The Economic Organization

by Frank Knight

When originally released, Frank Hyneman Knight's The Economic Organization revitalized the teaching of economic theory in America during the 1930s, laying the foundation for the price theory revolution led by economists emerging from Knight's circle at The University of Chicago. Knight shows that when societies choose to allow market organization, their economy simultaneously solves the fundamental functions of valuation and efficiency. It also organizes the production and distribution of resources, providing incentives for progress. The Economic Organization provides a short introduction to the basic principles of supply, demand, and distribution that emerge from neoclassical price theory. The central role of the price mechanism in market organization is illustrated neatly by Knight's "wheel of wealth" the circular flow diagram most often identified with macroeconomic flows, but introduced here for price theoretic reasons. This version also includes his essay on "Utility and Cost," which provides a seamlessly integrated alternative-cost interpretation of neoclassical theory. This expanded edition of The Economic Organization includes a new introduction by Ross B. Emmett, which expands upon the short note on capital theory inserted in the original. Knight wrote three versions of the note for student use, and all three are included in the second chapter. Few books have changed the landscape of American economics and economic education as much as Knight's The Economic Organization . This book should be read by all economists, historians, and policy makers.

208 pages, Hardcover

Published October 25, 2017

About the author

Frank Knight, admittedly, is a pen name.

Though pseudonymous, Frank Knight is a real person who has lived most of his life in northeast Ohio. He grew up on a farm and attended a variety of christian churches as a boy. He worked on several farms from the time he was 4 until he was 29. Most of his neighbors and fellow students through school were good, religious people from many walks of life.

Knight attended a typical Midwestern school with other middle class kids. Most were not farmers but their grandparents were. He spent ten years in college because he loved it and received three separate bachelor's degrees: two literary and one in science.

Working his way through a decade of college on farms, as a carpenter, in restaurants, gas stations, factories and even catering, Knight befriended a wide variety of people. Frequent travel in the Americas and abroad has also rendered him a long list of friends.

Towards the end of his profession as a student, he began working as an automation designer and engineer for the lingering rubber and automotive plants that once defined the Ohio Valley. Engineering, however, was just an unfortunate way of earning money.

Aside from his family, Frank's main love is to study languages and analyze literature.

As for the reason for the pen name, well, suffice it to say that this author has seen his share of harassment from the abrahamic religions and really doesn't need any more. For a few examples, refer to Bruce and Samantha in the book. Disregarding the paranormal, the harassment that those two children have received were real experiences of the author. Some of them happened more than once.