Review of Russell Hardin, How do you know?
The economics of ordinary knowledge
Princeton University Press, 2009, 240 pages
Published online: 16 July 2010
Springer Science+Business Media, LLC 2010
Rational choice is arguably the most important tool economists use to understand
individual behavior and social phenomena. However, the notion of rationality is
fundamentally reliant on the assumed knowledge of the decision-maker. One can, of
course, do away with any concerns regarding the content and quality of these beliefs by
assuming perfect knowledge, but that is neither the most common nor the most
interesting case (Bicchieri 1993, p. 13). This is the central motivation behind Russell
Hardin's How Do You Know?,whichisabookforawideaudienceofsocialscientists.
The chapters of the book contain studies on knowledge and belief in diverse
contexts, ranging from science and politics to religion and extremism. Hardin
explains that, for this task, we need an economic theory of knowledge, which, unlike
traditional epistemology, would address the question of “why we come to know
what we know or believe” (p. xi). Indeed, Chapter 1 is largely a discussion of what
such a theory would look like and why traditional epistemology is especially
unsuitable for the problem at hand. For Hardin, the difference between philosophical
and economic theories of knowledge is that of a general theory of public knowledge
vs. a pragmatic street-level account of personal, subjective knowledge.
The same allegation against traditional epistemology is repeated in some of the
later chapters. However, Hardin's attack seems to be largely unnecessary and
somewhat misdirected. While it is true that normative principles of reasoning are of
little use unless they take into account how people actually reason, any descriptive
theory also needs some amount of idealization, which is bound to be normative to
some extent (Harman 1986, p. 7). Furthermore, it is hard to convince anyone of the
importance of knowledge unless by “knowledge” you mean beliefs that are true.
And once you take into account the possibility of false beliefs, it should be explained
how the decision-makers would sort them out, which is a matter of justification.
Nevertheless, Hardin criticizes theories of justification by asking: who is the
philosopher to say what is justified and what is not? What Hardin seems not to
Rev Austrian Econ (2011) 24:77–80
S. Leppälä (*)
Turku School of Economics,