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Elemental Economics

Not Accounting, Not Business, Not Commerce, Not Mathematics  - Economics  






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Competitiveness of Nations

Cultural Econometrics

Cultural Economics

Elemental Economics

World Cultural Intelligence Network


Dr. Harry Hillman Chartrand, PhD

Cultural Economist & Publisher

Compiler Press


215 Lake Crescent

Saskatoon, Saskatchewan

Canada, S7H 3A1

Curriculum Vitae


Launched  1998



Economics 3593


1.0 Introduction

This course provides a survey of the economics of intellectual property in the context of varying legal traditions in the global knowledge-based economy.  In Introduction I will define such an economy and provide some inter-disciplinary definitions of knowledge.

The Knowledge-Based Economy

In 1995 the World Trade Organization (WTO) began operations and a new global economy was born.  Today, 2013, virtually all member states of the United Nations (UN) belong to the WTO including the People’s Republic of China and the Russian Federation.  Put another way, global regulation of political and military competition by the UN beginning in 1945 was extended to global regulation of economic competition by the WTO fifty years later.  This was possible only because of the global triumph of the Market over Marx.  It was also the result of the ascendance of the United States of America as the sole superpower in a post-Cold War world.

For the first time virtually all Nation-States agreed to abide by common rules of trade recognizing the WTO as final arbitrator of disputes and authorizing it to sanction countervailing measures against offenders of its rules.  Given the historical role of trade disputes fueling international conflict, the WTO compliments the UN as a bulwark of international peace, order and global governance. 

As an international legal instrument, the WTO is a ‘single undertaking’, i.e., it is a set of instruments constituting a single package permitting only a single signature without reservation.  One of these instruments is the Trade-Related Intellectual Properties and Services Agreement (TRIPS) that constitutes, in effect, a global agreement on trade in knowledge, or more precisely, in intellectual property rights (IPRs) such as copyrights, patents, registered industrial designs and trademarks.  TRIPS is, however, but one part of the complex WTO package that includes the General Agreement on Tariffs and Trade (GATT) and some twenty-six other technical agreements. 

TRIPS, in turn, exists in the context of a constellation of international agreements, conventions, covenants and treaties administered by the World Intellectual Property OrganizationWIPO is a special subject agency of the United Nations.  TRIPS requires accession to some but not all WIPO instruments.  In turn, WIPO instruments apply only to Nations-States that accede to them.  Generally, acceding States provide only ‘national treatment’ to citizens of other States, i.e., the same rights are extended as if they were nationals but the rights so extended are defined by each national legislature.  This treatment contrasts with ‘harmonization’ characteristic of other WTO efforts, e.g., definition of subsidies.  Currently ‘in force’ WIPO instruments, as well as TRIPS, ignore and thereby deny protection to ‘non-marketable’ intellectual property rights, e.g., moral rights of artists and authors, aboriginal heritage rights (Farrer 1994; Chartrand 1995) including rights to traditional ecological knowledge or (TEK) and collective or community-based intellectual property rights in general (Shiva 1993).  Such ‘non-marketable’ rights, together with commercial rights that have lapsed through time, constitute the public domain of knowledge from which any and all may freely draw. 

In 1996, the Organization for Economic Cooperation and Development (OECD), whose members constitute the First World of developed, democratic market economies, published The Knowledge-Based Economy (OECD 1996).  The next year the OECD published guidelines for competitiveness in this new economy: National Innovation Systems (OECD 1997).  In effect as the former Second World of centrally planned economies melted into a single global marketplace, the economies of the First World especially in the Anglosphere shifted from a foundation based on manufacturing to one based on knowledge. 

Another way of looking at the knowledge-based economy is through the work of Harold Innis, the founder of the only indigenous school of Canadian economics the ‘staple theory’ of economic development.  He studied Canada’s development  from cod to fur to timber to wheat.  Each staple, according to Innis, engenders a distinctive patterning to the economy.  Arguably manufacturing became the next staple in Canada’s development.  Near the end of his career, however, Innis moved on to communications arguing that it is the ultimate staple commodity (Innis 1950, 1951).  His student and colleague, Marshall McLuhan extended Innis’ work formulating the aphorism: The Medium is the Message.  In this view the knowledge-based economy is one in which the staple is knowledge in the form of intellectual property rights. It too engenders a distinctive patterning of the economy. 

