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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
http://klempner.freeshell.org/businesspathways/
Issue number 75
21st December 2012
CONTENTS
I. 'Consolations of a Business Philosopher' by Geoffrey Klempner
II. 'Michael Polanyi: Tacit Knowledge, Articulation and Economics' by
Pedro Blas Gonzalez
III. 'From Data and Information to Actionable Knowledge' by Georgios
Constantine Pentzaropoulos
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EDITOR'S SEASONAL NOTE
The last issue of Philosophy for Business for this year contains
articles by Professor Pedro Blas Gonzalez and Georgios Constantine
Pentzaropoulos, each addressing the question of knowledge, not in the
traditional way of theories of epistemology, but in its actual context
in the social sphere: in science, business and politics.
Professor Gonzalez looks at the undeservedly neglected work of
Michael Polanyi, who in his wide-ranging philosophy stressed the
importance of tacit knowledge, that form of knowledge which we have
and use, which we seek to express in various ways and for various
purposes, but which is always more than its mere expression.
Rejecting the academic distinction between 'knowledge that' and
'knowledge how', Polanyi's concern is one that might be described as
'existentially situated' knowledge, the understanding gained through
sense experience, inference, and above all praxis, by the
responsible, self-aware investigator.
Georgios Pentzaropoulos continues his investigation undertaken in
'Generating Stable Knowledge via Reduction in Entropy' (Philosophy
Pathways Issue 167, 28 November 2011) looking at knowledge not as
something we 'possess' -- the knowledge contained in a book, for
example -- but rather as an active, or interactive process of
increasing understanding through the judicious sifting and processing
of raw information. As Macmurray argued in his Gifford Lectures, 'All
knowledge is for the sake of action.' Instead of seeking to define
some abstract notion of knowledge in a vacuum, what philosophers
should be getting to grips with is the notion of actionable knowledge.
Both of these articles are fairly demanding reading, so I've added a
short essay on a seasonal theme which is easier to read if you are
relaxing after your Christmas dinner. I have a little bit to say
about knowledge too: knowing what to do and when, but also knowing
when you don't know and when mere guessing could be fatal.
I wish you all the best for 2013!
Geoffrey Klempner
-=-
I. 'CONSOLATIONS OF A BUSINESS PHILOSOPHER' BY GEOFFREY KLEMPNER
Walking down Chesterfield Road to Sheffield City Centre the other
day, I came across two students standing by a large advertising
hoarding. One was taking a close up photograph with a digital camera.
After they'd gone, I looked to see what was so interesting. The
advertisement was for a supermarket chain. I can't remember which
one. The catchy slogan, 'Shop Your Way.' The idea being that with the
internet, you now have the choice to go out to the shops, or shop from
your own home.
So why take the photo? Some wag had added the words, in black felt
tip pen, '...to the grave.'
Shop your way to the grave. A fitting motto for the consumer society
in the second decade of the 21st century. Now more than ever, with
the effects of the recession still upon us, we need consumers to help
stimulate growth. Get your shopping in for Christmas! It's your civic
duty. Don't worry if the weather is too wet or cold to go out. You
can shop from your computer. If you have a laptop or iPad you don't
even have to get out of bed.
You've worked hard and earned the right to treat yourself to the
latest widescreen TV. Besides, it's wrong to hoard money when you
could be stoking the fires of the economy.
And what about all those who despite their best efforts can't get
work? The latest scheme, being considered by the Conservative Work
and Pensions Secretary Iain Duncan-Smith, is aimed at preventing
claimants using their benefit payments for anything but the
necessities of living. When asked about a possible plan to issue
electronic cards that could only be used for food or other necessary
items, he told interviewer Ross Hawkins on BBC4's 'The World At One'
programme yesterday, 'giving people cash sometimes can actually lead
to further problems.'
We are invited to imagine a scenario of good-for-nothing layabouts
who spend all their cash on cigarettes, beer and drugs. The reality,
if this plan came into effect, would be further alienation and
exclusion of the unemployed from ordinary social life, on top of the
pressures already bearing down on them. That's what the worker bees
want. More punishment for the drones. At least, from the perspective
of one Conservative Minister.
When the going get's tough the tough put in more overtime. To most
ordinary people who don't understand the intricacies of economic
theory, this seems plain daft. Why not ban overtime and spread the
work load, so that more people have the chance to get into work? It's
common sense. That's a policy that would gain wide approval.
Business owners face a different set of challenges. The shame and
social stigma of going bankrupt and losing everything, is no less a
fear than that of being made redundant, or not being able to find a
job. As a business owner, I've had more than a few rough patches over
the last 17 years since Pathways to Philosophy was launched. But I
believe in what I do. That counts for a lot.
There is a paradox in the very idea of a 'business philosopher'.
Philosophers are lazy -- in a good way. Bertrand Russell once wrote a
book In Praise of Idleness. Business is archetypically about not being
lazy, but about being proactive, not waiting until the bad news
disturbs your comfort zone but going out there and making waves. When
business is slack, you sit at your desk trying to think of something
to do that you haven't already done, or tried. But sometimes if
you're not careful you can do more harm than good. Don't stop
thinking and being creative. But remember that waiting, being
patient, are business virtues too.
When the orders don't come in despite your best efforts, tell your
sales managers not to panic. Save yourself for the greater effort to
come, when you know what needs to be done. Right now, maybe nobody
knows, or if they do, they're keeping it to themselves. Tell your
staff their jobs are secure and that their interests come before
profit. It isn't the whole truth, because if you can't pay your
creditors then everyone will lose their jobs, and your staff know
that. But it will help them stay cool under pressure. You're all in
this together, and that is true and not bullshit.
Don't negotiate from a position of weakness. Always remember that the
business world is a combat zone, and keeping up appearances is
paramount. The cool thing, if you have a philosophical frame of mind,
is that you don't have to lie. You don't have to pretend that business
is great when everyone can see that it isn't. The trick is not to
care. Show that you're not unduly concerned. You've been through
worse before. You're not going to accept usurial loans or sell stock
at a loss just to keep up the cash flow.
