The Competitiveness of Nations
in a Global Knowledge-Based Economy
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6.1 As Form
6.1.1 Personal & Tacit Knowledge
6.1.2 Codified Knowledge
6.1.3 Tooled Knowledge
6.2.1/ Codified & Tooled Capital
6.2.2/ Personal & Tacit Labour |
Epithet There
are four classes of idols which beset men’s minds. To these for distinction’s
sake I have assigned names—calling the first class Idols of the Tribe; the
second, Idols of the Cave; the third, Idols of the Market-Place; the fourth,
Idols of the Theatre. Francis
Bacon (1560–1626) Novum Organum, Aphorism
39 (1620).
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1. Economics concerns the satisfaction of human wants, needs and desires with limited means. In the Standard Model, satisfaction is achieved by consumers extracting utility (consumption) from goods & services purchased (demand) from firms that produce them (production) as outputs (supply). Firms combine factors of production or inputs injecting utility into outputs. The knowledge of how to combine inputs and inject utility into outputs is called ‘technology’.
2. In terms of Heidegger’s technology, outputs are the formal cause of economics taking a specific form to satisfy a specific consumer need, e.g., Heidegger’s sacrificial silver chalice (Heidegger 1954, 6). The material cause is the raw material or inputs used, e.g., the silver used for a chalice rather than for knives and forks. The efficient cause is the firm or entrepreneur, e.g., Heidegger’s silversmith. The final cause is profit earned by satisfying human wants, needs and desires. In this section I consider material cause, specifically how knowledge enters the economic process as input.
3. In the Standard Model, traditional inputs include: capital that earns interest; labour that earns salaries & wages; and, natural resources that earn rent. Sometimes, however, entrepreneurship is also included in the list. It earns profits, i.e., what is left of revenue once
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all other factors of production have been appropriately rewarded. The position of entrepreneurship in the Standard Model is, however, problematic. It is usually subsumed under capital on the assumption it flows from the risk-taking owner of capital who, it is assumed, runs the firm, i.e., the owner is in the store. Alternatively, however, entrepreneurship may be subsumed under labour assuming separation of ownership (shareholders) from control of the firm (the entrepreneurial CEO). Thus arises the question of ‘agency’, i.e., does the CEO, as an agent of the owners, pursue their interests or his own? As will be seen below, the choice is both functional and ideological. I will know demonstrate that traditional economic inputs - capital, labour and natural resources – can be expressed in terms of personal & tacit, codified and tooled knowledge as: codified & tooled capital, personal & tacit labour and toolable natural resources.
6.2.1/ Codified & Tooled Capital
1. The definition of capital is an unresolved problem in economics. To Marxists, it is theft. To the mainstream, however, its definition remains problematic as noted by T.K. Rymes of Carleton University in conversation with the author in the early 1970s: “If there is no theory of capital, there is no economics. And there is no theory of capital!”
2. The concept of capital has mutated and expanded through history. To the Mercantilists of the 17th century, capital was gold, silver, land and slaves. To the Physiocrats of pre-Revolutionary France, it was the surplus generated by agriculture. To the Classical School of the late 18th and early 19th centuries, it was the surplus resulting from the division and specialization of labour. To the Neo-Classical School of the late 19th and 20th centuries, it was financial capital as well as physical plant and equipment. To Bohm-Baverk and the Austrian School, capital was historically embodied labour produced through ‘round-about’ means of production (Blaug 1968, 510-11). How to measure such embodied labour has never, however, been satisfactorily answered (Dooley 2002). Today, when economists speak of capital, they may refer to cultural, financial, human, legal, physical, social or other forms expressed as a stock, e.g., physical plant and equipment existing at a given moment in time.
3. For my purposes, capital is codified and tooled knowledge, i.e., knowledge fixed in an extra-somatic matrix. Alternatively, capital is “knowledge imposed on the material world” (Boulding 1966, 5), or, “frozen knowledge” (Boulding 1966, 6). It includes:
· codified knowledge in the form of human-readable information management systems and databases, operating manuals and libraries as well as associated intellectual property rights such as copyrights, patents, registered industrial designs and trademarks; and,
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· ‘hard-tooled’ knowledge in the form of physical plant and equipment, i.e., sensors and tools, plus related ‘soft-tooled’ knowledge including machine-readable computer & genomic programs, standards and techniques.
4. Codified and tooled knowledge are fixed in material form; both have vintage; both are extra-somatic, i.e., they exist outside the natural person. I will now briefly examine the softer forms of capital - cultural, financial, human, legal and social - expressed as codified and tooled knowledge. Physical plant and equipment, i.e., physical capital, has, I believe, been satisfactorily demonstrated to be tooled knowledge by which we enframe and enable the production process.
6.2.1.1/ Cultural
1. Cultural capital, as artworks, books, photographs, plays, recordings, etc., is codified knowledge. As broadcast & recording studios, conservatories, libraries, museums, parks, printing presses, sets, props & costumes, theatres and other venues, it is tooled knowledge. In this sense, cultural capital (codified and tooled) contrasts with cultural practice or performance which is personal & tacit in nature.
