Economics of Inquiring, Communicating, Deciding (1968)

Abstract

We hear much of today’s ‘informational revolution’. We are also told of the rapid growth of the ‘knowledge industry’. Informational revolution is exemplified by TV pictures of the moon surface and also by robotized stock market transactions and, hopefully, by computerized professors. Fritz Machlup defined the knowledge industry to include education and research as well as publishing and broadcasting. He estimated its share in the gross national product of 1958 at 23 percent to 29 percent, and its growth rate at about 10 percent, or twice that of the GNP. Projecting to the present, the share of the knowledge industry would then appear to straddle the 40 percent mark!

Supported by a grant from the Ford Foundation to the Graduate School of Business Administration, University of California at Berkeley, and administered through the Center for Research in Management Science. Facilities of the Western Management Science Institute, Univ. of California at Los Angeles (supported by grants or contracts of the National Science and the Ford Foundations and of the Office of Naval Research) were used in preparing the present revised version of the Richard T. Ely lecture, American Economic Association.