Creation of the WTO and recognition of the knowledge-based economy by the OECD initiated an avalanche of change.  Rapid institution building began, continuing to this day in both the public and private sector around the world.  A new specialty emerged – ‘knowledge management’, not to be confused with its predecessor - information management; the ‘Chief Knowledge Officer’ (CKO) became an hierarchical feature of multi- and trans-national corporations; governments created knowledge ministries, departments and agencies; ‘knowledge audits’ of firms and Nation-States around the world began and continue (Malhorta 2000); and, Nation-States created ‘national innovation systems’ (NIS) to generate and market new knowledge.  A standardized lexicon or vocabulary was drafted to guide public and private sector discussion and debate (American National Standards Institute and the Global Knowledge Economics Council 2001). 

Only time will tell whether all this conceptual and institutional activity is a passing policy fad or marks a true evolutionary leap in economic developmental thinking.  What is certain is that knowledge is now recognized as a strategic asset in the competitiveness of nations and of firms.  

Inter-Disciplinary Definitions of Knowledge

In Introduction I offer five inter-disciplinary definitions of knowledge drawn from the philosophy of biology, comparative terminology, culture, etymology, i.e., the origin and meaning of words, epistemology, i.e., the domains of knowledge & PRACTICE, and psychology.


The philosophy of biology offers at least four insights into the nature of knowledge.  First, in the philosophy of biology knowledge is orientation of an organism in an active environment.  Every organism lives in an active environment consisting of:

invariants, e.g., the river, ocean, sky, mountains, seasons, etc., and,

affordances, e.g., predator, prey, possible mates and/or symbionts (Grene & Depew 2004). 

Invariants become subsidiary or ‘tacit’ to focal awareness of affordances.  In this view, it is tacit integration of subsidiary and focal awareness into a gestalt whole that constitutes knowledge (Polanyi Oct. 1962).

Second, the philosophy of biology highlights sharing knowledge between species through co-evolution, e.g., the hummingbird’s bill and orchid blossom co-evolve to match perfectly.  To drive the point home, on the inside of your elbow you will find some 182 species of microbes.  In fact a whole new science is emerging: the human microbiome - the study of microbes that live in and on people (Infectious Disease News, July 1, 2008).  Given that human beings depend on their microbiome for essential functions including digestion, a person is really a super organism consisting of one’s own cells and those of all associated symbiotic bacteria.  In fact, bacterial cells outnumber human cells by 10 to 1, meaning a person is, in a sense, a minority in one’s own body.  This new science may have significant implications for future human space travel, among other things.  Conceptually co-evolution or symbiosis mitigates Darwinian survival of the fittest and the so-called ‘selfish gene’.  It may, in fact, be the dominant evolutionary fact of life other than death (Chartrand 2007).

Third, the philosophy of biology highlights the difference between specialization and fitness.  In economic terms competitiveness means realizing competitive advantage, e.g., doing what one does best and buying what one does worse, a.k.a., specialization.  This can, however, reduce the fitness of a Nation-State, corporation or worker to adapt to environmental change.  De-industrialization or rather de-manufacturing of the West is arguably an example of reduced fitness during the first phase of the knowledge-based economy.  The human environment and fitness landscape is, of course, much more subtle and complex than that of an amoeba as explained below under Culture.

Fourth, organisms do not just adapt to their environment, they also adapt the environment to their purposes.  Ants do it with colonies; bees with hives; beaver with lodges.  Humanity does it with technology.  Technology enframes and enables Nature to serve human purpose (Heidegger 1954). 

Put another way, technology is a biological imperative.  In effect, it constructs a distinct human ecology growing ever more distant from Nature as the knowledge explosion continues to expand.  Consider coming home from the office in a car, unlocking the door to the house, turning on the lights, making supper using appliances, watching television, checking one’s email then driving to the local mall to shop.  All is technology; all becomes background environmental invariants to our way of life.  Technology enframes and enables us, defines and patterns life in the human ecology.  And physical technology is knowledge, tooled knowledge to be precise, as explained below.

