ABSTRACT
The all-encompassing importance of the individual’s state of knowledge was implicit in our analysis of the mind construct. The chapter focuses explicitly on an extremely important, though widely misunderstood, feature of decision-making: cost. In a subjectivist framework, cost must be seen in a way that takes account of both its foundations in utility theory and its forward-looking orientation. For our purposes there are two important ways for knowledge to be communicated: through prices and through institutions. It is a misconception of subjectivism to assume that it deals with only elements of the individual psyche that can never be intersubjectively communicated. Some fundamental aspects of the individual and social stock of knowledge are explored as "data" of economics. The chapter emphasizes the important differences between the subjectivity of the subject matter and the subjectivism of our method of investigation. The issues of knowledge are discussed from a perspective different from that normally pursued in the economics literature.
