that enframe and enable that environment and
“affordances”, i.e., opportunities and/or dangers, presented by it. All organisms have a purpose - to survive and
reproduce.
In the
ascent of humanity we made art, language and tools new ways of transmitting
information from one generation to the next, i.e., an external genetic code.
Coevolution refers to reciprocal evolutionary change in interacting
species. In this case it refers to the
coevolution of culture, or Carl Sagan’s extra-somatic
knowledge, and somatic
knowledge, e.g., instincts. This coevolution
has allowed us to transform ourselves from hunter gatherer to farmer to industrial
to knowledge worker.
In
this regard, humanity not only adjusts to its environment but, like other
organisms, adjusts the environment to itself. This enframing and enabling of the environment
to serve human purpose making it ready at hand as a standing reserve is called
technology by Heidegger. For my purposes
it is tooled knowledge passed on generation to generation, e.g., buildings, roads and sewers.
In effect, following the Scientific Revolution, the human species has
progressively enframed its own ecological fishbowl at the expense of all other
ecologies on the planet.
In spite of such cultural inventions only the individual can ‘know’. Books, pictures and computers do not know that they know, nor does any other species, at least on this planet. Companies, corporations and governments or, in Common Law, ‘legal persons’, cannot know. Only the solitary flesh and blood ‘natural person’ can know. And the biological imperative to
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know one’s environment in the geo-, bio- or noösphere constitutes
the Aristotelian material cause of knowledge, i.e., that out of which something is made.
Beyond
the polymorphous biological need to know three other facets of knowledge contribute
to its numinosity. First, there
is no equivalent to the binary bit (0, 1) in information theory. There is, as Kenneth Boulding
puts it, no ‘wit’, no single unit of knowing like an atom or a utile or a zero
and a one to equate a pirouette and a quark.
Second, as highlighted by Thomas Kuhn, knowledge
in related fields tends to become increasingly incommensurable, one to the
other, as puzzle solving normal science proceeds. Or, as de Solla
Price put it, there are ‘invisible colleges’ of perhaps forty or fifty people
in the world who understand what a leading-edge scientist really knows.
Third, there is language. With the exception of tacit and tooled
knowledge, most is expressed using a human language including mathematics. Each is inherently limited. In the case of English, for example, one
verb, ‘to know’, etymologically veils four distinct meanings: to know by the
senses, mind, doing and experience. In
this way, the English ‘knowledge’ is an etymological monad. In German, by contrast, there are four
separate and distinct verbs to express each of these meanings. To cite another example,
Since the beginning of Western philosophy
there has been a tradition of a non-rational way of knowing that rivals or even
surpasses rational knowledge. While the rational is embodied in our
concept of Science, the non-rational has remained a wraith taking many forms,
assuming many names and evading systemic identification. First, I will define Science and the rational
way of knowing then the non-rational. Second,
I will propose that ultimately all knowledge is the inter-play of the two. In effect, knowledge is diaphonic, i.e., it speaks in two voices, in
Pythagorean terms. These are the
efficient cause of knowledge in Aristotelian terms.
As
demonstrated above language filters knowledge.
In the West, logic has been accepted as the preferred path since the
ancient Greeks. It distances us from our
passions; it frees us from the distracting world of sensation and emotion. For the Romans the Greek logos became
‘reason’ derived from the Latin ‘ratio’ as in to calculate. And from the Romans we derive Science from the
Latin scire “to know” which, in turn, derives
from scindere “to split”. Science is the epitome of reason deriving
knowledge by splitting or reducing a question into smaller and smaller parts or
elements until a fundamental unit or force is revealed, e.g., Bentham’s utile or Newton’s gravity. Until innovation of the experimental method,
however, such splitting and reducing was restricted to words. Arguably, the unprecedented evolutionary
ascent of our species to global dominion, achieved in some twenty-five
generations, results from institutionalization of this new way of knowing - the
experimental method, or, as originally called, ‘experimental philosophy’.
Reductionism extends to epistemology or the theory of knowledge. Knowledge is split into domains, disciplines, faculties and specialities with an inevitable increase in incommensurability. Reductionism has, however, a significant advantage. It strips away secondary phenomena distinguishing cause from effect revealing in the natural sciences the ‘laws of nature’. Its success rests on ‘when-then’ causality with Time’s Arrow moving from the Past into the Present and then into the Future by way of prediction.
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The
non-rational way of knowing has had many names.