6.2.1.2/ Financial
1. Financial capital as currency, equities, bonds, mortgages and other financial instruments is codified knowledge, i.e., fixed on paper or in human readable electronic format. Anti-counterfeiting measures such as encryption, electronic strips and chips are forms of tooled knowledge. Debit and ‘smart’ cards are contemporary examples of financial capital as tooled knowledge. In this view, financial capital (codified and tooled) contrasts with financial practice which, again, is personal & tacit in nature.
2. It is as personal & tacit knowledge, however, that financial capital plays its primary role. As a generally accepted medium of exchange, store of value or unit of account, financial capital as money involves tacit knowledge routinely recognized and accepted by a natural person. In this sense, financial capital, including the price system (Hayek 1989), is an institution, i.e., a routinized pattern of collective human behaviour. Like a physical reflex, e.g., riding a bicycle, a human being learns to recognize, accept and exchange financial capital. In different cultures and periods of history what constitutes money and financial capital differs (K. Polany 1944; Humphreys 1969). In other words, financial capital is a cultural artifact, a form of organizational technology that is tacit, i.e., ‘generally accepted’ in a society.
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6.2.1.3/ Human
1. Human capital generally refers to the stock of skills and education possessed by a worker. Given human capital is embodied in a living human being, there is no extra-somatic component, i.e., there is no capital as frozen knowledge. The term ‘human capital’ is thus a misnomer. Human capital is personal & tacit knowledge and somatic to the individual. Additions to this stock reflect learning, education, experience and training on the memory and reflexes of the individual.
6.2.1.4/ Legal
1. Legal capital as law books, statutes, judicial and quasi-judicial decisions is codified knowledge. Legal capital as court houses, handcuffs, prisons and police cars is tooled knowledge. In this view, legal capital (codified and tooled) contrasts with legal practice which is personal & tacit knowledge.
6.2.1.5/ Social
1. Social capital can be codified and fixed on paper or another human-readable electronic format stating customs and conventions of behaviour, educational curricula, public rules and regulations as well as public safety standards, e.g., drinking water standards. Social capital as schools, hospitals, roads, sewage & water systems and telecommunication systems is tooled knowledge. In this view, social capital (codified and tooled) contrasts with social practice including market sentiment which are personal & tacit.
2. Social capital, according to some scholars, can be extended to include “values and beliefs” (Maskell 2001, 2). Such values and beliefs can be codified, e.g., the Analects, Bible, Koran & Vedas. Alternatively, they can be tooled into monuments and other works of aesthetic intelligence reflecting an ideology, e.g., socialist realism. Values and beliefs, however, take on meaning only when practiced or perceived by a living human being. In this sense, there is no extra-somatic component, i.e., there is no capital or asset that can be exchanged for money. Put another way, “Money can’t buy you love”.
3. With respect to economics, such values and beliefs include market sentiments. In The Theory of Moral Sentiments and The Wealth of Nations, Adam Smith stresses the role of Sentiment in market exchange, e.g., trust (The Economist Feb. 20, 2003). As Samuels put it, “the order produced by markets can only arise if the legal and moral framework is operating well” (Samuels 1977, 197). Together with division and specialization of labour, it is market sentiments, according to Smith, that assures the wealth of nations. In effect, Sentiment
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influences Reason and Reason influences Sentiment including economic expectations. Put another way: no matter the price, would you buy a used car from that person?
4 To the degree that various forms of capital – cultural, financial, legal, physical and social – can be expressed as codified and tooled knowledge, one may speak of ‘a knowledge theory of capital’. As will be demonstrated, however, such a theory is a corollary to a more general ‘labour theory of knowledge’.
6.2.2/ Personal & Tacit Labour
1. If the definition of capital is unresolved, the economic definition of labour is problematic in the extreme. In conventional terms, labour refers to the physical and mental effort of a worker in the production of goods & services. Labour, unlike capital, has been subject to definitional reduction, not expansion. It has been subject to capitalization rather than humanization as a factor of production. Thus education and training add to the stock of ‘human capital’, something ideologically alienated from labour and subject to managerial control as a corporate or national asset. Similarly, entrepreneurship and management have become detached from labour even though separation of ownership from control – public or private - makes the manager an employee or agent, not a principal or owner. In effect, labour becomes warm hot bodies applying muscle not brains doing what it is told. Effort is organized according to a division and specialization of labour (brawn) determined by a specialized class of employee called management (brains).
2. But why should one class of labour ‘work’ and another ‘manage’? This was the subject of Richard Bendix’s historically exhaustive Work and Authority in Industry: Ideologies of Management in the Course of Industrialization (1956; 1976; 2001). Bendix traces the conceptual history of modern management back to feudal times. He finds, in effect, a theory of positive thinking: managers have a positive self-image and can defer gratification while workers do not and cannot. Bendix thereby captures perhaps the last embers of the ‘Iron Law of Wages’. Classical economics accepted, with relative equanimity, the starvation of labour who must then accept lower real wages or who, alternatively, with higher real wages simply bred increasing the labour supply and thereby lowering wages through competition. Full employment, under the Classical model, was assured on the backs of labour, or what Marx called “the surplus army of the unemployed”.
