Knowledge and Cooperation: A Liberal Interpretation.

• Author: Gordon, Richard L.
• Position: Book review

Knowledge and Cooperation: A Liberal Interpretation Daniel B. Klein New York: Oxford University Press, 2012, 3,51 pp.

Daniel B. Klein's fascinating exposition of the case for limited government argues that understanding of the complexity of knowledge and its use to coordinate human actions indicates the impossibility of successful interventions by governments. His basic point is that knowledge is not simply something that always can be purchased on the open market and readily employed. People may create the knowledge that they utilize, and it always must be interpreted properly. Intervention kills such initiatives.

With cooperation, Klein distinguishes concatenate coordination (a somewhat awkward term) and mutual coordination. A better distinction might have been between active and passive coordination. Concatenate coordination seeks to produce something innovative; mutual coordination merely sets ground rules for activities already being undertaken. Running a firm is concatenate coordination; deciding about the side of the road on which everyone is to drive is mutual coordination. Given that Klein is a believer in the superiority of a spontaneous market order, he further argues that that market order produces concatenate coordination.

Klein's acknowledgements indicate that the bulk of the work derives from previously published works, but the book is far more coherent than the usual anthology. Nevertheless, some material of lesser interest remains. The text begins with a parable about a roller-skating rink. Such a rink illustrates how separate private actions achieve coordination that no planner could attain. The next chapter outlines his arguments about the nature of knowledge and the importance of economic freedom in acquiring it.

Next comes Klein's intellectual autobiography. He begins telling how as an underperforming 13-year-old from a left-leaning household in New Jersey, he was pointed toward his libertarian outlook by a friend who told him that school was boring because the government ran it. Klein later enrolled in an Austrian economics program at Rutgers-Newark and moved with the program to George Mason University. Graduate work at New York University followed, where he pursued more standard studies but also worked with Israel Kirzner. The resulting intellectual development confirmed his rejection of "mainstream" economics and fostered preferences among key exponents of libertarian economics. He became disenchanted with the rigidities of von Mises and Rothbard, maintained a qualified admiration for Kirzner, was strongly influenced by D. N. McCloskey, and became a fervent admirer of Adam Smith and Friedrich Hayek. Klein's concerns about Kirzner and response to Smith are major elements of the book.

Klein then more fully develops his distinction between...