Reconsidering Frank Knight’s Risk, Uncertainty, and Profit

• Published in: The independent review (Oakland, Calif.) Calif.), 2020-04, Vol.24 (4), p.533-541
• Main Author: Emmett, Ross B.
• Format: Article
• Language: English
• Subjects: Colleges & universities; Competition; Competition (Economics); Consumption; Economic theory; Economists; Entrepreneurship; Expected utility; Institutionalism; Knight, Frank; Knight, Frank H; Political science; Publishers (Persons); Publishing industry; Risk; Robbins, Lionel; Social control; Society; Students; Teaching; Uncertainty
• ISSN: 1086-1653; 2169-3420

In 1921, Houghton and Mifflin finally published the second-place essay from the 1917 Hart, Schaffner, and Marx economics dissertation competition. The publisher must have been exasperated with the author, Frank H. Knight, and his two supervisors, J. M Clark and A. A. Young, all of whom claimed that "minor corrections" had taken four years. In fact, Knight's presentation of the theory of perfect competition was revised, the material on uncertainty and entrepreneurial judgment was expanded, and a much longer discussion of the relevance of the book's themes to the social control of economic processes was added to the final chapter. Even the manuscript's title was changed, from "Cost, Value, and Profit" to Risk, Uncertainty, and Profit} When Knight submitted the essay to the competition, he was still at Cornell University, reading economic theory as a postdoctoral scholar with Herbert Davenport. When Risk, Uncertainty, and Profit (Knight 1921b) was finally published, he was a tenured associate professor of economics at the University of Iowa, with a key criticism of Alfred Marshall's price theory already published (Knight 1921a). In between, he had spent two years as an instructor of statistics for the Economics Department at the University of Chicago.