3. John Kenneth Galbraith in his New Industrial State (1967) went further and described the modern corporation as governed by a self-replicating technostructure of managers produced by and selectively chosen from graduates of so-called ‘B’ or business schools. It is they who direct workers on behalf of an ever increasing and diffuse pool of shareholder-owners. Galbraith also explored the relationship between large corporations and
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a newly emerging class of labour - creative talent, specifically artists (Economics & The Public Purpose, 1973). While the classless genius emerged with the Renaissance’s artist/engineer/humanist/scientist, by definition, it is exceptional and has not, historically, constituted a distinct class of labour. As will be seen, however, in the hands of Reich (1990) and Drucker (1998), a new class of creative workers has emerged called, respectively, ‘symbolic’ or ‘knowledge’ workers. In fact, there are three distinct classes of knowledge workers: productive, managerial and entrepreneurial.
6.2.2.1/ Productive
1. Productive workers are those on the shop floor actually producing goods & services. They are concerned with output. Their knowledge is technical and specialized to a given industry or firm. In effect they combine codified and tooled with personal & tacit knowledge (memory and reflex) generally learned on the job in the Anglosphere. Their knowledge involves making something or making something work. In this sense the competitiveness of a firm or nation “depends not only on sensible decisions about what to do, but on the availability of the skills that are required to do it” (Loasby 1998, 143).
6.2.2.2/ Managerial
1. Management, among other things, means “a governing body of an organization or business, regarded collectively; the group of employees which administers and controls a business or industry, as opposed to the labour force”. It also means “the group of people who run a theatre, concert hall, club, etc” (OED, management, n, 6). The role of management is to make available the means (inputs) so that production workers can perform their tasks and then to market and distribute the output. In many ways management is like a choreographer, music or theatre director. This sense of modern management is caught by Aldrich:
Thus the total operation is a performing art with blueprints for score or choreography, the difference being that in this technological case neither the co-ordinated performances (ballet) of the skilled workers nor the finished product is put on exhibit simply to be looked at, contemplated. It is a useful performing art. Its value is instrumental.” (Aldrich 1969, 381-382)
2. Similarly, according to Schlicht, it is:
the fit of the organizational elements, rather than the elements themselves, that characterizes a firm. Just as the quality of an orchestra performance cannot be adequately measured by the average quality of the performances achieved by the individual instruments, but depends crucially on the way the instruments are played together, so the productive value of a firm - as opposed to a set of individual contracting
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relationships - emerges from the quality that has been achieved through mutually adjusting the various activities that are carried on. (Schlicht 1998, 208)
3. One crucial characteristic of the firm is custom including tacit understandings of entitlements and obligations between productive, managerial and entrepreneurial workers. This constitutes part of what is commonly called ‘the corporate culture’ for which, on a day-to-day basis, management is responsible. Such entitlements and obligations are based on Sentiment, i.e., of a sense of right and wrong, of fair and unfair, rather than the rule of Reason. Management of a firm involves maintaining an “an island of custom in the ocean of the market” (Schilcht 1998, 207). The role of Sentiment has found expression in the work of Howard Gardner and his concept of ‘emotional intelligence’. This, and Garnder’s other forms of multiple intelligence, have now been formally introduced into the management literature with his new Harvard Business School book: Changing Minds: The Art and Science of Changing Our Own and Other People's Minds (Gardner 2004).
6.2.2.3/ Entrepreneurial
1. With the notable exception of firms like Microsoft (Bill Gates) and Walmart (Sam Walton), most modern corporations do not follow an original founder/owner but rather a ‘hired gun’, or business entrepreneur. The word ‘entrepreneur’ comes from the French entre meaning ‘between’ and prendre meaning ‘to take’. The English ‘middleman’ retains this original sense. During the Middle Ages and Renaissance, European traders (especially from Venice and Genoa) ‘middled’, at high risk, between foreign suppliers, e.g. of silk and spices from the Turks, and final consumers in northern Europe. Today the term usually refers to someone who sees and seizes an economic opportunity or a market opening or gap. This may take the form of a new product or of servicing an existing market in a new way. In both cases a high degree of creativity and risk-taking is implicit. In this regard, the first English usage of ‘entrepreneur’ was in 1828 meaning “the director or manager of a public musical institution.” Today we would call this ‘an impresario’. In fact, it was not until 1852 that entrepreneur took its modern meaning of “one who undertakes an enterprise; one who owns and manages a business; a person who takes the risk of profit or loss (OED, entrepreneur, a, b).
2. Entrepreneurial knowledge is intuitive in the sense of seeing and taking advantage of invariants and affordances in a market environment that others do not see. It involves seeing and realizing a vision of future markets, products and opportunities. Ignorance is the opposite of knowledge, i.e., want of knowledge. The non-rational way of entrepreneurial vision was called ‘animal spirits’ by Keynes (Keynes 1936, 161). Like some ancient priest-king, the entrepreneur ‘knows’ the future and leads his people (investors, managers, workers
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and consumers) into it – right or wrong - to success or failure. In a manner of speaking, prophets today seek profits, not souls. Ideally, this highly valued form of pattern recognition works best as “informed intuition” (Jantsch 1975). All available information, knowledge and opinion is explicated but then an intuitive, inductive judgemental vision is conjured up. In a sense, the business entrepreneur or CEO has assumed the mantle of the Western Cult of the Genius joining the artist, inventor and scientist.
