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Password: cz3u Title: Risk, Uncertainty and Profit
Author: [America] Frank H. Netter?
Translator: Wang Yu
Douban score: 9.0
Press: Renmin University of China Press
Publication year: 2005- 1 1-24?
Page count: 282
Content introduction:
Title: Risk, Uncertainty and Profit
ISBN: 7-300-06852-9
Author: [America] Frank H. Netter?
Version: 1- 1
Format: 16
Binding: plane
Unit price: ￥29.00.
Publication date: 2005- 1 1-24 Printing date: 2005- 1 1-24?
The first chapter is the introduction, which consists of 1 ~ 2 chapters. Chapter 1 mainly discusses the position of profit in economic theory. This chapter emphasizes the importance of economics as a theoretical scientific hypothesis. Perfect competition means complete knowledge, so under the assumption of perfect competition, profit does not exist. The second chapter mainly discusses the profit theory. This chapter makes a literature review and historical review of the dynamic theory and risk theory of economics, and points out that the dynamic theory confuses the consequences of change and the consequences of uncertainty in change; Risk theory confuses the difference between measurable probability risk and unmeasurable uncertainty. Knight once again stressed that changes that follow known laws will not bring profits, nor will measurable risks, because such risks can be eliminated through insurance or other measures.
The second chapter discusses the theory of perfect competition, including chapters 3-6. Among them, the third chapter mainly discusses the theory of selection and exchange. From the perspective of economic order, the author thinks that economic order is an economic activity mechanism to coordinate and meet the needs, but there are many conflicts between different needs, such as using resources to meet various needs; Law of utility and diminishing utility; Robinson and Robinson economy; Relative happiness and pain; Cost is the choice opportunity of sacrifice; The true meaning and cost of resources. This chapter uses functions, curves and equilibrium tools to analyze these problems. The fourth chapter mainly discusses joint production and capitalization. The author tries to explain the use of various resources in commodity production and the effect calculation in organization. On the basis of analyzing the law of diminishing returns, he attributed the production value to resources or investment goods. Because of the role of time in production and the fallacy of time preference, any classification method that classifies production factors into various "factors" is impossible to be established. The fifth chapter mainly discusses opportunities and the progress of a society without uncertainty. This paper analyzes the meaning of static conditions and different manifestations of progress, analyzes the classification of production "energy factors" according to the traditional three-point method, and compares the return on investment in various fields with the actual return without uncertainty, thus explaining the essence of interest. The sixth chapter mainly discusses the minor premise of perfect competition. The author analyzes the preconditions of perfect competition without uncertainty, the different forms of monopoly and monopoly, and the possible trend of competition system towards monopoly.
The third chapter discusses the imperfect competition caused by risk and uncertainty, which consists of chapter 7 ~ 12. Among them, Chapter 7 expounds the meaning of risk and uncertainty, and mainly analyzes the role of knowledge in behavior. The author thinks that behavior faces the future and knowledge predicts the future. Although experience can be decomposed into the behaviors of objects with invariable characteristics, there are so many such things for our human intelligence that we can't fully grasp them that we rely on inferring another behavior pattern from one behavior pattern. Because we can't make a detailed quantitative analysis, we can only "estimate", and the behavior patterns inferred from it are diverse, so the "risk" that leads to profit is the opportunity to make mistakes, which is inestimable in nature. The eighth chapter mainly analyzes the structure and methods of human dealing with uncertainty. There are two main ways to deal with uncertainty: one is centralization, and insurance is the representative of this form; The second is specialization, and the combination of enterprises helps to overcome uncertainty. Chapter 9 mainly discusses enterprises and profits. The author introduces the concept of uncertainty in static society, and explains the special decision-making and risk allocation mechanism of enterprises under uncertain conditions, as well as the supply and demand of entrepreneurial talents. Chapter 10 continues to discuss the problems of enterprises and profits, mainly explaining that the unique quality of managers is human judgment, and the ultimate control is the choice of people who control the enterprise organization. Chapter 1 1 mainly studies uncertainty and social progress. Change is the main source of uncertainty. The uncertainty of investment leads to the separation of investment function and savings function, which leads to the interest theory. The complicated problems brought by the capitalization of profits have become the permanent source of profits. Chapter 12 mainly discusses the social aspects of uncertainty and profit. The author points out that all methods to reduce or redistribute uncertainty have costs, and the degree of application of these methods depends on the degree of uncertainty that people do not want to exist.