To Plato it was Art; to the Church Fathers Revelation; to the
Scholastics analogy; to Adam Smith moral sentiments; to Kant productive
imagination; to Michael Polanyi subsidiary or tacit knowledge; to Thomas Kuhn
aesthetics, gestalt switching or intuition with “scales falling from the eyes”,
“lightning flash” and “illumination”. To
Erich Jantsch, it was Design. The idea of Design, however, is eternally
linked to a form of causality utterly rejected by physics and positivist
philosophies of science – teleology: “the doctrine or study of ends or final
causes”.
With
the discovery of perspective in the Renaissance a new word entered the English
language – design. The word derives from
the Latin designare “to mark out, trace out,
denote by some indication, contrive, devise, appoint to an office”. In Renaissance Italy it assumed its
contemporary aesthetic sense of geometric composition as distinct from its
social sense of planning. In French,
these two are expressed by separate words: “dessein
meaning ‘purpose, plan’; and, dessin meaning
‘design in art’”. In English, however,
both meanings are combined in the single word ‘design’. What they share is intent, specifically
the intent to make as opposed to understand. Design involves making patterns out of matter
and/or mind, i.e., construction, as well as recognition of purpose even
in natural patterns such as ships of clouds sailing across the living skies. At the extreme, this becomes ‘intelligent
design’, one reason why positivistic science resists teleology as an explanatory
principle.
Successful
imitation of Nature in the Renaissance led to Baumgarten’s
aesthetics in the mid-18th century that liberated Art from religion and
politics just as Robert Boyle’s ‘Latitudinalist’ compromise
liberated experimental physics and mechanics in the 17th century. In this regard “the original meaning of the
term aesthetics as coined by Baumgarten… is the
theory of sensuous knowledge, as a counterpart to logic as a theory of
intellectual knowledge”. Then in the early
20th century Gestalt psychology demonstrated that one can know the whole only if
one ignores the parts. In mid-century
Michael Polanyi formulated what can be called ‘gestalt knowing’ of which more
below. Then, in the last quarter of the
century, ‘pattern recognition’ emerged as a distinct sub-discipline or field in
both neural psychology and computer science.
Michael
Polanyi’s epistemology is explicitly rooted in gestalt
psychology and his ‘tacit’ knowledge is a critical component in contemporary discussion
of the knowledge-based economy. Three
concepts define his ideology: subsidiary/focal knowledge, indwelling and
displacement. First, we know in a
stereoscopic manner conjoining subsidiary and focal knowledge. Thus we know “subsidiarily
the particulars of a comprehensive whole when attending focally to the whole
which they constitute”. It is subsidiary
knowing that is called “tacit, so far as we cannot tell what the
particulars are, on the awareness of which we rely for attending to the entity
comprising them”.
Polanyi’s
focal/subsidiary knowledge is commensurable in aesthetics as figure/ground or
melody/note, in Grene & Depew’s biology as
invariant/affordance, in Heidegger’s enframing/enabling technology, and in
Thomas Kuhn’s puzzle-solving normal science. Critically, however, Polanyi concludes that it
is through integration of subsidiary and focal knowledge that we ultimately know
and this process itself is tacit or subsidiary.
Second, the ultimate in tacit knowledge is the human body. Everything we do in and know of the world is through our bodies. The body, however, is normally transparent to the mind in its doings and knowings. This transparency Polanyi calls “indwelling”. Third, indwelling has a powerful corollary that Polanyi uses to treat experimental instrumental science: displacement. It is here that Polanyi meets Heidegger. A characteristic of human being is displacement of sensation from point of contact to distant source. Thus in the use of a hand tool “the impact that their handle makes on our hands and fingers is not felt in itself at the place where it happens, but as an impact of our instrument where it hits its object”. This displacement allows humans to indwell in their tools and technology.
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The conclusion
is that the reductive method of experimental Science is always conducted in the
context of Design, e.g., an
experimental design whereby all factors are held constant except one to play the
cause of an instrumentally measurable change in an experimental or
“epistemic
system”. In this sense, all knowledge is obtained
through Science by Design or gestalt
knowing.
Form,
according to Francis Bacon, is “the real or objective conditions on which a
sensible quality or body depends for its existence”. Knowledge takes three forms – personal &
tacit, codified and tooled. These are
the Aristotelian formal causes of knowledge, the shapes it takes. As seen below, these, in turn, take economic
form as inputs to the production process as codified & tooled capital,
personal & tacit labour and toolable natural
resources then as economic outputs in the guise of the Person, Code and Tool.
