The archive.

Twentieth-century economics did not merely add topics to an old canon; it replaced the image of a system tending toward stable equilibrium with one shaped by uncertainty, hesitation, and breakdown. Out of that upheaval Shackle draws a map, sorting inherited doctrine by the kind of time and knowledge each theory assumes: perfect adjustment, calculable dynamics, aggregative comparative statics, and the economics of uncertain expectation. The organizing question is temporal—whether a model treats time as timeless adjustment, a dated sequence, or agents' conjectures about futures that cannot be known. Keynes straddles the categories, formally comparative statics yet substantively a theory of imagined futures. The chart doubles as a proposed curriculum and as a warning against teaching incompatible assumptions as though they belonged to one unified doctrine.

Imagined future events still form an entirely distinct category, since they do not constitute a unique series.

May an economist honorably use a theory he does not fully believe? Shackle answers that the alternative would abolish the discipline, since every usable theory remains partial, contestable, and interesting precisely because it is not final knowledge. Sincerity thus becomes disciplined awareness of a theory's limits rather than abstention from theory. The essay runs a sequence of tests—on the arbitrary boundaries that wall economics off from psychology and politics, on the incompatible pictures rival abstractions paint, on equilibrium as a mechanical borrowing, on econometrics and its dangerous phrase 'incomplete information.' Because its subject matter learns, imagines, and invents, economics can never treat fitted equations as eternal truths, and its practitioners, Shackle urges, should form an open craft rather than a guarded mystery.

Economics is not physics, it is psychics, the study of men with all their capacity for learning and experimenting and inventing and imagining.

The entrepreneur who sinks his fortune into a single plant makes a choice no lottery can model — and it is mathematical expectation, the workhorse of investment appraisal, that Shackle attacks in this sequel. Multiplying outcomes by probabilities and summing them, he argues, is legitimate only where an experiment is divisible or seriable, so that a spread of results can be possessed as a statistical aggregate; one business commitment has no such structure. The textbook urn and the game of chance are closed worlds that bar by rule the very unknowns constituting reality. In their place stand focus-values — the strongest gain one can plausibly hope for and the gravest loss one must plausibly fear — standardized on a gambler's indifference map, where a steeper feared loss demands a larger promised gain. The framework recasts Kalecki's principle of increasing risk without objective probability.

When the course of action is a non-divisible non-seriable experiment, such an additive procedure loses entirely the relevance it has for a divisible experiment, and has only one claim to fall back on: that of being a compromise.

'Profit,' Shackle observes, names two quite distinct things: the realized figure an accountant records and the forward-looking conjecture that induces an enterpriser to commit resources at all. Because production takes time, those resources must be specialized before the future market is known, and it is this unavoidable uncertainty that creates the enterpriser's double role as decision-maker and uncertainty-bearer. Written for accountants but aimed at economic theory, the essay dismisses both the rough 'best guess' and mathematical expectation, whose frequency ratios describe repeatable series but say nothing about founding a firm or building a factory. In their place stands potential surprise: ventures compared through focus-gain and focus-loss rather than a single maximized number. Timeless Walrasian equilibrium, he charges, excludes the very time, novelty, and monopoly from which profit springs.

In all production, because it takes time, there is an ineradicable uncertainty.

How can a person coherently expect to be surprised? Shackle's Economica note turns the paradox into a piece of logic. To expect an event, in his vocabulary, is to attach zero potential surprise to it — so a counter-expected outcome, one already imagined and rejected, cannot be the source of true surprise; only the genuinely unexpected, a possibility never before entertained, can. His resolution is the residual hypothesis: a deliberate heading for the possibilities one cannot yet specify, to which zero potential surprise may attach even as its detailed content is bound to astonish, like a nineteenth-century physicist confronted with a digital computer. The economics follows. When residual ignorance threatens widely separated gains and losses on a gambler's indifference map, doing nothing and holding cash may outrank any active policy — a theory of enterprise inhibited by news too obscure to interpret.

