The Production and Distribution of Knowledge

It is often amusing to hear knowledge management (KM) speakers, consultants and so-called thought leaders give their impression of the history of KM. Hardly any ever cites economist Fritz Machlup. It’s a big mistake. 

The Production and Distribution of Knowledge in the United States (Princeton 1961presents not only the assessment of the changes affecting the knowledge industry over the past two decades but also his own new insights developed during that period.”


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Fritz Machlup (December 15, 1902 – January 30, 1983) was an Austrian-American economist. He was notable for being one of the first economists to examine knowledge as an economic resource. (Wikipedia)


Published at the dawn of the information age, 1961, when most KM conference speakers were in diapers, Machlup furnishes a comprehensive view of the knowledge economy.

“The Production and Distribution of Knowledge” is a must read for anyone presenting themselves as a KM authority. It’s great for all the dubious and voluble ‘KM experts’ and their claims.

“Grounding his analysis in the history and philosophy of knowledge, Professor Machlup classifies knowledge production into six major classes: education, research and development, artistic creation and communication, media of communication, information services, and information machines.” (Inside Cover)

“There are few fields of economics to which Fritz Machlup did not provide a major contribution. But the economics of information is virtually his alone. From his earlier work on industrial organization and the patent system, it became clear to him that there is a distinct “knowledge industry,” that it is already one of the largest and most important in our economy, and that it is destined to grow absolutely and relatively. His monumental works on the subject constitute an extraordinary repository of factual information and analysis. Thanks to him, the economics of knowledge has become an established field of study that has been laid out in a systematic and comprehensive fashion, which will guide all future scholarly activity in this arena.”

shoulders-of-giants Your Colabria Action Research Network is a recognized authority on the academic, scholarly and most important work that has shaped modern knowledge management. It is a necessary and valuable action research theme given all the specious KM claims over the years. To paraphrase Newton and Bernard of Chartres, “We have only seen farther because we stand on the shoulders of giants.”

Much of the work that defines modern knowledge management, including technology, was completed Mid-Century, roughly 1933-1965. All KM practitioners are advised to approach their mission with humility and openness. Colabria’s profound, patient and respectful understanding the past helps Create the Future and delivers enormous credibility across the Action Research Networks.

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The Production and Distribution of Knowledge
in the United States, by 
Fritz Machlup
Table of Contents


Terms: Knowledge-Production Worker, Knowledge Industry

Part 1: Types of Knowledge

1 Introduction

  • The Economist as a Student of Knowledge-Production
    • Knowledge as a Datum in Economic Analysis
    • Knowledge as a Product, a Function of Resource Allocation
  • Terminological Proposals
    • “Production and Distribution”
    • “Knowledge and Information”
  • The Program for this Work
    • Some of the Reasons for Our Curiosity
    • In Quest for Light and Fruit
    • Scope of Expanding Work

2  The Known and the Knowing

  • The Double Meaning of Knowledge
  • Meanings of Knowing
    • Knowledge-Of and Knowledge About
    • To Know What, to Know That, and to Know How
    • The Special Status of Knowing That
    • An Assortment of Knowns and Knowings
    • Arrangement by Interrogative Pronoun
    • Further Comments on Knowing That and Knowing How
  • Elements and Modes of Knowing
    • The Examples Surveyed for Different Modes of Knowing
    • The Elements of Knowing
    • Modes as Combinations of Elements
  • Degrees of Knowing
    • Elements, Modes, and Degrees
    • More Details, More Accuracy, More Confidence
  • Information and Knowledge
    • To Know and to Inform
    • Enduring Knowledge and Timely Information

3 Mundane, Scientific, Humanistic, Artistic, and Other Classes of Knowledge

  • Mundane Knowledge
    • Persuasive Definitions
    • Mundane Knowledge, Intentional Learning, and Erudition
    • The Proportions among Types of Knowledge
  • Scientific Knowledge
    • Science Excluding Empirical Knowledge
    • Admitting Empirical Sciences
    • Expelling All but the Natural Sciences
    • Science in Other Languages
  • Humanistic Knowledge
    • Traditional Meanings
    • The Humanists’ Identity Crisis
    • Legal and Institutional Definitions
    • The Antiscientistic Humanist
    • The Two Cultures
    • The Characteristic of the Humanities
  • Social-Science Knowledge
    • Historical Development
    • Methodological Controversies
    • An Academic Subject Group
    • The Sense of It All
  • Artistic Knowledge
    • Liberal, Professional, Mechanical, and Fine Arts
    • Performance versus Precepts for Performance
    • Creation and Communication
  • Knowledge Without Words
    • Verbal and Nonverbal Arts
    • Visual Arts
    • Performing Arts
    • Mundane Experiences
    • Knowing a Tune and Knowing a Feeling
    • Knowledge as a Mere Euphemism

