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Bruce Littleboy

Shackle (1903–92) was both an enthusiastic supporter and a nuanced critic of Keynes. Whereas Keynes’s micro-foundations were Marshallian, Shackle emphasized individual uncertainty and system-wide complexity. Crucial investment decisions pose a deep existential question to the individuals who make them: is the hope of prosperity more salient than the dread of bankruptcy? Furthermore, asset markets are inherently restless and vulnerable to sudden shifts in sentiment. Any bull–bear balance is fragile, and real production responds to events in asset markets. However, Shackle was not a complete “nihilist”: stabilizing conventions can emerge for a time, and inertial predictability is possible over the short term. Over the long term, by contrast, prediction is impossible. The collective future results from today’s free choices made by disparate individuals informed by little more than what they imagine to be possible. Shackle viewed his position as drawing out and adding to the inspirational insights of Maynard Keynes.