Modern science, economics, law and other fields often purport that their forms of knowledge are more or less universal and invariant to which individual experience, subjective insights, and local knowledge must be subordinated as less reliable and useful.
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Andy Clark html 
writes about the idea of "extended cognition" -- the idea that the external environment functions as part of the mind, which cannot be conceived as a purely individual capacity. In a seminal essay, "The Extended Mind," written with Chalmers, Clark wiki argue that separating the mind, body, and the environment is inaccurate because external objects are critical to cognitive processes. The mind and the environment act as a "coupled system," functioning as a holistic cognitive system. See Clark's book Being There: Putting Brain, Body and World Together Again (1997).
M. Kat Anderson in her book Taming the Wild provides dozens of examples of Native Americans in the area now known as California who developed an intimate, very subtle knowledge of their local ecosystems and the lives of specific plant and animal species.
Even within the modern liberal state, governance structures are often designed to recognize the importance of local, situated knowledge. In the US, the constitutional idea of federalism devolves power to states, and they in turn to local governments. However, large corporations and politicians tend to prefer the consolidation of state authority, which means that local knowledge is ignored or overridden. See Frank Fisher, Citizens, Experts and the Environment: The Politics of Local Knowledge, Duke University Press, 2000), which challenges the habit of professional expertise to "ignore local knowledge that can help relate technical facts and social values."
A number of movements and organizations are actively attempting to reassert the importance of situated knowledge -- either local knowledge or subjective, non-scientific insights -- that should play a greater role in governance. Efforts to advance situated knowledge include citizen-science projects, projects to adopt community charters, the Community Environmental Legal Defense Fund, the Transition Town movement, permaculture, and advocates who wish to produce cosmo-locally.
The commons disproves this notion by showing that vernacular knowledge arising from highly specific circumstances can be very effective in managing shared wealth and community. Situated knowledge is based on the idea that people learn through participation in particular contexts. By contrast, most modern education assumes that knowledge can be abstracted, objectified and transferred.
Below, several perspectives on the importance of situated knowledge.