Knowledge that Transforms

Stimulating, provocative, often infuriating, but well worth reading.—Peter Newman, Economica His critical blast blows like a north wind against the more pretentious erections of modern economics. It is however a healthy and invigorating blast, without malice and with a sincere regard for scientific objectivity.—K.E. Boulding, Political Science Quarterly Certainly one of the most engrossing volumes that has appeared recently in economic theory.—William J. Baumol, Review of Economics and Statistics

EVER SINCE mathematicians first began to study the measurement of risk there has been general agreement on the following proposition: Expected values are computed by multiplying each possible gain by the number of ways in which it can occur, and then dividing the sum of these products by the total number of possible cases where, in this theory, the consideration of cases which are all of the same probability is insisted upon. If this rule be accepted, what remains to be done within the framework of this theory amounts to the enumeration of all alternatives, their breakdown into equi-probable cases and, finally, their insertion into corresponding classifications…