GLS Shackle (Weight of the Evidence, W, = 0) Against JM Keynes (Weight of the Evidence is 0 ≤ W ≤ 1)
20 Pages Posted: 15 Jun 2017 Last revised: 17 Jun 2017
Date Written: June 14, 2017
In 1938, GLS Shackle had just finished his economics dissertation It was was supposed to have further advanced and developed the work done by Keynes in the General Theory on the connection between expectations and investment. Shackle had discovered, after reading the General Theory and tiny bits and pieces of the A Treatise on Probability, that Keynes was, not only not a radical subjectivist like Shackle, but was not any kind of a subjectivist at all. Keynes, in fact, had built an objective, logical theory of probability on the foundations of George Boole’s 1854 The laws of Thought. Keynes’s definition of uncertainty in the General Theory in chapter 12 on p. 148 defined uncertainty as an inverse function of the weight of the evidence, w, from the A Treatise on Probability, where weight came in degrees. Weight of the evidence was defined in the A Treatise on Probability as 0 ≤ w ≤ 1. Shackle’s definition was that weight, w, always equaled 0 because no one had any knowledge of the future. That meant that uncertainty for Keynes had to come in different gradations or degrees. Shackle’s definition of uncertainty was actually equivalent to Keynes’s definition of ignorance, where w, based on a scale from 0 (no evidence) to 1(complete evidence), equaled 0. Shackle’s definition of uncertainty directly contradicted Keynes’s definition of uncertainty. Shackle was in a quandary and deeply worried about what to do until he discovered that Keynes‘s February,1937 reply to his critics in the Quarterly Journal of Economics did not mention w or the A Treatise on Probability as he had in the General Theory. However, then another problem came up for Shackle. Keynes kept using the word “degrees” throughout his reply in 1937 in the Quarterly Journal of Economics. Keynes made it crystal clear that uncertainty came in degrees. However, Shackle found a paragraph in Keynes’s reply where Keynes concluded the paragraph with the conclusion that “We simply do not know”. Shackle decided that he would, there after, put forth the canard that this paragraph represented the true meaning of the General Theory and that no one would have to read the A Treatise on Probability or the General Theory because Keynes had finally figured out what he had wanted to say all of his life in that one paragraph. All one had to do was to read the February,1937 reply to his critics in the Quarterly Journal of Economics.
Unfortunately, Joan Robinson, Austin Robinson and R Kahn all seconded Shackle’s canard as representing the true meaning of Keynesian uncertainty. In general, all Post Keynesian and Institutionalist economists based their work on Shackle’s canard. Uncertainty for Post Keynesians means total ignorance, although Post Keynesians hide this by talking about “irreducible” uncertainty, non quantitative probabilities, incomparability, non measurability incommensurability, etc.
The exchanges between Keynes and Townshend from 1937 till 1938 directly contradict Shackle’s ploy and demonstrate that Keynes’s concept of uncertainty came directly from the A Treatise on Probability. Shackle kept pushing his canard from 1938 till his death in 1992.
Keywords: weight, interval vaued probability, upper and lower probabilities, nonnumerical probabilites, liquidity preference
JEL Classification: B10, B12, B14, B16, B20, B22
Suggested Citation: Suggested Citation