Critical Perspectives on Shackle’s Theory

Abstract

When Shackle’s Expectation in Economics was published, it was widely praised for its originality: for example, Graaff and Baumol (1949, p. 338) suggested that he had offered a ‘quite devastating critique’ of orthodox thinking. In addition to standard book reviews, it was accorded lengthy review articles by Carter (1950) and Mars (1950; 1951) and was given a major place in a key survey article by Arrow (1951). It can be seen now a precursor to state-of-the-art non-Bayesian, non-additive approaches to choice under uncertainty such as Shafer’s (1976) Evidence Theory (Fioretti, 2001; 2004; 2009; Zappia, 2008). Yet by 1961, when Shackle offered his book Decision, Order and Time as a thorough restatement and clarification of his position, interest in his theory had all but fizzled out. This was despite an attempt by Shackle’s friend Eraldo Fosatti to keep interest alive by devoting a double issue of his journal Metroeconomica to papers about Shackle’s theory.¹ This 1959 symposium had an eminent set of contributors and was timed to mark the tenth anniversary of the publication of Expectation in Economics. However, a sign that Shackle had already lost the battle to sell his ideas was the fact that Arrow’s contribution rather rudely made no more than passing reference to Shackle’s theory and concentrated instead on Savage’s subjective probability approach and how it might be used.