Always remember that ethics is not negotiable. If even your best
friends and closest colleagues are pleading with you to compromise,
then you will have to put some effort in to persuade them in return.
But better than using up all your valuable gumption in needless
argument is just to show by your own example that you're not afraid.
If the worst comes, then it comes. The chances are, it won't. As a
business philosophy, optimism has much to recommend it.
(c) Geoffrey Klempner 2012
E-mail: klempner@fastmail.net
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II. 'MICHAEL POLANYI: TACIT KNOWLEDGE, ARTICULATION AND ECONOMICS' BY
PEDRO BLAS GONZALEZ
Michael Polanyi (1891-1976) is a very rare type of twentieth-century
thinker. Besides being a polymath, the Hungarian philosopher is also
a uomo universale. Polanyi embraces a form of intellectual curiosity
that is virtually non-existent in contemporary academic circles. The
scope and breath of his thought is intellectually honest,
awe-inspiring and tellingly instructive. The quality of Polanyi's
thought is worthy of study given its ease in demonstrating the unity
of a vast array of human knowledge. How many contemporary academic
scholastics can be considered awe-inspiring? It is indeed uncommon to
encounter a twentieth-century thinker who can match the thread that
Michael Polanyi weaves through philosophical, scientific and
religious thought.
In addition, Polanyi's thought is exemplary for its sound and
penetrating understanding of the history of ideas. Intellectual
history is an area that the majority of twentieth-century
philosophers have all but neglected. Instead, most twentieth-century
thinkers have opted for the security and less demanding work of
specialization. Their neglect of interdisciplinary questions makes
the vast catalogue of twentieth-century philosophy one-dimensional
and sterile. With the passage of time, this disregard for the nexus
of ideas and its significance to vital life has made a great deal of
contemporary philosophy passe.
As against the demons of our current overt specialization, Polanyi's
thought demonstrates an original and penetrating grasp of the
fundamental role that metaphysics plays in science and religious
faith. This is what has traditionally been thought of as the
perennial philosophy. Polanyi's visionary ability in realizing the
importance of offering a unifying intellectual account of man, circa
1950s, demonstrates his overarching genius. His thought pays homage
to the systematic thought of past philosophers. This is particularly
important in light of the dysfunctional fragmentation that
philosophical reflection has undergone in the latter half of the
twentieth century.
Analytic thinkers have incessantly tinkered with philosophy, in what
can only be described as a hybrid form of academic scholasticism.
This kind of scholasticism bears very little resemblance to vital and
existential human concerns, the meat and potatoes of philosophical
reflection. On the other hand, many post-modernist, deconstructive
continental thinkers have all but pulverized the relevance of
philosophy for a thoughtful and culturally literate reading public.
This academic camp has made philosophy the whore of make-work,
social/ political fashion. In sharp contrast to these two dominant
intellectual aberrations, Polanyi's epistemology remains grounded in
common sense. For Polanyi, knowledge is uninterested and requires
enormous sacrifice by individuals to ascertain. He explains:
These things, noble actions, works of art or science, serve
no material need, but demand, on the contrary, material
sacrifice: they are deemed excellent in themselves. And it
is because man is capable of such sacrifice that he himself
demands to be respected, and will be respected by those who
share his respect among men. And this is also the
framework, therefore, within which man writing history
confronts the men who made history.[1]
I will elaborate on three aspects of Polanyi's thought: Tacit
knowledge, the articulation of human knowledge and the implication of
the aforementioned to human liberty and economics as a staple form of
being human.
The Significance of Tacit Knowledge
Michael Polanyi argues that 'we can know more than we can tell.'[2]
This, of course, is a central tenet of human knowledge. I will add
that this is precisely the entry level experience of young thinkers
-- this is commensurate with the thought process of young children --
upon first discovering human reality, via their unpolished effort as
individual thinkers. Polanyi's assertion that tacit knowledge is the
basic form of human knowledge makes prodigious sense. By all
practical considerations, tacit knowledge remains outside the domain
of quantification.
If knowledge is possible, this is because a knower, that is, an
individual thinker has actively uncovered an aspect of human reality
-- a techne, let us say -- of thought as a tool, which is employed to
uncover a specific area of knowledge. 'Active' is the operative word
that best describes our search for truth. However, by specific I mean
to suggest technical knowledge as a craft: building a house, flying an
airplane or hitting a baseball consistently. We must consider how
technical knowledge affects the question of human knowledge as a
whole. Technical knowledge -- know-how -- is a liberating discovery
of human possibility. A chapter in Polanyi's book Tacit Knowledge is
appropriately titled 'A Society of Explorers.' While technical
knowledge does not concern itself in addressing questions of 'why,'
but rather only of 'how,' the young thinker learns that objective
knowledge is not only possible, but that it is also an indispensable
aspect of human well-being.
In addition, if knowledge is possible, that exciting discovery points
to the fact that actual knowing 'this' or 'that' must necessarily come
as a result of realizing the human potential for knowledge. It is not
difficult to appreciate that tacit knowledge is two-fold: 1) It is
the recognition that individuals possess knowledge that is
pre-articulate, that one must manifest outwardly, in a verifiable and
objective manner at some point, if we are to be considered
knowledgeable. 2) The other condition that tacit knowledge must meet
is the realization that human potential for knowledge, the capacity
for logical inference, let us say, is already a form of knowledge in
itself.
Of course, the former form of knowledge allows us to gather knowledge
about objective reality that we can make use of, and that eventually
can be transferred to other receptive human beings. This type of
cognition allows for the realization that knowledge is objective,
and, as Plato has argued, also eternal in make-up. For instance,
Polanyi recognizes the importance of identifying objective knowledge
as the necessary ground of science and epistemological certainty.
However, this does not preclude the fact that it is differentiated
human beings -- individuals -- who must undertake the pursuit of
knowledge. The pursuit of knowledge requires good will and great
personal sacrifice.
