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Machlup, Fritz (1902-1983)

MACHLUP, FRITZ (1902-1983)

Fritz Machlup was born in Vienna, Austria, and began his career there as an entrepreneur and businessman. He did not pursue a scholarly career until after he moved to the United States in 1933. In the United States, Machlup's career encompassed work in many fields, including capital, monetary, and business-cycle theory, along with work on knowledge creation and dissemination.

Career Highlights

During his career, Machlup was a visiting professor at more than fourteen American universities, including Harvard University, Cornell University, the University of California at Berkeley, and Stanford University. He was the Abram G. Hutzler Professor of Political Economy at Johns Hopkins University in Baltimore, Maryland, from 1947 to 1960 and the Walker Professor of Economics and International Finance and Director of the International Finance Section at Princeton University in New Jersey between 1960 and 1971. He was on the faculty of the School of Economics at New York University from 1971 until his death in 1983. In addition, Machlup was a Visiting Professor at Osaka University in Japan (1970), at the University of Melbourne (1970) and at the University of Vienna (1972-1973).

Among his non-academic accomplishments, Machlup was a council member of the Austrian Cardboard Cartel in Vienna, Austria (1929-1931), a Special Consultant to the Post War Labor Problems Division, Bureau of Labor Statistics, U.S.Department of Labor (1942-1943), Chief of the Division of Research and Statistics, Office of Alien Property Custodian, Washington, D.C. (1943- 1946), and a consultant to the U.S. Department of Treasury (1965-1977).

Areas of Study

In 1950, Machlup began his groundbreaking work on the role of knowledge and its economic influence and continued to research and publish on the topic for more than thirty years. Through his work, Machlup was instrumental in developing the scholarly subfield of knowledge creation, diffusion, and utilization. In 1980, in the first volume of Knowledge (his series on knowledge creation, distribution, and economic significance), Machlup provided a classification of five major types of knowledge: (1) practical knowledge, (2) intellectual knowledge, (3) small talk or pastime knowledge, (4) spiritual knowledge, and (4) unwanted knowledge. Practical knowledge is the knowledge that is instrumental or central to one's work or profession. Intellectual knowledge satisfies one's "intellectual curiosity." Small talk knowledge satisfies one's "nonintellectual curiosity and one's desire for light entertainment and emotional stimulation." Spiritual knowledge is related to one's religious beliefs. Unwanted knowledge is outside of one's interests—"usually accidentally acquired, aimlessly retained" knowledge.

Before he arrived at this scheme, Machlup had reviewed and considered several distinctions— such as basic and applied knowledge, theoretical and historical knowledge, general/abstract and particular/concrete knowledge, nomothetic and ideographic knowledge, analytical and empirical knowledge, enduring and ephemeral knowledge, knowledge for many and for only a few, as well as social and private knowledge. Machlup reserved his most critical discussion for the most widely used classification: mundane knowledge, scientific knowledge, humanistic knowledge, social science knowledge, and artistic knowledge.

It should be remembered that each type of knowledge has a "claim" on how one establishes what is "known" as "true knowledge." Each offers a set of rules or understandings for the inquiry to establish acceptable evidence. Scientific knowledge, in the sense of controlled experiments in the natural sciences, has come to be viewed, by many, to be a unique and superior form of knowledge because it offers a set of rules for inquiry that promises precision and the hope for overcoming systematic bias and human error.

Machlup went beyond some rather traditional distinctions between data, information, and knowledge. Data is meant to be the most rudimentary unit of analysis (i.e., raw material). Information goes beyond data. Information is thought of as refined data, which provides some added value to the user. Knowledge, which goes beyond information and provides added value, must be able to withstand being subjected to some validation or "truth test."

The type of knowledge may well have an effect on how one views utilization and how one thinks about relevant and appropriate outcomes. Not only have some types of knowledge assumed more importance than others in potential users' perceptions, but past studies also often refer to use as if there are no significant differences among various types of knowledge that might be used.

Publications

Over the years, Machlup authored more than twenty-two books, including The Political Economy of Monopoly (1952), An Economic Review of the Patent System (1958), The Production and Distribution of Knowledge in the United States (1962), and Education and Economic Growth (1970). His later works on information and knowledge include Information Through the Printed Word (1978) and the Knowledge series (of which he completed three volumes: Knowledge and Knowledge Production, 1980; The Branches of Learning, 1982; The Economics of Information and Human Capital, 1983).

His numerous contributions to international economic theory include International Trade and the National Income Multiplier (1943), International Payments, Debts, and Gold (1964), Remaking the International Monetary System: The Rio Agreement and Beyond (1968), and The Alignment of Foreign Exchange Rates (1972). He was also a major contributor to the literature on the methodology of economic research, which work appeared in two volumes, Essays on Economic Semantics (1963) and Methodology of Economics and other Social Sciences (1978).

Machlup's papers—"Register of the Fritz Machlup Papers, 1911-1983"—are available through the Hoover Institution on War, Revolution, and Peace Archives at Stanford University. These papers contain correspondence, writings, reports, memoranda, notes, questionnaires, data, financial records, grant proposals, instructional materials, and other printed matter related to economic theory and to information systems and the creation and dissemination of knowledge.

See also:Economics of Information; Knowledge Management.

Bibliography

Dreyer, Jacob S. (1978). Breadth and Depth in Economics: Fritz Machlup—The Man and His Ideas. Lexington, MA: Lexington Books.

Kregel, J. A., ed. (1989). Recollections of Eminent Economists. New York: New York University Press.

Ludwig von Mises Institute. (2001). "Fritz Machlup."<http://www.mises.org/aboutmachlup.asp>.

Robert F. Rich

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