Economics of Inquiring, Communicating, Deciding (1968)

Abstract

Informational revolution is exemplified by TV pictures of the moon surf ace and also by robotized stock market transactions and, hopefully, by computerized professors. Researcher Fritz Machiup defined the knowledge industry to include education and research as well as publishing and broadcasting. He estimated its share in the gross national product (GNP) 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. There is a suspicious overlap between these activities and those which economists Adam Smith and Karl Marx called "unproductive" and which include the work of kings and professors, none of whom add to the vendible and visible stocks of the nation. To be sure, analysis by economists T. W. Schultz and Carl V. Weizsaecker found it both convenient and feasible to define human capital and thus to consider education as investment. But the notable fact remains that professors and kings or the modem equivalent of kings managers, both public and private are strongly involved in those trends namely informational revolution and growing knowledge industry.