Journal of Economic and Social Research 2 (2) 2000, 59 -74 The Role of Practical Knowledge in Market Processes:An Assessment of the Austrian Contribution Fuat Oguz 1 Abstract. This paper considers the works by Austrians concerned with knowledge, especially "practical knowledge" or "inarticulate or tacit knowledge." Mainly studied are the writings of Friedrich A. Hayek who was especially influential. The paper examines the Austrian understanding of knowledge before Hayek, the contributions made by Hayek, and then the work that was done by Austrians after Hayek. Hayek's writings indicate that practical or inarticulate knowledge enables people to do things in a skillful way despite their having no conscious awareness of this knowledge unlike their awareness of scientific and propositional knowledge. Due to this realm of the knowledge, experts use the right kind of information in their work and entrepreneurs make intuitive business decisions. The Austrians point out that market processes can take advantage of this type of knowledge while central planning cannot. The author concludes by suggesting that we know little about practical knowledge and how to develop it. JEL Classification Codes: B53, D40, D83. Key Words: Austrian Economics; Knowledge Problem; Market Process; Tacit Knowledge. 1. Introduction There has been a revival of interest in the issue of knowledge in economics in recent years. Yet, this increasing interest rarely gives way to systematic studies of the practical nature of knowledge. Although neoclassical economics did not explicitly include “practical knowledge” into its building blocks, alternative schools of thought acknowledge its place. In schools of thought such as the Austrian, evolutionary, and realist schools we find explicit recognition of this influential aspect of human action. Among these schools, it is the Austrian school that takes practical knowledge the most seriously. Yet, the concept is a controversial one and far from being settled. 1 Department of Economics, Karaelmas University, Zonguldak/ TURKEY