Comparative Terminology

Knowledge can also be understood in contrast with related terms.  These include:

Information: consisting of data, facts, bits or bytes.  With commercial innovation of the computer in the 1950s there began the ‘Information Revolution’ generating huge quantities of information threatening to overwhelm decision-makers;

Knowledge: consisting of organized, systematized and retrievable information.  With the development of relational data basing beginning in the 1960s the information explosion was gradually tamed as was the Internet in the late 1990s with innovation of efficient search engines; 

Understanding: valuing the meaningfulness or usefulness of an accelerating body of knowledge in virtually every field of human endeavour; and,

Wisdom: exercising sound judgement in choosing between alternative means and ends.

Economist Kenneth Boulding (1966) observed that ‘information’ can be quantified and manipulated by number of ‘bits & bytes’ but knowledge has no unit measure.  He suggested ‘a wit’.  Consider two messages of equal ‘bit & byte’ size, one a telephone conversation between two teenage girls in Saskatoon and the other between the Presidents of the United States and Russia.  Quantitatively they are the same; qualitatively very different.  Knowledge is qualitative and contextual in nature.

Since the1960s, of course, there has been the personal computer, Windows 95, the Internet, Google, Facebook and a vast new industry called data mining.  All are fueled by mathematical algorithms generating a phenomenal growth of knowledge defined as organized, systematized and retrievable information.  We can, however, only hope for a revolution in human understanding and wisdom.  In the 400 years since the Scientific Revolution humanity has become master of its home planet.  In the last 109 years we learned to fly.  It is less than 50 since we landed on the Moon.  We’ve come a long way, very fast!


As noted above under Biology, the human environment is much more subtle and complex than an amoeba’s.  In fact the polymorphous diversity of human culture vastly exceeds that of ant colonies, beehives or beaver lodges. 

For our part, we have no trouble acknowledging the existence of a human nature, characterized by a species-specific array of highly plastic and variable traits, which, just because they are plastic, forbid easy normative conclusions about what behaviors, practices, institutions, laws, moral codes, and so forth are “natural.” (Grene & Depew 2004, 335)

From birth the perceptions of the infant then child and finally adult are saturated by a specific culture with its indirect perceptions of the environment through tools, language and pictures (Grene & Depew 2004, 357-8).  These become environmental invariants to the individual. 

If knowledge is orientation in an active environment then cultural knowledge is critical to survival.

Our minds are certainly adapted to deal  … by way of ideas… because the tie that binds us to the cultural world as agents, caregivers, competitors, speakers, and thinkers affords us direct (rather than representational) access to the environments in which we act responsively and, ultimately, responsibly. (Grene & Depew 2004, 339)

As I practice cultural economics (a recognized sub-discipline) constrained maximizing or economic behaviour takes place within the context of culture and law.  Failure to account for culture gets you into the cannibal’s cooking pot, failure to account for law gets you into jail.  Neither is a maximizing outcome.  In general, however, cultural economics treats law as a varying cultural artifact defining what is property, i.e., what can be bought and sold and under what terms and conditions. 

Why do the English and Japanese drive on the left?  It is because Napoleon never reached them (McLuhan & Fiore 1968).  Why are images of women censored in Islamic cultures?  Knowledge of such cultural norms and customs are crucial to survival of the individual yet vary significantly between Nation-States.  They form the cultural tectonic plates identified by Samuel P. Huntington in his seminal 1993 article “Clash of Civilizations?”.  They include Muslim, Confucian, Hindu and Buddhist societies as well as the secular/Christian West and the secular/Orthodox East. 

Economist Ekkehart Schlicht notes that “customs, habits, and routines provide the bedrock for many economic and social formations yet our understanding of the processes that underlie the growth and decay of customs is very limited.  The theory of social evolution has hardly commenced to evolve” (Schlicht 2000, 33).  With globalization proximity of tectonic cultures become closer, tolerance of difference and understanding more critical.