Personal
& tacit knowledge is fixed in a natural person first as a matrix of
neurons that constitute memories (knowledge) as part of one’s voluntary
wetware, i.e., subject to conscious control specifically to recall. Memories can usually be described and
codified, i.e., spoken and transcribed into language or drawn as a
picture. The second are reflexes,
i.e., knowledge fixed in one’s muscles
and nerves. This may be the fine
practiced motor skills of a brain surgeon or bricklayer. They are both tacit in performance, i.e.,
not subject to articulation and codification.
Codified
knowledge refers to encoding knowledge in written language, symbols (including
mathematics), sounds or pictures. In
effect, the knowledge of one person is fixed in a communications medium that subsequently
– distant in time and/or space – can be decoded and assimilated by another
human mind into personal & tacit knowledge.
It is semiotic in nature, i.e., conveyed in signs and symbols. Accordingly codified knowledge refers only to
‘human-readable’ code excluding machine-readable computer code and the machine/molecule-readable
‘code of life’. The distinction is
between semiotic meaning communicated from one mind to another versus
operating instructions for a machine or a molecule. As will be seen below,
machine/molecule-readable code is a form of ‘soft-tooled’ knowledge.
Tooled
knowledge refers to knowledge embodied in a functioning physical matrix as an
instrument such as a sensor, tool or toy, or more generally, as a work of
technological intelligence. Such works constitute ‘hard-tooled’ knowledge. That knowledge is tooled into matter is
demonstrated by reverse engineering. Operation
of an instrument, however, is associated with tacit and/or codified knowledge as
operating programs, mathematics, standards and techniques. These constitute ‘soft-tooled’ knowledge. In summary, computer programs are
machine-readable code used to operate instruments. Genomic programs are molecular/machine code
read by machines to analyze and/or synthesize biological structures and
entities. Standards are codified
knowledge designed into an instrument defining its operational
properties, e.g., a 110 or 220 volt electric razor. Mathematics is the language in which such
standards are usually set and in which instruments are calibrated. Techniques are personal & tacit and/or
codified knowledge defining the manner of use and application of an instrument
to realize its intended purpose. Knowledge
tooled into an extra-somatic matrix remains, however, a functionless artifact
until someone makes it work by pushing the right buttons. This requires personal & tacit knowledge gained
through practice and experience. Again,
all knowledge is personal and tacit.
Personal & tacit, codified and tooled knowledge enter the economic process as codified & tooled capital, personal & tacit labour and toolable natural resources. Capital is “knowledge imposed on the material world” or “frozen knowledge.” It includes codified and tooled knowledge. Both are fixed in material form; both have vintage; both are extra-somatic, i.e., they exist outside the natural person. Personal & tacit labour, however, exists only in the natural person and takes three forms: productive, managerial and entrepreneurial. At first glance, natural resources appear to have no relationship to knowledge. They exist as John Locke said in “the
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State that Nature hath provided”. They remain just part of the environment,
however, only until a knowing mind recognizes them as useful. Just as a tool is recognized by its purpose,
we identify natural resources by human purpose. In this regard genomics has opened up a whole
new spectrum of toolable natural resources in the success
stories told by the genes of every living organism on the planet.
In a knowledge-based economy there are three outputs: the Person,
the Code and the Tool. They come in two forms: as
intermediate and final goods. As an
intermediate output the Person is utilitarian, i.e., valued for a
purpose other than one’s self. As a final output, the Person is
non-utilitarian, i.e., valued in-and-of-oneself, e.g., the celebrity. Arguably, the Person is the ultimate output of
a knowledge-based economy. This
reflects, among other things, Republicanism and its principle of one person one
vote as well as the U.N.’s Declaration of Universal Human Rights. It is through education, training and
experience that personal & tacit knowledge is somatically fixed into
neuronal bundles of memories and conditioned reflexes of the Person. Or, in Shakespeare’s phrase, “What a piece of work is Man’. In other words, if one is what one knows then
personal & tacit knowledge is the definition of human being.
Code,
excluding speech, is extra-somatically fixed in a communications medium
permitting access by another mind distant in time and space. As final and intermediate output Code takes
form as articles, books, correspondence, magazines, technical and training
manuals, memoranda, motion pictures, paintings, radio and television programs
and sound recordings insofar as they are carriers of semiotic meaning. As seen below, it is the distinction between
the non-utilitarian or utilitarian matrix that distinguishes Code, protected by
copyright and trademark, from Tools, protected by patent and industrial design.
