Frank Knight on Self-interest

The purposes of this paper were to examine Frank Knight’s analysis of the market economy and democratic discussion in terms of the character and function of self-interest, and to clarify the uniqueness of his reflections on self-interest. To this end, the paper organized the significance of the re-examination of Knight’s thought as it has developed over recent years in terms of an assessment of the proper role of self-interest in modern society. Knight’s position could be described as skepticism towards two types of optimism. The first is the optimism of the next generation of Chicago economists who saw wants as a given and affirmed an economic order based on self-interest. The second is the optimism of the liberal institutionalists regarding the control of self-interest. In contrast, Knight’s position was ambivalent, recognizing the need for and difficulty in searching for relatively absolute super-individual norms. Knight’s unique position was based on this skepticism. For him, searching for super-individual norms through discussion was necessary, but desperate in the real world. This attitude differed from that of the Chicago economists, who saw wants driven by self-interest as a given, and that of the liberal institutionalists, who were influenced by Dewey’s optimistic view that self-interest could be controlled positively. Knight’s unique position in the genealogy of self-interest is found in this ambivalent attitude toward both types of optimism, and in his nuanced consideration of a market economy and democratic discussion.