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Frank Knight's First Law of Talk

Frank Knight's First Law of Talk extrapolates economic theory and applies it to communication. Knight was known for his sarcastic comments and rather jaded views of economics and politics. His theories were often of a negative character as applied to humanity in general. His Law of Talk could be placed under this heading.

Frank Knight, a professor at Chicago University from 1922-1972, was considered one of the founders of the Chicago School of economics. This was not a "school" with a building and a staff. It was, rather, a "school of thought" that generally viewed capitalism as the best of all possible systems in dealing with the human condition as applied to the distribution of goods and services within a society. Frank Knight considered this regretable, but true. In an age when socialism was all the rage, he understood that socialism was inefficient and incapable of supporting growth, expansion and scientific advancement.

Frank Knight's First Law of Talk states that "Talk is cheap and it drives out talk that is less cheap." This is derived from the economic dictum that cheap money drives out sound money. The principle is that when people are confronted with inflated currency, they will store the currency or assets that hold or increase in value and naturally spend the assets that do not hold their value. This tends to create a spiralling effect that further degrades the value of "cheap money".

Frank Knight humorously hypothesized that this idea about bad and good money could be applied to communication. "Cheap talk" was easilly manufactured and it tends to drive out more reasoned talk because the response to cheap talk is more generally even cheaper talk that is yet more inflated. This law can easily be seen in action in the realm of politics and diplomacy. It also applies to academic arguments that generate a certain amount of vitriol.

It is arguable whether Frank Knight generated cheap talk in any quantity himself. It is a fact that he wrote several influential books on economics including, Risk, Uncertainty and Profit and The Ethics of Competition.


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