ARTICLE — HAYEK ON TACIT KNOWLEDGE

“Hayek on Tacit Knowledge” by Fuat Oguz. Abstract:

This paper discusses the place of ‘tacit knowledge’ in Hayek’s writings. How did Hayek understand tacit knowledge? How did his understanding change through time? I address these questions and follow the change in Hayek’s works from skills and techniques of thought in the 1930s to the use of ‘tacit knowledge’ in the1960s. Hayek uses Polanyi’s concept in many writings, but remains short of approving its implications. The paper emphasizes that while Hayek was quite aware of the differences between tacit knowing and knowing-how, he was not keen to stress the divergence. In the end, I offer some potential explanations for this preference.

Also of interest:

“Economists on Polanyi and Tacit Knowledge: Do We Really Mean What We Say?” by Fuat Oguz. Abstract:

‘Tacit knowledge’ is used widely among economists. While it was limited to Austrian economists in the sixties, more and more mainstream economists use it to describe practical knowledge, inarticulate knowledge and knowing how.

This paper argues that the concept is abused in many cases. In most cases, economists mean Gilbert Ryle’s ‘knowing how’, when they say ‘tacit knowledge’ ignoring fundamental distinctions between Polanyi and Ryle both ontologically and epistemologically.

For a long time, the distinction between Polanyi and Ryle did not matter much for economists. It was enough to say that they were ‘essentially’ the same. However, recent debates over the role of tacit knowledge in organization theory and economics, not to mention many other social sciences, have brought forward the significance of the distinction. Attempts to find some way to introduce tacit knowledge to the formal modeling seem to neglect its irreducible and dynamic structure. For example, the recent debate on codification of economic knowledge starts from the argument that most of tacit knowledge can be reduced to codifiable information, and unarticulable knowledge is not what social scientists should study. The implications of the debate for general economic science and formal economics appear to be far-reaching.

The paper focuses on the differences between these conceptual structures and discusses reasons and consequences of economists’ tendency to say ‘tacit knowing’ but mean ‘knowing how.’ I start from Ryle and Polanyi and describe their use of knowing-how and tacit knowing. Then, I turn to economists’ understanding of these concepts. I will give special emphasis to Friedrich Hayek and following Austrian economists. I will offer a brief survey on the economists’ understanding and use of the concept.

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