6.2.3/ Toolable Natural Resources
1. At first glance, natural resources appear to have no relationship to knowledge. By definition, they exist as John Locke said in “the State that Nature hath provided” (quoted in Dooley 2002, 4). They are just part of the environment until the knowing mind recognizes them as useful. Thus oil lay in the ground virtually untapped until invention of the internal combustion engine. Just as we recognize a tool by its purpose (Polanyi 1962a, 56), we similarly identify natural resources by the human ends we attribute to them. At a given point in time a naturally occurring substance is seen as nothing but an environmental feature. Take a pathway through the jungle one day and you see a large rock outcrop. The next day, with new knowledge, the same path leads not to an environmental feature but to a bauxite deposit that can be converted into aluminum. It has become a toolable natural resource. Yet it itself has not changed, one day to the next, rather new knowledge allows us to see it in a different light.
2. This ‘changed way of seeing’ is captured by Loasby when he writes:
Menger begins by arguing that an object becomes a good only when someone discovers how to use it to satisfy some human need. Goods are endogenous, created by new connections between human need and physical or human resources; and their value is derived from the need which each of them serves and - crucially for this paper - from the knowledge that it can serve this need and also the knowledge of how it can be made to do so... The creation of goods, and of technology, rests on the creation of knowledge, and therefore on previous uncertainty - or indeed sheer ignorance.” (Loasby 2002, 6)
3. Before turning to outputs of a knowledge-based economy, I must ask why capital has been subject to such extensive conceptual division and specialization while the concept of labour has narrowed. The explanation, in my opinion, lies in the great schism between Marxist and Market Economics. Marxists attributed all productive value to labour. In response, Marketers focused on capital minimizing the role of labour. In effect, the Standard Model capitalizes rather than humanizes labour. With emergence of the knowledge-based economy, however, this is changing. Quite simply, if all knowledge is ultimately personal &
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tacit then one may meaningfully speak of a knowledge theory of capital as corollary to a labour theory of knowledge.
1. Outputs of a knowledge-based economy, as formal cause, can also be expressed in terms of personal & tacit, codified and tooled knowledge. If we assume all human wants, needs and desires can be transliterated into ‘needs to know’ then some goods and services satisfy physical needs such as the need to know heat on a cold winter day. Some satisfy abstract needs like the need to know God. Quite simply, knowledge satisfies ignorance, i.e., want of knowledge (OED, ignorance, 1 a). Ignorance is, however, indeterminate. We simply don’t know what we don’t know until we do. Furthermore, in economics there is no aesthetic distancing, no moral judgement, no scientific objectivity in satisfying a want of knowledge. Every good and service that yields the pleasure of knowing from food to sex from religion to science are legitimate epistemic object (Rheinberger 1997), i.e., whatever a human being wants to know is the legitimate subject of economic investigation. It is in this sense that economics is an amoral discipline. For my purposes, there are three knowledge outputs – the Person, the Code and the Tool.
1. The Person comes in two forms: as an intermediate and as a final good. As an intermediate output the Person is utilitarian, i.e., valued for a purpose other than oneself. As a final output, the Person is non-utilitarian, i.e., valued in-and-of-oneself. Arguably, the Person is the ultimate output of a knowledge-based economy. This perspective reflects, among other things, democratic republicanism and its principle of one person one vote as well as the U.N.’s Declaration of Universal Human Rights.
2. As an intermediate output, it is through education, training and experience that personal & tacit knowledge is somatically fixed into neuronal bundles of memories and conditioned reflexes. Examples include the tailor, tinker, soldier and spy as well as astronomer, athlete, sub-atomic particle physicist and genomicist and, lest we forget, the accountant, economist, engineer, lawyer, physician, et al. In this sense, all Persons are knowledge workers whether they rely upon the processing of memories fixed in neuronal bundles or the trained reflexes of nerve and muscle engaged in handling physical products. In this view, a manual labourer is a knowledge worker. Lack of knowledge, e.g., of how to
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lift heavy objects, has economic consequences such as workman’s compensation. This excludes, of course, artificial or ‘legal persons’ called ‘bodies corporate’.
3. The Person, as final knowledge output, in a biological sense, fulfills the teleological need to know. Consider the 2004 Summer Olympics in Athens. The best athletes in the world demonstrated what trained human reflexes and knowledge from practice and experience can achieve together with sports medicine. The scholar similarly exercises and trains his brain like any volitional organ and builds up neuronal connexions of argument, evidence and reasoning of one’s own making as well as coded knowledge of other scholars distant in time and space. Making such connexions is a naturally pleasurable activity in its own right. It satisfies ignorance by fulfilling the biological need to know. The power of this human need is evident to every parent by the phrase: ‘Why mommy?’
4. Beneath the surface of conscious and volitional knowledge, however, lay the twinned domains of the personal and collective unconscious. Socrates is famous for, among other things, recognizing that one knows but knows not that one knows. Such knowledge forms part of the personal unconsciousness and the Socratic method is a traditional way of raising it to consciousness. Another is the ‘talk therapy’ of analytic psychology. As to the collective unconscious, it “contains the whole spiritual heritage of mankind's evolution, born anew in the brain structure of every individual” (Jung, The Structure of the Psyche, CW 8, par. 342 quoted in Sharp 1991). Analytically, access to such collectively unconscious knowledge is through active imagination, fairy tale, myth and legend generally via art and religion.