Ultimately, however, Code, as
intermediate or final output, requires a Person to convert it back to personal
& tacit knowledge.
Like
the Person and Code, the Tool takes the form of an intermediate or final good. A Tool fixes functional knowledge into a
material matrix as a work of technological intelligence. Sensors and tools are intermediate and
utilitarian while toys are final, non-utilitarian goods. Like Code, a Tool is frozen knowledge and has
vintage. Ultimately, however, a Tool
requires a Person to operate it using personal & tacit knowledge.
It is,
however, content rather than form that constitutes the final or teleological
cause of knowledge. It is the ‘what,
why, when, where and who’. To sum up:
the biological need to know is the material cause of knowledge; Science by Design is its efficient
cause; the Person, the Code and the Tool are its formal cause; and, content is
its final cause. Content completes the
puzzle.
The
content of knowledge, however, is accelerating as the second Cambrian Explosion
roars on. From biology, chemistry and
physics to anthropology, economics and sociology to language, literature, music
and religion to accounting, engineering, law and medicine, human knowledge is
continually splitting and expanding. It
is becoming increasingly incommensurate, one field to the another.
While content may be incommensurable,
the question is: Are there common or shared patterns for the presentation of
knowledge across domains? One previously
identified is gestalt knowing. Another
is a qubit or four-fold unit of knowledge. The traditional binary bit of information
theory (0, 1), ‘on-off’, is extended and alternatively expressed as (0, 1, 2,
3) or (1, 2, 3, 4). It is explicit in
sub-atomic physics as the quark, in genomics as the four bases of life and, as
will be seen, in analytic psychology. It
is also evident, of course, in Pythagoras’ Tetraktys and
Aristotle’s Four Causes. It is used here to present in a
‘nutshell’ findings about knowledge in etymology, psychology, epistemology
& pedagogy, law and economics.
First, in etymology, the English verb ‘to know’ has absorbed the meaning of three other verbs (two now obsolete): can, wit and ken. In German, all four survive and define distinct ways of knowing. The English ‘to know’ means to know by the senses, mind, doing and/or experience.
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These four meanings constitute the qubit
WIT. Given ‘can’ derives from the same
root as ‘to know’, the old English cnáw,
much discussion about the knowledge-based economy is actually about a
‘know-how’ or ‘can-do’ economy, not an economy of the mind.
Second, in analytic psychology there are
four faculties of knowing: thinking, intuition, feeling and sensation. I rename these Reason, Revelation, Sentiment
and Sensation. Collectively, they
constitute the qubit PSI. In an
individual, all four function. Like
quarks, they do not exist alone. There
are no free faculties. Rather they exist
entangled in the ‘self-awareness’, ‘consciousness’, ‘knowing’, ‘mind’ or ‘wit’
of a human being living in a particular place and time and subject to social
conditioning. Finding one’s unique blend
and balance is a life passage Carl Jung calls ‘individuation’. Uniqueness, however, creates a
meta-methodological dilemma. If
knowledge exists only in the individual then ‘knowledge about knowledge’ is
comparatively impossible. The individual
is, however, not just unique but also social as captured in Bronowski’s
phrase ‘social solitaire’. Individuals
share the same faculties; their uniqueness is the gestalt resulting from the interplay
of these shared faculties.
Third, it is through sharing knowledge
that socially useful categories – epistemologies – emerge as a social genetic
transmitted through pedagogy. For my
purposes there are two epistemic/pedagogic categories: Domains and Practices. Domains include: (i)
the Natural & Engineering Sciences (NES); (ii) the Humanities & Social
Sciences (HSS); and, (iii) the Arts. The
Practices include the self-regulating professions such as accountancy,
architecture, dentistry, engineering, law and medicine. Taken together these four constitute the
qubit EPI. While the EPI provides a taxonomy for epistemology, another qubit exists at the pedagogic
level. Knowledge can thus be classified
according to domain/practice, discipline, sub-discipline, specialty.
This quartet constitutes the qubit PED.
There
are three primary natural science disciplines – biology, chemistry and physics.
Each breaks out into sub-disciplines and
cross-disciplines, e.g., biochemistry. In each there are engineering specialties, e.g.,
chemical, genetic, mechanical and electrical. It is from these that most physical technology
flows. Arguably, the success of the NES can
be attributed to three factors. First
is the Pythagorean Effect, i.e., exploitation of the cognate
relationship between mathematics and the world of matter and energy. Second is the Instrumentation Effect,
i.e., scientific instruments generate evidence not requiring
intermediation by a human subject and provide readings at, above and below the
threshold of human sensibilities. Third
is the Puzzle-Solving Effect of normal science which permits vertically
deep insight into increasingly narrow questions, i.e., depth at the cost
of breadth of vision.
