I was passing through Heathrow recently and noticed an Accenture advert featuring Tiger Woods. Notice the distinction between "information" and "interpretation".
Strydom says that "linguistically knowledge refers to the sum of what is known, whilst information is associated with items of knowledge" ("The Economics of Information", Elgar Companion to Austrian Econmomics), which Lachmann (1986) summarises as:
the stock of knowledge and the flow of information
Pete Boettke's paper on “Information and Knowledge".pdf (Review of Austrian Economics, 15(4):263-74, 2002) applies it to search theory, Bayesian updating, and market failure due to asymmetric information. He says that:
Knowledge is ever changing and is multifaceted, while information is something fixed. In other words, information is the stock of the existing known, while knowledge is the flow of new and ever expanding areas of the known...While the Austrian, or subjectivist, definition of knowledge as a flow flies in the face of the dictionary definition, it does distance itself from the conflation of information and knowledge that exists in the standard textbooks
Hayek also emphasized in that 1945 essay that the knowledge of the market process is not of the type that can be treated as a statistic and instead is knowledge of particular time and place that agents deploy in making their decisions on the spot. Agents outside of a particular institutional context, do not have the relevant knowledge for decisionmaking within that context. Knowledge, in other words, is concrete and contextual and not abstract.
Ackoff's "From Data to Wisdom" (Journal of Applies Systems Analysis, Volume 16, 1989 p 3-9) refers to a "Knowledge Hierarchy" of:
- Data: symbols
- Information: data that are processed to be useful; provides answers to "who", "what", "where", and "when" questions
- Knowledge: application of data and information; answers "how" questions
- Understanding: appreciation of "why"
- Wisdom: evaluated understanding.
Which, interestingly, stems from T.S. Eliot's The Rock:
where is the life we have lost in living?
where is the wisdom we have lost in knowledge?
where is the knowledge we have lost in information?
I've been reading through the Symposium on Information and Knowledge in Economics from EconJournalWach 2(1) April 2005, and propose the following classification:
One of the reasons I'm sorry Owen Barder has stopped blogging is that he professes to take an interest in both information and knowledge. However for that distinction to be meaningful requires the introduction of Knightian Uncertainty, cognition, radical ignorance - in short, subjectivism and epistemics - which he routinely denied as being relevant for the study of economics. Treating knowledge seriously doesn't make you an Austrian, but it prevents you from being strictly neoclassical.