Economics as an Art of Thought: Essays in Memory of G. L. S. Shackle (review)

George Lennox Sharman Shackle (1903–1992) was a rare historian of economic thought. In the 1960s, beginning with his pathbreaking article "Recent Theories Concerning the Nature and Role of Interest" (1961), and culminating with his classic The Years of High Theory (1967), he laid the groundwork for one of the most active research programs in the history of economic thought over the subsequent twenty-five years: the vast literature on "Keynes and uncertainty." If all that Shackle had written were The Years of High Theory, he would be remembered not only as a pathbreaker, but also as an unusually gifted writer; the book is one of the best in the literature.

But it is neither his role as the first person to emphasize Keynes's concern with uncertainty nor his talents as a writer that made Shackle a rare historian of economic thought. The thing that made him so rare is the fact that he was also an accomplished economic theorist. In the 1930s, 1940s, and 1950s, Shackle was one of the most creative theorists of how decisions are made when people are uncertain of what will happen as a consequence of their actions. Trained at the London School of Economics in the 1930s under Hayek's influence, Shackle made the most of this Austrian influence to examine business investment decisions. While he found little of value in Böhm-Bawerk's capital theory, he turned subjective individualism into a powerful tool of inquiry when examining how business decisions to invest in new plant and equipment are made. Shackle's theory of potential surprise is an original contribution.

Unfortunately, by the late 1950s, it was clear that Shackle's contribution was not going to influence mainstream, neoclassical economics. As is revealed in the final two pieces in this volume—a catalogue of the Shackle papers now deposited at the Cambridge University Library by Kathleen Cann, and an overview essay on the contents of those papers by Stephen Littlechild—many well-known theorists corresponded with Shackle about his theoretical work, but none found a way to incorporate it into his own work. Shackle was highly regarded, but passed over.

The reasons for Shackle's failure to influence the larger profession would seem obvious: his emphases on the role of surprise and creativity in his treatment of subjectivism simply do not lend themselves to the kind of fixed matrix of options and outcomes that is required in the mathematical treatment of economic behavior. But as Littlechild's essay and the editors' introduction to the volume suggest, this failure to connect with the mathematizing project of the mainstream contains the seeds of something like a classic Greek tragedy. Shackle's father received first-class honors in mathematics at Cambridge and was subsequently Keynes's tutor in mathematics when Keynes sat for his mathematics entrance exam to Eton; even more intriguing is the fact that at the peak of his own career as an economic theorist, Shackle took time to write an introductory textbook titled Mathematics by the Fireside (1952), which his correspondence suggests was an effort to reproduce the mathematical education his own father had given him. The book was published by Cambridge University Press and was translated into French in 1967.

The ultimate tragedy, of course, was not Shackle's failure to attain fame, but the economics profession's failure to engage his ideas. This story is bigger than simply Shackle's honorable refusal to use mathematics where he did not believe its use was appropriate; it is a much larger story about a profession that was desperate for scientific authority after its failure to influence policy makers during the Great Depression. Now that the much heralded "New Economy" boom of the 1990s has collapsed along with the profession's many arguments...