Polanyi poses and addresses the question: How can knowledge be both
personal and objective? This is a concern that has been hailed by
many thinkers. Plato, for instance, views truth (aletheia) as that
underlying aspect of human reality that must be sought after in order
for man to break through to objective knowledge. Aletheia demands that
the thinker be an active participant in the pursuit of knowledge. This
means that the latent level of reality that aletheia brings forth will
not reveal itself in the absence of a willing and capable knower who
desires to know. Truth, then, can only be embraced through an active
intellectual process, and not by embracing passive and often damaging
opinions (doxa). This is also the strain of opinion and truth that one
encounters in Parmenides. More recently, the Spanish philosopher, Jose
Ortega y Gasset (1883-1955), argued that just because man embraces
truth from a finite perspective does not mean that truth is relative.
Ortega argues that we are always inching forward in understanding the
nature of objective reality. Polanyi argues thus: 'I regard knowing
as an active comprehension of the things known, an action that
requires skill.'[3]
It goes without saying that thinkers who seek truth as the objective
operant principle of the universe -- and human existence -- must
remain humble in this pursuit. Why is this important? Consider the
psychological and moral dynamics of thinkers who confront the
possibility that, in their search for objective truth, they may be
wrong. The possibility of logical error is a fundamental condition of
objectivity. This is an admission that when I am wrong, the problem
lies in my faulty logical inference, not with the structure of truth
and objectivity. This is also what Polanyi argues regarding the
importance of objectivity in science. Ironically, error should not be
encountered in relativism, if we are to remain consistent and sincere.
The possibility of logical error acts as a form of reconciliation that
is an essential moral characteristic of sincere seekers of truth. This
is what Socrates called the elenchos, the spirit of philosophy proper.
An additional irony of tacit knowledge is that it cannot be properly
understood at the start of an inquiry into the nature of knowledge
but rather as its outcome. Polanyi argues that comprehension is
neither an arbitrary act nor a passive experience. Yet the human
capacity for understanding does indeed yield objective knowledge.
Polanyi's positing of tacit knowledge as the essential aspect of
human intelligence counters the reductionist philosophy that
contemporary thinkers have passed on to unsuspecting people. Tacit
knowledge is not so much a measure of knowledge but recognition of
what Polanyi refers to as man's capacity for conceptual development.
He explains:
But can it be argued, once more, that the possibility of
teaching these appearances by practical exercises proves
that we can tell our knowledge of them? The answer is that
we can do so only by relying on the pupil's intelligent
co-operation for catching the meaning of the demonstration.
Indeed, any definition of a word denoting an external thing
must ultimately rely on pointing at such a thing. This
naming-cum-pointing is called 'an ostensive definition,'
and this philosophic expression conceals a gap to be
bridged by an intelligent effort on the part of the person
to whom we want to tell what the word means. Our message
had left something behind that we could not tell, and its
reception must rely on it that the person addressed will
discover that which we have not been able to communicate.[4]
The tacit dimension of human knowledge, as Polanyi refers to this, is
concerned with integrating knowledge with all other aspects of the
human person. It is for this reason that tacit knowledge serves as
the ground of human understanding, and all forms of articulate or
pre-articulate wisdom.
Articulation and Execution of Knowledge
Polanyi presents knowledge as possibility, as a potentiality of the
human person as a unity of reality. Knowledge is rooted in such
structures as language, pre-linguistic tacit understanding and man's
inarticulate faculties. In whatever form or stage of development,
knowledge should inform the moral capacity of the human person. For
Polanyi, knowledge cannot be conceived in isolation. He eschews all
attempts to reduce philosophic and scientific knowledge to their
respective component parts.
What exactly is the relationship between articulate and inarticulate
knowledge in Polanyi's thought? One practical way to address this
question is to distinguish what we know from what we can say about
it. The former pertains to the tacit dimension, while the latter is
our attempt to communicate knowledge. The area of agreement between
these two poles culminates in a synthesis, what Polanyi calls
articulation. Yet articulation must keep tacit knowledge as its point
of reference. This is the whole point of articulation. It is
important, Polanyi argues, that the articulation of tacit knowledge
not be allowed to deteriorate into a mode of expression that strives
for self-conscious recognition.
A fundamental characteristic of tacit knowledge is that this form of
knowledge exceeds our power of articulation. It is difficult to
imagine a dog chasing its tail, if the tail is positioned at the
front of the animal. This same understanding can be conveyed in terms
of tacit knowledge. In Polanyi's epistemology, articulation is not the
main event, but rather the vehicle that delivers us to meaning. He
explains:
While I read the letter, I was consciously aware both of
its text and of the meaning of the text, but my awareness
of the text, but my awareness of the text was merely
instrumental to that of the meaning, so that the text was
transparent in respect to its meaning. After putting the
letter down, I lost my conscious awareness of the text, but
remained subsidiary aware of it in terms of my inarticulate
knowledge of its content. Tacit knowledge is manifestly
present, therefore, not only when it exceeds the powers of
articulation, but even when it exactly coincides with them,
as it does when we have acquired it a moment before by
listening to or reading a text.[5]
Because the meaning of the text is not something tangible, like the
text itself, Polanyi can argue that knowledge and thought are
predominantly tacit. According to Polanyi, we are always aware of the
character and essence of our knowledge. Yet we are not necessarily
aware of 'its innumerable items.'[6] This is more akin to Plato's
conception of eidos, that is, the form of a given thought, than as a
catalogue of any specific area of knowledge. In addition, the meeting
ground between tacit knowledge (what we know) and its articulation
cannot become a 'third' party. This would defeat the clarity that
articulation brings to the conversation concerning tacit knowledge.
