The therapeutic quality of Frank Knight’s Risk, Uncertainty, and Profit

When Alvin S. Johnson suggested that Frank H. Knight take up the theory of profit as his dissertation topic in the spring of 1914, Johnson undoubtedly expected that “the keenest student of theory” he had ever taught (Johnson 1952: 227) would be able to clear away the intellectual stubble and chaff that surrounded the existence of profit and provide it with a theoretical basis consistent with marginal productivity theory. Knight’s success at fulfilling Johnson’s expectations is attested to by the longevity of the dissertation’s reputation within economics. As George Stigler said, RUP is “still a part of the living literature of general economic theory” (Stigler 1971: ix).1