More Salome

Abstract

Confucius knew more than neoclassical theory. Neoclassical theory not only knows solely ‘what one knows’, but is also based on the premise that such knowledge is complete. To know what one does not know means we must ‘expect the unexpected’ as Boulding (1968) advocated, and we have already demonstrated the fatal consequences of accepting the neoclassical assumption of perfect knowledge in Chapter 3. In that chapter the role of information problems in corporate resource allocation was examined. In this chapter we extend the analysis to look at further areas in which information problems may be encountered, particularly in the area of state direction. We shall also look at types of activity which are likely to be based around information problems and contrast them with activities that do not involve information problems.

Shall I tell you what knowledge is? It is to know both what one knows and what one does not know.

Confucius