The hair-splitting that would ensue, if articulation is converted
into a third thing between what we know and what can be said about
it, would be colossal. If the latter takes place, the attention
garnered by articulation-as-a-third-thing would grow exponentially,
until the importance of the initial question of how to articulate
tacit knowledge, is eventually vanquished. Of course, this form of
bloated pedantry goes against the grain of knowledge-seeking. This is
precisely the form of contemporary scholasticism that disqualifies
most academic philosophy from being considered vital philosophical
reflection. Polanyi has a few choice words to say about this topic:
The gap between the tacit and the articulate tends to
produce everywhere a cleavage between sound common sense
and dubious sophistication, from which the animal is quite
free.[7]
Articulation of knowledge is geared toward confirmation and
communication of objective knowledge. Polanyi's thought strives to
steer clear of reductionism and radical skepticism. Truth, he argues,
ought to be pursued as an end in itself. This suggests that thought is
not premeditated; truth seekers follow a course of research or
reflection that is honest and practical. Polanyi settled upon this
conviction after his conversations with Bukharin, the Soviet
strategist who told him that science needed to be placed at the
service of the State. This communist aberration, which made science a
state-mandated activity, was to serve only one end: to respond to the
demands of the latest five-year plan of the centralized Soviet
economy. This form of state-sanctioned science is neither pure nor is
it applied science. Polanyi was horrified to witness the extent to
which human thought had been politicized and corrupted by Marxism in
the Soviet Union:
Every time our existing framework deals with an event
anticipated by it, it has to modify itself to some extent
accordingly. And this is even more true of the educated
mind; the capacity continually to enrich and enliven its
own conceptual framework by assimilating new experiences is
the mark of an intelligent personality.[8]
In contrast to the aforementioned, the mind's ability to
conceptualize the essences that inform human experience resists being
made into a science of mind. One reason why the latter is
impossibility, and why the Soviet repressive state apparatus did not
succeed in making science into a handmaiden of communist ideology
indefinitely, is that man's rational framework, practically speaking,
is infinite. This is why Polanyi can pose the question: why do we
entrust the life and guidance of our thoughts to our conceptions? The
answer, he argues, is that reason indeed comes into contact with some
aspects of objective reality. This statement is an essential
component of Polanyi's thought because it demonstrates how reason
comes to grasp human reality. Of course, Polanyi does not suggest by
this that man has total knowledge of objective reality.[9] He
explains:
The fact that our intellectual strivings make effective
progress during a period of incubation without any effort
on our part is in line with the latent character of all
knowledge.[10]
Articulation brings to light latent knowledge through what are
essentially a priori synthetic concepts that become fully known in
their being worked out. Polanyi views this working out as a process
that involves rational calculation and intuition. He tells us, 'The
manner in which the mathematician works his way towards discovery, by
shifting his confidence from intuition to compulsion and back again
from computation to intuition, while never releasing his hold on
either of the two, represents in miniature the whole range of
operations by which articulation disciplines and expands the
reasoning power of man.'[11]
One of the many strokes of genius that one encounters in Polanyi's
thought is his critique of philosophic doubt-as-sport. By all
accounts, this criticism of doubt is a philosophical novelty in
contemporary philosophy. Polanyi credits St. Augustine with taking
ancient Greek philosophy and demonstrating that all knowledge should
be conceived as originating in grace. This is important, he argues,
because it is a recognition that knowledge is personal, that is, of
the person and, by implication, also tacit in make-up. Citing St.
Augustine, Polanyi writes:
His maxim nisi credideritis non intelligitis expresses this
logical requirement. it says, as I understand it, that the
process of examining any topic is both an exploration of
the topic, and an exegesis of our fundamental beliefs in
the light of which we approach it; a dialectical
combination of exploration and exegesis. Our fundamental
beliefs are continuously reconsidered in the course of such
a process, but only within the scope of their own basic
premises.[12]
Suffice it to say that Polanyi's critique of philosophic doubt
conceives of belief as a form of tacit knowledge. Tacit knowledge
accepts belief during the time it takes reason to deliberate on the
evidence available. Belief in God, according to Polanyi, acts as a
form of indwelling that can only be apprehended in serving God, the
same way that we serve beauty, truth or justice. Polanyi contends
that comprehension becomes one with its object of knowledge. We
recognize this in mathematics, art and fiction, in the manner that we
come to know the inner logic of these disciplines. Polanyi's
conversion to Catholicism in 1923 is worthy of interest, even though,
for our purpose, it is enough to point out that religious belief
requires that believers undertake a rite of passage that delivers
them to genuine understanding. The greater point that Polanyi makes
in this regard is that religious belief cannot be divorced from tacit
knowledge:
This relation of factual clues to a heuristic vision is
similar to the relation of factual experience to
mathematics and to works of art. The analogy brings
religious faith into line with these great articulate
systems which are also based on experience, but which the
mind can yet inhabit without asserting any definite
empirical facts.[13]
Articulation of knowledge must remain practical. One cannot lose
track of the sole purpose of articulation. Can articulation of
knowledge be a scientific pursuit? By no means, Polanyi argues.
Articulation of knowledge serves as a tool of our striving for
understanding and our ability to communicate objective truth. This
places human beings at the center of the pursuit of knowledge.
Polanyi does not deny this. Yet his point is that while individuals
have to be responsible in seeking knowledge, the understanding they
receive is not the result of their own invention. Personal
responsibility in science and philosophy is an integral part of
Polanyi's thought.
Responsibility is important, Polanyi informs us, because it sets up
an ideal standard of measurement. While ideals may not be fully
realizable, they nevertheless force thoughtful people to orient their
rational pursuits to the search for objective knowledge. In other
words, the responsible vision, as Julian Marias has referred to this,
makes for the possibility of attaining a transcendent form of
knowledge. Polanyi writes: 'I have said that the shaping of knowledge
by the knower can lay claim to universal validity by submitting to a
strict sense of responsibility.'[14]
Hence, articulation takes a new meaning in Polanyi's thought.
Articulation can no longer be viewed as the end result of speech or
language. Rather, articulation acts as a kind of de-militarized zone
between what is implicitly known, and its outward presentation as
communicable, objective knowledge. This process must remain a
practical endeavor. The act of articulation in Polanyi's thought is
an admission that the nature of man is characterized by a zest for
transcendence, even though, man will always lack full knowledge about
the nature of knowledge itself and the objective reality that we
strive to understand.