About the author:
Frank H. Netter (1885— 1972) is one of the most influential economists in the 20th century and one of the greatest thinkers in the west. He has made outstanding contributions to the development of economics and the innovation of economic analysis methods. "As a classical liberal, he is the founder of the Chicago School; As a critic, he warned the public that economists' knowledge is limited and their prediction errors are inevitable; As a teacher, he trained famous economists like Friedman, stigler and Buchanan.
1885, Knight was born on a farm in Illinois, USA. He received his bachelor's degree from Milligan College in Tennessee at 19 1 and his master's degree from the University of Tennessee at 19 13. In the same year, Knight entered Cornell University to study philosophy, and a year later he began to study economics. 19 16, knight received his doctorate from Cornell university, and his doctoral thesis is this book-risk, uncertainty and profit. After graduation, Knight taught at Cornell University for one year, then at the University of Chicago for two years, and then moved to Iowa, where he was promoted to professor. From 65438 to 0927, Knight returned to the University of Chicago and became the most influential economist in the history of the University of Chicago. He worked at the University of Chicago until he retired.
Knight is also one of the most authoritative figures in American economics. /kloc-0 was elected president of the American Economic Association in 1950, and/kloc-0 was awarded the Francis Volcker Medal in 1957, which is the highest award of the American Economic Association. Knight wrote many academic works in his life. In addition to risk, uncertainty and profit (192 1), there are mainly Economic Organization (1933), Ethics of Competition and Other Literary Theories (1935) and Freedom and Reform: Essays on Economics and Social Philosophy.
Knight pointed out: "Since I paid attention to economics, I have been particularly interested in the significance of economic theory, the necessary assumptions and the inconsistency between theoretical conditions and actual conditions." In his book Risk, Uncertainty and Profit, Knight starts from the inconsistency between competition under theoretical conditions and competition under actual conditions, that is, from the analysis of perfect competition and incomplete competition, and reveals the essential difference between theoretical perfect competition and actual competition by introducing the concept of uncertainty, especially by distinguishing the two different concepts of uncertainty, thus revealing the source of profit. In this process, Knight studied and defined the essence of enterprises and entrepreneurs with a genius eye.
Knight believes that, as the title of Risk, Uncertainty and Profit shows, the theoretical system of this book is to start from the profit problem in the income distribution theory and start the analysis process of the whole book. The basic nature of perfect competition is that there is no profit or loss, and the value of goods is completely equal to the cost, that is, the value of products is completely distributed to the owners of various production factors, and there is no surplus. However, in the real society, cost and value only "tend" to be equal, that is, they are only completely equal by accident. Under normal circumstances, there must be positive or negative "profit" between the two, so profit becomes the starting point for analyzing the inconsistency between perfect competition and real competition.
(A) the difference between risk and uncertainty
In order to explain the source of profits, Knight first distinguished two kinds of uncertainties. Knight pointed out that in this book, we will use "risk" to refer to measurable uncertainty and "uncertainty" to refer to unmeasurable risk. As we have pointed out, the profit theory is established precisely because of real "uncertainty" rather than "risk". Specifically, the characteristics of risk are the reliability of probability estimation and the possibility of treating it as insurable cost. The reliability of estimation comes from the following theoretical laws or stable empirical laws. As far as economic theory is concerned, the key point of the whole probability problem is that as long as the probability can be expressed by numbers in either of these two methods, the uncertainty can be eliminated. Different from calculable or foreseeable risks, uncertainty refers to people's lack of basic understanding of events and little knowledge of the possible consequences of events, so they cannot make predictions and quantitative analysis through existing theories or experiences.
The philosophical significance of Knight's distinction between risk and uncertainty lies in: risk is an uncertainty whose probability distribution is known, but people can infer the possibility of the future according to the past; Uncertainty means human ignorance, because uncertainty means that people can't predict future events that have never happened. It is brand-new, unique and has never appeared before.
(B) explained the source of profits
The main content of classical and neoclassical economics is price mechanism. Enterprises are only abstracted as profit-maximizing producers, that is, enterprises have complete knowledge and foresight, and they always follow the principle that marginal cost equals marginal income. Therefore, under the condition of long-term competitive equilibrium, enterprises can only obtain normal profits. In order to criticize this theory, Knight used uncertainty to explain the rationality of the existence of profits under the condition of incomplete competitive equilibrium.
