ABSTRACT
Economic theorists generally consider RUP a classic statement of the theoretical core of neoclassical economics and a precursor to several of the most important twentieth-century developments in economics (including decision theory, the theory of imperfect competition, and market-failure-based theories of the firm). Beyond that, interpretations diverge significantly. History of economic thought textbooks generally focus on the first half of the book – which George Stigler (1971: ix) identified as “a condensed restatement of the theory of value … crowded with advances over the existing literature.” Recent interpretations, however, have turned attention to the second half of RUP, where Knight explains “the crucial importance of uncertainty, and its inevitable consequence, ignorance, in transforming an economic system from a beehive into a conscious social process with error, conflict, innovation, and endless spans and varieties of change” (Stigler 1971: x).