Articulation is a vehicle by which man's rational ordering principle
enacts the task of uncovering the nature of objective truth. A
sincere observation that can be made, concerning the make-up of our
striving for knowledge, is that perhaps full disclosure of knowledge
may remain unfulfillable. This realization has profound implications
for all fields of human study. Reflection on human nature, a subject
which is central to Polanyi's thought, informs all of his work. The
aforementioned has tremendous implication for Polanyi's understanding
of the free society and the inevitable economic activity that marks
the daily lives of individuals.
The Logic of Liberty and Economics
The structure of totalitarian societies, especially those which have
been marked by Marxism, is grounded in positivism, and the
institutional control that the latter signifies for the advent of
science and individual liberty. Auguste Comte's conception of
positivism is founded on 'The Law of the Three Stages.' Stage one, he
calls the theological stage. Stage two is referred to as the
metaphysical stage. For the purpose of this enquiry, it is stage
three that concerns Polanyi's thought. The final of Comte's three's
stages of historical development, he called the positive stage. The
third stage, what Comte considered the synthesis of a long and
painful societal evolution, concerns itself with the arrangement of
the 'facts' of history. This means that man encounters a universe of
matter and material processes that he merely re-arranges for
technical and industrial ends. In this stage, man is stripped bare of
any existential make-up and is therefore de-spiritualized. Man's
social/ moral condition, in short, all human values are made to work
for one end: the State. In this stage, all concerns for personhood,
individuality and authorship must be vanquished in the service of a
state-sanctioned existence. Of course, here we are talking about the
annihilation of personal, existential freedom, and, as a consequence,
the destruction of social/ political liberty. History has already
demonstrated the destructive effects on human freedom of Comte's law
of the three stages of history. The culmination of this savage
existence has been aptly described in Huxley's Brave New World;
Koestler's Darkness at Noon; Zamyatin's We and Witkiewicq's
Insatiability, for instance. Undoubtedly, Comte's positive stage is
marked by absolute institutional control. This, in turn, marks the
destruction of aspects of man that have little to do with social/
political categories.
As a social/ political theory, positivism requires that societies
become stringently planned. This is neurosis posing as science. This
artificial and arbitrary stratification of human reality destroys
man's desire for spontaneous order. As a point of principle, such
planned existence is forcibly managed and maintained through the
necessary destruction of spontaneous order. Spontaneous order, in
Polanyi's thought, has less to do with the idea of free association,
as important as that liberty is to free societies, and everything
with safeguarding primordial free. Spontaneous order means the
existential ability for individuals to make a path for themselves in
objective reality, that is, in life. In a free society individuals
embrace a self-imposed code of personal responsibility. On the other
hand, the absence of spontaneous order means having to implement
coercive measures, repression and violence. How does the latter
reality affect science, the arts, religious faith, free thinkers and
economic activity among individuals?
All activity in a free society, Polanyi informs us, 'The principle
belief -- or I should rather say the main truth -- underlying a free
society, is that man is amenable to reason and susceptible to the
claims of his conscience.'[14] Spontaneous order is characterized by
the desire of individuals to adjust 'their actions to the actions of
others.'[15] This aspect of Polanyi's thought, what essentially
amounts to a common sense view of human reality, does double duty as
a refutation of economic planning.
Economic activity, according to Polanyi, cannot be planned. Much the
same as individuals live their lives through the prism of a
spontaneous order; economics must be allowed to flourish by dint of
the exercise of personal freedom. Polanyi's economic principles are
based on his rejection of state control of science, a tragic reality
that he witnessed firsthand in the Soviet Union in the 1920s. We
ought not to forget that economic activity is just another form of
human activity. Much has been made, especially in the twentieth
century, about the need to create the rational means to unearth data
that will make it easier to plan and control economic activity.
Polanyi has the following to say about this impulse for reductionism:
Producers and Consumers are of course the same people, and
form in effect the whole population. The devices of
monetary circulation and money-making offer to the
population the only possible way of rationally co-operating
in the common exploitation of a pool of varied resources,
for the production of a large variety of goods destined for
distribution among themselves.[16]
Not only are producers and consumers the same people who live under
the same sun, and who barter, trade, sell and buy, but it is also
essential to remember that producers and consumers come in a myriad
of unpredictability. What economic planner can honestly say who will
purchase what from whom, and under what circumstances? For instance,
let us briefly consider the role of intellectuals as producers and
consumers. If we are ready to admit that intellectuals -- including
writers and artists -- are producers of goods, products and services,
then we must also be prepared to recognize that none of these entities
can predict with any degree of certainty the products of their
artistic and reflective toil. Most importantly, even if they could,
they would not be able to predict the effects of their creation on
others. The 'Others,' in this case, are no less than the consumers of
such artistic creations. Of course, these can include other
intellectuals, writers and artists. Libraries, from the great library
of Alexandria to the Library of Congress, are replete with the
products of human toil for readers to consume. Hence, even
intellectual property is a form of human production. This truism is
conveniently left out of consideration by those who denigrate human
creations that are readily consumed by those 'others,' who have been
exclusively labeled as consumers.
Economic activity does not and cannot differentiate between the
consumption of comestible goods and other forms of human production
or artistic creation, as the case may be. The days when such
capricious and fallacious ideological conventions are protected from
rational scrutiny must be made a thing of the past. In either of
these two categories, human ingenuity, industry, skill and good will
inform the product that is created. For decades, the Soviet
Intelligentsia and their brethren in Soviet satellite nations
consumed -- they actually relished -- the Bolshoi Ballet and the
Saint Petersburg Symphony. These were considered the exclusive
product of Soviet totalitarianism. We can turn to a discussion of the
hierarchy of axiological values on another occasion. For now, it will
suffice to realize that people throughout all epochs of human history
have produced and consumed goods as a matter of survival or a form of
existential salvation.
If Polanyi is correct in his conviction that meaning is tied to
intellectual freedom, then the free society must be viewed as the
cradle for the possibility of free thinking people to create
meaningful lives. Of course, Polanyi is also right to argue that if
thought and reason are viewed by nihilists as being of no importance,
nihilists will deem it unnecessary to defend reason, truth and free
societies as being intrinsically good human pursuits. The importance
and essential role of economic activity in free societies is that it
allows individuals to live on the strength of their personal beliefs
and higher values, and to be responsible for where these may lead.
