Macroeconomic change, information and knowledge

This paper considers the conceptual problems of information and knowledge within the context of twentieth- century economic theories. Whilst information as a commod ity and as a concept may be too complex to be articulated within neo-classical economic models, such models still provide the framework within which economic arguments are conducted. Of central importance is the idea of the market as a transmitter of information. Keynes' approach advocated government intervention to address the problem of market information failure and to return the economy to equilibrium. Conversely, the philosophical position of the New Right is that State intervention is unnecessary and that an unfettered market, closely tied to a 'spontaneous order', is both a suitable conveyer of information, and also provides a means for the efficient allocation of resources. However, given the informational problems inherent in economic theory, it is argued that, paradoxically, the free market requires an active and interventionist State to operate efficiently