"The possibility of saying anything about a thing rests on the assumption that it preserves its identity, or continues to be the same thing in the respect described, that it will behave in future situations as it has in past"
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Knight is quietly rigging the floorboards under everyday speech: the moment you describe anything, you smuggle in a theory of stability. To say "this is inflation", "that firm is risky", or even "the market will react" assumes the object of analysis stays itself long enough to be tracked. Identity is not a metaphysical luxury here; it is the price of admission for explanation, prediction, and policy.
The line lands hardest in the shadow of Knight's signature distinction between risk and uncertainty. Risk is calculable because identities hold: the coin, the borrower, the production process behave enough like their past versions that probabilities mean something. Uncertainty is what happens when that continuity frays - when the "thing" mutates, when the category stops matching the world. Then our sentences still come out grammatically correct, but they're no longer anchored. We speak as if the future is a replay with different lighting, because our tools - statistics, models, even common sense - are built for replay.
There's also a sly warning to economists who treat labels as facts. "Market", "consumer", "technology" are conveniences that pretend not to be. Knight is pointing at the hidden bargain: you get to generalize only by holding reality still. In a modern economy defined by innovation, institutional churn, and shifting preferences, that bargain becomes fragile. His sentence reads like a polite note passed across a seminar table: careful - your confident nouns may be doing more work than your arguments.
The line lands hardest in the shadow of Knight's signature distinction between risk and uncertainty. Risk is calculable because identities hold: the coin, the borrower, the production process behave enough like their past versions that probabilities mean something. Uncertainty is what happens when that continuity frays - when the "thing" mutates, when the category stops matching the world. Then our sentences still come out grammatically correct, but they're no longer anchored. We speak as if the future is a replay with different lighting, because our tools - statistics, models, even common sense - are built for replay.
There's also a sly warning to economists who treat labels as facts. "Market", "consumer", "technology" are conveniences that pretend not to be. Knight is pointing at the hidden bargain: you get to generalize only by holding reality still. In a modern economy defined by innovation, institutional churn, and shifting preferences, that bargain becomes fragile. His sentence reads like a polite note passed across a seminar table: careful - your confident nouns may be doing more work than your arguments.
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| Topic | Reason & Logic |
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