In contrast with this I define an unexpected event as one which has never been formulated in the individual’s imagination, which has never entered his mind or been in any way envisaged.

The complete economist, on Shackle's mischievous accounting, would need mathematics, philosophy, psychology, anthropology, history, geography, politics, prose, and practical finance all at once—an impossible portrait meant to show that no single technique defines the field. Theory, he argues, is the disciplined imaginative construction of recurrent structures; it grows rigorous not by turning algebraic but by drawing out implications and testing them against rival forms. Keynes stands as proof, since abler mathematicians produced no revolution of their own. From this breadth follows an educational program: recruit able rather than residual students, delay premature specialization, and keep mathematics the servant of economic problems. An economist, on this view, is formed by breadth disciplined into judgment—the capacity to quantify without forgetting the people economics is finally about.

Economics emphatically is about chaps.

Shackle opposes reason to imagination and probability to poetry, without discarding knowledge: business policy, he argues, is an originative art conducted under radical uncertainty, not the solving of a well-posed problem. He builds a scale of openness from dice and cards, which yield a complete list of outcomes, through horse-racing to new enterprise, which has no card of runners and no book of rules. Decision is commitment to a future that does not yet exist, and therefore choice among imagined possibilities rather than known facts. Where probability demands an exhaustive list of contingencies, he substitutes judgments of possibility, surprise, and ascendancy, with focus-gain and focus-loss standing for an enterprise in deliberation. Success, he concludes, needs not only the axial mind that reasons toward a solution but the radial imagination that sees outward into an expanding field of possible histories.

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

One unfinished project links Keynes's Treatise on Money and his General Theory: the attempt to make economics adequate to a future no agent can know. Shackle finds the sharpest tool not in the General Theory but in the Treatise's Fundamental Equations, which he reads as rudimentary sequence analysis—income as anticipated cost, profit as the gap between what was expected and what occurred. From this ex ante/ex post distinction he rebuilds liquidity preference and the marginal efficiency of capital as phenomena of speculative markets, confidence, and mood, not as stable schedules. Economic life becomes kaleidic: neither a march toward equilibrium nor a regular cycle, but a succession of temporary patterns that shifting expectations can shatter in an instant, leaving resources idle as asset-holders retreat into liquidity.

Income, in the Fundamental Equations, is a conjecture which can be wrong.

Thought is the only thing directly known, and its passing is the raw experience from which time itself is abstracted—an unlikely starting point for a theory of choice, and a deliberate one. Shackle builds from it a critique of deterministic economics: if choice genuinely matters, it must be a beginning, an uncaused cause, a taking-place not already implicit in its antecedents, and its sequels cannot be a ready-made list waiting to be ranked. Possibility, for the chooser, becomes the absence of discernible fatal obstacles rather than a measurable frequency; commitment, not calculation, is the vital act, staking self-esteem on imagined outcomes. Marshalling potential surprise, ascendancy, and focus-gain against frequency probability, he makes investment the exemplary economic act—a symbolic wager on a future whose outcomes can never be exhaustively listed.

Possibility, for the chooser, is the absence of discernible fatal obstacles.

The alternatives among which a person chooses are creations of his own thought, not a menu the world hands down — and from that premise Shackle builds this compact statement of subjectivist economics, written to introduce Alexander Shand's survey of the tradition from Plato to Hayek. Choice becomes creative rather than calculative, its consequences unknowable in advance, so that the future is not merely unknown but partly made. Non-determinism and the unpredictability of history-to-come follow, along with a political corollary: central coercion cannot render human affairs predictable, only extinguish the dispersed invention that renews economic life. Markets earn their place by disseminating knowledge after events occur, never by abolishing uncertainty.

Subjectivism credits the individual with the power of the alchemist who can throw into his crucible whatever his fancy has invented but knows not what will emerge.