Etymology: The Origin & Meaning of Words

With respect to etymology the philosopher Martin Heidegger observed that “All ways of thinking, more or less perceptibly, lead through language in a manner that is extraordinary” (Heidegger 1954, 3).  For his part philosopher of science Michael Polanyi noted:

Words used in speech and, more particularly, nouns, verbs, and adjectives, are used like pointers to designate things they mean… Owing to the partial transposition of this experience to a distance… this object becomes in effect what we mean by our utterance. (Polanyi Oct. 1962, 605)

As will be demonstrated, according to Polanyi, we ‘indwell’ in our language, our tools and toys.  In English four distinct meanings lay hidden within the verb ‘to know’ including knowing by the:

Senses – sight & sound (distant senses - sensuous), smell, taste and touch (near senses - sensual);

Experience – been there, done that, got the T-shirt;

Mind – I think and remember and therefor I am; and,

Doing – can do, know how, experiential knowledge, learn by doing.

Within this list one can conclude that the knowledge-based economy is not an economy of the senses, experience or the mind but rather of doing, i.e., it is a ‘can do’ economy.

By contrast, these four meanings are expressed by four separate verbs in German wissen, kennen, erkennen, and (in part) können; and in French by two, connaître and savoir.  The economy of English is both a blessing in terms of ease of use and a curse in clouding nuanced meaning.  For example, the aboriginal peoples of the Arctic have distinct names for different types of snow.  This is part of their traditional ecological knowledge or TEK.  Arguably each human language has a distinct sense of what constitutes knowledge.  This includes written and non-written languages that have already died out and those currently dying out.  Arguably, a unique nuanced meaning of knowledge dies with each.  Their knowledge or orientation in an active environment is lost to humanity forever.

Epistemology: Knowledge Domains & Practices

There are three domains of knowledge distinguished by their methodologies, objectives and tolerance of difference through time.  They are:

Natural & Engineering Sciences (NES) – the hard experimental sciences;

Humanities & Social Sciences (HSS) – the soft human sciences or sciences of the artificial (Simon 1969); and,

The Arts – literary, media, performing & visual arts.

Knowledge in the Natural & Engineering Sciences is fact-based and subjected to objective, value-free testing in which replicability is the criterion.  It is concerned with objective truth, understanding and manipulation of the physical world.  It exhibits decreasing tolerance through time for difference and error as old knowledge is progressively and reductively displaced by the new, i.e., NES knowledge progresses vertically up the ladder of time.

In fact the word Science derives from the Latin scire “to know” which, in turn, derives from scindere “to split”, a.k.a. reductionism.  Similarly in Greek what was Logic became Reason in Latin from ratio as in to calculate.  In economics I call this calculatory rationalism – doing things by the numbers. 

Arguably, the success of the NES in generating new knowledge can be attributed to three factors.  First is the Pythagorean Effect, i.e., exploitation of the cognate relationship between mathematics and the world of matter and energy.  Second is the Instrumentation Effect, i.e., scientific instruments generate evidence not requiring intermediation by a human being and provide readings at, above and below the threshold of native human sensibilities.  In effect, this lends metaphysical legitimacy to the NES.  Scientific instruments realize the Platonic “belief in a realm of entities, access to which requires mental powers that transcend sense perception” (Fuller 2000, 69).  Furthermore, the language of scientific sensors realizes another ancient Greek ideal, that of Pythagoras, by reporting nature by the numbers.  Third is the Puzzle-Solving Effect of ‘normal science’ (Kuhn 1996) which permits vertically deep insight into increasingly narrow questions, i.e., depth at the cost of breadth of vision. 

When applied for utilitarian purposes, NES knowledge generates physical technology, i.e., the ability to manipulate matter and energy to satisfy human want, needs and desires.  The impact of the experimental method in the NES has been impressive in evolutionary terms.  In the twenty generations since the Scientific Revolution we have literally enframed our planet enabling ourselves of its bounties, making them ready at hand to serve our purpose from the deepest oceans to the outer reaches of the solar system. 

It should be noted that traditional reductive science of controlled experiments is giving way to emerging inter-disciplinary ‘synthetic’ sciences such as ecology and climatology.  These draw evidence from both the hard and soft sciences and use extremely complex mathematical models to put things together (synthesis) as opposed to breaking them down into smaller and smaller parts – reductionism. 

