G. L. S. Shackle, “Policy, Poetry, and Success” (1968)

Shackle’s address argues that business policy is not best understood as applied arithmetic, optimization, or probability calculus, but as an “originative art” conducted under radical uncertainty. He opens by opposing “reason or imagination; probability or poetry,” not to reject knowledge, but to deny that practical life supplies the bounded conditions of a formal problem. A problem has givens and one right answer; business has no such closed field. Policy-makers must invent the very alternatives among which they choose, and then imagine futures that cannot be exhaustively listed.

Art is the manipulation of constraints.

This sentence is central: Shackle’s “poetry” is not arbitrary fancy. Like music or painting, business creativity works within materials, conventions, technologies, contracts, and institutions. Yet the knowledge needed is “what can be done rather than what must be done.” His dice, cards, horse-race, and investment examples build a scale of increasing openness. Dice and cards have rules that yield a complete list of outcomes; horse-racing is already far less tractable; new enterprise has no “card of runners” and no “book of rules.” The entrepreneur must imagine products, plant, finance, markets, and rivals, but also unknowable future discoveries and decisions by others.

our lives float on a fathomless depth of unconjecturable revelations and inescapable surprises.

The conceptual pivot is Shackle’s definition of decision as a mental commitment to a future that does not yet exist. Since all knowledge concerns the past, and decision concerns future action, decision cannot be selection among known facts. It is selection among imagined possibilities. This is why modern mathematical techniques, for Shackle, testify less to the calculability of choice than to the elusiveness of its objects.

My first proposition is that decision is choice amongst the products of imagination.

The middle of the essay develops the epistemological basis of this claim. Science works through “stereotypes”: recurrent patterns of variables that allow explanation and prediction. But prediction depends on repetition, and practical decision presupposes that the future is not wholly fixed by the past. If everything were determined, decision would not be originative; if nothing were connected, consequences could not be reckoned at all. Shackle therefore posits “partial connectivity”: the world constrains what can happen without determining what will happen.

The phase-space is unknown.

This phrase marks his break with probability as the final language of policy. Probabilities require a complete list of possible contingencies, or at least a stable system from which frequencies can be inferred. Business investment lacks such closure. Shackle replaces calculable probability with judgments of possibility, impossibility, surprise, desirability, and “ascendancy”—the power of imagined outcomes to seize attention. A decision-maker ranks possible “biographies” of an enterprise not by objective frequencies but by degrees of plausibility and by the attraction or dread of their consequences. The important imagined outcomes become focus-gains and focus-losses: the promise and threat that stand for an enterprise in deliberation.

The essay’s most distinctive move is its treatment of the residual unknown. Even after listing A, B, C, or G as possible sequels, the decision-maker must add “something else”: futures generated by decisions not yet made and knowledge not yet discovered. This remainder is not a minor omission but constitutive of real policy-making.

It is a black box, containing he knows not what.

Shackle does not abolish statistics. He assigns it a subordinate but essential role: statistics helps establish the scientific stereotypes by which possibility is judged. But the climactic act of policy is different. It is the “exploitation of an essential lack of knowledge,” the attempt to profit from indeterminacy rather than merely solve a pre-given problem.

The conclusion returns to the opening contrast as a theory of mind and management. Modern management education rightly teaches mathematical problem-solving, but it risks mistaking the manager for a programmed machine. Shackle’s relevance lies in his insistence that entrepreneurship, investment, and strategy require not only analytical skill but imaginative world-making.

There are truth-seekers and truth-makers.

The truth-seeker finds the one correct answer to an already formed problem; the truth-maker composes new possibilities from an open field. Shackle’s final distinction between “axial” and “radial” minds names the essay’s practical lesson: business success depends not only on looking straight ahead toward a solution, but on seeing outward into an expanding field of possible histories.