The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Knight, Frank Hyneman (1885–1962)

  • George J. Stigler
Reference work entry


A founder of the Chicago School, Frank Knight in his 1921 classic text Risk, Uncertainty and Profit defined perfect competition and distinguished risk from uncertainty in that under uncertainty the probability of events was unknowable. He criticized Pigou’s proposal that increasing-cost industries should be taxed. His work on capital theory refuted Böhm-Bawerk’s use of the period of production concept. Yet he conceived of economics as applying to only a small part of human activity; he criticized competitive enterprise as intrinsically unethical and unfair and debasing in practice, and feared freedom would be undermined by increasing monopoly and income inequality.


Böhm-Bawerk, E. von Capital theory Comparative costs Curves of diminishing returns Dimensionality Diminishing returns Ethics of competition External economies Friedman, M. Graham, F. Hayek, F. von Hutchison, T. W. Inequality of income Kaldor, N. Knight, F. H. Lange, O. Machlup, F. Marshall, A. Monopoly Moral hazard Perfect competition Period of production Pigou, A.C. Positivism Price theory Probability Rent Risk Robbins, R. Sombart, W. Spencer, H. Stigler, G. J. Time periods in production Uncertainty Weber, M. Young, A 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • George J. Stigler
    • 1
  1. 1.