European Journal of Economic and Social Systems 14 N
2 (2000) pp. 143-155
The division and organisation of knowledge
Brian J. Loasby
Department of Economics, University of Stirling, Stirling FK9 4LA, Scotland.
Hume demonstrated the impossibility of proving any general empirical proposition, and turned to the
question of how people acquired `knowledge'. Adam Smith postulated a human need to make sense of phenomena
by imposing patterns, which are replaced when they systematically fail; this process is accelerated by
specialisation, which leads to a differentiation of locally-efficient frameworks of thought and action.
Thus the division of labour results in the division of knowledge -- both `knowledge-how' and
`knowledge-that', or capabilities -- and a consequential increase in the total knowledge in a community.
Marshall added a principle of variation within an evolutionary cognitive process, and also the need for
multiple forms of organisation. Learning is not a distinctive activity but a characteristic of human
existence; it requires frameworks, or institution, which are themselves subject to evolution. Penrose
analysed the growth of knowledge within a business, Richardson focussed on the importance of similarity
and complementarity across capabilities, and the consequential need for linkages between businesses. Firms
need both internal and external organisation; in an important sense, learning is collective as well as
Division of labour, evolution, cognition, learning, frameworks.
Correspondence and reprints: Brian J. Loasby
Copyright EDP Sciences 2000