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Whilst the modern usage of the phrase is generally linked to Michel Foucault, the exact statement of this aphorism is attributed to British philosopher Francis Bacon (Meditationes Sacrae, 1597). The idea itself is also found earlier in the Old Testament. (e.g. "A man of knowledge increaseth strength". Proverbs 24:5, Everything King James Bible.)

Foucault's usage of the cliche suggests that power is not a resource (e.g. I have a formal edification therefore the power is MINE!!), but rather power circulates through social relations via knowledge.

For further discussion of power/knowledge see Cletus' look at Power and Michel Foucault.