ABSTRACT
The notions of ‘knowledge’ and ‘power’ represent threats to mainstream neoclassical economics.1 In general equilibrium theory (GET) market power is absent while information is free and knowledge perfect. Monopoly and oligopoly power are seen as structural market failures, which may be corrected through state intervention. This requires state neutrality towards agents (e.g., monopolies) which, however, presupposes the absence of market (and other types of) power! Knowledge is in the form of information and it is treated just as a commodity. For its acquisition, rational agents will spend just enough time to offset the costs of search by acquired benefits. If as a result, information asymmetries appear, and (thus) market failures, the state can solve them, or these can be prevented through internalization of markets by firms.