5. For a metaphysical perspective, however, I must change terms. The word ‘Person’, according to the OED, is sometimes used “as a substitute for Man” (OED, person, n). The word ‘person’ itself comes from the Old French persone out of the Italian meaning “a mask used by a player” (OED, person, n, I 1). The word ‘man’, as in ‘human’, however, is rooted in the classical Latin humus and the ancient Greek chthonic meaning ‘earth’” (OED, man, n. 1, Etymology). Thus the word ‘Man’ derives from humus or earth and our species, homo sapiens, is literally ‘the wise earth’ or ‘earth wise’.
6. Beyond sapience, however, two other characteristics distinguish our species: ‘humour’ and ‘humility’, words sharing the same root as homo. Quoting the holy woman Therese of Lisieux: “Humility isn't at all about denying one's abilities and accomplishments. Humility is simply knowing the truth about yourself, and about where you come from, and about Who gets the ultimate credit” (Ruof, December 5, 1996). This catches the sense of homo sapiens sapiens, i.e., the man that knows he knows. As to humour, Ruof notes that “to be human is to know humor. And to have humor is to have the ability to see through things.
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It's the knack, as it were, of seeing two different or conflicting things at once, which when brought together are simply funny. The classic example … is the elegant-looking gentleman in top hat and tails slipping on a patch of ice and falling on his tail” (Ruof, December 5, 1996).
7. The creation myth of the world’s three great monotheistic religions (or theistic ideologies) – Judaism, Christianity and Islam – share, among other things, the belief that humanity was created from the earth, or more precisely God created ‘them’- male and female. These ‘people of the Book’ share the First Book of Moses called Genesis in which it is written:
Genesis 1.26 And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over every creeping thing that creepeth upon the earth.
Genesis 1.27 So God created man in his own image, in the image of God created he him; male and female created he them.
8. While this text has been subjected to more exegesis and analysis than any document in human history, I am compelled to offer yet another. First, why did God create ‘them’? Thomas Mann answers that:
“The Angels,” so ran the train of thought, “are created after Our image, but yet not fruitful. The beasts, on the other hand, lo, they are fruitful, but not after Our likeness. Let Us create man - an image of the angels, yet fruitful withal!” (Mann 1944, 4)
9. Second, dominion over the world was granted to ‘them’, male and female. It is only later in Genesis (2.22) that a splitting off of the original or first Adam (male and female) produces a submissive and passive Eve. Accordingly, use of the word ‘Person’ is intended to escape sexist implications. It also highlights the ‘speciation’ of feminist studies which now occupies a seat at the university’s table of thought. For most of human history, however, sexual apartheid has been the norm. In the most simplistic terms, men were encouraged to develop Reason in its reductive and destructive sense, i.e., the warrior, while women were encouraged to develop Sentiment in its relational sense. In the secular West (as opposed to the religious West) sexual apartheid and its epistemological corollaries have, more or less, been rejected. This rejection, however, has, in turn, alienated much of Islam (as well as ‘fundamentalist’ Hinduism, Judaism and Christianity) fuelling the so-called ‘war on terror’ that has come to dominate life at the beginning of the 21st century. In other words, Al Quaeda’s ideological effort to establish a global caliphate is rooted in opposition to the equality of women and of ‘women’s knowledge’.
10. Before the appearance of Eve, however, God created, for the original androgynous Adam, a Garden of Eden in which there was “the tree of life … and the tree of knowledge” (Genesis 2.9). God permitted Adam to eat of all the trees in the garden but warned: “But of
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the tree of the knowledge of good and evil, thou shalt not eat of it: for in the day that thou eatest thereof thou shalt surely die” (Genesis 2.17). The serpent, the story goes, convinced Eve that instead “in the day ye eat thereof, then your eyes shall be opened, and ye shall be as gods, knowing good and evil” (Genesis 3.6). And when Eve, in turn, convinced Adam to eat of the fruit, “the Lord God said, Behold, the man is become one of us, to know good and evil: and now, lest he put forth his hand, and take also of the tree of life, and eat, and live forever” (Genesis 3.22) expelled the duo from the garden and “placed at the east of the garden of Eden Cher’-u-bims, and a flaming sword which turned everyway, to keep the way of the tree of life” (Genesis 3.24).
11. Significantly there was no injunction against eating of the tree of life before the Fall from what traditionally is called ‘innocence’ but which, in this context, is ignorance. The price paid for the fruit was not just knowing good and evil but also knowing death. And it is knowledge of death that ultimately distinguishes a Person from extra-somatic forms of knowledge such as Code or Tool which can never ‘know’ death. Heidegger (Grene 1957) makes much of death, the realization of which shocks one into seeing Time not as history or abstraction but as one’s being defined by a very personal beginning and end.