Polanyi's thought is forward-looking, for he recognized that the only
way that man can achieve a lasting peace is to respect individual
autonomy. While positivism and Marxism are
philosophies-to-end-all-philosophies, no philosophy or science is
capable of planning and tracking the movement of free will. Polanyi
warns us of this when he writes:
We see at work here the form of action which has already
dealt so many shattering blows to the modern world: the
chisel of skepticism driven by the hammer of social
passion.[17]
Free societies create lasting institutions that come about as the
result of existential enterprise. In addition, free societies exist
to protect the spirit of man. In the absence of free societies, what
man encounters is misery and state control of all aspects of the
human person. These are some of the most ominous and undeniable
implications of central economic planning that history has presented
us with.
Notes:
1. Michael Polanyi. The Study of Man. (Chicago: The University of
Chicago Press, 1958), p. 86.
2. Michael Polanyi. The Tacit Dimension. (Garden City, New York:
Anchor Books, 1966), p. 4.
3. Michael Polanyi. Personal Knowledge: Towards a Post-Critical
Philosophy. (Chicago: The University of Chicago Press, 1968), p. VII.
4. Polanyi. The Tacit Dimension, p. 5.
5. Polanyi, Personal Knowledge, p. 91.
6. Ibid, p. 93.
7. Ibid, p. 94.
8. Ibid, p. 103.
9. Polanyi's understanding of the Objective-Subjective/ Knower-Known
poles is very similar to Jose Ortega y Gasset's Objectivism/
Perspectivism, where the Spanish philosopher argues that reality is
objective but that such a realization can only make sense from a
human perspective, that is, through the interdiction of individual
knowers. See: Jose Ortega y Gasset's Meditations on Quixote.
10. Polanyi, Personal Knowledge, p. 129.
11. Ibid, p. 131.
12. Ibid, p. 267.
13. Ibid, p. 283. See: The section in Personal Knowledge titled
'Religious Doubt.' 'Religion, considered as an act of worship, is an
indwelling rather than an affirmation. God cannot be observed, any
more than truth or beauty can be observed. He exists in the sense
that He is to be worshipped and obeyed, but not otherwise; not as a
fact -- any more than truth, beauty or justice exist as facts. all
these, like God, are things which can be apprehended only in serving
them.'
14. Michael Polanyi. The Study of Man. (Chicago: The University of
Chicago Press, 1969), p. 42.
15. Michael Polanyi. The Logic of Liberty: Reflections and
Rejoinders. (Indianapolis: Liberty Fund, 19980), p. xi.
16. Ibid, p. 180. See: 'Financing of Intellectual Activities,' p.
205. Also see: What Polanyi views as the inherent problems of
formulating mathematical models of economics. On this topic, he
writes: 'I have explained that economic problems take up an
intermediate position between the fully formalizable and entirely
unformalizable tasks: they are theoretically formalizable. We can set
up mathematical models of economic problems and speculate on
mathematical methods of solving them. The fact that a mathematical
model can be set up of the functions performed by a market economy as
a whole, has in the past lent strength to the idea that the economic
system could be managed centrally by solving the set of simultaneous
equations constituting this model. This project has been opposed by
F.A. Hayek on the grounds of its twofold impracticability; that it
would be impossible to collect the requisite numerical data and that
even if these were made available, the task of carrying out the
proposed computations would be excessive.,' p, 222.
17. Ibid, p. 5.
(c) Pedro Blas Gonzalez 2012
E-mail: gonz7750@bellsouth.net
-=-
III. 'FROM DATA AND INFORMATION TO ACTIONABLE KNOWLEDGE' BY GEORGIOS
CONSTANTINE PENTZAROPOULOS
In reality, we have no knowledge;
truth lies at the bottom of things.
- Democritus
Keywords: Epistemology; information philosophy; data; knowledge
stability; entropy; business intangibles; knowledge economy/ society.
Part I: Data and Information
According to Fowler's Modern English Usage (1981), the word data is a
Latin plural and its singular form, datum, is comparatively rare. A
less formal and far more entertaining interpretation is given by
Philip Howard in his book Weasel Words (1979):
With the explosive increase in the quantities of data that
modern science feels it necessary to handle, and (through
modern computers) finds it possible to handle, the
individual datum becomes decreasingly relevant. The word is
used as a singular since it is merely the aggregates of
data, considered as an indistinct mass like butter, that
influence decision-making.
Naturally, the 'computermen', as Howard refers to computer scientists
and professionals 'have got it into their minds that data is an
aggregate singular like English porridge'. With that in mind, one
feels obliged to approach a mass of data with due caution if one is
to make any sense of that/ those data. This is especially true when
data (in singular form, from now on) is extracted from various
webservers across the Internet.
Data in binary form becomes meaningful when interpreted by a data
processing (DP) system. In such a system, a given data stream follows
the well-known step function, which is the result of the application
of the binary system (0,1). In the case of free-format data, such as
images, colours, digitized voice, etc., all of which come to our
attention through the senses, we make the assumption that such a DP
system is analogous to the human brain's neuronal circuitry.
Data in its raw form has no significance by itself. Binary data often
comes in the form of a fact or statement but often without any
apparent relation to other observable things. Information, on the
other hand, always includes some kind of a relationship between cause
and effect.
In computer science and technology, knowledge differs from binary
data or information in the sense that new knowledge may be created
from existing one using logical inference.
Following this discussion, we may write:
C1. Data {Processing} => Information {Logic} => Knowledge
In epistemology truth and belief are preconditions for knowledge
acquisition. The problem of defining knowledge dates back to Plato's
work Theaetetus in which knowledge is true belief plus a logos, else
certification by reason (Blackburn, 2008). The distinction between
knowledge and belief forms the basis of the definition of knowledge
as justified true belief.
Epistemologists refer to either propositional or ability knowledge.
The latter, or know-how knowledge, has gained importance in recent
years as practical skills have become essential elements of our
evolving information society. In this work we concentrate on ability
knowledge. Hence, we assume that data of any form is the source of
information acquired through the senses. Information, then, is
considered as the result of applying some kind of processing to data,
giving it meaning in a particular context. This meaning requires a
relational connection, as this terms is known from systems theory.
