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Subject Area: Political Theory

“Pure” vs. “Grubby” Knowledge - Leonard P. Liggio, Literature of Liberty, July/September 1978, vol. 1, No. 3 [1978]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


“Pure” vs. “Grubby” Knowledge

Nathan Rosenberg

  • Stanford University

“Problems in the Economist's Conceptualization of Technological Innovation.” History of Political Economy 7 (1975): 456–481.

Technological innovation is the primary cause of long-term economic development, the crucial, life-sustaining process in human history. But economists share a misconception about such innovation. They tend to overemphasize “pure” forms of knowledge (i.e., scientific knowledge) and discount “mere” technological or engineering knowledge. In this they have been misled by Schumpeter's focus on the charismatic entrepreneur who, by a bold stroke, “innovates.” Schumpeter dismisses subsequent improvements as trivial.

Empirical studies, however, display how such improvements are the major source of more efficient use of resources. Two thirds of all research and development expenditures promote development rather than basic research. Schumpeter's disinterest in the “grubby” technical process misled later economists. As a result, economists overlook economically important knowledge in favor of scientifically interesting knowledge.

The importance of specialized and localized knowledge complements F.A. Hayek's defense of such knowledge in “The Use of Knowledge in Society.” By focusing on economics as a process, Rosenberg implicitly supports the Austrian School's view of dynamic competition as opposed to static perfect equilibrium models.