12. Dominion over Nature was not, however, withdrawn after the Fall and its key was arguably found by Francis Bacon in the instrumental experimental scientific method. Arguably, this leads us back to the tree of life in the guise of the DNA helix promising, if not life everlasting, a significant increase to the three score and ten years granted to the fallen Adam. This explains, in part, resistance in the religious West to human stem cell research and its embrace by others. Arguably, however, the flaming sword of God still bars the way to the tree of life, at least in some countries and cultures. Alternatively, we can follow the advice of the German playwright Kleist:
Consequently, I said a bit distracted, we would have to eat again from the tree of knowledge in order to return to the state of innocence. Indeed, he answered, this will be the last chapter in the history of the world. (quoted in Jantsch 1975, 263)
13. The ‘sensational’ or ‘earthy’ nature of human knowledge cannot be ignored. Consider the classic miser counting his gold as having carnal knowledge with his money (OED, knowledge, n, II, 7). By ignoring the mortality of neuronal bundles and reflexes, we metaphysically slip, abstracting ourselves beyond the realm of human knowledge into that of artificial intelligence. Thus Hubert L. Dreyfus, one of the leading critiques of artificial intelligence,
asserts that in order to think, one must have (be) a body. The rationale for this assertion comes from existential phenomenology, particularly that of Merleau-Ponty. Since computers do not have (human) bodies, they
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thus cannot think (humanly). It is this identification of body as a necessary condition of thought which is of primary interest here. (Idhe 1991, 69)
14. One last Biblical reference needs to be raised due to its ideological implications. Judaism, Christianity and Islam share the paradigm of ‘the Covenant’. Unlike other world religions, a human community contracted with God, most especially through the man from Ur, Abraham (Genesis 17.2). Later, Jacob wrestled with the angel who would not reveal his name but instead named Jacob ‘Israel’ or ‘he who struggles with God’ (Genesis 32.28). With the appearance of Christ, the Covenant was arguably transferred to the Christian community and then, with Mohammed, Seal or last of the Prophets, to the nation of Islam. The Covenant, beginning with the Jewish people, is a unique cultural artifact. In other religions, humanity is the plaything of the gods, not a contractual partner. A Person does not ‘struggle with God’, one simply accepts divine command. And unlike most other religions, the three great monotheistic faiths welcome converts. Quite simply, the biblical status of the Person is next to God and the individual human soul is the most precious ‘thing’ in all of creation. By analogy, from a biological perspective, the human mind is the most precious of all things in Nature.
1. Codified knowledge, as output, also comes in two forms: as intermediate and final good. Before addressing both, I must again distinguish my argument from current discussion and debate about codified knowledge. Unlike Romer (1996, 204) and others, I insist on a fundamental distinction between human-readable and machine-readable code. First, machine-readable code can never be a final output, i.e., valued in-and-of-itself. It always remains a utilitarian tool serving a purpose other than itself. Second, the primary purpose of machine-readable code is information processing using the binary bit which, as demonstrated, does not provide a measure of knowledge (Boulding 1966). A third distinction is that “we can use words in a sense previously unknown to the linguistic community and make ourselves understood by means of the context for example, in using original metaphors” (University of Chicago, Media Glossary, 2004). The complexity of such codes is captured by Roman Jakobson when he wrote:
No doubt, for any speech community, for any speaker, there exists a unity of language, but this over-all code represents a system of interconnected subcodes; each language encompasses several concurrent patterns which are each characterized by a different function. (Jakobson 1958).
2. Human-readable Code is semiotic in nature using signs, sounds, symbols and images including written alphabets that are ‘readable’ only with prior knowledge of cultural context. This sense is captured in Krystyna Pomorska’s “Tolstoy contra Semiosis” in which it is
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argued that Tolstoy’s “protagonist’s behavior [is] an attempt to supersede the artificial cultural code (behavior and speech) of his class and move into another code which is considered more natural” (Bagby & Sigalov 1987, 473). Cultural context, of course, extends beyond class to, among other things, the incommensurable paradigms of the natural & engineering sciences which require specialized knowledge and education to ‘read’ or decode. It is in this sense that Northrop Frye writes “man is a child of the word as well as a child of nature” (Frye 1981, 22)
3. Code invokes language – directly as the spoken or written word and indirectly as the language of sound or music, of image and shape, of motion or dance as well as body language and dress. As demonstrated, however, language presents a meta-methodological problem for ‘knowledge about knowledge’. Michael Polanyi highlights this problem by reference to the work of Evans-Pritchard concerning a tribal people, the Azande. They use a poison oracle to determine truth from falsehood. It proved impossible to reason with them because while: “They reason excellently in the idioms of their beliefs … they cannot reason outside or against their beliefs because they have no other idiom in which to express their thoughts” (quoted in Polanyi 1962, 611, n15).
4. Code, excluding the spoken word, is extra-somatically fixed in a communications medium permitting access by another mind distant in time and space. As final and intermediate output, Code takes the form of articles, books, correspondence, magazines, technical and training manuals, memoranda, motion pictures, radio and television programs and sound recordings insofar as they are carriers of semiotic meaning. As will be demonstrated, it is the distinction between the non-utilitarian or utilitarian nature of the carrier or matrix that distinguishes Code, protected by copyright and trademark, from Tools, protected by patent and industrial design rights. Ultimately, however, every Code, as intermediate or final output, requires a Person to read and convert it back into personal & tacit knowledge.
