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Polanyi's paradox

PARADOX economics

Polanyi's paradox, named in honour of the British-Hungarian philosopher Michael Polanyi, is the theory that human knowledge of how the world functions and of our own capability are, to a large extent, beyond our explicit understanding. The theory was articulated by Michael Polanyi in his book The Tacit Dimension in 1966, and economist David Autor gave it a name in his 2014 research paper 'Polanyi's Paradox and the Sh

Metadata

  • Slug: 00356-polanyi-s-paradox
  • Type: PARADOX
  • Tags: economics
  • Sources: 1
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Axioms

  • Assume the rules of the domain apply uniformly.
  • Assume the observer’s criteria remain fixed.
  • Assume classification boundaries stay consistent.
  • Assume the model describes the real case.
  • Assume repeated steps do not change the outcome.
  • Assume no hidden variables are introduced midstream.

Contradictions

  • Two reasonable lines of inference yield opposite conclusions
  • A global rule conflicts with a local judgment
  • A stable resolution appears to violate a starting premise
  • Changing the framing reverses the outcome
  • Intuition and formalism diverge at the same step

Prompts

  • Which assumption is doing the most hidden work?
  • What changes if you relax the smallest constraint?
  • Does the paradox dissolve or relocate when reframed?
  • What is conserved, and what is sacrificed?

Notes

Sources

Overview

Polanyi’s paradox, named in honour of the British-Hungarian philosopher Michael Polanyi, is the theory that human knowledge of how the world functions and of our own capability are, to a large extent, beyond our explicit understanding. The theory was articulated by Michael Polanyi in his book The Tacit Dimension in 1966, and economist David Autor gave it a name in his 2014 research paper “Polanyi’s Paradox and the Sh

Tension

  • Two reasonable lines of inference yield opposite conclusions.
  • A global rule conflicts with a local judgment.
  • A stable resolution appears to violate a starting premise.
  • Changing the framing reverses the outcome.
  • Intuition and formalism diverge at the same step.

Why It Matters

This entry tests how a stable rule-set can yield unstable conclusions under certain assumptions.

Prompts

  • Which assumption is doing the most hidden work?
  • What changes if you relax the smallest constraint?
  • Does the paradox dissolve or relocate when reframed?
  • What is conserved, and what is sacrificed?