In some respects, governments are better able to assemble vast amounts of knowledge, but the kind of knowledge involved is often in the form of statistical or verbal generalities known as “expertise,” which is no substitute for the kind of concrete knowledge that someone in the middle of a particular economic situation has. Just picking the right location for a particular business in a particular community can be the difference between profits and bankruptcy, even though that kind of knowledge may not be exciting from an intellectual standpoint. Experts may indeed have far more knowledge than the average amount of knowledge among individuals in the general population but the total amount of knowledge among millions of people in the general population vastly exceeds the total knowledge that any group of experts can assemble.

The economic pressures to keep abreast of changes in an industry, the economy and the society force business owners and managers to seek a wide range of knowledge, going beyond the internal management of their own enterprises. Among the responses to this imperative have been trade associations, which provide highly detailed data on what is happening in their respective industries. A trade association for hotels, for example, provides detailed statistics on such things as what percentages of what kinds of hotels provide king-size, queen-size, and twin beds, cable television, voice mail, video games in the rooms, ironing boards, written material in foreign languages, and even what percentage of what kinds of hotels provide liquid soap in their bathrooms.

An individual hotel needs this kind of information because it competes with other hotels, and cannot afford to fall behind in what it provides to the public. Small economy motels do not need to match everything provided by large luxury resorts, but a given small, low-priced motel cannot afford to fall too far behind other small, low-priced motels and still expect to survive. Such details may be uninteresting to many who consider themselves knowledgeable people but those details are a matter of economic life and death to those who run businesses that will prosper or fail according to how well they meet the needs of other people. Knowledge cannot be narrowly defined to include only those things of interest to the educated classes, when major economic consequences for the society as a whole depend on a vastly broader range of knowledge.

Lenin was just one of many highly educated people who assumed that running a business must be easy because it was done by people with little of the special kind of knowledge taught in schools and universities.

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