Free Access
Volume 14, Number 2, 2000
Page(s) 143 - 155
DOI: 10.1051/ejess:2000114

European Journal of Economic and Social Systems 14 N$^\circ$ 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 individual.

Keywords: Division of labour, evolution, cognition, learning, frameworks.

Correspondence and reprints: Brian J. Loasby

Copyright EDP Sciences 2000