If there is such a thing as growing human knowledge, then we cannot anticipate today, what we will only know tomorrow.
—Karl R. Popper, The Poverty of Historicism
WHAT CAN ECONOMISTS KNOW?
Market outcomes (such as asset prices) or overall levels of economic activity, consumption, or investment result from the decisions of many individuals. In analyzing how outcomes unfold over time, Hayek, Knight, Keynes, and other early modern economists related their accounts to individual decisionmaking. Their profound insight was to place nonroutine change and market participants' imperfect knowledge at the center of economic analysis. This focus led them to discover the limits of economists' own knowledge—and thus of economics itself.