Part III - Information

Summary

Capital consists in a great part of knowledge and organization: and of this some part is private property and other part is not. Knowledge is our most powerful engine of production; it enables us to subdue Nature and force her to satisfy our wants. Organization aids knowledge; it has many forms, e.g. that of a single business, that of various businesses in the same trade, that of various trades relatively to one another, and that of the State providing security for all and help for many. The distinction between public and private property in knowledge and organization is of great and growing importance: in some respects of more importance than that between public and private property in material things; and partly for that reason it seems best sometimes to reckon Organization apart as a distinct agent of production.

Alfred Marshall, Principles of Economics (1890)

Alfred Marshall's insight about the economic significance of knowledge and information reflected the huge transformation in the knowledge economy that occurred in the second half of the nineteenth century. The telegraph and the telephone unified hitherto distant and discrete markets, thereby creating the informational consistency required for Smithian competition. Daily financial newspapers which carried the latest price information, and ticker-tape machines in stockbroker's offices throughout the country, democratised information that once had been the preserve of a small clique of dealers in Exchange Alley and Capel Court in the City of London.