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Frank H. Knight on Uncertainty and Profit: Manager Versus Entrepreneur

  • Yasuhiro Sakai
Chapter
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 18)

Abstract

This chapter aims to carefully discuss how Frank H. Knight, the “Grand Old Man” of Chicago, dealt with uncertainty and profit, with special reference to manager versus entrepreneur. Frankly speaking, Knight was a sort of man in paradox, having a dualistic view and adopting an eclectic approach. In order to shed a new light on his life and work, we first argue that there possibly exist some traces of the great Knight in the words and deeds of Martin Bronfenbrenner, once one of Knight’s students at Chicago. Then we focus on the distinction between risk and uncertainty. According to Knight, non-measurable uncertainty must radically be different from measurable risk: only uncertainty, but not risk, enables the entrepreneur to acquire true profit as its reward. In contrast to the manager who are doing just routine jobs every day, the entrepreneur dares to engage in new venturous activities, thus playing the central figure of the capitalist system. We live in the new age of uncertainty. The second Knight is urgently needed.

Keywords

Frank H. Knight Martin Bronfenbrenner Risk Uncertainty Entrepreneur Profit Capitalist system 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Yasuhiro Sakai
    • 1
  1. 1.Department of EconomicsCenter for Risk Research, Shiga UniversityHikoneJapan

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