Much
is written about the Scientific Revolution and its implications but one seldom
hears about the preceding ‘Humanist’ and subsequent ‘Social Science’
revolutions. With the Reformation, the
Renaissance of the artist/engineer/humanist/scientist genius ended and all of
The
success of the NES in the 17th and 18th centuries, followed by the first
‘research’ university at
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The limited success of the HSS, however, reflects
lack of the Pythagorean, Instrumentation and Puzzle-Solving Effects.
The
Arts consist of four primary disciplines: the literary, media, performing and
visual arts. Each uses a distinct medium
of expression: the written word; the recorded sound and/or image; the live
stage; and, the visual image, respectively. Each is composed of distinct sub-disciplines
and schools. Each has a five stage product
cycle: creation, production, distribution, consumption and conservation. And each takes on five distinct functional
forms including the amateur, applied, entertainment, fine and heritage arts.
Once
the Renaissance imitators approximated the original – natural or ancient - the
Arts, specifically the visual arts (including architecture), attained a
significantly higher social status and the visual artist attained to
celebrity. Thus in 1563 in
If
Domains are concerned with the growth of knowledge then the Practices are
concerned with its application to satisfy specific and pressing human wants,
needs and desires. For my purposes, a
practice is the “carrying on or exercise of a profession” which involves
‘praxis’. The Practices centre on the
self-regulating professions such as accounting, architecture, dentistry,
engineering (applied), law and medicine. They engage knowledge in real life situations.
Praxis is not academic
speculation. And unlike the atoms, cells and physical structures of the
NES, people can and do sue for malpractice.
Fourth, if all
knowledge is ultimately personal & tacit then the question arises: how does
knowledge become legal property that can be bought and sold? Property means ownership together with rights
of access, or, in this case, ‘rights to know’. This is done through intellectual property
rights (IPRs). The legal principle
behind IPRs is that an idea, a.k.a. knowledge, is not protected, only
its expression fixed in material form or a matrix. IPRs are granted for new knowledge fixed in a
matrix for a limited time. The matrix
may be utilitarian as with patents & designs (a Tool); non-utilitarian as
with copyrights & trademarks (a Code); or, a Person – natural or legal - as
with trade secrets and know-how. All
other knowledge (new and old) falls into the public domain where it is freely
available to all. These four matrices –
utilitarian, non-utilitarian, the Person and the public domain - constitute the
qubit IPR. IPRs are justified as a
reward for creative genius in order to benefit the public, i.e., to grow the public domain. The public domain is thus a national asset, a
pearl without price. The public domain
is also historically linked to Republican political freedoms of assembly, expression,
of the press and privacy.
Fifth and finally, it is in economics that knowledge as an abstract Platonic noun finds most explicit expression as technological change. Technological change is the effect of new knowledge on the production function of a firm or nation. Its content is not a concern; only its effects which are conventionally broken into two dichotomous complimentary categories: disembodied/embodied and endogenous/exogenous. These four constitute the qubit FLX. The first two refer to the form while the second set refers to the source of new knowledge. Disembodied technological change refers to generalized improvements in systemic factors such as communications, energy, information and transportation networks. Such change is disembodied and spread out evenly across all industries and sectors of the economy. Embodied
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technological change, on the other
hand, refers to specific knowledge fixed in specific products and processes, e.g.,
the transistor in the transistor radio.
The
source of exogenous change is outside the economic process. New knowledge may emerge from the curiosity of
inventors or pursuit of ‘knowledge-for-knowledge-sake’. In effect, exogenous technological change, for
the firm or nation, falls from heaven like manna. By contrast, endogenous technological change
emerges from the economic process itself in response to profit and loss. For Marx and Engel all technological change is
endogenous. Endogenous change includes
industrial research and development or R&D programs.
