This is a good summary, Ross. You correctly note toward the end of 
your 6 points that whether one attributes profit to luck depends on 
whose point of view one takes toward uncertainty. If one takes the 
entrepreneur's point of view, profit should not be attributed to luck 
because if the entrepreneur did this, he would not regard anticipated 
profit as an incentive to act. Entrepreneurial action would then 
amount to a mere gamble.

If one takes the outsider's point of view, "we have no way of 
judging" whether the profit was due to luck. "I'm as likely to 
attribute it to luck as to judgment."

This is the epistemological issue that I referred to. Now that we 
agree on it, I think that I can go further by discussing the history 
of this early neoclassical economics. Recall that this economics was 
a reaction to the socialist and Marxist idea that because labor is 
the source of value, there is no need for capitalists to be rewarded. 
Early neoclassical economics, by tracing value to the role of the 
consumer, countered the argument of the Marxists, pointing out that 
consumers would be damaged if each factor of production is not 
rewarded in accord with its marginal revenue product. In its most 
advance form prior to Knight, this theory of value was tweaked. 
Davenport's tweaking amounted to the following: "Consumers would be 
damaged if each factor is not rewarded in accord with THE 
ENTREPRENEURS JUDGMENT OF the marginal value products of the factors. 
This was the theory on the eve of Risk, Uncertainty and Profit.

Knight certainly did not intend to contradict that theory. Rather he 
wanted to add to it. So if one is representing Knight's contribution 
to early neoclassical economics, I feel it is imperative to take the 
entrepreneur's view and not an outsider's view. This is not 
hair-splitting in my estimation. It is the essence of the issue that 
we were addressing. It is of crucial importance to the interpretation 
of 20th century professional economics.

You have explained why you wrote what you did. So perhaps we can 
leave the issue at this.

Pat Gunning