Knowledge, especially ability knowledge, gained through data or
information can often be deceiving, and this may lead to wrong
decisions. Therefore, information gained through the senses or by
means of a DP system should always be held up for inspection.
The world-wide web, through its vast number of interconnections, has
made the world seem like a smaller place: a global electronic village
without borders. The following words come from Susanne Huttner, Head
of OECD's Science, Technology and Industry Directorate (OECD
Observer, 2008):
Can you remember life before the Internet? [...] What is
perhaps less apparent today is that Internet-based
applications underlie major advances notably in science,
business organisation, environmental monitoring, transport
management, education, and e-government. Nowadays, without
the Internet, planes would not fly, financial markets would
not operate, supermarkets would not restock, taxes would not
get paid and the power grid would not balance the supply and
demand for electricity.
The above statement clearly reflects our increasing reliance on the
Internet for scientific, business, and social activity. A similar
critical stance with respect to the Internet's enormous diffusion has
also been expressed by neuroscientist Susan Greenfield (2008), who
regards new technologies as two-dimensional, with a preference for
process over content. But, as we shall see later, digital content is
actually the building block of our knowledge economy/ society.
Our perception of space and time has changed in recent years, to the
extent that knowledge is sometimes confined to what happens now. This
extraordinary phenomenon is discussed in Farthing (2012), who suggests
that we now live in a screen age. The author gives a number of
convincing examples which show that our society is gradually becoming
screen-depended. An important point, which is relevant to our work, is
also offered by Greenfield and quoted by Farthing (2012) as follows:
Information is not knowledge, and information processing is
not the same as understanding...
One must also add the problem of the assumptions that we frequently
make in order to claim knowledge. This problem is nicely illustrated
by Klempner in Chapter 4 of his book The Possible World Machine
(2007) as follows:
What we call our 'knowledge' rests on a vast network of
assumptions; assumptions whose truth or falsity would be
impossible to check or prove in their entirety. We might
feel safer making the more modest claim that all we really
know is what each of us has learned directly through our
senses. Everything else that we believe comes under the
heading of the 'best explanation' of our sense experiences.
Let it be noted that the above network of assumptions has a clear
similarity to the well-known series of 'if... then... else'
statements often expressed as logical conditions in algorithmic
programming languages.
Part II: Reliability and Stability of Knowledge
The distinction between perception and thought is clearly illustrated
in the famous wax tablet paradigm in Plato's Theaetetus. The objects
of perception are assumed to be constantly-changing, but the objects
of thought are those objects of perception to which we have chosen to
give a measure of stability by imprinting them on the wax tablets of
our minds (Chappell, 2009).
Mere true belief is often fleeting, as Plato demonstrates in his work
The Meno. There, it is argued that knowledge is more stable than
belief (opinion) because knowledge is not easily lost. In the course
of the above dialogue Socrates refers to an old legend (mythos) known
as the 'Statues of Daedalus' to show that right opinion, unlike
knowledge, is unstable. True beliefs are still useful, but they
cannot stay in their place unless they are tethered to the ground by
what Socrates calls a logical explanation (aetias logismos).
Pritchard (2008), who also quotes the above example, links stability
of knowledge to the underlying reliability of information. Therefore,
it may be said that knowledge gained through reliable information has
grater instrumental value than true belief and that such knowledge is
always more stable.
Although sense and intuition are usually treated as separate
entities, in practice these entities seem to work concurrently. Quite
often, what we perceive seems to be connected to what we already know,
i.e. our background knowledge.
According to Floridi (2005, 2012) knowledge and information are
members of the same conceptual family. The difference is that
knowledge contains a web of mutual relations (interconnections) by
which a person may have an overall view of the world associated with
epistemic efforts. The upgrading of information to knowledge can be
achieved using results from network theory.
In a recent article (Pentzaropoulos, 2011a) we argued that
'information does not equate to knowledge'. This result is in line
with Greenfield's observation mentioned in the previous section.
Information processing, as we have noted, allows data to be
transformed into knowledge. Although such processing cannot be the
same as understanding, it can be argued that reliable data combined
with careful processing always leads to more informed decisions.
However, evidence shows that knowledge gained through the senses is
not always reliable. Returning to the earlier problem of extracting
knowledge through information processing, we note that initial input
might contain errors. Whenever that happens, knowledge becomes
unstable. Such errors might be factual, e.g. distorted numbers, or
logical, when for example a sequence of statements breaks down.
In another recent article (Pentzaropoulos, 2011b) we examined the
problem of knowledge stability both from an epistemic and systemic
point of view. There, the final conclusion was that reliable
information always leads to greater stability of knowledge. Such
stability requires first a reduction in uncertainty. The latter can
be described as a manifestation of entropy. Therefore, by reducing
entropy, uncertainty is also reduced, and the flow of information
approaches steady state. Thus, we may write:
C2. Entropy minimization => Less uncertainty => Greater knowledge
stability
According to the above conclusion, knowledge is stable in the
steady-state region (or the plateau) of the system under study. In
everyday life, information is commonly associated to a sense of
order. Any lack of order brings about uncertainty sooner or later. In
physics, the entropy of a system is typically defined as a measure of
intrinsic uncertainty (Soanes and Stevenson, 2005). Many real-life
systems, including business environments and organizations, often
exhibit circulatory movements of information: such movements may take
the form of a feedback which contributes to an increase in entropy.
Since entropy distorts information content, this often leads to
incomplete knowledge and away from the right decisions. The
traditional meaning of entropy as known from theoretical physics was
placed in a modern context thanks to the pioneering works of Claude
Shannon and Norbert Wiener. Shannon introduced the term 'information
entropy' inspired from the so-called mathematical theory of
communication. Wiener, the founder of Cybernetics, regarded
information as the negative quantity of entropy.
