A Scheme of Economic Theory

[Front Matter and Publication Details]: Title page, publication history, and copyright information for G. L. S. Shackle's 'A Scheme of Economic Theory', published by Cambridge University Press in 1968. [Dedication and Table of Contents]: Book dedication to John Cohen and Raffaello Maggi followed by a detailed table of contents outlining chapters on equilibrium, Marshallian change, Keynesian kaleido-statics, growth models, and production structures. [Preface]: Shackle argues that a single unified economic model is no longer practicable due to the complexity of time, uncertainty, and divergent assumptions. He proposes a 'scheme' to order existing theories—including those of Marshall, Keynes, Harrod, Hicks, and Leontief—based on their treatment of time and the possibility of knowledge. [Acknowledgements and Introduction Header]: Acknowledgements thanking Professor C. F. Carter and Mrs. E. C. Harris for their assistance in reviewing and preparing the manuscript. [Introduction: The Role of Time in Economic Theory]: Shackle introduces the central theme of the book: how different conceptions of time shape economic models. He distinguishes between 'mechanical time' (viewed by a detached observer as a series of co-valid dates) and 'expectational time' (the participant's view of an uncertain future). He argues that a single, omni-competent model is impossible because different models rely on mutually exclusive assumptions about time and choice. The chapter previews the classification of major theories—from Walrasian equilibrium to Keynesian kaleido-statics—based on their 'time-involvement'. [The Methodology of Economic Models and Mathematics]: This section discusses the relationship between economic theory and mathematical tools. Shackle argues for a more precise notation regarding the sign of equality, distinguishing between 'identical equality' (by definition or hypothesis) and 'conditional equality' (market equilibrium). He warns against the danger of mistaking formal mathematical solutions for genuine economic insights and emphasizes the need for careful language to bridge the gap between subject-matter and logical manipulation. [Appendix to Chapter I: Interpretation of Mathematical Concepts]: A brief technical appendix providing non-formal definitions for measurables, variables, values, vectors, and functions to assist the mathematically unsophisticated reader in understanding the economic models presented in the book. [Chapter II: Equilibrium and the Market as Knowledge Exchange]: Shackle analyzes the concept of equilibrium as a solution to the 'epistemic problem'—how individuals can have the knowledge required for rational action. Equilibrium assumes a timeless simultaneity where all participants have perfect relevant knowledge through market prices. The chapter explores the limitations of this model, such as its necessary exclusion of money (which exists to defer choice) and the future (which implies ignorance). It also touches upon the stationary state, stability, and the distinction between equilibrium and welfare. [Chapter III: Marshall and the Modes of Change]: This chapter examines Alfred Marshall's unique integration of equilibrium and evolution. Shackle describes the 'Marshallian time-spectrum,' where the distinction between market, short, and long periods allows for the analysis of sequential adjustment. Marshall's 'long period' is characterized as an actual journey through historical time where firms discover internal and external economies. Shackle highlights the complexity of Marshall's 'normal' value as a process of continuous settling down rather than a static state. [Chapter IV: Keynesian Kaleido-statics and the Swedish Model]: Shackle analyzes Keynes's 'kaleido-static' method, where the economy moves between precarious equilibria based on conventional judgments about an unknowable future. He contrasts this with the Stockholm School's ex ante/ex post framework, which he uses to clarify the relationship between saving and investment. The chapter includes a detailed derivation of the Multiplier as a process and discusses the 'inducement to invest' as a balance between profit hopes and the interest rate, emphasizing the inherent restlessness of bond markets. [Chapter V: Models of Systematic Movement - Growth and Cycles]: This chapter explores self-contained dynamic models, focusing on Harrod's growth theory and Hicks's trade cycle engine. Shackle explains Harrod's 'fundamental equation' and the inherent instability of the 'warranted' growth path. He then details Hicks's model, which combines the Multiplier and the Accelerator with a 'full employment ceiling' to explain cyclical reversals. The section also includes Shackle's own model of a self-generating expectation-cycle and a comparison with Domar's growth formulation. [Chapter VI: The Structure of Production]: Shackle examines the anatomy of production through two lenses: the Austrian theory of capital and Leontief's input-output model. The Austrian view treats capital as 'time,' focusing on the average period of production and the postponement of consumption. Shackle defends the insight of this model while acknowledging its measurement difficulties. He then presents Leontief's matrix-based approach, which maps the technical interdependence of industries, providing a synoptic view of sectoral transactions and the requirements for final use. [Chapter VII: A Scheme of Economic Theory]: In the concluding chapter, Shackle synthesizes the book's arguments into a formal classification scheme. He orders major economic theories along three axes: mechanical time, evolutionary time, and expectational time. He argues that a 'super-model' is impossible because these time-conceptions are logically incompatible. Instead, the social philosopher must use different models for different insights, balancing the 'pure logic of choice' against the realities of the human psyche and the constraints of the physical world. [Index and Author Biography]: The index for 'A Scheme of Economic Theory' followed by a brief biographical sketch of G. L. S. Shackle, highlighting his contributions to the theory of business decisions under uncertainty and Keynesian theory.