Uncertainty and the Social Organization of Economic Activity

The last two chapters of Frank H. Knight’s Risk, Uncertainty and Profit are seldom cited and frequently ignored. But in those chapters, Knight moves from entrepreneurial judgment and organizational strategies to meet the challenges uncertainty presents at the firm level to the wider question of how uncertainty affects the social organization of economic activity. Ignoring the concluding chapters of Knight’s book means we treat his book as if it stood alone, unconnected to his other early career work on free enterprise and social economic organization. The purpose of the paper is to lay out the perspective on uncertainty and the social organization of economic activity that he outlined in the final two chapters of his first major work within the context of his other contemporary writings