4 Alternative Classifications of Knowledge

  • Various Aspects and Distinctions
    • Basic and Applied Knowledge
    • Theoretical and Historical; General-Abstract and Particular-Concrete; Analytical and Empirical
    • Knowledge of the Enduring and of Transitory Interest
    • Knowledge Many and Knowledge for Only a Few
    • Instrumental, Intellectual, and Spiritual Knowledge
  • The Chosen Classes
    • Five Classes of Knowledge
    • Subjective Sorting and Operational Criteria

Part Two: Qualities of Knowledge

5. Truth, Beauty, and Truth

  • Knowledge and Truth
    • Facts and Propositions
    • Verifiability, Confirmability, Falsifiability
    • Relevance for the Purposes of this Study
    • The Wrong Fifty Per Cent
    • Pastime and Artistic Knowledge
    • Practical Knowledge Has Better Be True
  • Knowledge and Beauty
    • The Object and the Form
    • Performing Arts
    • Beautiful Theories, Beautiful Exposition
  • Knowledge and Goodness
    • Ethics
    • Normative and Empirical Statements
    • Moral Education
    • A Special Class of Knowledge?

6 Other Standards of Quality

  • High-Grade and Low-Grade Knowledge
    • Serious versus Lightweight Knowledge
    • Workmanlike versus Shoddy Knowledge
  • Unwanted Knowledge
    • Wanted by Some, Unwanted by Others
    • Nuisance Commercials as the Price of Desired Gifts
  • Noncomprehended Knowledge
  • Restricted or Forbidden Knowledge
    • The Victims of Dangerous Knowledge
    • Unwholesome Knowledge
    • Obscene Knowledge and Pornography
    • Erotic Knowledge and Intellectual Freedom
    • Inflammatory or Explosive Knowledge

7 Notions of Negative Knowledge

  • Accepted Knowledge Negated by New Knowledge
  • Disproved and Suspended Knowledge
  • Knowledge Losing Relevance
  • Alternative Knowledge: Acceptance Pending
  • Demoted Sciences
  • Controversial Knowledge Claims
  • Questionable Knowledge
  • Vague Knowledge
  • Superstitions
  • Illusive Knowledge
  • Confusing Knowledge
  • Excluded Possibilities and Negative Predictions
  • Conclusion

Part Three: Knowledge As A Product

8 Choosers and Users of Knowledge

  • Consumers’ Choice, Entrepreneurial Initiative, Political Decision
  • Subjectively New and Socially New Knowledge
  • Knowledge as an Intermediate or a Final Product

9 Stocks and Flows of Knowledge

  • A Collection of Scientific Journals
  • The Role of Books
  • The Stock Knowledge in Human Minds
  • The Flow of Knowledge
  • Generation, Dissemination, and Use of Information
  • Accumulation, Replacement, Current Input, Consumption, and Waste

10 The Economic Cost of Knowledge

  • The Private and Social Cost of Acquiring Knowledge
  • Knowledge at No Cost
  • The Scarcity Value of Alertness
  • The Intentions of the Recipient of Knowledge
  • The Initiative to Produce Knowledge

11 Transmission and Reception

  • Techniques and Intents of Knowledge Production
  • Types of Individual Knowledge Transmitters: Eight Levels
  • Knowledge Receiving as Knowledge Production

12 Consumption, Investment, Intermediate Product

  • Production: The Use of Valuable Input for Valuable Output
  • Investment in Knowledge and Investment for Knowledge
  • Knowledge as Intermediate Product
  • Knowledge-Producing Personnel in Business Firms
  • Instruments for the Production of Knowledge
  • Who Pays for It and How?
  • Chatting and Other Knowledge Production by Amateurs

13 Uses, Value, and Benefits of Knowledge

  • Uses of Knowledge
    • Information Services and Knowledge Acquired
    • Pastime Knowledge and Practical Knowledge
    • Process versus Contents of Information
    • Some More Examples of Use
  • The Value of Knowledge
    • The Value of Information
    • Value of Knowledge to Individual Would-Be Knowers
    • Practical and Intellectual Knowledge
    • The Private and Social Value of Education
    • Higher Earnings for Longer Schooling
    • An Alternative Notion of the Value of Schooling
    • The Private and Social Value of Scientific Journals
  • Benefits From Knowledge
    • Benefit-and-Cost Analysis
    • Five Types of Benefit-and-Cost Comparisons
    • Eager Ophelimetricians
    • Who Pays? Who Benefits?

14 Knowledge Industries and Knowledge Occupations

  • Knowledge Industries
    • What We Don’t Know about Some Knowledge Industries
    • The Type of Product or the Type of Labor
  • Industries and Occupations
    • Knowledge Industry
    • Knowledge Occupations
    • Degrees of Arbitrariness
    • A Heuristic Fiction: “Compete” Division of Labor
    • Production for Interindustry Trade and Intraindustry Use
    • The Major Knowledge Industries and Branches
  • Firms, Industries, and the Whole Economy
    • The Occupational Structure of Single Firms
    • A Different Model of the “Information Economy”
    • Strategies and Tactics in Quantitative Analysis

Happy reading!

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