The Ethics and Science in F. H. Knight's Economics

Abstract

The Chicago School has changed since Knight's time. Though the modern Chicago School puts an emphasis solely on the positivistic aspect of economics, Knight emphasizes the ethical aspect of economics at the same time. This change corresponds to that of liberalism in Chicago.
Putting evaluation of these changes aside, we try to understand why and how Knight thought ethics and economics are inseparable. We find his basic vision of a society to be consisting of problem-solvers. For a person trying to find out what he or she really wants, freedom is needed, not to get the best, but to have a chance to try. Therefore economic activities consist of two interrelated parts: seeking better values and satisfying wants. Correspondingly two kinds of freedom must clearly be distinguished. One is freedom as an end in itself, and the other is freedom as an instrument. Of course, freedom as an end in itself can only be defended on ethical grounds.
Similarly, scientific activities can be understood as consisting of two parts: seeking “better truth” and getting useful results. According to Knight, defining truth is also a matter of value judgment.
Thus, economics is value-loaded in two meanings. One is that the behavior of seeking better values, i. e., freedom as an end in itself, is value-loaded. The other is that truth, which economics as one branch of science explores, is value-loaded.