Introduction

Learning follows a natural progression from the receiving of information to the acquisition of knowledge and finally to the development of understanding. Many people carelessly use these terms as if they were interchangeable. Understanding the difference lays the groundwork for precise language and clear thinking.

I will briefly explain the difference between these three terms, after which I will describe how I plan to use them in my future publications.

Developing Understanding

Information

Although it may be the easiest to comprehend, people tend to misuse the concept of information more than any of these three broad terms.

Information consists of a state of nonrandomness. Randomness consists of anything that has no distinguishable order. We experience few, if any, totally random processes in our lives. The atmosphere in which we live, from our perspective, seems random. A plain piece of paper or the solid color of a wall both seem random. We cannot distinguish the features of those objects.

Nonrandomness, or information, comes in the form of things that we can distinguish from their backgrounds, whether we have a name for them or not. A rose carries information. Scribbling on a piece of paper has information. Electromagnetic waves have information; we see some waves as light, while others, e.g., radio waves, exist outside our visual perception.

Although we can detect it in several ways, information has no meaning to us by itself.

Knowledge

To extract meaning from the information that bombards us requires that we have knowledge. We must have knowledge to answer the questions of what and how we can translate meaningless information into useful knowledge.

What

When we observe a furry bit of information moving down the street, we must have prior knowledge to identify it as something we have named “dog.” The same thing applies to many objects in our lives to which we give names: “iPhone,” “toothbrush,” “chair,” “automobile,” etc.

We can identify many of these things with a limited amount of knowledge, and we may even know their names. However, this alone does not inform us how these objects work.

How

By learning how things that we recognize work, we can fill in more and more of our knowledge. We know how to make a call on our iPhones. We know how to brush our teeth. We can sit in a chair. Some of us can even drive an automobile.

Knowing how things operate does not equip us to use that knowledge more broadly. Understanding gives us a way to make our knowledge more useful.

Understanding

Achieving understanding requires a great deal more effort than acquiring knowledge. Understanding requires that we ask and answer questions related to how.

To stick with my former examples, you may use an iPhone without understanding why it works. A toothbrush seems simple, but why do we use them? Why does a chair support our weight? And why, when you turn the steering wheel in your car, does it turn in a particular direction?

Developing understanding creates a lot of advantages for an individual. Understanding helps you do better at the processes in which you engage. Understanding can help you give meaning to knowledge about seemingly unrelated topics. Understanding becomes very important in separating fact from fiction.

Focus on How and Why

The primary focus of my writing consists of answering questions about how and why free markets operate the way they do. You can find a lot of static (a form of information) about what happens in markets. Occasionally, you can find fairly cogent descriptions of how things operate in free markets. But none of this knowledge helps you a great deal in understanding why free markets operate the way they do.

Believe it or not, I don’t pretend to know all the answers, but over the years, I have developed a pretty good sense of when we need to ask “why.” I will strive to help you delve into questions about how and why markets operate.

Conclusion

Real learning requires a lot of individual effort. You may find it easier to accept the information you’re given, but I encourage you to put in the effort to answer for yourself the questions about how and why.

Please don’t dismiss references to markets as something beyond your level of interest. Markets exist in large and small sizes. You operate in markets in your daily life. You probably recognize the grocery store as a market, but have you ever considered your family as a market?