The
modern Nation-State is the product of the Republican Revolution with its call
of “We, the People’. While the term
‘Nation-State’ is less than one hundred years old, it has become locked in as
the dominant form of nationhood today. Only
Nation-States can be members of the United Nations (UN) and, with the
historical exception of
Sovereignty
as “supreme controlling power” over the territory of a Nation-State is a myth
with a twist. Many, if not a majority,
of United Nations members do not exercise military sovereignty but rather share
it in alliance with other Nation-States. Economic sovereignty has similarly been eroded
by the WTO which defines the rules of a global marketplace in which arbitrary
action in one’s national self-interest carries with it the threat of countervailing
measures authorized by the WTO. Culture,
on the other hand, remains an arena in which sovereignty is still exercised
under exemptions granted by the original 1948 GATT agreement. Similarly, IPRs are an arena of competition
subject not to strict ‘harmonization’ but rather to milder ‘national treatment’
under the WTO’s TRIPS Agreement.
The
Nation-State plays five distinct and overlapping roles with respect to the
national knowledge base. First,
it acts as Custodian of its patrimony, i.e.,
codified and tooled knowledge linking its present to its historical foundation. Second, it acts as Facilitator for
creation and preservation of knowledge by private nonprofit and for-profit
agents using tax policy, e.g.,
research & development tax credits. Third,
it acts as Patron endowing arm’s length agencies to distribute public funds generally
to nonprofit actors to foster and promote ‘art-for-art-sake’ or
‘knowledge-for-knowledge-sake’. Fourth,
it acts as Architect providing direct grants and contributions to public,
nonprofit or for-profit agents to construct, maintain and operate national networks
that, in the case of knowledge, constitute the national innovation system. Fifth, the Nation-State acts as
Engineer owning, operating and/or regulating networks critical to sovereignty
and/or national identity, e.g.,
regulation of the electromagnetic spectrum within its territory.
Competitiveness or fitness? Which is the more appropriate metaphor for the success of a Nation-State in a global knowledge-based economy? Each carries ideological baggage. The competitiveness of sports brings with it the sense of win/lose against an opponent and winner takes all. The fitness of biology brings with it the sense of survival/reproduction of the Nation-State in an environment increasing enframed and enabled by human technology and populated by many more symbionts than predators. The first metaphor is hostile and aggressive; the later, cooperative and coevolutionary.
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In
effect most Nation-States have opted for coevolution in the guise of trading
blocs such as NAFTA and the European Union. Division and specialization remains limited by
the extent of the market and most are not large enough in population and/or
natural resources to do everything. Like
Kauffman’s two bacterial species - red and blue – or prokaryotes coevolving
into eukaryotes, they can no longer independently survive and/or reproduce
themselves.
Environmentally
it is critical to recognize that human technology, transcendent to all
Nation-States, is enframing and enabling the entire planet – the geosphere,
biosphere and the noösphere, e.g., the WWW – making it ready at hand to
satisfy human wants, needs and desires. This physical technology, rooted in the early NES
success of the West, has successfully been adopted in the East, e.g.,
A global
knowledge-based economy seen in a biological light raises radical questions about economics
itself. The word ‘economy’ derives from
the ancient Greek oikos meaning ‘house’ and nemo meaning ‘manage’, i.e. managing the house.
It shares its root with ecology from oikogie meaning modes of life and relations within
the house and with ekistics, or the
science of human settlement. The
question becomes therefore what is the ‘house’ needing management?
Its
original sense was the self-sufficient ancient estate. Its management, however, ascended to
progressively higher orders of human settlement as the village, town and
city. While Adam Smith moved management up
to the level of the State arguably a detour occurred during the Market/Marx
Wars. Economics turned away from questions
about the State and towards management of the firm. Microeconomics was born. It was not until John Maynard Keynes’ General
Theory in 1936 that macroeconomics returned. Nonetheless, mainstream resistance to economic
management of the Nation-State continues, witness the dominant policy role
played by the school of rational expectations and the monetarists. In a global knowledge-based economy such
resistance is, however, futile. Such an
economy can only exist because of the Nation-State, not in spite of it. It defines the rules of the game, its tokens
and talismans – intellectual property rights. And it enjoys more degrees of freedom to
foster comparative advantage in IPRs than in any other industrial sector.
But seventy years after Keynes’ General Theory economics now confronts a global knowledge-based economy with the visible and global consequences of human technology progressively, and in my opinion inevitably, enframing more and more of the geosphere and biosphere, enabling it, making it ready at hand to serve human purpose. This is the way of life. In effect, the globe has become the house in need of management. If mainstream economics cannot find its way then perhaps a new discipline of thought, perhaps out of the old American Institutionalism rooted in biology and law rather than physics and mechanics, may be in order. I offer therefore, as my last word, the neologism: Econology.
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The Competitiveness of Nations
in a Global Knowledge-Based Economy
February 2006