1. Like the Person and Code, the Tool takes the form of an intermediate or final economic output. A Tool involves fixing functional knowledge into a material matrix as a work of technological, intelligence. Sensors and tools are intermediate and utilitarian artifacts while toys are final or non-utilitarian devices. And like a Code, a Tool is frozen knowledge and has vintage.
2. Choice of the term ‘Tool’ meaning ‘instrument’ (OED tool, n, 2a) allows an escape from the traditional linkage between art and craft summed up in the Greek word ‘techne’. Thus Aldrich (1969), like Kant and Aristotle before him, uses the term ‘work’ as in works
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of aesthetic or technological intelligence. As will be seen the term illuminates features shared by Code as a work of art and Tool as a functioning artifact. However, it also confabulates their differences, a Code carries semiotic meaning while a work of technological intelligence, or Tool, carries function. I will now examine the term ‘work’ to demonstrate such similarities and differences and justify my choice of the term ‘Tool’ as an output of the knowledge-based economy.
3. ‘Work’ is a very old English word. It is both a noun and a verb. As a noun it has three branches with thirty-five meanings and over sixty sub-meanings. The first branch refers to something to be done, something being done, or something already done by an agency – divine, human or mechanical (OED, work, n, I). The second branch refers to the thing done or made or constructed including works of art, machines and buildings (OED, work, n, II), i.e., works of aesthetic and technological intelligence (Aldrich 1969, 381). This sense also reflects ‘the effect or consequence of agency’ (OED, work, n, II, 9 b). The third branch involves ‘work’ in phrases such as workplace (OED, work, n, III).
4. As a verb, work has three branches – as a transitive and intransitive verb and in association with adverbs. It has forty meanings and over 100 sub-meanings. The first branch, as a transitive verb, generally refers to construction, creation, design, direction, execution, herding, making, management, manufacturing, performing or producing anything from works of art and books to buildings and miracles. The second branch, as an intransitive verb, generally refers to the action, agitation, effect, fermentation, influence or other operation of an agency – divine, human or mechanical - in doing or making something. The third branch deals with work in relationship to adverbs such as work in, work with, work off, etc.
5. Three additional definitions are required: biological, mechanical and economic. The biological concept of work as expressed by Kauffman (2000, 49) is ‘the constrained release of energy’. Thus,
the coherent organization of … constraints on the release of energy … constitutes the work by which agents build further constraints on the release of energy that in due course literally build a second copy of the agent itself…” (Kauffman 2000, 72)
This concept applies to a work of aesthetic or technological intelligence which requires the constrained release of energy for its creation and its use or appreciation. In fact it is the constrained release of energy that makes an instrument work. In physics and mechanics ‘work’ similarly means “the operation of a force [energy] in producing movement or other physical change, esp. as a definitely measurable quantity” (OED, work, n, I, 8). In economics, work is labour or “human effort, physical or mental, used to produce goods and services” (Mansfield & Yohe, 2004, A6). In the Standard Model, work is treated as
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disutility, i.e., pain, for which a worker is compensated by a wage used to buy goods and services from which to extract utility, i.e., pleasure. Work is rewarded according to its disutility, i.e., the greater pain, the higher the wage. Arguably, as the constrained release of energy, work also links with Heidegger’s enframing technology particularly given his interpretation of energeia in the classical Greek as meaning “enduring-in-work” (Heidegger 1954, 161). In this sense, technology involves stores of energy fixed in physical structures (static or dynamic) enabling us, making this force ready at hand to serve human purpose on demand.
6. ‘Work’, as a verb in real life, however, is about much more than disutility and the real wage. Among other things, it is about motivation. If work is simply disutility then opportunistic behaviour may occur, i.e., slacking off. This is the implication of Liebenstein’s x-efficiency, i.e., consumption in the act of production or, put another way, how many coffee breaks does it take to make an unproductive worker (Liebenstein 1966, 1978, 1992)? But if work is not just disutility then the concept of ‘psychic income’ emerges, i.e., a worker receives satisfaction from work above and beyond the real wage.
7. Since the introduction of universal compulsory education in the Anglosphere (Bennett 2000) during late 19th century, vocational training, i.e., training for work, has progressively crowded out ‘education’ meaning “culture or development of powers, formation of character” (OED, education, 4). Culture, in this sense, is the source of traditional ‘consumption skills’ (Chartrand 1987b) or appreciation, i.e., “estimating qualities” (OED, appreciation, 2 a). This was one basis of the pre-revolutionary aristocratic leisure society in which one’s social standing was a function of appreciation not just birth. In this regard, growth of a leisure economy involves increasing appreciation. Alternatively, a recreational economy involves recreating the ability of workers to work.
8. Work has, of course, been subject to increasing division and specialization of labour since the time of Adam Smith generating increasing incommensurability of knowledge. Today in the Anglosphere, work, rather than culture, has become the focus of ego and social identity with skill specialization, rather than appreciation, the apex of ambition. How the social fabric is maintained in the face of such fragmentation is a question to be more fully addressed below. For now it is sufficient to note the influence of a political glue in the guise of republican egalitarianism and a communications nexus generated by a pervasive mass media broadcasting ‘public opinion’ creating and recreating consistent and coherent ‘pictures in our heads’ (Lippman 1922, 1).
