Ludwig M. Lachmann’s 1959 essay reviews G. L. S. Shackle’s Time in Economics as a major contribution to subjectivist methodology. Lachmann accepts Shackle’s challenge to the natural-science conception of time, especially the idea that economic action can be modeled as movement through a homogeneous temporal continuum. The essay’s concern is not merely exposition, however: Lachmann asks what Shackle’s view permits, and what it may wrongly exclude, from economic theory.
Shackle’s key insight is that the human present is not a neutral point on a calendar axis. It is the setting in which imagination, preference, decision, and expectation occur. Lachmann presents Shackle’s moment-in-being as the foundation of this argument:
“The moment-in-being rolls, as it were, along the calendar-axis, and thus ever transports us willy-nilly to fresh temporal viewpoints. This I shall call dynamic movement in time” (p. 15).
Lachmann agrees that this destroys any simple analogy between economics and mechanics. Human beings do not merely react to known variables; they reinterpret situations, revise plans, and form new purposes. Yet he thinks Shackle risks carrying the argument too far. If every present were wholly self-contained, then learning, planning, disappointment, and plan revision would become unintelligible. Lachmann therefore distinguishes between the discontinuity of ends and the relative continuity of knowledge about means.
It seems to us that while his thesis applies to human ends, of which we are unable to postulate any continuous existence in time, it does not apply to our knowledge of the adequacy of means to ends.
This distinction is central to Lachmann’s revision of Shackle. Preferences and purposes may alter unpredictably, but actors can still accumulate experience about how means serve ends. Economic subjectivism must therefore include not only subjective utility but also subjective interpretation: individuals understand, compare, and reinterpret the world through time. This makes economic process possible without reducing it to deterministic sequence.
The essay’s market-theoretic argument follows from this point. Shackle’s dynamics, Lachmann suggests, remains too close to the isolated individual. In markets, especially forward markets, plans and expectations acquire a socially observable form. Contracts, prices, and commitments do not make the future predictable, but they reveal enough of present expectations to allow analysis of coordination and discoordination. Thus Lachmann preserves a limited dynamic market theory: not a mechanics of the future, but an account of how plans confront one another over time.
On prediction Lachmann remains close to Shackle. Since future knowledge and future decisions cannot be known before they arise, economics cannot provide positive historical forecasts of the kind imagined by naturalistic social science. Its strength lies instead in interpretation: reconstructing plans, purposes, and causal connections after or during events. It may also offer negative predictions by showing that certain policies or plans are logically incompatible with their own aims.
The final issue is knowledge. Expectations are like hypotheses, but they are tested in a world whose conditions and meanings change through action itself. For Lachmann, this prevents expectations from being fitted into a closed dynamic equilibrium system.
As soon as we permit time to elapse we must permit knowledge to change, and knowledge cannot be regarded as a function of anything else.
The essay’s conclusion is therefore double. Shackle is right that human time, decision, and knowledge defeat mechanistic prediction. But this need not confine economic dynamics to private inner experience. A subjectivist economics can still analyze market processes, provided it treats them as processes of interpretation, learning, and plan coordination under irreducible uncertainty.
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