Wiener believed that communication of information has an inherent
tendency to resist entropy. Therefore, an increase in information
will always increase the order of a system, whether communicated by a
living being or a machine (Wiener, 1950). The ancient Greek word
'homeostasis' was interpreted by Wiener as a kind of steady-state
applicable to both humans and machines. Therefore, the key factor
appears to be information entropy. In the field of economics of
information, Arrow (1984) defines information exactly as the
reduction in uncertainty.
Entropy has been investigated in recent years within a branch of
epistemology known as 'philosophy of information'. According to
pioneer Robert Doyle (see link, in references), knowledge may be
defined as actionable information. This term has its roots in
physics, particularly thermodynamics. A similar term that comes
closer to our analysis, namely actionable knowledge, has been
suggested by Chris Argyris (1996a, 1996b). This term is familiar to
experts in management science, particularly organizational theory.
We return to the notion of actionable knowledge in the next section.
For now, we only need to note that information flow within a system
always reduces entropy and, hence, uncertainty. This reduction in
uncertainty, when examined through classical information theory,
indicates some kind of self-organization within the system (Abramson,
1963). Knowledge-based systems can be seen as special cases of
self-organized systems.
Part III: Knowledge in Organizations and the Economy
Most researchers in organizational theory and practice agree that
businesses need to evaluate, frequently and accurately, several
aspects of their operations. Many of such operations are based on
physical assets. In contrast, intellectual capital is intangible by
its nature. Yet, it is regarded as one of the most valuable assets in
the business world. When the intellectual capital of an organization
is properly mobilized, knowledge follows.
According to original work performed by Ackoff (1989), a pioneer in
the mathematical modelling and analysis of information systems, the
human mind can actually proceed in small steps from elementary
information to wisdom. This is in line with our observations as
stated in the previous section.
Knowledge, along with other business intangibles, may prove to be a
key factor as regards an organization's performance. Innovation,
collaboration, education, and management skills are all considered
important.
Since knowledge is now highly regarded across the business world,
many organizations try to explore the value of their knowledge.
However, an attempt to measure the value of corporate knowledge
presents several challenges exactly because knowledge is an abstract
entity. Only certain ingredients of knowledge e.g. computer skills
can be expressed quantitatively, typically by means of performance
indices. These indices are then used to give some insight into
business performance.
The field of information systems, a growing area of IT research, is
known to be heavily oriented towards the application of information
technology in business. An interesting connection between IS research
and philosophy, which is due to P.J. Dobson (2002), concerns the
'useful role' that philosophy can play as 'underlabourer' to IS
research and practice. Dobson notes that the term 'under-labouring'
is taken from Locke as 'clearing the ground a little, removing some
of the rubbish that lies in the way of knowledge'.
Therefore, at this stage, we may write:
C3. Ability to measure knowledge => Better understanding of problems
=> More informed decisions => Improved organizational performance
Matters get even more complex in the field of economy and economic
policy. Certainly, most policy makers today recognize the
contribution of knowledge to national economies. However, exactly how
such an intangible asset as knowledge contributes to economic growth
and development is far from clear. Again, as noted in the case of
organizations, the main problem is measuring the contribution of
knowledge to an economy, which is a quantitative problem.
Today's global economy is largely driven by the dynamics of
Information and Communication Technologies. ICTs are now considered
important elements of economic growth and development in the
industrial world (OECD, 2010). Measurements and statistical findings
are readily available in many cases, and all these have increased our
understanding of the power of new technologies within the evolving
knowledge economy/ society. Yet, when we take a closer look at the
nature and properties of knowledge in an economy, a number of
problems become apparent:
(i) Economic models rely mainly on tangible goods. Information is
intangible.
(ii) Information cannot be transformed into knowledge without a
process of learning and this opens up the problem of knowledge
codification.
(iii) The knowledge economy depends both on content and
infrastructures, especially broadband networks. However, it is not
yet clear which of the above two co-factors is the main driver of
economic growth.
(iv) There is a also concern that the diffusion of digital
technologies has not reduced the digital divide, as originally
expected. Thus, we need better policy measures to encourage greater
equity in the use of the Internet.
Many of the key issues connecting knowledge, information society,
economics, and organization are addressed in detail in a series of
recent articles edited by Robin Mansell (2009). Quantitative aspects
of the knowledge economy are discussed in Leydesdorff (2006).
Part IV: Concluding Remarks
Thanks to the pioneering works of Shannon and Wiener, we are now
aware that information and system entropy are opposite entities. In
the field of economics of information, Arrow regards information as
the reduction in uncertainty.
Information is an intangible asset. It cannot be transformed into
knowledge without application of logical inference. Measuring the
contribution of knowledge to an organization, or to an economy,
presents several problems. Even in cases where measurements are
available, these are mainly in the form of indices which by
themselves cannot show the whole picture. Most experts today agree
that empirical findings must now lead to a comprehensive theory of
knowledge in economy/ society.
In this article, we have tried to demonstrate that knowledge, most
notably actionable knowledge, can be regarded as the outcome of
information processing in conjunction with logical inference.
Further, knowledge was shown to be a central element of the
intellectual capital in the business world. Knowledge, being
intangible, is generally hard to measure. However, some studies
indicate that certain aspects of knowledge can be described
analytically. Quantifying knowledge is a very complex task, which
(fortunately) falls outside the scope of this article.
Following the arguments presented so far, we may state this final
conclusion:
C4. Actionable knowledge may be seen as equivalent to: {(true belief)
plus (logos) minus (information entropy)}; subject to inherent system
constraints.
The above is not meant to be a kind of 'formula' for knowledge
quantification. It should rather be seen as a logical extension of
the traditional concept of knowledge as justified true belief.
Acknowledgements
This work has been partially financed by grant 'elke/70/11/698'
awarded by the Research Committee of the University of Athens, Greece.
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Georgios Constantine Pentzaropoulos
Associate Professor, Information and
Communication Technologies
Mathematics and Information Technology Unit,
Department of Economics, University of Athens,
8 Pesmazoglou Street, 105 59 Athens, Greece.
(c) Georgios Constantine Pentzaropoulos 2012
E-mail: gcpent@econ.uoa.gr
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