9. Beyond the puritan and republican traditions of the Anglosphere, and in contrast to the catholic and aristocratic traditions of continental Europe (Scitovsky 1976), this crowding out of education reflected a need, from the mid-19th to mid-20th centuries, to develop repetitive industrial skills among what initially was an uneducated, rural work force. While the deadening effects of the Smithian division of labour were arguably mitigated by mass
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education, the effects remain problematic as noted by Roberston Davies in a long but most wonderful quote.
We have paid a terrible price for our education, such as it is. The Magian World View, in so far as it exists, has taken flight into science, and only the great scientists have it or understand where it leads; the lesser ones are merely clockmakers of a larger growth, just as so many of our humanist scholars are just cud-chewers or system grinders. We have educated ourselves into a world from which wonder, and the fear and dread and splendour and freedom of wonder have been banished. Of course, wonder is costly. You couldn't incorporate it into a modern state because it is the antithesis of the anxiously worshipped security which is what a modern state is asked to give. Wonder is marvellous, but it is also cruel, cruel, cruel. It is undemocratic, discriminatory, and pitiless.” (Davies 1987, 836)
10. By the late 1970s, Marshall McLuhan observed that the production skills in the new economy are non-repetitive, adaptive and judgmental invoking pattern construction and recognition - characteristic of traditional consumption skills. In this new economy, the worker/consumer becomes the ‘electronic man’ for whom “logic is replaced by analogy, and communications are… superseded by pattern recognition” (McLuhan, 1978).
11. Similarly, Robert Reich in The Work of Nations (1992) recognized that displacement of manual workers by automation and computerization combined with increasing Third World ‘off-shore’ production was creating a new class of symbolic workers, i.e., those who manipulate words, numbers, visual and other recorded images and sounds. Also in 1992, the World Competitiveness Report observed that: “in the industrialized world today, only 15% of the active population physically touches a product. The other 85% are adding value through the creation, the management and the transfer of information” (World Economic Forum & Institute for Management Development 1992).
12. The dilemma of shareholders and managements in dealing with these new ‘knowledge workers’ is captured by Peter Drucker in his 1998 article “Beyond the Information Revolution”. Quite simply, a higher real wage is not enough to satisfy such workers. Rather Drucker concludes that it is necessary to find some way of “satisfying their values, and by giving them social recognition and social power” (Drucker 1999, 57). In fact, a higher real wage can, contrary to the Standard Model, have a negative effect on a worker’s “intrinsic motivation” (Schlicht 1998, 125).
13. I will use the second meaning of the noun ‘work’, i.e., the thing made or ‘a work’, and the transitive meaning of the verb, i.e., making or designing a Tool, a Code or a Person, as in Hamlet’s phrase: “What a piece of work is Man.” Individuals do, in fact, design themselves or rather individuate (Sharp 1991) subject to cultural constraints. Individuals are ‘custom-ized’ by their culture, e.g., to drive on the right or left (Schlicht 1998). And while customs differ between cultures, they are subject to what Schlict calls ‘clarity criteria’
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that are essentially aesthetic in nature including simplicity, regularity, conformity and conservatism. These criteria engage and reconcile the different knowledge faculties of the individual, i.e., Reason, Revelation, Sentiment and Sensation, through, among other things, cognitive dissonance (Schlicht 1998, 12-13). One can thus identify distinct patterns of culture (Benedict 1959) and distinguish individuals ‘custom-ized’ to each.
14. Given the ambiguous nature of the term ‘Work’, I will use the term ‘Tool’ to define a work of technological intelligence, i.e., a sensor, tool and toy. Similarly, works of aesthetic intelligence like a painting or sculpture are ambiguous in that extra-somatic knowledge is tooled or worked into a material matrix. What is tooled or fixed, however, is semiotic meaning rather than function. It is the distinction between a non-utilitarian or utilitarian matrix that distinguishes Code protected by copyright and trademark from Tools protected by patent and industrial design rights. Ultimately, however, a Tool requires a Person to operate it applying personal & tacit knowledge.
1. Ambiguity plagues analysis of knowledge reflecting its biological root. Thus Code, as an input to the economic process, is an extra-somatic encoding of knowledge into matter intended to be read or decoded by a natural Person while a Tool extends the senses and/or grasp of a natural Person. Similarly, as output the Person can be a Tool, or a ‘work’ as in Shakespeare’s “What a piece of work is Man’, produced through education, experience and training. A work of aesthetic intelligence is actually Code carrying semiotic meaning while a work of technological intelligence is an existential phenomenological extension of the senses and grasp of the natural Person.
2. For clarity, I restrict the term Person to the natural Person in whom personal & tacit knowledge is fixed as memory and reflex. I restrict Code to knowledge coded into matter carrying semiotic meaning and Tool to knowledge fixed in matter carrying function. Both Code and Tool, however, attain meaning or function only through the agency of a Person and, therefore, ultimately all knowledge is personal & tacit. And now, I will consider the final cause of knowledge - content, or what we want to know.
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The Competitiveness of Nations