Knight believes that under the assumption of uncertainty, all production decisions are made with limited knowledge, so that it is impossible to calculate the probability of possible results. Because each decision only produces a unique result, a series of possible results caused by a single decision are not constrained by statistical measurement. Economic analysis is the study of economic operation mechanism under the assumption of perfect competition. Perfect competition is the process of making the value of a product consistent with its cost. However, in reality, there is always a difference between the two, and this difference is profit. In other words, because the competition in reality is imperfect and the inconsistency between theory and practice causes uncertainty, uncertainty is the basis of profit.
Knight stressed that changes may not necessarily bring profits, because some changes can be accurately included in the cost in advance, so that the cost is the same as the product selling price and will not generate profits; Only uncertainty can link profit with change. The real source of profit is uncertainty, and only change and progress are not enough to generate profit. The result of change and progress is not the result itself, but the result of uncertainty.
(C) reveal the nature of enterprises
As we know, in 1930s, Coase asked classical and neoclassical economics: Since the price system is so effective, why are there enterprises that rely on administrative orders in modern economy? Nate answered the question first. Although Coase did not agree with Knight's point of view, Knight's exposition on the origin and essence of enterprises had a far-reaching impact on all economists including Coase, especially the new institutional economists.
Knight believes that under the assumption of uncertainty, deciding what to produce and how to produce it takes precedence over the actual production itself, so that the internal organization of production is no longer a dispensable thing. The internal organization of production should first find some people with the most management skills and put them in charge of production and business activities. Only a few people in the world are risk-averse and most people are risk-averse and risk-neutral. The latter is willing to hand over their control over the uncertainty, but the condition is that risk averse people, that is, entrepreneurs, want to guarantee their wages, so enterprises appear. That is to say, under the enterprise system, managers gain surplus by taking risks; Workers get paid by transferring risks.
In order to explain the essence of entrepreneurs and enterprises, Knight's basic analytical thinking is that the actual economic process is composed of actions to foresee the future, and there are always uncertain factors in the future. Entrepreneurs gain profits by identifying opportunities contained in uncertainty and integrating resources. Along this line of thought, Knight analyzed the essence of enterprises and the reasons why enterprises exist under modern production conditions. The existence of uncertainty means that people have to predict their future needs. The first problem and function is to decide what to do and how to do it. So a special class emerged, paying others guaranteed wages and controlling others' action functions. The result of multi-level specialization is the wage system of enterprises and industries, and its existence in the world is the direct result of uncertain facts.
(d) Proposed methods to reduce uncertainty.
In this book, Knight also analyzes two ways to reduce uncertainty. One is centralization, and insurance is the representative of this form. Insurance companies use the mutual compensation of uncertain results to gather many accidental events together, thus converting the insured's larger uncertain losses into smaller insurance premiums. The second is specialization, and the combination of enterprises helps to overcome uncertainty. Enterprises can reduce the control cost of uncertainty by increasing the production scale, because the cost level of large enterprises is always lower than that of small enterprises. With the increase of enterprise scale, specialized decision-making can reduce the uncertainty of cost control, produce more skilled skills and better cope with uncertainty.
About the author:
Frank H. Netter (1885— 1972) is one of the most influential economists in the 20th century and one of the greatest thinkers in the west. He has made outstanding contributions to the development of economics and the innovation of economic analysis methods. "As a classical liberal, he is the founder of the Chicago School; As a critic, he warned the public that economists' knowledge is limited and their prediction errors are inevitable; As a teacher, he trained famous economists like Friedman, stigler and Buchanan.
1885, Knight was born on a farm in Illinois, USA. He received his bachelor's degree from Milligan College in Tennessee at 19 1 and his master's degree from the University of Tennessee at 19 13. In the same year, Knight entered Cornell University to study philosophy, and a year later he began to study economics. 19 16, knight received his doctorate from Cornell university, and his doctoral thesis is this book-risk, uncertainty and profit. After graduation, Knight taught at Cornell University for one year, then at the University of Chicago for two years, and then moved to Iowa, where he was promoted to professor. From 65438 to 0927, Knight returned to the University of Chicago and became the most influential economist in the history of the University of Chicago. He worked at the University of Chicago until he retired.
Knight is also one of the most authoritative figures in American economics. /kloc-0 was elected president of the American Economic Association in 1950, and/kloc-0 was awarded the Francis Volcker Medal in 1957, which is the highest award of the American Economic Association. Knight wrote many academic works in his life. In addition to risk, uncertainty and profit (192 1), there are mainly Economic Organization (1933), Ethics of Competition and Other Literary Theories (1935) and Freedom and Reform: Essays on Economics and Social Philosophy.