More on Tacit Knowledge

20 September 2007 at 10:52 am Leave a comment

| Nicolai Foss |

O&M has featured a number of posts that are critical of the hugely influential notion of tacit knowledge (e.g., here and here). The latest issue of the Journal of Economic Methology has as nice paper by Jonathan Perrant and Iona Tarrant, ‘What Does Tacit Knowledge Actually Explain?”

Among other things, the authors argue that the literatures (in economics, economic geography, and management) have tended to take the concept as established as uncontroversial; that tacit knowledge rather than explaining much is very often a redescription of the explanandum phenomenon, and that the notion that rule-following is tacit is a problematic notion (their reasoning here is somewhat akin to the reasoning in this paper). The authors admirably synthesize a number of critiques of the notion of tacit knowledge, many of which were new to me. Here is the abstract:

The concept of tacit knowledge has come a long way from its origins in Michael Polanyi’s work and its championing by Hayek and other Austrian economists. It is now widely, even routinely, cited not only in Austrian economics, but also in institutional economics work, industrial economics and economic geography. Further, rather than being viewed as a hypothesis requiring conceptual clarification and empirical testing, the concept of tacit knowledge is almost invariably treated as established, even incontrovertible, virtually as a fact. Conceptual disputes over tacit knowledge have instead focused on the boundaries between codifiable and tacit knowledge. Here we draw upon a critique of tacit knowledge and tacit rule following from the social philosophy literature that has not been considered in the economics literature hitherto. In brief, this critique argues that the concept of tacit knowledge is merely a term given to a phenomenon the observer does not understand; as such, it has no explanatory content. Through a philosophical examination of rule following, this critique further argues that the concept of agents tacitly following rules is highly problematic, not to say implausible.

Entry filed under: - Foss -, Management Theory, Methods/Methodology/Theory of Science.

More on Prices as Property Organization Theory en Français

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
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