Knowledge in the Humanities & Social Sciences (HSS) is value-based and subjected to mixed value-free/normative testing in which historical context plays a critical role.  Experimental testing on human subjects is not ethically tolerated – any longer.  It is synthetic in that it seeks reconciliation between objective and subjective truth.  It exhibits shifting tolerances through time as old knowledge is often recycled in a pedagogic spiral to which new knowledge is added.  New knowledge therefore does not necessarily displace old knowledge and revisionism is common, i.e., seeing old things in new ways as well as seeing new things in old ways.

The limited success of the HSS in generating new knowledge compared to the NES can be attributed to the absence of the Pythagorean, Instrumentation and Puzzle-Solving Effects noted above.  First, while there may be some relationship, there is no apparent cognate relationship between mathematics and human behaviour.  Second, HSS evidence – in its collection, compilation and analysis - is subject to intermediation by human beings all along the evidence trail limiting objectivity.  Third, with the pedagogic exception of the Standard Model of market economics, there is no generally accepted paradigm in any HSS discipline corresponding to ‘normal science’ that, according to Kuhn, is required for efficient puzzle-solving. 

When applied, HSS knowledge generates organizational technology, i.e., the ability to shape and mold human personalities, communities, enterprises, institutions and societies.  This includes the entrepreneurial and managerial knowledge to combine capital, labour and technology into intermediate and final goods and services to satisfy human want, needs and desires.  It more generally involves management and organization of the firm and Nation-State.  It addresses questions of how to motivate workers and managers and how to marry them with financial capital as well as physical plant and equipment.  The search for the best in organizational technology is sometimes called In Search of Excellence (Peters & Waterman 1982).  In effect, the HSS provide the epistemological basis for governance.

Knowledge in the Arts is concerned with subjective truth; a search for kosmos or the right ordering of the multiple parts of the world (Hillman 1981).  It is holistic in its aesthetic contemplation or gestalt.  Testing is purely personal and subjective:  ‘It works for me!’  It tends towards increasing tolerance of differences, styles and tastes.  It is value laden, not value free.  New knowledge in the Arts does not displace the old.  Shakespeare still speaks, Bach still plays and even Tutankhamen still sits proudly on his throne before us today.  Thus modern creators compete not just against each other but against the best that have ever been!

Unlike physical and organizational technologies, however, design technology primarily affects the demand-side of the economic equation.  In effect, design technology involves the use of the Arts to manipulate the emotional responses of consumers (see Psychology below).  In this sense, Art is the technology of the human heart appealing to emotion not reason.  It is much more sensitive to culture, custom and tradition than physical technology. 

Aesthetic design is fundamentally different from technical or functional design such as a more efficient automobile engine.  It contributes ‘elegance’ defined as simple but effective or “the best looking thing that works”.  If a consumer does not like the way a product looks, he or she may simply not try it.  In effect, design technology involves marrying aesthetic to utilitarian value. 

Beyond consumer goods, the Arts play a critical role in advertising and form the research & development arm of the entertainment industry.  It is generally forgotten that within the ecology of capitalist realism, advertising is the lubricant of the market economy.  And advertising, to a great extent, is the application of the literary, media, performing and visual arts to sell goods and services.  Actors, dancers, singers, musicians, graphic artists, copywriters, and editors are all employed to sell everything from fruit to nuts; from cars to computers, from beer to toilet paper. 

If Knowledge Domains are concerned with the growth of knowledge then the Practices are concerned with its application in satisfying very specific and pressing human wants, needs and desires.  For my purposes, a practice is the “carrying on or exercise of a profession …, esp. of law, surgery, or medicine; the professional work or business of a lawyer or medical man” (OED, practice, 5).  I extend this definition to include other traditional and contemporary professions such as accountant, architect and engineer. 

In turn, a profession is a “vocation in which a professed knowledge of some department of learning or science is used in its application to the affairs of others” (OED, profession, III 6).  Put another way, practices “link bodies of knowledge to forms of action” (Layton 1988, 92).  I will, however, narrow this definition to exclude the now obsolete definition of profession as “the function or office of a professor in a university or college; … public teaching by a professor” (OED, profession, IV 7).

Application of professed knowledge to satisfy the needs of others involves knowledge in action that accounts for theory, the client/patient relationship and ethics, i.e., “the science of morals; the department of study concerned with the principles of human duty” (OED, ethics, II 2).  Professional ethics, of course, are a socially conditioned and historically relative.   

