Division of Knowledge

… a core term used in Economic Analysis and Atlas102


Division of knowledge is a term introduced by economist Friedrich Hayek to connote a subtle variation of the division of labour [see Division of Labour].

Anthony DiRenzo (reference below) describes the idea as follows:

“As Nobel economist Friedrich Hayek noted seventy years ago, the division of labor, which made possible the Industrial Revolution, has become a more subtle “division of knowledge,” which now characterizes and sustains modern business, political, and academic institutions. Borrowing a term from Adam Smith, Hayek called our knowledge-based civilization the Great Society: social arrangement based on widespread and decentralized economic interdependence, abstract legal codes, and impersonal information rather than local and concentrated family ties, concrete tribal customs, and personal dialogue. The division of knowledge, therefore, carries profound political, ethical, and rhetorical significance. As Hayek declares in “The Use of Knowledge in Society:” “We make constant use of formulas, symbols, and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess.” Since no one possesses total knowledge, Hayek concludes, different disciplines and professions of knowledge must learn to understand and dialogue with each other.

“In Post-Capitalist Society (1994), Peter Drucker shows how Hayek’s theory affects both business and the academy. Underlying all three phases in the global shift to a knowledge economy – the Industrial Revolution, the Productivity Revolution, the Managerial Revolution – has been a fundamental shift in the meaning of knowledge itself: “We have moved from knowledge in the singular to knowledges in the plural,” Drucker explains. “Traditional knowledge was holistic and general; contemporary knowledge, in contrast, is partitioned and highly specialized, focused on practice and concerned with results. “This is as great a change in intellectual history as ever recorded,” Drucker declares. While the traditional university demoted specialized knowledges to the level of “crafts,” the modern university elevates them to “disciplines” and “professions.” Such privileging is fitting, Drucker argues, for without this necessary specialization of disciplines and professionals, mass society and the global economy would collapse, and billions would perish.

“The shift from knowledge to knowledges has given knowledge the power to create a new society. But this society has to be structured on the basis of knowledge as something specialized, and of knowledge people as specialists. This is what gives them their power. But it also raises basic questions – of values, of vision, of beliefs, of all the things that hold society together and give meaning to our lives….[I]t also raises a big – and new – question: what constitutes the educated person in the society of knowledges?””

Atlas topic, subject, and course

Trade (core topic) in Economic Analysis and Atlas102 Economic Analysis.


Anthony DiRenzo, The Division of Knowledge, at Economics A-Z, at http://faculty.ithaca.edu/direnzo/ptw/divisionofknowledge/, accessed 5 May 2016.

Page created by: Ian Clark, last modified 5 May 2016.