“though valuation is in origin the personal and private act of the individual mind, yet it becomes through the device of the market a public and objective fact upon which every individual, at least in regard to goods for immediate consumption, agrees… Prices, given this public authority and validity, enable collections of the most diverse objects to be measured in a single dimension… economics might almost be defined as the act of reducing incommensurables to common terms”
GLS Shackle (1992:9)
Update: To answer Mario Rizzo, the full citation is Epistemics and Economics (1992[1972]), although looking through the passage now the final part goes into page 10. Also, Pete Boettke has picked up on this quote and perhaps now I should explain my motivation for posting it. Contra Matt Mueller, no-one is claiming that a single quote proves anything. Shackle - in a similar way as Keynes - is so gifted in the art of writing and creative imagination that it is nigh impossible to neatly pigeon hole him. Intepretations of both authors often tell us more about the interpretor than the economists themselves. All I want to stress is that there is solid evidence that Shackle accepts the broad coordinative function of the market economy, and to advocate a "reading" that is drastically opposed to this threatens to divert the debate away from the usefulness of radical subjectivism. Can familiarity with Shackle help us interpret real-world entrepreneurial decision-making? Yes, I think so. Does the abandonment of price theory reduce the ability of economics - as a science - to systematically study such a world? Yes, it does. I don't think it's necessary to have to choose between Shackleian subjectivism and price theory.
"Interest in Shackle", +1 to things I don't understand. I suspect it has something to do with having drank the "description-ist" kool-aid, i.e. people who are really really into describing the economy, in which case I do understand what Boettke said about his early interests in economics-ethnography confluences.
Since I drink another kind of kool-aid, I find it all somewhat disturbing.
Posted by: Gabriel | December 25, 2008 at 01:03 PM
Where is the quotation from?
Posted by: Mario Rizzo | January 02, 2009 at 08:36 PM
Gabriel - only a historian would seek to "describe" the economy, applied economists (which I'd hope you'd accept that many modern Austrians are) seek an understanding. There's a big difference between being discriptive and taking an eclectic and open-minded position position on what might aid our understanding of the catallaxy
Posted by: aje | January 07, 2009 at 06:59 PM