This distinct form of knowledge may be called ‘praxis’, a term with a colourful history of its own.  It was coined by the alchemist, metaphysician and subsequent saint, Albert Magnus, about 1255 C.E.  He derived it from a Greek noun of action meaning “doing, acting, action, practice” (OED, praxis, Epistemology).   It was re-coined by Cieszkowski in 1838 to mean “the willed action by which a theory or philosophy… becomes a social actuality.”  It was then adopted by Marx in 1844 for whom it explained “how knowledge could give power” not through thought like Hegel but through the will.  In this sense, praxis approximates design in its emphasis on intent (OED, praxis, 1 c).  It also reflects knowing by doing, not just by the senses or mind.  Practice as experience is another facet of praxis as knowledge.  More generally, praxis means the “practice or exercise of a technical subject or art, as distinct from the theory of it” (OED, praxis, 1a).  For my purposes it will mean ‘knowledge in action’.  In this regard, it is important to remember that knowledge can be used as a verb as well as a noun (OED, knowledge, v)

The Practices centre on the self-regulating professions such as accounting, architecture, dentistry, engineering (applied), law and medicine.  Practices engage knowledge in real life situations while Domains involve knowledge creation or interpretation, e.g., knowledge-for-knowledge-sake or art-for-art’s-sake.  Praxis is not academic speculation.  It is not knowledge as a noun but as a verb affecting the lives of real people.  As in aesthetics and science, however, the Practices observe a professional distance from their subject but it is the very subjective human being.  And unlike the atoms, cells and the physical structures of the NES, people can and do sue for ‘malpractice’.  In fact, malpractice and product liability lawsuits are a hot button political issue in the United States due to their alleged negative effect on American competitiveness.

The Practices draw, merge, mingle and apply knowledge and methodologies beyond those internal to their experience from all three Domains in varying combinations, e.g., the use of actors by medical schools to prepare future physicians to face the emotional realities of patients.  Another example is the Art of Dentistry.  Unlike academic disciplines, e.g., economics, final certification or ‘licensing’ is not granted by the university but rather by an independent professional society, e.g., a College of Physicians and Surgeons.  This partially reflects the fact that praxis cannot be fully codified, i.e., written down.  Put another way, there is a gap between graduation and professionalism that must be filled before being licensed to practice independently.  This gap is reflected in the requirement, in all Practices, of some kind of compulsory apprenticeship, articling or internship.

In many ways, the Practices are descendants of medieval guild mysteries operating in the Mechanical Arts.  More so than academic disciplines, the Practices control entry and exit, set rates, supervise initiates and regulate practice.  In the case of medicine and law they were also the first practical subjects to be admitted to the university.  Some Practices are also associated with grant-giving or funding agencies such as the Canadian Institutes for Health Research (formerly the Medical Research Council of Canada) and the National Institutes of Health in the United States. 

Guilds originally received their charters from the Crown granting them monopoly rights in return for fealty and sometimes tribute.  Today the Practices are regulated by the State, but as with business law (Commons 1924), most traditional customs and privileges of the Practices are effectively enshrined, preserved and protected by legislation under Common Law.  

As private institutions serving the public purpose – including health, education and welfare as well as wealth and legal rights – the Practices have seldom been acknowledged as critical players in the competitiveness of nations in a global knowledge-based economy.  How they should be regulated and held accountable is, however, an important question for public policy in general and for development of an effective national innovation system in particular.  As demonstrated by Birkenshaw, Harden and Lewis (1990) in their review of Government by Moonlight: The Hybrid Parts of the State in the U.K., USA, France, Germany and Austria, there are different ways in which this may be done. 


Psychology’s ‘knowledge about knowledge’ is dyadic with a physical foundation of knowledge on which is mounted psychic faculties for its acquisition.  The first can be called ‘hardware’; the second, ‘software’.  Alternatively, the brain inclusive of the central nervous system is ‘wetware’ (Rucker 1988), a neologism distinguishing biological or carbon-based artifacts (natural or genetically modified) from silicon-based computer systems or ‘dryware’.  I first review findings from cognitive psychology concerning wetware and cognition, i.e., physically how do we know, and then examine analytic psychology’s model for the acquisition of knowledge.

