Foucault directs his analysis toward the "statement", the basic unit of discourse that he believes has been ignored up to this point.

In this understanding, statements themselves are not propositions, utterances, or speech acts. Rather, statements create a network of rules establishing what is meaningful, and it is these rules that are the preconditions for propositions, utterances, or speech acts to have meaning.

Power/Knowledge was a work by Foucault that explains his theory of how power is created and transferred throughout an "economy" of discourse (or conversation). It shows how power is transferred along conduits of dialogue according to the knowledge one has. Barry Allen says that it is only to have a statement pass among others as "known or true". Therefore, knowledge does not necessarily have to be true, but it only needs to be passed on as true for the statement to have an effect on the speakers in the discourse.