A Case Study of the Pioneers
Chapter 2: Frank Hyneman Knight, the moral philospher
2. Frank Hyneman Knight, the moral philosopher It is fitting to begin the analysis of the revival of laissez-faire by concentrating on the research of Frank Hyneman Knight (1885–1972). Both members and analysts of the Chicago School assert that he assumed the organizing role in the development of its version of the doctrine of laissez-faire. For example, ‘participant-observer’ Melvin W. Reder observed that Knight’s ‘contribution to the Chicago tradition was that of sage and oracle’; he was ‘the “baton-passer” ’ due to his immense ‘personal impact on a few influential students’, including Simons and Friedman, that went on to form a ‘Knight affinity group’ (Reder 1982, pp. 1, 6 and 7). Analyst John Henderson observed that Knight was ‘the moving spirit of the Chicago point of view, fostering . . . a strict laissezfaire philosophy’ (Henderson 1976, p. 355). Knight came of age during the progressive era of American history. Not all members of society shared in the unparalleled prosperity created by American industry during the second half of the nineteenth century. Thus politically it became a time when The spirit of reform took possession of the country. The question was not whether to change or not to change, but how to change. Counsels were widely divided between encouraging and destroying trusts, between centralizing and decentralizing the financial system, between expanding and limiting labor unions, between stimulating and stabilizing free enterprise. The one premise upon which nearly all reformers agreed, although not consciously, was the intervention of government in economics. (Dorfman 1949:...
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