It was only in the 20th century that wetware was meaningfully addressed by neurophysiology, i.e., the study of the brain and nervous system.  In simple terms, the human brain has developed through three evolutionary stages.  First came the so-called Reptilian Brain whose nature was the subject of Carl Sagan’s The Dragons of Eden (1977).  Sometimes called the ‘rectilinear or R-structure’ it includes the brain stem and its specialized extensions such as the medulla oblongata.  It receives sensations from the nervous system – voluntary and involuntary - and regulates the involuntary system.  Second, overlaying this primitive brain is the Mammalian Brain or cerebellum with its distinctive lobes – left/right, front/back.  Finally, like wrapping paper enfolding the previous two, is the cerebral cortex, the grey ridged matter sometimes called ‘the human brain’ but which we, as a species, share with both the higher primates and cetaceans such as whales and dolphins.

Put another way, the human brain is a collection of dedicated modular units each adapted to deal with a particular set of problems.  There are distinct modules for color vision, locomotion, language-acquisition, motor control, emotional recognition, etc.  Each module developed through natural selection (Grene & Depew 2004, 340) complimented by coevolution (Kauffman 2000). 

In this regard, research over the last hundred years has revealed a lateralization of higher brain functions or faculties.  In the simplest, and least controversial terms: the left lobe is responsible for speech; the right lobe for pattern recognition, the front or temporal lobes for reasoning; the back or occipital lobes for visualization.  The latter involves not just physical sight but also imagination, i.e., “that faculty of the mind by which are formed images or concepts of external objects not present to the senses” (OED, imagination, 3). 

The creative process appears to be rooted in the lateralization of brain function.  The left hemisphere is primarily responsible for cognitive activities relying on verbal information, symbolic representation, sequential analysis, and on the ability to be conscious and report what is going on.  The right hemisphere, on the other hand, functions without the individual being able to report verbally, and is concerned with pictorial, geometric, timeless and nonverbal information (Hansen, 1981, 23).  In this regard, noted systems theorist Geoffrey Vickers wrote:

I welcome the recent findings of brain science to support the common experience that we have two ‘styles of cognition’, the one sensitive to causal, the other to contextual significance.  I have no doubt that the cultural phase - which is now closing - restricted our concept of human reason by identifying it with the rational, and ignoring the intuitive function, and thus failing to develop an epistemology which we badly need, and which is within our reach - if we can overcome our cultural inhibitions. (Vickers, 1977)

More recently research has shown that not just knowledge but intentional human action displays a gestalt-like quality.  Thus intentional decision is preceded by emotional assessment (Freeman 2000).  Again a combination of context and focal awareness is at play. 

Then there are psychological ways of knowing, for example, those identified by Carl Jung and applied in industry and the public sector using The Myers-Briggs Type Indicator®.  Thus we know by:

Thinking - interpreting what is perceived;

Intuition – perceiving possibilities inherent in the present;

Feeling - judging what something or someone is worth, and,

Sensation - perceiving immediate physical reality

Thinking and feeling are decision making faculties.  In this sense, both are rational.  Thinking uses logic leading to the Sciences.  Feeling uses aesthetics leading to the Arts which I call ‘the technology of the heart’. 

On the other hand, Intuition and Sensation are a-rational in that neither explains or judges.  Intuition generates what futures studies calls ‘no-knowledge’ - knowing but not knowing how one knows - one simply ‘knows’ (Jantsch 1967).  Sensation especially those arising from the near or sensual senses of touch, taste and smell tend to overwhelm all others.  This is why the ancient Greeks pursued logic to distance themselves from the thrall of physical sensation.  Similarly the need to distance ourselves from the sensual is the root of the Fine or Beaux Arts birthed by Baumgarten’s 18th century philosophy of aesthetics - the science of sensuous knowledge balancing logic as the science of intellectual knowledge (Kristeller 1952, 34).

In the next lecture I will explore the economics of knowledge.  This will include its nature as a public good, the role of property rights in the history of economics and the forms of knowledge that become marketable commodities when converted from a public good into a private one through the agency of the Law.

To 2.0 Economics of Knowledge